Make UK comment on Growth Plan statement by the Chancellor

Commenting on the announcement by the Chancellor today, Stephen Phipson, Chief Executive of Make UK, said:

“The Chancellor has clearly recognised that we are heading for very stormy waters in the face of eyewatering increases in energy and other costs, together with a difficult international environment.  Industry will welcome today’s statement which, coming on the back of the support for energy, contains a number of positive measures to help shield viable companies from the worst impact of escalating costs and help protect jobs. The focus on prioritising growth with plans to speed up planning reforms, boost infrastructure and investment is especially welcome.

“However, this is the sixth growth plan in little over a decade which has seen ever increasing political uncertainty. This has resulted in zero certainty for business, the most important thing it needs. Government must try and reverse this process by working with industry to develop a long-term economic strategy together with a National Manufacturing Plan. At its heart must be a properly designed tax system and a certainty of policy that aims to transform the low level of business investment, develops the workforce of the future and equips people with the digital skills they will need in the new industries and technologies which are rapidly emerging.

“Given the tools and, the right economic environment, industry can help itself and, at the same time, help the Government meet its growth target. Now is the time to end to put in place the right building blocks for the long-term.”

On taxation measures, Seamus Nevin, Chief Economist, said:

“Setting the Annual Investment Allowance at its highest level ever is a very helpful move that manufacturers have been calling for some time. It was a huge disincentive that businesses were previously taxed for upgrading their factories with technologies that boost productivity growth and cut carbon emissions. It will especially benefit smaller manufacturers who will now be able to make long-term plans to invest in critical areas of their business, from automation to improving energy efficiency and self-generation. However, more work can be done to make the UK capital allowance regime even more attractive for domestic and international businesses alike.

“The cut to national insurance and the cancellation of the planned rise in corporation tax are welcome common sense decisions that will put much needed cash back in the pockets of businesses who have seen their cash reserves collapse during the Covid 19 pandemic.

“However, tax cuts are not the only measure that can boost growth and with the weakened state of the Pound and the public finances we should be looking at securing some easy wins. Tax incentives will be less effective whilst industry is dealing with major labour shortages and supply chain disruptions. With a near record ninety three thousand vacancies in the manufacturing sector right now the UK economy is missing out on £7bn per annum in lost output and productivity gains as a result. Some straight forward reforms to the Apprenticeship Levy and visa rules to increase access to the skilled workers industry needs would therefore be of huge benefit to economic growth, at no expense to the Exchequer.”

On plans to boost the labour market, Jamie Cater, Senior Policy Manager, Employment at Make UK, said:

“As manufacturers fight to attract and retain talent, support for older workers who have recently become economically inactive to access employment opportunities is welcome. Manufacturing firms have seen a number of employees become inactive after the pandemic, and this provides a chance for over-50s to re-enter the workplace and employers to access new skills and experience.

“With as many as one in four manufacturers expecting up to a fifth of their workforce to retire within the next ten years, it is important that the Government continues to consider how to support both employers and employees to access employment and training opportunities to older workers, including via the Workforce Industry Exchange to allow experienced workers to contribute as part of the teaching workforce and train the next generation of talent.”