Businesses are urging the Chancellor to pull every financial lever at his disposal in his forthcoming Summer Statement to safeguard as many jobs and livelihoods as possible.
Make UK’s submission to the Treasury calls for immediate measures to ease the cost base for companies, including relief on Business Rates for industry similar to that already granted for the retail sector, and extended time to pay VAT and PAYE costs which have been deferred.
In its latest ‘Manufacturing Monitor’, 61% of companies said reducing Business Rates was the number one priority for government to help.
In addition to re-iterating calls for a National Skills Taskforce to support employees in the sector who are made redundant, government should expand the eligibility of the National Retraining Scheme (NRS) so that it is accessible to anyone at any skill level, and at any age.
Government should also remove the requirement that the worker has to leave their current job before they can access training from the NRS with another employer. In addition, government should also fund the employer-led training element of the NRS for up to 12 months.
Make UK chief executive, Stephen Phipson, noted that conditions are still very tough for many companies with disruption likely to continue for some time.
He continued: “The economy will emerge from this pandemic and, as it has shown during the crisis, industry will be the sector to which the nation will turn to re-purpose and rebuild toward a greener and sustainable future.
“Science, engineering and digital technologies have been catapulted centre stage and the Chancellor has the ideal opportunity over the next few months to set out his vision for a rebooted economy.”
There are tentative signs that some of the worst indicators may be easing slightly, according to the Manufacturing Monitor. The number of companies reporting loss of sales and orders in the last two weeks was 68% and 61% respectively, both down by around 10% since the early part of the crisis.
The number of companies expecting a return to normal trading conditions over more than a year has also dropped from just under 40% to below 33%.
However, 42% of companies said sales are still down by between 25% and 50%, showing that the painful economic conditions are still being felt.
Key recommendations in Make UK’s submission:
- Introduce a scrappage scheme for digital investments based on enhanced reductions on Business Rates or other Corporation Tax
- Roll out the Made Smarter industrial digitalisation initiative across the UK
- Increase incentives for R&D spend including expanding the Industrial Strategy Challenge Fund
- Increase investment allowances for smart technologies
- Speed up national rollout of 5G and ultrafast broadband
- Introduce a ‘digital premium’ for short-term digital skills training
- Incentivise training providers and colleges to invest in the capital infrastructure needed to deliver digital content
- Make industrial energy efficiency schemes to cover plants as well as buildings more easily accessible
- Increased investment allowances for ‘green investments’ which improve the energy efficiency of industrial processes
- Exempt green and smart investments from counting towards the rateable value of business premises
- Incentives for businesses and training providers in order to retrain employees with green skills as part of the drive to a zero-carbon economy
- Fund a national supply chain mapping project to identify critical sectors and gaps while promoting supply resilience and reshoring production to the UK
- Increase resource and participation in Trade Accessing Programmes and other trade events
- Boost the skills fund to support the export training base
- Widen access to export finance, insurance and other guarantee schemes
To mitigate the impact of an acute skills crunch in the coming years, government should:
- Provide a £1,000 direct payment incentive to employers who take on T Level learners
- Cover the full employment related costs for recruiting younger apprentices (aged 16-21) in their first year by increasing and expanding the Apprenticeship Incentive Funding for Employers and cover the full costs of off-the job training.
*Header image courtesy of Depositphotos