Stephen Phipson, chief executive of Make UK, said: “This budget was always going to involve tough choices for business as the Chancellor grapples with the state of the nation’s finances whilst, at the same time, improving the foundations of the economy. However, there is no escaping the fact that raising Employer National Insurance contributions and, the surprising change in thresholds, at a time of other cumulative increases in employment costs will be challenging for many businesses and especially SMEs.”
“However, looking at the bigger picture and, the medium to long-term, we welcome the Governments clear path to growth for manufacturing with a number of positive measures. In particular, the commitment to an Industrial Strategy, the Corporate Tax Road Map and, continued support for vital programmes such as Made Smarter, are key elements of a growth plan which will enable UK manufacturing to make significant progress over the coming years.”
On the rise in Employers’ National Insurance Contributions, Verity Davidge, Make UK director of policy, said: “This is a substantial increase in employers’ costs and will cause many to think twice about recruiting, make pay increases for employees much less likely and, inevitably lead to some job losses for working people.
“The rising costs associated with the National Living Wage, apprenticeship levy and other policies over recent years already risks hampering manufacturers’ investment in their workforce. This cumulative increase will send employers’ costs soaring.”
On Industrial Strategy, Stephen Phipson, said: “The UK has long been an outlier in not having a industrial strategy at the heart of its economy. There can be no doubt that advanced manufacturing now has a critical part to play in driving growth across all regions of the UK. The commitment to a long-term industrial strategy by this government is to be celebrated. It will deliver growth, investment and high-quality jobs.”
“After the announcement of the Industry Strategy Council, Government now needs to move at pace to formalise the creation of the individual sector groups so that the formal strategy and more detailed plans can be brought forward.”
On the Corporate Tax Roadmap, Fhaheen Khan, Make UK Senior Economist, said: “Certainty and predictability are the bedrock on which investment decisions are made. This is why the Government’s commitment to corporation tax policy will be a great comfort to many businesses who have seen the tax burdens they shoulder grow heavier.
“By backing support for investment and innovation, R&D will be at the centre of propelling UK industry forward and will encourage businesses to proceed with productivity enhancing projects with greater confidence. It is imperative we continue to maintain a fine balance between existing tax burdens and the relief for good decision-making creating opportunity in the high growth areas of industry, such as automotive, aerospace and life sciences. Manufacturers now proceed confidently knowing the mission for growth is a clear and achievable objective.”
On Made Smarter, Nina Gryf, Make UK Digitalisation lead said: “Made Smarter has been championed by Make UK and industry for seven years and is the only programme proven to be effective in helping smaller manufacturing businesses boost productivity by successfully adopting digital technologies. Today’s announcement that the programme’s funding is being protected is good news for Britain’s manufacturers, helping ensure the sector can continue to lead the way globally. “
“The programme helps companies choose the most effective digital technologies for their individual needs. Without it, thousands of SMEs would have been unable to take those first important steps towards automation as the wider landscape of support for industrial digitalisation is fragmented and difficult for manufacturers to navigate.”
Chris Iveson, the CEO and co-founder of technology startup FourJaw Manufacturing Analytics, said that today’s Chancellor’s Budget statement is a “mixed bag for manufacturers”, delivering cost increases while also promising new opportunities for manufacturers in a wide range of sectors.
Iveson said: “Today’s Budget was a mixed bag for manufacturers. The forecasts around growth and inflation are positive and should encourage manufacturers that have delayed investments to spend again on measures that drive long-term improvements. But the changes to the national living wage and national insurance will add to manufacturers’ cost base when many are vulnerable due to spiralling input costs.”
“These cost increases will make reshoring of manufacturing work, which has been a key source of growth in recent years, harder to justify, and there is a risk it will limit employment opportunities in the sector, particularly for those entering the industry. There will need to be more focus on automation and other technologies to drive productivity and more efficient manufacturing operations.
“The Chancellor’s focus on growth, investment and the use of technology to drive improvements and efficiencies is most welcome. Manufacturers in the aerospace, automotive, healthcare and construction supply chains are likely to be feeling optimistic after today’s announcements.
“The multi-year funding commitments for aerospace, electric vehicles and life sciences are great news for manufacturers in these sectors, while support for new green hydrogen projects across the UK could be a game changer. These are already some of the most advanced, efficient, and tech-savvy sectors in our economy, and these commitments can help them become world-leading.”
In relation to the impact of the Budget on the UK automotive industry, SMMT chief executive Mike Hawes, said: "The Chancellor is right to set out measures to address the deficit while investing for future growth. The automotive industry is a growth-driving sector, fundamental to the delivery of the country’s net zero ambitions. We therefore welcome today’s commitment of £2 billion of automotive transformation funding as part of the government’s modern Industrial Strategy.
"Delivering that strategy depends on the UK being globally competitive. Additional National Insurance Contributions will put massive pressure on the automotive supply chain which is predominantly SMEs. Next year’s spending review must find resources to fund measures that alleviate the strain on these companies and help them transition to an electrified future.
“A strong manufacturing sector depends on a strong market. The lack of substantive measures to support the new car market – in particular for electrified vehicles – is hugely disappointing. We welcome the extension of the Plug-in Van Grant and company car tax benefits, but these alone cannot drive the growth in demand needed.
"With the sector challenged to deliver the world’s most ambitious EV transition targets, achievement of those targets is in serious doubt. There must be an urgent review of the market and regulation, else the cost will soon be felt in reduced UK investment, economic growth and jobs.”
