Tony Hague, CEO of PP Control & Automation, said the Autumn Statement was a huge improvement on the last mini budget – ”at least I never thought ‘oh my God, it’s like a Liz Truss moment”Today’s Autumn Statement was considered a success for UK manufacturers, with a massive policy win on full expensing with further details of the package enabling the full roll-out of the Made Smarter scheme. There were also announcements on tax cuts (National Insurance and R&D reliefs for SMEs), apprenticeships, investment zones, planning red tape, and national grid connectivity.
Stephen Phipson, chief executive of
Make UK, said: “This was a bold statement by the Chancellor who has worked hard to understand industry’s needs and deliver a transformational strategy designed to turbo-charge investment. Manufacturers will applaud this focus on addressing the painful achilles heel that has troubled the economy for decades. The biggest factor that companies want when planning investment decisions is certainty in policy and this has now been provided by making full expensing permanent.
“Industry will also welcome measures to boost engineering apprenticeships and stimulate advanced manufacturing, which will be vital in boosting high-value growth and high-skill employment in the economy of the future. The Chancellor has worked closely with Make UK and promised an Autumn Statement with manufacturing at its heart. He has delivered on that commitment and it is now down to industry to pick up the gauntlet.”
Greater Birmingham Chambers of Commerce also welcomed Jeremy Hunt’s Autumn Statement in the wake of recent pleas for a boost to UK investment. GBCC CEO Henrietta Brealey said: “Despite many of the measures heavily trailed in advance, there were a number of announcements which will land well with the business community as we emerge from a turbulent period in our recent history. It was pleasing to see the Chancellor back a number of our calls in a bid to drive investment and reduce cost pressures – namely the move towards full expensing, restructuring of pension funds, reforming the R&D tax reliefs system and extending business rate relief for hospitality and retail firms.
“It was also reassuring to see the Chancellor commit to plans to simplify the planning process in order to speed up the delivery of infrastructure projects. Given the current labour market pressures, additional funding for Apprenticeships is also welcome, however, offering businesses more flexibility on how they spend their levy funding would have made the measure even more effective.
“In particular, the confirmation of the West Midlands Investment Zone is a major boost for the region, creating thousands of jobs for local people and offers a vital opportunity to leverage private sector investment.”
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Steve Morley (pictured left), president of the
Confederation of British Metalforming (CBM), said: “I have witnessed first-hand how a few of our members have benefitted from investment and hopefully this incentive should give others more fiscal confidence to look at where they can invest, in order to become more efficient or to take advantage of new opportunities they are seeing.
“We were one of 200 businesses and organisations that signed the CBI and Make UK Declaration, and we genuinely believe this decision could prove the difference between thousands of manufacturers pressing the button on new machinery and technology or not. The Chancellor’s £4.5 billion package for advanced manufacturing was already announced before the Autumn Statement and was intended to grab headlines. It certainly did that, but the bigger picture is that this support does not start until 2025 (and possibly after another election) and will this vital funding make its way downstream to the Tier Ones, Tier Twos and Tier Threes in the supply chain.
“This is what we will be actively lobbying for and ensuring every manufacturer has an opportunity to benefit from grants, collaborative innovation projects or by ring-fencing UK content in big infrastructure and vehicle projects. A 10% increase in the minimum wage is good for workers. However, it can push wage inflation inside already squeezed SMEs.
“While most of our members pay above the living wage, we have heard from them that previous rises have kick-started other employees in their workforce asking for higher wages. This could cut margins even further.”
More apprenticeshipsEngineeringUK chief executive Dr Hilary Leevers said: “The Chancellor highlighted the importance of skills in his Autumn Statement, yet there was little to address widespread issues in the skills systems. We welcome the modest announcement of £50 million for engineering apprenticeships, but are concerned that this is limited to a two-year pilot to explore ways to stimulate training in these sectors and address barriers to entry in high-value standards.
“As outlined in our recent report ‘Fit for the Future’, we need large-scale investment in getting more apprenticeships for young people off the ground now and to ensure that the country has the engineering and technology workforce it needs for the future. We urge the Government to take a bolder approach.”
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Responding to the announcement on skills, Bekki Phillips, chief operating officer at
In-Comm Training, one of the UK’s leading training providers said: “After decades of being in the shadows of universities, it was refreshing to see vocational learning play such a prominent role in the Chancellor’s speech. The headline will no doubt be the £50 million additional investment in pilots that encourage more apprenticeships into engineering and manufacturing.
“This is music to our ears as a specialist provider to this sector and comes just a few weeks after we announced our record cohort intake, with 200 new apprentices recruited at our Aldridge and Telford academies. In reality, we had a further 40 vacancies at local employers, so the company demand is definitely there. It was also pleasing to see an increase in wages for apprentices for their first year of training. This is significant and will mean that vocational learners will be further valued as members of the workforce rather than, what has traditionally happened, been regarded as cheap labour.
“Hopefully, this will encourage youngsters to embark on an apprenticeship rather than seek employment in areas, such as fast food and retail – sectors that might offer immediate higher returns, but fewer long-term prospects. If there was one thing missing from the skills announcement, it was the urgent need to take the training levy a step further, so that it goes beyond apprenticeships and fund qualifications and courses specific to industry needs.
“These are niche courses, but vital if manufacturers are going to bridge the skills gap and tackle the need for emerging skills, such as robotics, automation, machine learning and augmented reality (AR). Finally, the Prime Minister mentioned in Prime Minister Questions that the Government was interested in creating an Apprenticeship Education Secretary — yes please!”
Missed opportunityGareth Stace,
UK Steel director general, was more cautious. He said: “It is disappointing that the Chancellor did not use his Autumn Statement to announce a UK CBAM and a timetable to implement it by 2026. Imported steel should also pay for its carbon footprint as we have done for years. With over 90% of global steel production facing no carbon cost, it is only right to introduce a carbon border policy to create a level playing field on carbon pricing. It is a missed opportunity not to set out the Government’s plans for its own carbon border policy.
“As UK steelmakers are announcing plans for green steelmaking, a UK Carbon Border Adjustment Mechanism (CBAM) will be essential to these investments, making sure that low-emission, green, UK-made steel is not undercut by high-emission, imported steel, which has not faced carbon costs. Delaying the confirmation of a UK carbon border policy will risk the UK playing catch-up with the EU on timetables. The steel industry needs certainty, not further delays.”
PP Control & Automation CEO Tony Hague, a strategic outsourcing specialist working with 20 of the world’s largest machinery builders, said: “I’ve been relentless for many years about the need for the UK to invest in more automation and technology and the ‘full expensing’ announcement today could well be a significant driver in ‘tipping the balance’. It should promote much needed investment to drive productivity and increase efficiencies, offsetting rising input costs around materials, energy, transport, and labour.
“Like all announcements, there is a ‘but’. If the Government changes in the next election, will this important business decision be reversed by new Ministers keen to make their own mark on proceedings? This is what really worries me with no coherent industrial strategy in place. For UK manufacturing to thrive, we need long-term thinking and a stable/tax efficient environment.
“Getting people back to work is key, which is why I am all for the £50 million apprenticeship boost (devil will be in the detail) and the £2.6 billion funding to help the long-term unemployed and those suffering with sickness and illness. Mr Hunt suggested this could deliver 200,000 people back into the workplace. That seems a huge number but would certainly be welcomed by employers fishing in a shrinking recruitment pool.
“In summary, the Autumn Statement was a huge improvement on the last mini budget – at least I never thought ‘oh my God, it’s like a Liz Truss moment.”