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 per cent 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 the R&D Tax credit announcement, EEF chief economist, Lee Hopley, said: “The Chancellor is putting real resource into delivering its target of 2.4 per cent 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.”
Discussing 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.”
Lee Hopley said of increases to the National Living Wage and National Minimum Wage rates: “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.”
