Autumn statement

Spending Review: what manufacturers want to see

By Michael Stones

- Last updated on GMT

The chancellor's Spending Review should settle seven key questions: EEF
The chancellor's Spending Review should settle seven key questions: EEF
British manufacturers – including food and drink producers – will be looking for answers to seven key questions in the chancellor George Osborne’s Spending Review and Autumn Statement this afternoon, according to manufacturing organisation EEF.

Topping the list from the EEF’s senior business environment policy adviser Chris Richards was: What will be happening to the Innovate UK budget? “Manufacturers will be looking for the budget for Innovate UK to be maintained along with stability in the overall support landscape to support manufacturers investing in innovation,”​ said Richards.

Manufacturers will also want to know: what does the future look like for export body UK Trade and Industry? “Front line support for UK exporters is important for UK exporters, maintaining this will allow us to move closer to the government's own target of £1 trillion in exports.”

Do we really have certainty around roads funding, was the third question? “Roads are a crucial transport network for manufacturers, ensuring the Road Investment Strategy and local road maintenance capital allocations are kept in place, will allow important road upgrades to go ahead,”​ said Richards.

Apprenticeship levy

What will the apprenticeship levy look like, questioned the EEF? “Paving the way for a boost in both the quality and quantity of people in apprenticeships, by balancing costs with a focus on high quality training provision is a priority for the manufacturing sector.”

The fifth question was: will energy intensive manufacturers be compensated from government energy taxes? Manufacturers will be looking for commitment from the government to the introduction of energy intensive compensation measures and the confirmation of the budget out to 2020, according to EEF.

Will reform of business rates move it back to being a property based tax as it is elsewhere in Europe, was the sixth question manufacturers will want to ask the chancellor. Manufacturers in most sectors, including steel, will be looking for the government to remove plant and machinery from rateable value calculations, said Richards.

Finally, will the incentive to save for a pension remain? Given the ambition to get more people saving for pensions, manufacturers will expect the government to not alter the current taxation basis for pensions.

“The removal of pension relief would be an unbudgeted, substantial and additional business cost undermining the amount businesses pay into pension schemes,”​ concluded Richards.

Read more about EEF’s seven questions here​.

Driver skills shortage

Meanwhile, the Freight Transport Association (FTA) has urged the chancellor to help remedy the driver skills shortage, cut fuel duty and boost infrastructure investment.

Osborne should support industry-led training schemes and student loan-type arrangements for those seeking vocational skills, cut fuel duty by 3p a litre and invest in the nation’s infrastructure network, said the FTA.

The Department for Environment, Food and Rural Affairs had volunteered to accommodate a 30% budget cut​ earlier this month.

Seven questions for the chancellor

  1. What will happen to the Innovate UK budget?
  2. What does the future hold for UKTI?
  3. Do we really have certainty around roads funding?
  4. What will the apprenticeship levy look like?
  5. Will energy intensive manufacturers be compensated from government energy taxes?
  6. Will reform of business rates move it back to being a property based tax as it is elsewhere in Europe?
  7. Will the incentive to save for a pension remain?

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