An Opportunity Missed. Following Rishi Sunak’s Budget and Spending Review Announcements yesterday, Suneeta Johal CEO, CEA (Construction Equipment Association) comments:
“The Chancellor’s pledge to invest in our economic infrastructure, innovation and skills were welcomed by the CEA…… but there were many missed opportunities to help the manufacturing sector.
The government revealed plans to invest £130bn to connect our towns and cities which seems like positive news for our sector but failed to mention that much of this has already been on the agenda for months. In addition, there was no detail on the Integrated Rail Plan which is disappointing.
An £11.5bn cash injection to build 180,000 affordable homes will boost business for both machinery manufacturers and plant hirers. The £1.8bn pledged towards brownfield housing developments will make a real impact in making the UK more sustainable.
Whilst the Treasury’s announcement that it will be increasing spending by £3.8bn to fund the skills revolution is welcomed, it’s not enough and fails to address just where the workforce will come from. CEA members report participation in the Kickstart Scheme has not yielded the expected number of apprentices and whilst funding apprentices and the new T-level scheme is positive, the government must be more proactive in steering young people into engineering and vocational training.
The chancellor also confirmed that £1.4bn will be set aside for a Global Britain Investment Fund to attract foreign investment, which will have a particular focus on electric vehicles. Whilst the CEA sees this as a way of encouraging additional investment in ‘green’ construction projects to meet the government’s net-zero strategy and welcomes investments into battery technology, it is imperative that HMG understands that electrification of vehicles is not the only solution for reducing carbon emissions.
Following a review, the government will reduce the burden of business rates in England by over £7bn over the next five years, and make the system fairer, more responsive, and more supportive of investment. Changes to business rates, including a new 12-month relief for companies to invest in their premises means manufacturers can expand and improve without incurring increased costs.”
The target for hitting R&D spending will reach £22bn by 2026-27, two years later than had been initially planned – this is very disappointing and I don’t believe this investment is enough to maintain ‘superpower’ achievements.
In summary, this Budget is an opportunity missed for the UK’s manufacturing sector with no measures to support business with sharply rising energy and steel costs, no commitment to supporting export and no extension of the 130% super deduction.
Source: CEA (Construction Equipment Association)