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Spring Statement Misses Significant Opportunities, Says Manufacturing Association

Commenting on the spring statement, Stephen Phipson, chief executive of Make UK, said: “It is right that the Chancellor prioritizes help for the lowest earners and those who need it most at a time. so difficult and companies will understand that.

“However, the government cannot escape the fact that manufacturers are facing exorbitant cost increases which are pushing many towards a tipping point and companies would have sought substantial business support measures to help mitigate them. In particular, the lack of action on energy costs for businesses is particularly difficult to understand.

“It has been two years to the day since lockdown began and there is very little in today’s statement to support a sector that has continued to function throughout the pandemic, ensuring that it there was food on the shelves, PPE for our NHS and medicine for people who needed it. The promise of a jam tomorrow with consultations through the summer and action in the fall will also be cold comfort to many who would have liked to see action and support immediately.”

“We have yet to see a long-term economic vision that puts enterprise, growth and innovation at its heart. Without adding a turbocharger for growth, the government risks letting the economy collapse in two stages.

Commenting on the rise of NICS, Verity Davidge, Policy Director at Make UK, said: “Today the Chancellor missed an opportunity to act on concerns raised by employers’ and workers’ groups. employed to delay the rise in NICs until the economy is in a more robust situation. position. The NIC hike is a tax on jobs, with six in ten manufacturers saying it will impact recruitment and the majority planning to pass it on to the customer, bringing further inflationary pressures. The increase in NICs is just one of many significant costs facing UK manufacturers and there will be a big question mark over whether the UK is a competitive place to do business at the moment.

On the lack of support for businesses on energy, Verity Davidge, policy director at Make UK, said: “The lack of support for businesses to deal with spiraling energy costs is beyond disappointing and deeply frustrating. As manufacturers experience historically high energy bills, today was an opportunity for the government to provide much-needed support to businesses. Reducing the cost of policies that account for a large portion of overall electricity costs, coupled with increased energy funds and subsidies, would have given manufacturers the best chance of lowering their energy bills and keeping their businesses running smoothly. flow.

Discussing potential reforms to the R&D tax credit scheme, Fhaheen Khan, Principal Economist at Make UK, said: “The R&D tax credit scheme is the most commonly used by manufacturers. Any modification of the regime must be made in close consultation with the manufacturing sector, which accounts for 64% of private investment in R&D.

“The government must be careful not to throw the baby out of the bathwater. Although the system is not perfect, it needs to be reshaped, not radically reformed, and any suggestions to eliminate it altogether should be ignored. We look forward to continuing to work with the government to make the program work better for businesses of all sizes and to ensure the UK can continue to compete on the global innovation stage.

On the pledge to review investment tax cuts, James Brougham, Principal Economist at Make UK, said: ‘For what was a welcome policy at the time of its inception, the Chancellor has missed out. the important opportunity to pick fruit at hand as a means of correcting some simple, but fundamental flaws in the super deduction system. Hinting at upcoming investment tax announcements in the next budget does little to support the industry now, when investor confidence desperately needs a boost.

“If the government wants the economy to invest, innovate and grow now, the Chancellor must also stand ready to instill confidence in the sector through longer-term policies that show that individual businesses are supported in the investments that they undertake that ultimately benefit people, places and communities.

“The absence of investment-boosting policy announcements today will send a worrying signal to the wider industry that businesses must bear the risk of this fragile recovery on their own, which will certainly hamper investment for the rest of the world. the year as the tidal wave of rising costs dashed hopes of a prosperous recovery.

Commenting on the apprenticeship tax review, Bhavina Bharkhada, Head of Policy and Campaigns at Make UK, said: “The decision to review the apprenticeship tax is long overdue and will be widely welcomed by manufacturers. – the true champions of the gold standard of learning. It will be essential that the government works with business to make the right calls for future reform so that we get it right. Over the past decade the government has been committed to an employer-led apprenticeship system and it is important that it continues to uphold this principle. Any change must ensure that apprenticeship funding is sustainable over the long term and that companies can use it to recruit and retain the apprentices they need.

“In the short term, allowing employers to use part of their levy funds to contribute to apprentice wages would immediately unlock greater investment in apprenticeships. If the scope of the tax were expanded to include non-apprenticeship training, the government needs to demonstrate how apprenticeship funding would be protected and how manufacturers could use this added flexibility to access the right job training for their businesses.