Industry applauds Autumn Statement support but seeks coherent plan
28 Nov 2023
Manufacturing and process industry chiefs have welcomed in principle the commitments made by Chancellor Jeremy Hunt in his Autumn Statement aimed at science-led economic growth but have pushed for signs of coherent economic policy.
Among the undertakings, which reflect prime minister Rishi Sunak’s previous emphasis on life sciences but also manufacturing, Hunt announced:
- £50 million investment in the Apprenticeship Growth Sector pilot scheme
- £4.5 billion for strategic manufacturing industries
- £20 million to foster university derived spin-out firms’ development
- £50 million for the British Business Bank (BBB) Future Funds breakthrough programme
Said the Chancellor: “It’s critical that we harness this potential and give universities the tools they need to translate cutting edge research into exciting UK businesses that start and grow in the UK.”
Meanwhile space science has already been another major beneficiary with the Space Cluster Infrastructure Fund (SCIF) having secured £47 million investments spread among 12 schemes.
These include Northumbria North East Space Skills and Technology (NESST), based at the university receives £10 million for its work on satellite communications, as well as space weather and energy. Also Cardiff’s Space Forge received £8 million for the new National Microgravity Research Centre to support work on advanced materials, production and tooling.
Early support for the statement came from Make UK’s chief executive Stephen Phipson, previously a consistent critic of government economic and industrial policy.
Phipson, whose organisation has worked closely with Government recently, was bullish in his approval, saying the Chancellor had delivered on his manufacturing commitment, adding it was down to industry to “pick up the gauntlet”.
“This was a bold statement by the Chancellor who has worked hard to understand industry’s needs,” said Phipson.
But elsewhere, key industrial and science leaders offered only partial approval tempered with demands for more specific action.
Stephanie Baxter, head of policy at the Institution of Engineering and Technology (IET) hailed measures to boost engineering apprenticeships and stimulate advanced manufacturing, saying these would be vital for high value growth and high skill employment
However, she added:
“Manufacturers in the UK are facing critical skill shortages in the face of rapid technological advancement: 21% report skill shortages in adapting to new equipment. This hinders our ability to harness digitalisation and new technologies for innovation. Therefore, government must ensure that the investment addresses these skill gaps to gain maximum benefit from the investment.”
Engineering UK chief executive Dr Hilary Leevers concurred, adding that despite highlighting the importance of skills in his statement, the Chancellor had done little to address systemic problems.
“We welcome the modest announcement of £50 million for engineering apprenticeships, but are concerned that this is limited to a two-year pilot to explore ways to stimulate training,“ she said.
For Chris Barlow, Partner at MHA, while the manufacturing support was “eye-catching”, questions remained as to how and when the funds will be delivered after a General Election.
“The most important takeaway from [the] statement is the continued absence of a comprehensive, long-term, industrial strategy for the sector,” he warned, adding that the merger of the R&D Expenditure Credit (RDEC) and SME schemes was certain to be less generous to SMEs.
“The Government cannot keep providing short term solutions in an attempt to distract from the glaring lack of long term vision. This budget should’ve given manufacturing the one thing it didn’t have - room to plan”
UK Steel director general Gareth Stace bemoaned a “missed opportunity” to confirm that the UK would implement a Carbon Border Adjustment Mechanism (CBAM) given the EU – which imports three quarters of UK steel industry’s exports – plans to have its own CBAM by 2026.
“It is disappointing that the Chancellor did not use his Autumn Statement to announce a UK CBAM and a timetable to implement it by 2026. Imported steel should also pay for its carbon footprint as we have done for years. With over 90% of global steel production facing no carbon cost, it is only right to introduce a carbon border policy to create a level playing field on carbon pricing,” he concluded.
