On the right path
Published: 02 January, 2018
The recent Industrial Strategy White Paper was widely welcomed by leading industry organisations such as the Institution of Engineering and Technology (IET), who said that the Government’s continued focus on industrial strategy is a crucial and very welcome step towards engineering an economy that works for all. Likewise EEF added that it was a good foundation for a new partnership with industry “where Government and business can ensure consistency in policy thinking and implementation to ensure the UK is a world leader in these new technologies”.
Dr Joanna Cox, head of policy at the IET, also highlighted the point that the White Paper was an essential opportunity to build a shared vision - across Government, industry and society - for the UK’s new position on the global stage following its departure from the EU, and to create an accompanying policy framework that will ensure that resources are aligned in support of this vision, and that on-going issues such as the skills agenda are addressed. The White Paper does take some steps towards tackling the skills issue although as the IET points out there remains much more to be done.
Some however believe believe that the Government’s White Paper hasn't gone far enough with R&D tax relief despite the heavy rhetoric. I agree with Mark Tighe, CEO of R&D tax specialist Catax, who says that if the Government wants the UK to be a global centre for R&D, it should stop tinkering and make more meaningful adjustments: “The industry was looking for a rise of 4% in R&D tax relief to 15%. Instead, it’s stuck with a raise of 1%. This might look good on paper as it’s actually a 9% rise in the rate of relief overall, but this isn’t change on a scale that will supercharge the potential in our economy as many would wish.”
Although the overall message is positive, as Tighe highlights, ministers are yet again talking about R&D as if it’s all just about cutting-edge firms when the majority of companies that could benefit belong to more traditional industries:
“Not enough businesses know it’s not all about space travel and driverless cars, but a new pint of beer or menu for a restaurant too. Lots of companies don’t realise they are entitled to this kind of relief and it’s often the smaller firms with tighter balance sheets that would benefit the most so this rhetoric has to change.”
A positive development is the introduction of independent scrutiny of the progress of the Industrial Strategy plans. The Government by introducing an independent Industrial Strategy Council is signalling that there will be a strong focus on measuring delivery, which industry will welcome.
In addition the Strategy highlights the Made Smarter Report, which anticipates a Sector Deal for Industrial Digitalisation, which has the potential to make a real difference to the uptake of, productivity boosting, digital technologies.
Overall the introduction of a new Industrial Strategy is a positive first step towards supporting efforts to improve productivity and invest in not just current industries, but those of the future, which are set to radically change the ways in which people live and work. It is obvious however that a considerable amount of work still needs to be done if the recommendations are to become reality but there does seem to be a genuine commitment from both Government and Industry to achieve change, and therefore we should remain optimistic that the economic contributions to the UK economy from manufacturing are at last being taken seriously by Government.
