Jeremy Hunt delivered the country's latest Autumn budget this morning. He stressed the country's "genius for innovation" and that three of the top ten global universities are in Britain. Hunt added that the UK now "needs to be better at turning world class innovation into world class companies... I want to combine our technology and science brilliance with our formidable financial services to turn Britain into the next Silicon Valley."
He announced that he has also asked the Chief Scientific Adviser Sir Patrick Vallance to lead “new work on how we should change regulation to better support safe and fast introduction of new emerging technologies.”
Manufacturers react to Autumn statement:
Stephen Phipson, Chief Executive of Make UK, and a keynote speaker at this week’s SME Growth Summit said: “The government is having to respond to a potent cocktail of factors, both domestic and global. Economic and political stability is the spine of our economy. The chancellor has recognised this and taken action which is welcome.
“In particular, substantial help with business rates, protection of infrastructure and science spending, the extension of Made Smarter, together with the timely unlocking of significant scale up funding from Solvency II reform are very welcome.
“However, energy costs and access to labour remain manufacturers’ biggest problems. We currently face a labour crisis and today’s statement did little to address this. Without a fast improvement, government will need to urgently consider options such as radical changes to the shortage occupations migration list or access to labour from our closest neighbours, if we are to deliver growth.
“Furthermore, energy support for business has been very welcome and helped many firms survive. However, the apparent decision to end support next April when prices are likely to remain high for much longer is troubling. The certainty and lower costs enjoyed by our near neighbours gives them a large competitive advantage which puts UK jobs at risk.
“Beyond this, we still need a visionary approach to policy and growth which matches the multiple challenges we face. While a focus on growth sectors is welcome, there remains an absence of an overarching plan for how the big drivers of growth such as skills, innovation and science are brought together. This is essential if we are to improve productivity, take advantage of the UK’s undoubted strengths in its academic base and boost growth across all areas of the UK.”
John Pearce, CEO Made in Britain: “I agree with the chancellor that the recovery can be made in Britain, but only if our manufacturing companies, the vast majority of which are SMEs, are treated in a way that reflects the rising cost of doing business and addresses some of the many complex and interlocking inflationary challenges they face. When looking to protect SMEs – the lifeblood of the British economy – the government must give particular attention to the manufacturing sector, as these companies are uniquely vulnerable to inflationary pressures due to increased exposure to rising costs of the workforce, raw materials, energy and transport.”
John Mills, Founder of The Institute for Prosperity, said: “The British economy faces a bleak future based on high taxation, austerity, and low growth. Living standards are set to fall for many people in this country already facing soaring inflation. The government needs to focus on growing the size of the British economy to pay for the public services we all need, and to increase living standards. Exploring a competitive exchange rate policy and creating conditions where investment in technology, automation, and power, the drivers of productivity, are front and centre, will achieve this.”
Sir Vince Cable, former Business Secretary, said: “ The government faces extremely difficult choices in its Autumn Statement. Unfortunately, some of those measures may involve significant tax increases and spending cuts. As part of the measures, it will outline the government’s needs to ensure that we have an industrial strategy that protects education, training, and innovation which are crucial to long-term future growth and growing our manufacturing sector.”
Labour MP, Stephen Kinnock, said: “The British economy is suffering from a decade of low growth, higher inflation, and low productivity. Austerity is not the answer to Britain’s economic problems. We need a comprehensive industrial strategy to revive British manufacturing, support key industries such as steel in my constituency and to reduce our strategic dependency on authoritarian countries.”
Johnathan Dudley, Head of Manufacturing at Crowe UK, audit, tax, advisory and risk firm, commented: “I haven’t seen anything here that will help manufacturers cut their energy costs from next April. This could be ‘mission critical’ for many businesses on the brink and hardly supports the chancellor’s objective of stability. Sizewell will indeed reduce reliance on third party fossil-based fuel supplies and will help our zero carbon commitments but will indeed take time to come.”
“The Chancellor has announced that he wants the UK to be the new ‘Silicone Valley’ and support innovation. Yet he has announced cuts and ominous-sounding changes to R&D (we are still awaiting detail), which those very innovative businesses rely on to develop world-beating products and processes. Of course there is a need to stop abuse; however so many legitimate claims are being held up by ever increasing scrutiny as it is. The Treasury and HMRC could well be combining to stifle investment in innovation in spite of the Chancellor’s stated intentions.”
Rahul Kejriwal, CEO of Bricsys: “Five years ago, the 2017 Made Smarter Review promised investment in industrial design technology (IDT) would boost productivity, add £455 billion GVA, reduce CO2 emissions by 4.5% and create 175,000 new jobs over a decade. Investments in open source, flexible technologies could have been the saving grace for the construction industry – but the impact of this review has not been felt and the budget doesn’t go far enough to advance or protect the construction and manufacturing businesses, which together make up 16% of the UK’s GVA.
