Over the past year, firms have been faced with increased uncertainty – whether that’s in political, market, or economic terms. Turbulence across the UK economy has held back companies across the board from pursuing available opportunities for growth.

For business across Yorkshire and the Humber a return to macro-economic stability is now imperative.

The manufacturing sector, which in our region accounts for over 10 per cent of GDP, higher than the national average, has been affected in particular. It is an industry which offers huge potential for growth – but many prizes have so far been left untouched amid the economic turmoil.

This matters not only to manufacturers, but to wider society, because the sector delivers substantial value for the economy and taxpayers. Every £1 million contributed by the manufacturing sector to UK GDP generates a further £1.5 million of benefit spread across the economy.

Manufacturing firms, including those within our region, are also trailblazers when it comes to innovation. For example, the sector supplied the NHS with life-saving ventilators during the Covid-19 pandemic, helping to uphold under-pressure public services in the face of global disruption. In the UK’s quest to reach net zero targets, manufacturers are spearheading the adaptation of process and production to help drive investment in the green economy.

The manufacturing sector can be proud of its legacy, particularly in light of significant economic tailwinds. Yet, opportunities for even greater growth are still up for grabs.

When Government delivers the Autumn Statement on November 17, the spotlight will be on the Chancellor’s efforts to restore economic stability. Amongst the noise, the Government can’t forget about some of the key fundamentals that must be addressed now to help manufacturing firms thrive, in both the short- and long-term.

As an immediate priority, Government must address the upcoming business rates increase. With rates due to rise in line with inflation by 10 per cent, manufacturers are facing a tax cliff-edge in April 2023. Such a sharp increase could seriously damage firms – not only in manufacturing, but across multiple sectors – and stifle growth throughout the UK economy. Action on business rates can help unlock investment, too: firms would be able to instead use the money to build new factories, hire more employees and close in on net-zero targets.

In the longer-term, the Government must help firms with other severe pressures, such as energy prices. There is an urgent need to sustainably improve energy efficiency to help companies manage surging costs.

As a crucial first step, Government must extend the Industrial Energy Transformation fund by five years, from 2025 to 2030. This will help companies accelerate energy efficiency drives, by providing capital to improve buildings and operations.

The manufacturing sector stands ready to harness the ready opportunities to increase exports and evolve its standing as a global innovation hub. Preventing a tax cliff-edge in April 2023 by reforming business rates and extending the Industrial Energy Transformation Fund is the first step towards helping manufacturers in Yorkshire and the Humber realise their full potential.

Beckie Hart is CBI Regional Director for Yorkshire & Humber.

Business rates cliff-edge in April could stifle growth - Beckie Hart