Britain’s manufacturers are calling on the Government to use the Budget as a starting point to set out a major long-term industrial and economic strategy on a scale not seen since the Marshall Plan to ensure the UK takes advantage of its world class science base and growth in new technologies.
The call by Make UK comes on the back of its latest Manufacturing Monitor tracking survey which shows that companies are preparing for a long-haul recovery from the current pandemic. Make UK believes that while further short-term tactical measures will be needed in the Budget to help support companies through this year, there is an urgent need to develop a longer-term strategic vision that sets out how the UK can prosper.
In particular, Make UK believes this requires a change in mindset from Government that goes beyond simply thinking about how we can diverge from the EU, to how the UK can benefit from digital technologies, the innovation derived from industry and academia, together with growth opportunities from the transformation to a net zero economy by 2050.
Welcoming the recent announcement of a new science research agency to invest in cutting edge blue-sky technologies Make UK believes this can be the starting gun on a new era of technological advance and opportunity.
Commenting, Make UK CEO Stephen Phipson, said:
“As a country and an economy we are at a crossroads. There are clearly short term issues to address including fixing border delays and Budget measures to ease industry’s cost base to help companies through the rest of this year.
“Looking to the long term, however, we need to lift our horizons to how we can transform the economy. This will require a different mindset in Government from believing we can achieve growth simply through diverging from EU regulations which have little or no economic significance in the bigger picture.
“Instead we need an industrial strategy and vision on a scale not seen since the Marshall Plan which identifies new technologies and market openings that will benefit from enterprise friendly policies on taxation, research and development, infrastructure and regional investment.
“In particular, Government must work with industry to harness our thriving, world-class academic science and innovation base and put in place a process whereby this can be commercialised, especially as we move to a net zero economy. Now we have left the EU this will require a drive and vision to ensure we build new markets in the UK, together with support for exporters to help them compete in global ones overseas.”
According to the survey more than a quarter of companies (28.9%) believe it will take a year or longer for normal trading to return while more than a third (36.7%) think it will take between six and twelve months. Furthermore, just a quarter of companies (25.4%) are currently operating at full capacity while just half expect to be by the start of 2022.
The continuing difficult conditions are highlighted by the fact that more than a third of companies have seen sales (35.9%) and orders (36.6%) decrease since the start of the year. A quarter of companies (24.7%) said the current lockdown is better than the previous two, almost two thirds (61.8%) said conditions were the same while 13.4% said conditions now were worse.
The survey also backed Make UK’s call for the furlough scheme to be extended to at least the end of Q3 with less than half (44.3%) of companies saying they had no employees furloughed while more than a third (37.8%) said they still had up to 10% of staff furloughed. While the survey suggests that most redundancies have already taken place, approximately one third of companies (33.7%) are still considering redundancies in the next six months compared to two thirds who say they have no plans to.
When asked what measures Government should take in the Budget, extending the Job Retention Scheme was the second highest choice of companies (47.5%) while Make UK is also calling for additional measures which were backed by the following percentages in the survey:
- Waive Business Rates and reduce the overall cost burden (56.8%)
- A longer-term commitment to increase investment allowances (45.4%)
- Greater fiscal incentives for R&D including doubling the R&D tax credit (35.5%)
In addition, Make UK wants Government to commit to supporting a new Manufacturing Skills Taskforce, reform the Apprenticeship Levy, roll out the Made Smarter initiative across all regions and introduce a net zero support package. Make UK also believes there should be rewards for businesses that reach green targets and support for those sectors where transition will be a challenge.
The survey 0f 186 companies was taken between 13 and 21 January.