Make UK budget comment
Published: 16 March, 2023
Commenting on the Budget Statement, Stephen Phipson, chief executive of Make UK, said:
“Given the limited headroom the Chancellor had, his pursuit of continued stability and reassurance is understandable. Within this he was right to focus on significant measures to boost investment and the welcome support for childcare. Companies will be disappointed, however, that there is no extension of support for energy with the rapidly approaching cliff edge of the current scheme ending, while the planned changes to R&D tax credits remain and will be unwelcome for SMEs in particular as they are implemented in April.
“Looking forward, given the bigger picture at play and, in the face of the firepower that the US and EU are bringing to bear with their huge incentive programmes to bolster onshore manufacturing, the UK needs transformational reforms that look to the long term, with the aim of equipping businesses and individuals for the scale and pace of the challenge we are facing.”
“This can only be done through building on the Chancellors’ five key areas of growth with a radical, ambitious modern industrial strategy and policy agenda that has science, technology and innovation at its heart. Industry will welcome his reference to ‘Industrial Strategy’ and stands ready to work with and, support him, to reshape our economy and boost growth.”
On Full Expensing, James Brougham, senior economist said:
“Industry will welcome this boost to investment which is key to unlocking improved productivity for both the sector and the wider economy. Nevertheless, investment intentions have been dwindling over the past year as businesses have been forced to take a shorter-term view with their capital in the face of an onslaught of costs, despite thee significantly more generous, super-deduction scheme.
“To see the Government’s ambitions of growing investment, the focus must now be placed on removing wider challenges so industry is afforded the privilege of taking a longer-term view to investment. While the implementation of this new policy for three years compared to the two of the super-deduction allows more time for considered investment planning, a longer or permanent implementation would better fit the longer investment cycles of the sector. Concerns also remain for those smaller businesses with less access to capital, as it is those companies who are more likely to lease or buy second-hand plant & machinery, of which both methods of capital investment are excluded from the announced scheme’s benefit.”
Commenting on R&D changes, Verity Davidge, director of policy, said:
“While the Chancellor set out big and ambitious plans for AI and quantum, the focus on diffusion and adoption of digital adoption overall is lacking. R&D tax credit policy keeps chopping and changing and many businesses will struggle to keep up. Large swathes of small and medium sized manufacturers will find themselves out of pocket when the new changes come in in April this year and we were looking to the Chancellor to delay, or even better, reverse these changes to boost R&D across all of manufacturing.”
Commenting on Energy Security and Costs, Brigitte Amoruso, energy & climate change adviser, said:
“The Chancellor’s focus on energy security with the extension of Climate Change Agreements, and prioritising of nuclear and SMRs is welcome. However, this does little to tackle the real and immediate threat manufacturers face with rocketing energy bills. While the current energy support scheme has reduced bills overall, the incoming scheme is unlikely to be triggered, leaving many companies on a cliff edge at the end of the month. We now need to see further action from Government to turbo-charge industrial energy efficiency with competitive tax incentives and reliefs to invest in green technologies.”
On Labour Market Changes, Jamie Cater, senior employment policy manager, said:
“There is much which will begin to address the current labour challenge in manufacturing, but there remains much more to do. While manufacturers will benefit from improved skills training options for people who have become economically inactive, government support for upskilling and retraining remains piecemeal, and take-up of existing pathways is still low. It is important that government works with industry to make sure that workers of all ages can access the training they need, and that employers and employees alike have a clear understanding of what is available to them.
“Manufacturers will also welcome the Chancellor’s support for improving the accessibility and affordability of childcare. As they continue to make strides in becoming more inclusive employers, and seek to enable more parents, grandparents and others with caring responsibilities to come back to work, this additional support from government is a step in the right direction.”
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