The Chancellor George Osborne called for a “march of the makers” yesterday as he identified manufacturing as the key growth sector for the economy.
Help for manufacturing will include extending export credit schemes, increased research and development (R&D) tax credits, more capital allowances for short life investments, enhanced capital allowances where high-value manufacturing is the focus, a cut in fuel duty and the scrapping of 43 tax reliefs as part of a simplification of the tax code.
In addition, the Government will launch the first technology and innovation centre in high- value manufacturing, which will bring together the activities of a number of centres, including the Advanced Manufacturing Park in Rotherham. It will also fund 12 further university technical colleges.
The Chancellor also announced plans to create 21 new enterprise zones across England, including Leeds and Sheffield, offering discounts on business rates and “radically” reduced planning restrictions.
Meanwhile, the Government responded to growing fears about youth unemployment by announcing a £180m package to fund 50,000 new apprenticeships over the next three years. Around 10,000 of the places will be advanced level and higher apprenticeship places, focused on small and medium-sized firms.
Mr Osborne concluded his Budget announcement yesterday by saying: “We want the words ‘Made in Britain,’ ‘Created in Britain,’ Designed in Britain,’ ‘Invented in Britain’ to drive our nation forward. A Britain carried aloft by the march of the makers. That is how we will create jobs and support families.”
Manufacturing sector bosses described the budget as one of the most supportive for manufacturing for some years.
David Raistrick, UK manufacturing industry leader based at Deloitte’s Leeds office, said: “Increased R&D tax credits will encourage the sector to diversify and advance into low carbon manufacturing, going some way to helping the Government meet its ambition for the UK to be a global leader in the low carbon field.
“Increasing capital allowances for short life assets is another boost to investment in the sector whilst the cut in fuel duty was as welcome as it was surprising. The manufacturing sector has been ardent in expressing the view that the Government must simplify the tax system and it seems they have listened.”
He added: “This isn’t a panacea for the industry which still faces an incredibly challenging year or two, but it is a positive step and will provide reassurance that concerns are being addressed.”
Sheffield’s Master Cutler Bill Speirs welcomed the additional export credits, which he described as “very helpful” but warned that the “devil is always in the detail”.
He added: “The technology and innovation centres are absolutely perfect but there seems to be an awful lot of universities so why don’t we adapt some of them instead of building new university centres?”
However, Andy Tuscher, regional director of EEF, the manufacturers’ organisation, warned that manufacturers faced a “significant rise” in energy bills threatened by the Carbon Price Floor and called for a more co-ordinated and cost effective approach to creating a low carbon economy.
Announcing the new apprenticeship places, Mr Osborne said the Government would now be delivering 250,000 more apprenticeships over the next four years compared with the previous Labour administration’s plans.
New grant funding will be offered to firms offering advanced and higher-level apprenticeship schemes aimed at addressing skills shortages.
Mr Osborne told MPs that one in four firms in Austria, Norway and Germany offered apprenticeships, compared to just one in 10 in England.
The Chancellor also announced that 100,000 work experience placements would be offered across the UK over the next two years, five times as many as originally planned.
Latest figures showed that 974,000 people aged between 16 and 24 are unemployed.
Mr Speirs described the additional apprenticeship places as “superb and essential” but said: “We need to know how it is put into practice – who is funding it and there also needs to be input from industry.”
Lee Hopley, chief economist at the EEF, said: “Whilst additional apprenticeship placements are welcome, government needs to make sure the pipeline of suitable students from schools is also being addressed.”
Budget at a glance
New enterprise zones in cities including Leeds and Sheffield;
More capital allowances for short life investments and enhanced capital allowances where high value manufacturing is the focus;
Forty-three tax reliefs scrapped as tax code is simplified;
Launch of first technology and innovation centre in high value manufacturing and funding for 12 further university technical colleges;
Make permanent two schemes for exporters – the Export Credits Guarantee Department’s (ECGD) Letter of Credit Guarantee Scheme and a facility that allows ECGD’s guarantees to be used to raise long-term finance in capital markets for UK exports.