Demand to Sunak for manufacturing minister and new industrial strategy

Richard Powell, partner at major accountancy group MHA, was speaking after the publication of the latest UK Manufacturing PMI report, which showed manufacturing shrinking for the sixth successive month and increasing the likelihood of an economic recession in the country.

“While the previous industrial strategy that was scrapped by Kwasi Kwarteng in 2021 wasn’t perfect, it set clear targets for key sector areas such as technology and innovation and provided policy makers with a clear framework in which to operate,” said Powell. 

“The introduction of a new strategy, along with a separate minister for manufacturing, would be welcomed by the sector and provide a much needed boost of confidence across the sector that is currently at a very low ebb.” 

He warned that with the risk of recession high for 2023, the outlook was challenging for manufacturers who had already passed the pain of cost increases on to the customer.

Now he predicted, many would need to consider having to reduce wages and supply chain cost to protect their business margins.

And at a time when investment in renewables and automation was needed, Government was removing some incentives for doing so, pointed out Powell. He cited the removal of the so-called ‘super deduction’ for capital allowances on plant and machinery investment as well as the imminent reduction from 130% to 84% for R&D incentive reduction tax relief at the end of the present financial year on 31 March.