20 Feb 2024

Autumn Statement: A positive impact for UK manufacturing?

Manufacturing optimism 2024

The Chancellor’s recent Autumn Statement has resulted in mixed opinions among industry leaders, highlighting both commendations and reservations within the manufacturing sector.

Chief Executive of Make UK, Stephen Phipson’s endorsement of the Chancellor’s strategy reflects an optimistic outlook, emphasising the long-awaited policy certainty for investment decisions. The permanent nature of full expensing and initiatives to bolster engineering apprenticeships and advanced manufacturing align with industry aspirations. Phipson’s call for the sector to seize the gauntlet underscores the potential for transformative growth.

Contrastingly, Chris Barlow’s (Partner at MHA) perspective introduces a note of caution. While the headline-grabbing £4.5bn support for strategic manufacturing industries captures attention, the devil lies in the details of implementation. Barlow rightly points to the pressing questions of how and when these funds will materialise, especially given the looming spectre of a change in government next year. The scepticism he hints at is a stark reminder of the delicate balance between short-term financial boosts and the need for a sustained, long-term industrial strategy.

Barlow’s concerns extend to the revamped R&D tax credits scheme, where the merging of RDEC and SME schemes raises valid questions about the potential impact on SMEs. The reduction in the tax rate for intensive loss-making companies, while a step in the right direction, is perceived by some as insufficient, considering the economic challenges anticipated in the coming year. His assertion that the government cannot rely on short-term solutions to mask the absence of a long-term vision resonates with a sector hungry for stability and foresight.

Stephanie Baxter’s comments from the Institution of Engineering and Technology (IET) offer a nuanced perspective. While welcoming the recognition of engineering apprenticeships and the £50m investment in the Apprenticeship Growth Sector Pilot, Baxter underscores the need for flexibility in fund utilisation. The call for employers to use unspent levy funding for short, tailored courses in cutting-edge technologies demonstrates a forward-looking approach to upskilling and adapting to the evolving landscape of AI and Digital Twins.

Baxter’s emphasis on addressing critical skill shortages in the face of rapid technological advancement echoes the sentiments of many manufacturers. The promise of wider infrastructure investment to support net-zero targets is welcomed, but the real litmus test lies in ensuring that this investment effectively bridges skill gaps, enabling the sector to harness the full potential of digitalisation and emerging technologies.

Company info: Smart Futures