TM has collated reactions to the industrial policy set out by Business Secretary Vince Cable.
The Business Secretary Vince Cable today supplied details of his department’s industrial policy.
One strand of the strategy is the creation a ‘business bank’ – a government-backed institution intended to boost lending to UK companies, that could operate through alternative lenders, like the new challenger banks such as Handelsbanken and Aldermore and other other non-bank lenders.
It also includes collaborative and challenging sector strategies in the advanced manufacturing sectors of aerospace, automotive and life sciences, increased focus on technologies, a better skills policy linked closely to the needs of employers articulated through the Employer Ownership Pilot scheme and the development of a closer relationship between government and its domestic supply chain. Resulting in contracts published earlier and more procurement ending up in the hands of British companies.
Mike Peters, managing director of Universal Products (Lytham) Manufacturing, pharmaceutical and personal care contract manufacturers, whose company recently won North West Business of the Year in the BIBA Awards.
“I’m all for more domestic government procurement. Why is it when the EU hands out rules on procurement, we all sign up to them but the French, Germans and Italians are the first to drop them – only the UK seems to play by the rules, to our detriment.
“To make a real difference, though, I would provide 100% capital allowances for capex investment in the first year. My company is in the frame to win two large contracts that would contribute about 20 per cent to next year’s bottom line. We have calculated that a £700,000 investment in machinery and new staff will secure the job – that’s a very large chunk of last year’s profit. If the Government could just say 100% tax relief on that investment, we could invest, win the business, create jobs and be competitive with rivals overseas. The simple stuff generates growth.”
Andrew Esson, managing director of Quick Hydraulics, member of EEF’s NE Regional Advisory Board and a member of the EEF NE Skills Group
“I expressed concern to BIS and UKCES at the launch of the Employer Ownership of Skills scheme that the funding thresholds that had been set would exclude SMEs from getting involved, despite the announcement that this scheme was meant for SMEs. The fact that Siemens, Sembcorp and Nissan are among the successes confirms my reservations.
It is great for those businesses who have been able to take advantage of this scheme, but it has, and will do, nothing for my business, or similar businesses to mine, which is a concern. Skills is a major issue at all levels, but it’s not just apprentices, or other forms of technical training. UK manufacturing is lacking in management capability and vision, and in particular this is holding back many SME’s who based on my MAS Advisory Board experience are not achieving their potential. ”
Juergen Maier, managing director of Siemens UK Industry Sector:
“I like all the elements of the industrial strategy. I’ve never seen something this long-term in the UK. A business bank is very valuable and will help to understand and support the SME sector in the same way as the German model [where the KFW provides SME finance]. Manufacturing is very capital intensive and the returns take a little bit long so it requires banking with a specialist focus. Getting a bank to understand that is vital.
“I’m pleased and surprised that Vince Cable [Business Secretary] has put his neck out on and said there will be support for certain sectors, to bring extra R&D support and advice. Chuka Umunna [Shadow Business Secretary] has criticised picking winners but he hasn’t been on the business circuit very long and has rushed his criticism. I hope he spends some time listening to the industry like Vince [Cable] and then make his view. There is a danger that this support will fade away depending on what new government we may get but the business leaders want to keep some consistency. This is a 20 year journey now and we need to keep with it, we shouldn’t be chucking it out at the next term.”
Tony Hague, Midlands Assembly Network and managing director PP Electrical Systems:
“There’s not a manufacturer out there who will deny there is a genuine need for a more coherent industrial strategy that cultivate ours strengths and enables us to compete globally.
The question is, has Dr Cable given us one? Only time will tell.
The intentions are good. Increased funding to address actual skills needs of employers is a positive and, as a collective that thrives on innovation, MAN would be big supporters of any scheme that unlocks academic excellence for industry exploitation.
Recognising the importance of removing barriers to finance, especially when it comes to capital equipment, could be a major step forward if delivered correctly.
But there areo a lot of unanswered questions. Will this be a long-term strategy that has cross party support, or will it be churlishly discarded by the next government?
Doing something to control escalating energy prices was noticeable by its absence and, again, Cable has missed the importance of specialist funding streams for SMEs. The Regional Growth Fund is all well and good, but it’s about feeding the whims of the big boys. It’s about time the supply chain got a fair chance to tap into targeted financial assistance to grow and create jobs?”
Terry Scuoler, chief executive of EEF, the manufacturers’ organisation
“The debate that’s starting on industrial strategy comes at the right time and in an increasingly challenging economic environment. The Secretary of State’s announcements today contain some of the right elements. It is important that government and industry work strategically to ensure that the UK is well placed to develop future technologies if we are to pay our way in the world in the long run.
“However, it is clear that today’s challenge of growing and rebalancing our economy is not something one department or, a group of sectors, can meet on their own. We need a clear vision for our economy and a strategy to deliver it not only within the Department for Business but, across government, to get behind every company that is looking to invest, export and grow.”
Robin Johnson, chair of the industrial engineering group and partner at international law firm Eversheds
“All this is very positive as rhetoric but it needs implementing in practice and funding to support it. Companies still feel there are many hurdles, such as red tape, to go through.
“If a truly new Investor in Industry is set up, it will need to be flexible in its approach and broad in its investment criteria.
“Most SMEs do not want to give up control of their business and need convincing the proposals are genuine and that the controls will not inhibit them in implementing their business strategy. Profit should not be the primary objective, instead key performance indicators that focus on job creation, training, apprenticeships, tax revenues, regional development, regions of excellence and export markets, should be considered.”
David Caddle, area director for the Manufacturing Advisory Service
“While firms continue to trade against a volatile economic picture, they are looking for a Government that is committed, in the long-term, to help industry grow. The Industrial Strategy outlined by Vince Cable recognises the need to focus on advanced manufacturing, it sets out ways in which more funding will help address skills gaps and it identifies the importance of turning the UK’s fantastic academic expertise into real commercial benefits for Britain.
“The creation of a new institution to ensure firms can invest in capital is a must and it will be interesting to see how this develops over the coming months.”
John Cridland, CBI director-general
“British business has been challenging the Government to put in place firm foundations on which our companies can build their long-term futures and rebalance our economy. The UK is a world leader in many sectors and if we are to secure significant growth in the decades to come, the Government must enable them to capitalise on their competitive advantages and stay ahead of international rivals.
“Politicians of all persuasions need a laser-like focus to provide a stable and supportive policy environment. Today’s commitment from the Business Secretary is a valuable first step on this critical path to future success.”