Plant & Works Engineering
UK Budget 2021: encouraging investment and jobs should be a priority for the manufacturing sector – MHA comments
Published:  01 March, 2021

With the UK’s budget announcement being made this week (3 March 2021), Atul Kariya, head of manufacturing and engineering at MHA, says that the upheaval caused by Covid-19 and Brexit has left UK manufacturers in need of clear and comprehensive recovery policies which encourage investment:

“With both Covid-19 and Brexit having brought many challenges to the manufacturing sector, it’s imperative that we see a greater emphasis on encouraging and safeguarding investment as well as offering tax reliefs for the sector in this year’s budget.

“As the government prepares to ease lockdown restrictions, the focus of the Chancellor should be on providing sustainable measures for the manufacturing sector, designed for both short and long-term recovery. Central to these measures should be job creation, particularly for the UK’s younger demographics, and tax reliefs to encourage automation within the manufacturing process. The government’s Kickstarter programme announced last year doesn’t go far enough, and new initiatives should be considered to allow manufacturing SMEs to be able to easily and fully participate in job creation programmes from the off.

“Job support should go beyond the minimum wage, and focus on skills and professions that are currently in shortage, such as engineering. More comprehensive apprenticeship incentives should be introduced together with national insurance contributions and tax reductions to ease the burden on employers.

“Greater incentives should be made to lower the carbon footprint of manufacturing supply chains, many already significantly impacted by Covid-19, to meet the government’s ambitions of lowering emissions to net zero by 2050. Sustainability incentives need to be driven at the original equipment manufacturer (OEM) level but with local focus, including sustainability assessments on regional infrastructure projects and support to local SMEs.

“The budget must also address several key issues that have risen post-Brexit for manufacturers. We have seen a growing number of businesses simply cease exporting due to the high amount of red tape involved, which will significantly impact growth for the sector. Many have also accelerated shortening their supply chains, through onshoring and reshoring, and investing to develop products that they cannot find in the UK, which should qualify them for R&D tax relief. Therefore it is crucial that this relief be safeguarded for the overall sector to be able to adapt and thrive in the post-Brexit world.”