Manufacturing and engineering companies receive boost in Autumn Statement
British manufacturing and engineering companies received some welcome news in today’s autumn statement.
The chancellor announced a doubling in UK export funding capacity, a new National Productivity Investment Fund providing £23 billion over the next five years, focussing on the need to keep the talents developed in Britain within Britain and the implementation of a management skills programme. The chancellor also confirmed that £2 billion of funding per year will be provided for research and development by 2020-21.
Whilst the strength of British high-technology manufacturing was specifically highlighted by Philip Hammond as a feather in the cap, the British productivity gap was noted as being a significant challenge compared to our counterparts in the US and Germany which were noted as being 30% more productive, with France at 20% and Italy at 8%. The chancellor made it clear that Britain must address this productivity gap to ensure that we do not fall behind our counterparts. Some have theorised that the demise of British productivity has resulted from a reduction in the levels of pay during the recession and those finding work in lower paid jobs. Pay levels have, however, also been addressed by the chancellor, with a rise in the national living wage from £7.20 to £7.50 per hour due in April 2017 and a rise in the personal allowance to £11,500 at the same time, with a further commitment to raise personal allowances further during this government.
What is surprising is the radio silence on the apprenticeship levy, which was predicted to be an area which may have come under review in today’s statement, but has remained intact. The levy will be introduced from 6 April 2017 and will be charged at 0.5% of an employer’s total wage bill. When offset against an employer allowance of £15,000, the levy will effectively become payable when an employer’s wage bill is in excess of £3 million per year.
The next Manufacturing Business Leaders’ Forum in conjunction with NatWest and Grant Thornton is being held on 6 December at Hotel Terravina.