Chancellor must provide boost for innovation, says EEF
YORKSHIRE's manufacturers are calling on the Chancellor Philip Hammond to boost innovation, infrastructure and digital technology when he delivers the Autumn Statement later this month.
Manufacturers’ organisation the EEF believes the Chancellor must use the statement to tackle the fallout from recent political turbulence, and reassure nervous businesses with measures aimed at supporting the Government’s plans for a new industrial strategy.
The EEF’s research indicates that one in four manufacturing companies are holding off investment plans due to the uncertain economic climate.
An EEF spokesman said: “While the Statement must reinforce a commitment to prudent financial planning, the Chancellor must signal a moderate fiscal stimulus package aimed at boosting innovation and export support for UK manufacturers.
“It should also aim to remove bottlenecks holding back capital investment and push through further infrastructure commitments – from improved digital broadband connectivity to local road schemes.”
Although the EEF supports the Government’s decision to abandon the budget surplus target, it also acknowledges that the Chancellor faces a balancing act in avoiding an overly expansive fiscal stimulus programme while the consequences of Brexit remain uncertain.
Instead, the Government should retain its ability to deploy “heavier fiscal artillery” next year if evidence points to a sharp slowdown in UK economic activity, according to the EEF.
Andy Tuscher, the Yorkshire and Humber region director of EEF, said: “The Government’s commitment to an industrial strategy has come at the right time, with the new administration setting a clear and welcome precedent.
“The Chancellor has a significant opportunity to put a down payment on this through a range of measures which prioritise productivity growth, boost investment in digital technologies and supports exports.
“The whole of Government must get behind UK businesses and demonstrate a clear appreciation of the need to back such a strategy, backing sectors while also tackling systemic problems such as skills, energy costs and infrastructure weaknesses.
“Creating such an environment in Yorkshire and Humber will instil confidence in manufacturers to pursue their business ambitions, anchoring investment in our region, and ensuring that we take early advantage of new digital technologies.”
According to EEF, the Autumn Statement should underpin efforts to improve productivity, combined with an industrial strategy which helps to set out a clear path to long-term growth.
Such a strategy should include measures to boost innovation, research and development and key technologies as part of the “fourth industrial revolution”, the EEF said.
The EEF argues that this strategy should also involve major investment in infrastructure and a new and “joined-up” energy strategy.
The EEF’s submission to the Chancellor said: “The Statement should support manufacturers’ own priorities with an industrial strategy that has four key themes at its core, a more productive and flexible workforce, more reliable and resilient infrastructure, a lower cost of doing business and better support for growing businesses.”
The specific recommendations in the submission include the introduction of measures to extend the scope of the R&D (research and development) tax credit to allow for more process innovation by SMEs (small and medium-sized enterprises).
The EEF also wants to see an increase in the level of the R&D tax credit under the “large companies” scheme.