“ We need to see also an immediate extension of the 12 months of 100 % business rates relief on green plant machinery and equipment and building improvements to three years to reflect the business payback period ,” it added .
The UK government recently developed its Advanced Manufacturing Plan ( AMP ). This plan defines “ Advanced Manufacturers ” as businesses with “ production processes that integrate advanced science and technology , including digital and automation , to manufacturing .”
John Deere recently launched the new John Deere 5M tractor .
A missing industrial strategy
On 27 February 2024 , Make UK CEO ( Stephen Phipson ) called for all UK political parties to commit to an industrial strategy with an explicit target for industry to account for 15 % of UK GDP , with the potential to add an extra £ 150 billion to economic output .
He set out five key priorities for the next UK government , as well calling for a fundamental review of defence policy and procurement policies which favour the UK ’ s defence manufacturing sector . As well as other demands , he also called for the next government to commit infrastructure spending to match the OECD average , with the planning system being torn up and current fiscal rules on capital spending changed . He also wanted the next government to double down on policies on net zero and safeguard energy security .
“ The lack of a modern , long-term , robust industrial strategy is the UK ’ s economic achilles heel . Every other major economy , from Germany to China and the U . S ., has a long-term national industrial plan . As such , the UK is an outlier and if we are to help tackle our regional inequality and improve our competitiveness on a global stage , we need a national industrial strategy with cross-party consensus as a matter of urgency . One which survives elections and parliamentary cycles and builds international confidence ,” said Stephen Phipson .
“ Overall , such a strategy would have the aim of growing the contribution of manufacturing to GDP from 10 % to 15 % and so I am calling on all political parties to commit to this in their manifestos . If we were to achieve this ambition , over time it would add around one hundred and fifty billion pounds to our economy , help tackle regional equality and pay for the public services we all want to see ,” he added .
He addressed the urgent skills issue by calling for substantial reforms of the Apprentice Levy and Bentley apprenticeships . a complete review of the UK ’ s vocational skills system .
“ This must be a national endeavour to equip the current- and next-generation workforce with the digital skills they will need for the many jobs of the future that have yet to be invented . This revolution must also start within the education system so that we have a constant pipeline of talent to fuel the expansion of manufacturing ,” he continued .
A multiverse apprentice at JLR in the UK .
He called for the next government to increase infrastructure spending to the OECD average and “ rip up the cumbersome , expensive planning system with a fast track for projects of strategic national importance .” He also criticised fiscal rules , which he believed are preventing investment in capital spending , and the decision to cancel the HS2 rail project .
“ We also need to double down on maximising the opportunities of a net zero economy and safeguard UK energy security , the biggest transformational issue that we face . Rather than arguing over a specific sum , we need to see policy certainty and clarity from whomever forms the next government so that business can maximise the substantial opportunities that green transition presents ,” he concluded .
Reforms for prosperity
Last July , the IMF ( International Monetary Fund ) recommended ambitious reforms to bolster the UK ’ s productive potential and ensure that the country remains a global innovation leader . These included measures to bring down inflation , address structural challenges and increase the pace of innovation and technological diffusion .
It highlighted policies that could add momentum to UK efforts such as a stable , long-term strategy to promote business investment ( including a permanent set of tax incentives that could potentially apply to investments other than plant and machinery to strengthen investor confidence ). Public infrastructure investment ( notably in transport , health , networks and the green transition ) could “ crowd-in ” private investment , it said .
“ Liberalising the planning system would reduce barriers to investment in new industries and facilitate the mobility of both firms and workers . The authorities could also consider unlocking pension and insurance savings for investment in higher-return projects , while being mindful of any implications for financial stability ,” suggested the IMF .
In addition , upskilling and knowledge development , as well as higher investment in the education and training of young adults , would strengthen human capital and raise labour productivity it said .
“ Long-term sickness and , to a lesser extent , early retirement are the main drivers of the post-pandemic spike in inactivity . Hence , improving health outcomes is critical . The authorities should consider additional targeted mental-health interventions alongside an expansion of goodquality apprenticeships and career counselling in schools to tackle high unemployment among young people . Flexible working and coaching services could enhance female labour participation and complement the announced expansion in childcare support ,” it added . n
40 | ismr . net | ISMR April 2024