Manufacturers need more support in the budget, trade body warns

Posted on 18 Sep 2020 by Tom Lane
National Investment Bank for Britain - Puzzle with the national flag of great britain and british pound on a world map background - image courtesy of Depositphotos.

The Manufacturing Technologies Association have urged the chancellor to back Britain’s makers in his forthcoming budget.

The Manufacturing Technologies Association (MTA) the trade body that represent UK manufacturing technology suppliers, have urged the Chancellor to give more support to manufacturers in his forthcoming budget.

Manufacturing, like much of the economy, is in need of government support to assist with a speedy recovery from the impact of the Coronavirus pandemic.

The MTA CEO James Selka has written to Rishi Sunak to warn that: “failing to support such a vital sector of the economy threatened to stall progress on key national interest projects such as decarbonisation, high-speed rail (including HS2 and the Northern Powerhouse rail projects) and the new Tempest fighter aircraft.”

The MTA submission went on to highlight the need to keep fiscal incentives available for companies looking to invest in capital goods. The MTA successfully helped encourage former Chancellor Philip Hammond to increase the Annual Investment Allowance (AIA) from £200,000 to £1m back in 2018. However, that incentive is due to expire at the end of this year.

Data from the ONS shows that business investment fell by more than 30% in Q2 and while overall economic activity has been picking up, survey data on investment intentions suggests recovery will take longer. Concerns around a second wave of infections and the end of the Brexit transition period foster uncertainty.

The MTA has argued that extending AIA to 2024 and increasing it to £1.5m will “boost investment confidence and kick-start investment decision-making.”

[14:12] Daniel Kirmatzis Institutes of Technology – The government will provide £120 million to bring further education and higher education providers in England together with employers to open up to eight new Institutes of Technology. These institutions will be used to deliver high-quality higher level technical education and to help close skills gaps in their local areas. (1 liked)​[14:13] Daniel Kirmatzis Facilities and equipment to support T levels – The government will provide £95 million for providers in England to invest in high quality facilities and industry-standard equipment to support the rollout of T levels. Funding will support T level routes being delivered from autumn 2021, including construction, digital, and health and science. National Skills Fund – The government will consult widely in the spring on how to use the new National Skills Fund. Apprenticeship Levy – The government will look at how to improve the working of the Apprenticeship Levy, to support large and small employers in meeting the long-term skills needs of the economy. Apprenticeships – The government will ensure that sufficient funding is made available in 2020-21 to support an increase in the number of new high-quality apprenticeships in small- and medium-sized businesses.
Parliament Image: Shutterstock
Concluding his letter to the Chancellor, James Selka said: “Despite the current enormous challenges related to COVID-19 and other market changes, we believe that, with your increased support, UK Manufacturing has the strengths and capabilities needed to reinvigorate the UK economy and deliver the jobs and community growth needed across the nation.

“Government has already invested in key elements of infrastructure geared to keeping British businesses ahead of the market, such as the fantastic High Value Manufacturing Catapult Centres and the Made Smarter programme.”