Stephen Morley, President of the Confederation of British Metalforming (CBM), reflects on a Budget that is still leaving manufacturers waiting for the government’s much vaunted ‘growth’ measures.
Just over a week has passed since the Chancellor/OBR revealed her Budget, a Budget that appears to pander more to backbench Labour MPs than it does to businesses trying to navigate a complex trading landscape.
This is the view of Stephen Morley, President of the Confederation of British Metalforming (CBM) who added that the damage to the association’s 200 CBM members, who work in the critically important metalforming and manufacturing sectors, was done long before last Wednesday. “All Rachel Reeves did was rearrange ‘deckchairs on the Titanic,’ while making only superficial changes to appease business leaders and groups,” said Stephen.
“Previous Government policies on employment costs and escalating energy prices had dealt a severe blow to companies supplying critical components to the automotive, aerospace, renewables and defence sectors.
“With yet another increase in the National Living Wage and changes to salary sacrifice pension contributions, further burdens are now being placed on our members. Regardless of what was promised in the manifesto, the ‘litmus test’ is that this Government claimed to be elected on a mandate for growth, yet nothing announced on 26 November will change the current downward trajectory of the UK economy.
“Many companies have recently seen price increases due to the stealth Nuclear RAB tax being used to subsidise the construction of Sizewell C.
“The financial strain will only continue next April with the next impending energy blow set to be delivered. This could potentially add tens of thousands, and, in some cases, up to a million pounds, to bills. Many firms may struggle to cope with these uncontrollable additional costs.”
Labour’s Industrial Strategy outlined energy support for a further 7,000 companies, but Stephen claims that this will not be implemented until at least 2027. “This arbitrary number is just a drop in the ocean when you consider there are five million businesses in the UK – support to reduce energy bills must be for the many not the few!
“We argue that if the Government cannot provide energy assistance sooner, they should postpone the planned energy market changes until 2027 to give management teams a fighting chance. While the move towards more sustainable manufacturing is welcomed, companies should not be forced to bear most of the costs over an unrealistic timeframe.”
People
The positive skills announcement that SMEs will be able to have training for apprentices (under the age of 25) fully funded is welcomed by the CBM. However, Stephen added that many firms need apprenticeships at Level 2, and unfortunately trying to find training providers who will deliver this is not easy. “There is either not enough money in it for the provider, or they cannot get a big enough cohort to make it sustainable, especially when it comes to some sector-specific standards.
“This issue needs to be addressed urgently if the government is serious about apprenticeships. The Business Secretary promised to address our concerns about the Employment Rights Bill and the Government has taken the first step with its U-turn on offering all workers the right to claim unfair dismissal from their first day in a job. This change is very welcome and will definitely result in employers taking on more staff.
“However, this is just the start. There are many elements to the Bill, which will prove extremely costly to business and will strangle recruitment intensions. These need to be reviewed and amended if Labour really wants the ‘growth’ that appears to be central to its manifesto. If it fails to act, manufacturers must feel Government policy is like death by a thousand cuts.”
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