BRITISH industry needs to get rid of its “make do and mend” culture and invest in the future if it wants to spearhead Britain’s economic recovery.
Meanwhile, government must stop chopping and changing tax incentives and regulations at the drop of a hat and provide some serious funding for start-ups, SMEs and technology businesses.
That was the message from Juergen Maier, managing director of Siemens UK Industry Sector, which includes Sheffield-based Siemens VAI Metal Technologies, the world beating engineering company that designs plant for the steel industry.
Speaking in the Cutlers’ Hall during the Global Manufacturing Festival: Sheffield, the Austrian-born, British educated businessman, who has spent most of his working life in the UK, described Britain’s “poor investment culture” as the country’s Achilles Heel.
Last year, UK manufacturing grew by 3.6 per cent, while investment in capital equipment fell by 8.8 per cent, having been slashed by 21 per cent during the preceding year.
“Contrast that with Germany, where manufacturing grew by seven per cent in 2010 and investment in capital equipment grew by 9.4 per cent,” said Mr Maier.
Siemens had taken over a number of big name UK companies and found them to be starved of investment, said Mr Maier, adding that despite the low levels of investment, British productivity levels had been impressive and compared well with those in Germany, Japan and France.
Mr Maier called for the creation of a UK equivalent to Germany’s public sector bank, KfW, which supports high risk start-ups, technology companies and SMEs with growth potential.
Last year, KfW lent almost £70 billion to industry – compared to the £1 billion the UK government was putting into its new Green Investment Bank – said Mr Maier, who also criticised the lack of a focus on investing in technology and manufacturing businesses for the new Regional Growth Fund, which will invest £1.4 billion over three years.
Mr Maier, who is due to meet coalition government deputy leader and Sheffield Lib Dem MP Nick Clegg today, said his key message to the government was the need for simplicity and consistency.
“We need a simplification of the tax system and tax credits for investment. Creating short term tax credits or improvements that chop and change is not good. We need a stable environment that gives us confidence to invest in the long term,” said Mr Maier.
He also criticised changes to the Carbon Reduction Commitment that will cost Siemens £1.2 million.
“I am encouraged that the Coalition has put manufacturing higher up the agenda, but it needs to be like that for the next 20 years, not just a headline grabbing initiative to get through to the next election,” said Mr Maier.