“Where the Government doesn’t do enough, the onus falls on businesses to navigate a brutal market. Design for manufacturing and assembly (DfMA), or Industrialised Construction, is the best route to both profit and sustainability. DfMA methods are 50% faster and more environmentally friendly than traditional building projects and require fewer expert skills to execute – a crucial point in the face of razor thin margins, an imminent recession and a talent and technology shortage.”
Simon Tucker, Global Head of Energy, Utilities & Resources at Infosys Consulting: “The Chancellor’s Autumn Budget energy announcement has been built on the ruins of previous government policies. Today was a missed opportunity to turn around the UK’s current energy situation.
“Expanding the windfall tax by 10% risks being counter-productive for the country’s energy transition – it’s a short term solution to a long term supply and demand problem, which has now positioned the UK as a short term, high tax energy location.
“Rather than promoting clean energy and putting focus and investment on the development of SMR’s and mini nuclear to create renewable resources and new jobs, the tax increase corners businesses into larger capital outlays. Combined with the energy imbalances from the ongoing situation in Russia and Ukraine, post-COVID demand and Iranian oil embargo, market forces will only cause prices to increase.
“On the other hand, the announcement that Sizewell C will go ahead, again, provides the UK with no new initiatives. Despite the plant aiming to provide up to 7% of the UK’s total electricity needs, in the time it would take to come online it won’t provide any new, clean energy for another 10 years minimum – assuming there are no production hiccups.
“If the UK government wish to drive real change, every effort must be made to engage and audit the big players on clean energy investment. Improving this supply and reducing energy use will be key to navigating the uncertain months ahead.”
Anthony Ainsworth, Chief Operating Officer at npower Business Solutions, said: “For us, the key headline for business energy users from today’s Autumn Statement is the Government’s realisation that energy efficiency is just as important as energy security when it comes to reducing energy costs. Energy efficiency can make a huge and immediate difference, so the announcement of a new target to reduce energy demand from buildings and industry by 15% by 2030 and an additional £6bn of funding for energy efficiency from 2025 is welcome. We look forward to reading the plans from the Department for Business, Energy and Industrial Strategy and the newly formed Energy Efficiency Taskforce when they are published.
“The Chancellor confirmed that a new targeted approach to supporting businesses beyond April – when the current Energy Bill Relief Scheme ends – will be announced by the end of the year. The uncertainty of what this could mean for many businesses beyond this date is hugely impacting confidence, and, while the additional funding for energy efficiency is welcome, it is still two years away. Businesses need more immediate help to implement measures that will both reduce energy demand and emissions, to enable them to invest with confidence.”
Mick Howard, CEO of soft drinks manufacturer, Clearly Drinks commented: “Today’s Autumn statement by the Chancellor has been highly anticipated for a long time and one that the whole manufacturing sector has been waiting patiently for. As an industry, we are heavily impacted by rising costs and inflation rates and while today’s announcement looks to address some of these concerns, there is definitely more to be done and more action needed as we face a recession.
“As a business, we are facing increased costs on a daily basis and we are currently unable to plan ahead and budget for the coming year due to uncertainty over energy prices and inflation, which makes it almost impossible for us to forecast and predict what prices we should be giving to our customers to remain a profitable business. Today’s announcement does very little to provide clarity for businesses and I don’t feel we are yet in a position to feel confident for stability in the coming months, but we hope that this at least kick-starts further conversations on protecting and supporting UK businesses to allow us to grow.”
Saar Yoskovitz, Augury CEO, said: “Manufacturing keeps on being overlooked by Westminster, despite how important the sector is to the UK economy and reducing our carbon emissions.
“Commitments to R&D spending and legislation updates on impacts are all very well, but manufacturers will have to stand on their own on immediate challenges.
“When it comes to reducing energy and use and producing more with less, emerging technologies hold one of the very few levers manufacturers have left to press.
“For example, manufacturers are sitting on mountains of untapped data in the tiny signals machines give off. Smart machine health technology captures vibration, temperature and magnetic data from rotating machinery. This can be harnessed to identify problems with 100% accuracy as they happen and before they even occur, avoiding downtime altogether.
“I’ve seen companies reduce their energy consumption by as much as 20%, just by getting ahead of problems and eliminating downtime. And unlock capacity equivalent to four months of runtime.
“Manufacturing also just isn’t seen as sexy. We need to rewrite the cultural narrative of what manufacturing is to better reflect its current state.
“Sell potential hires the excitement of fundamentally rethinking how we approach engineering. The breakthroughs of today are what the future industry will be built upon. Invite job seekers to be a part of it.”
Mike Hawes, SMMT Chief Executive said: “We recognise that all vehicle owners should pay their fair share of tax, however, the measures announced today mean electric car and van buyers – and current owners – will face a significant uplift in VED. The sting in the tail is the VED supplement which will unduly penalise these new, more expensive vehicle technologies. The introduction of taxes should support road transport decarbonisation, and the delivery of net zero, rather than threaten both the new and second-hand EV markets.
“With a ZEV mandate on the way for car and van manufacturers, we need a framework that encourages consumers and businesses to buy electric vehicles. We look forward to working with government on how to transition the market and ensure the tax framework on road users supports this objective.”