EEF Full budget comments
23 November 2017
Commenting on the Autumn Budget EEF Chief Executive Terry Scuoler said:
"The Government's commitment to a comprehensive industrial strategy and support for manufacturing, innovation and new technology is a welcome stiffener for business as Brexit anxiety looms. The Chancellor's explicit pledge to deliver an implementation plan ahead of Brexit will reassure companies of the Government's intent, giving business certainty amid gathering Brexit jitters.
“We are delighted to see the Government's National Productivity Fund has been extended for a further year to £31 billion to upgrade Britain's economic infrastructure and the extension of the R&D tax credit increasing to 12% will boost business investment in future productivity and technological advances.
“The £5bn commitment to build 300,000 houses a year will not only benefit first time buyers but, with a very heavily integrated supply chain, it will be a boost for the UK construction sector.”
Commenting on today’s R&D Tax credit announcement – EEF Chief Economist Ms Lee Hopley said:
“The Chancellor is putting real resource into delivering its target of 2.4% of GDP on R&D over the next decade. The additional allocations from the National Productivity Investment Fund devoted to R&D and the increase R&D tax credit should help ensure the public and private sector are moving in tandem towards this important goal. The Chancellor has used some of his available leeway do what policy to reduce the risk of UK businesses being left in the wake of competitors’ technology advances and did so without tearing up the business tax road map, which provides some certainty on the path of corporation tax.
“That said, it is clear from the massive productivity downgrades that future fiscal headroom will need to keep pushing ahead with measures to support innovation and business investment if the UK is going to get out of this productivity rut.”
Commenting on the transforming cities fund announcement – EEF Chief Economist Ms Lee Hopley said:
“Today's announcement of a new Transforming Cities Fund rubber stamps the argument manufacturers have consistently been making – that regional transport investment must be the priority focus of devolution to help increase the size of talent pools and provide wider access to skills. If we are to boost regional infrastructure investment in a systematic way we need to shift from decisions having to wait for an annual Budget statement in Westminster towards investment decisions being taken closer to those that will benefit. Ministers must provide Mayors with the fiscal tools, through the promised Mayoral infrastructure levy, to help them identify and prioritise their own investments coupled with a clear plan to rollout devolution to other parts of England currently without.”
Commenting on the national retraining scheme and apprenticeships Tim Thomas, Director of Employment and Skills Policy at EEF said:
“Any funding targeted towards investment in skills will be music to manufacturers’ ears. With engineering employers facing a real and acute skills shortage and already putting their hands in their pockets, the sector should immediately be deemed high priority for future investment. Government must, however, learn the lessons from the past and set out the key objectives for the fund as well as avoiding duplication, targeting it where there is a gap in training provision and making the process transparent and easy for businesses of all sizes to use.
“Whilst we support the continued aim of creating more high quality apprenticeships, Government will need to act quickly and deliver the indicated flexibility to apprenticeship levy payers, enabling them to spend their levy money which is all too often currently out of reach.
Commenting on additional funding for maths and teachers Tim Thomas, Director of Employment and Skills Policy at EEF said:
“It is vital that our young people are taught by world class teachers if the UK is to compete on the global stage, particularly as 52% of school leavers in England currently don’t have a good GCSE pass in maths. Additional funding must be pinpointed to drive up the quality of teaching and also incentivise more young people to study invaluable subjects such as maths. These are first steps but be backed up with Government looking to the long-term to achieve results for generations of school leavers. Government must target the new funding at attracting and retaining the best maths teachers for the long haul - only then we will see take up and importantly achievement of these core subjects increase and deliver the skills that our industry so desperately needs.”
Commenting on increases to the National Living Wage and National Minimum Wage rates EEF Chief Economist Ms Lee Hopley said:
“The National Living Wage increases announced today shows that the Low Pay Commission (LPC) is committed to its goal of getting the National Living Wage (NLW) to 60% of median earnings of 2020. Today’s increases should not come as a huge surprise for manufacturers, many of which have planned for incremental rises year on year. However, today’s increases will see more companies feeling the impact of NLW and potentially pressure on differentials.
The majority of manufacturers use the NLW as the base pay for minimum pay and therefore will be relatively unaffected by the increases to the other rates. With employers already planning for the future, the government must now set out what direction of travel the NLW will take after 2020 and give businesses the certainty they need to put their plans in place.”
For more information, please visit: www.eef.org.uk