Manufacturers respond to Chancellor George Osborne's announcements and their implications for British Industry
Charles Morgan, MD, Morgan Motor Cars: “As I expected, the Autumn Statement did not produce what I would like to see on tax breaks for exports. Sir David McMurtry has a fabulous plan for this which he is trying to get Vince Cable to adopt. The new export finance facility looks like a way of backing bank loans – if you can get them.
“I would like to see a reduction in tax on exported goods – like the IC-DISC system in the USA. The increase in funding for UKTI which the Chancellor announced will just go towards and trade missions – not supporting the ongoing costs of selling your products abroad in the long term which are significantly higher than selling them domestically.
“Another thing which was lacking in the Statement was conviction on infrastructure investment. Speaking personally, progress on HS2 will be very important to my business. One of our main export markets is France and it would make a huge difference to my business to be able to get there quicker.
Mark Ridgway OBE, managing director of engineering company Group Rhodes and newly appointed president of the Manufacturing Technologies Association:
“In 2012, an Oxford University study marked the UK 31st among 33 countries in a measure of the effective marginal tax rate. Only Chile, from memory, was lower. We [the MTA] warmly welcome this increase – I would just ask that it be made permanent.
“I was very pleased with the 25% rise in the budget for UKTI, which will help the UKTI improve their facilities in over 30 regional offices to help companies to internationalise. UKTI can work on this with the LEPs (Local Enterprise Partnerships), who should be empowered by the Statement. This work is badly needed for some companies who are capable of accessing global markets.”
“I, and the MTA, also welcome the confirmation of funding for the Business Bank, although that is not new. More importantly, the new export finance facility [£1.5bn] will give SMEs the ability to pitch for international contracts.”
Juergen Maier, MD Siemens Industry Sector UK:
“We were looking for support for growth and not just short term. Items of note in that regard are the improved capital allowances and some more investment in key fields of science which we view as very positive. Most of the rest, like the business bank, whilst positive, was old news.
“The £5bn of Infrastructure projects is welcome, but we’re not sure how much of that is new and it won’t translate into much real growth. In summary, when you add up the real growth measures versus cuts, it looks to us like the balance remains more on the latter.”
Keith Attwood, CEO of high tech electronics engineering firm e2v:
“Against the backdrop of missing the target to reduce debt as a proportion of GDP, what the UK economy desperately needs is real and sustainable GDP growth.
“e2v is an established and successful manufacturer and exporter but we need more success stories to truly support an export-led economic recovery. In that context, I am pleased to see the £70 million increase in UKTI’s annual budget to help small and medium size exporters and the strengthening of Chambers of Commerce and business groups on the ground to help identify high value opportunities in new emerging markets.
“Anything that can be done to help develop new business opportunities overseas will be a big support in the tough economic conditions we are all facing.”
Mike Norfield, CEO, TTG: “When the Chancellor made the decision to cut capital allowances in 2010, it was a huge setback for manufacturing SMEs across the UK.
“While the economy remains in a state of change, his decision to increase allowances will create much-needed optimism for the UK manufacturing industry, and go some way to generating growth, investment and further job opportunities for skilled workers.”
John Elliott MBE, Chairman, Ebac: “The Chancellor’s analogy
that the British economy is ‘healing’ sounds encouraging, but this is just sticking plasters on the symptoms, rather than addressing the underlying problem.
“The Government cannot continue borrowing money it doesn’t have from other countries, to buy those nation’s exports. We are perfectly capable of domestically manufacturing many of the goods we consume here in the UK, yet we insist on importing them. If we exported an equal value of goods, then it would not be a problem, but we do not.
“It makes little or no economic sense to continue like this, especially when the answer is as simple as taking people out of unemployment and making some of the things we currently import. The cost would be no more than the tax payer is currently paying out on benefits for these people.”
Brain Holliday, Divisional Director, Industry
Automation, Siemens Industry UK:
“We are delighted with the Chancellor’s announcement that £1 billion will be released for free schools and academies. Under this umbrella come the University Technical Colleges. There are five UTCs now open and twenty eight more planned. As I understand it however, this new funding could allow six to seven more to be opened.
“This step is good for vocational education and good for employer opportunities to engage in education. We can see that the government is taking steps to close an employability gap in the UK – though more needs to be done. EEF report that four to five of their members are struggling to recruit – and yet we are in a time when there is record unemployment of sixteen to twenty-five year olds in the UK.”
Chris Mulvihill, manufacturing director, EMS Manufacturing: “The Chancellor has done a very good job given the room he has for manoeuvre. The news on corporation tax and capital allowances are both welcome – I think the latter in particular could really make a difference for our business.
“Confirmation of backing for the Business Bank was reassuring. I am very interested to see how this develops. I am hoping it will make it much easier for our customers to fund and finance their projects, and what helps them, helps us.
“The Chancellor’s Statement showed consistency of messaging around the importance of science and technology. This is really significant as a sign of commitment to the repositioning of the UK as a manufacturing nation.
“The last thing which really caught my notice was the fuel duty freeze. Our whole supply chain will benefit from this. Anything we can do to keep logistics costs down in the UK will support national productivity and competitiveness.”
Karl Koehler, CEO, Tata Steel in Europe:
“I welcome the Chancellor’s statement for committing substantial funds to important infrastructure projects. Not all of these will have as immediate an impact as I would like, but they should boost the UK’s construction sector. I also welcome the additional funding for the Regional Growth Fund.
“Last week the government announced details of its new Energy Bill, which promises to help avert a further deterioration in energy costs for UK manufacturers.
“These are positive steps in the right direction that will create a better environment for British industry. I hope and believe this marks the start of a long-term change in the government’s views about the role manufacturing and construction play in the economy, and of a more considered approach to industrial strategy.”
Andrea Rodney, managing director, Hone-All Precision: “The cut in corporation tax is welcome but only of use to those businesses able to generate profits in uncertain times. Improved Capital allowances would be a more effective way to promote growth, innovation and investment for manufacturing therefore enabling the tools that stimulate businesses to generate profits.
A lack of stimulating investment combined with the bleak outlook for expected output could result in a self-fulfilling prophecy for those companies hoping to beat the recent turbulent times.
If improved capital allowances were combined with serious action on bank lending, I think businesses would be better placed and able to make the bold moves required to stimulate essential improvements.”
Julian Hunt, communications director, Coca-Cola Enterprises:
“I was pleased about the proposed corporation tax reduction and changes to capital allowances. This reinforces the messages that Britain is open for business.
The decision to abandon the fuel escalator will help consumers, as well as our logistics team!
Our biggest concern is the gloomy macroeconomic predictions. As a consumer goods company we are as keen as anyone to see more signs of life in the economy.”