EEF and CBI reaction to Autumn Statement
FINAL READ: Chancellor Philip Hammond in his office ahead of delivering the Autumn Statement. Picture: PA.
Posted: 23 Nov 2016
REGIONAL director the manufacturers' organisation, EEF's Andy Tuscher, has joined national policy figures in giving detailed reaction to today's Autumn Statement.
Mr Tuscher, who is from northern Lincolnshire, sits as Yorkshire and Humber regional director at the organisation. He said: “Business was looking for reassurance from the Chancellor at a time of considerable uncertainty and he has helped calm nerves with a pre-Brexit tonic pitched at the right level. He is walking a fiscal tightrope, but his pragmatic statement provides enough stimulus in key areas vital to improving productivity while holding back some fiscal firepower if, as the OBR suggests, the economy stutters.
“The Chancellor has also provided industry with a down payment on a modern industrial strategy. The boost to science and innovation is vital if we are to be at the forefront of the fourth industrial revolution, while the doubling of support for exports should grease the wheels for business in growing markets abroad. The Chancellor has also signalled a welcome recognition that our digital network and local roads are not fit for purpose and need major upgrade.
“From now on this should be the direction of travel for future statements and policy decisions, with Government using the right levers to address productivity, regional growth and housing. A commitment to keep pushing on these priorities, while addressing past under-investment in infrastructure, will send out the right message to businesses here and overseas that post-Brexit Britain really is open for business.”
On the boost for Innovation funding, Lee Hopley, chief economist at EEF, said: “Manufacturers are aiming for growth and innovation is their first strategy to achieve it. The Chancellor made a significant commitment to support innovation over the rest of this parliament, by committing to review the scope and extent of the R&D tax credit and ramping up spending on innovation support. Through this inevitable period of uncertainty, this is the right strategy to ensure that UK businesses will continue to innovate, and to do so in the UK.
On digital network investment, she said: "“The Government has seen the ‘light’ in backing a full fibre digital network right to the doors of businesses across the country. This will not only deliver on speeds but also resolve the issue of reliability, latency and resilience, while also future proofing a critical national infrastructure network.
“As manufacturers gear up to take advantage of the fourth industrial revolution, fibre to factory will be a core enabler of that investment. Today’s announcement should be seen as the start of that journey and it is encouraging to see Government playing a far more active role in supporting the delivery of infrastructure in this commercial market.”
Commenting on the increased roads funding, Chris Richards, senior business environment adviser at EEF, said:
“Extra funding for roads announced by the Chancellor has recognised the high return on investment of local road and transport schemes, with investment in new Pinch Point funding. The Government should now cement their recognition of the importance of local schemes by wrapping future local road funding into the roads fund to ensure both national and local networks have the stability and funding certainty to fix the nations crumbling road networks.”
On the extension of the National Living Wage, Tim Thomas, director of employment and skills policy at EEF, said: "The Low Pay Commission (LPC), has rightly taken the view, like other forecasters, that there are risks to wage growth over the coming year and has adjusted the trajectory of the National Living Wage accordingly. Increasing the wage to just below the previous estimates is reflective of this. Today’s rate confirms that the LPC is sticking to the target to get NLW to 60 per cent of earnings by 2020, which will give employers greater certainty around future rises.”
On Business Rates, Ms Hopley, chief economist at EEF, said: "Including plant and machinery in the calculation of business rates represents a tax on productive investment that is out of step with international practice. The Chancellor’s lack of action on this issue represents another missed opportunity to support long-term capital investment and improve the attractiveness of the UK as a competitive location for manufacturing at a time when both are desperately needed."
“EEF will continue to push for this crucial change which will benefit every sector that finds its investments captured in the business rates system due to a historical quirk, rather than hard evidence or international best practice.”
On the funding for Management skills, Tim Thomas, Director of Employment & Skills policy at EEF, said:
“With manufacturers predicting a continued rise in their demand for management and leadership skills, they will welcome the Chancellor’s emphasis on the need to improve these vital skills which will contribute so much to improving the UK’s productivity. This is especially important if we are to make the most of the 4th industrial revolution.”
Carolyn Fairbairn, CBI Director-General, said: “The Chancellor has prioritised a pragmatic down payment on future productivity growth. His emphasis on R&D, housing and local infrastructure will help businesses in all corners of the UK to invest with greater confidence for the long-term, during turbulent times. This will be warmly welcomed.
“These measures must now be translated into action. That means tarmac, tracks and telecoms being laid, and clear, deliverable timetables for major projects – only then will they act as a catalyst for investment, jobs and growth.
“Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses. Importantly, the new fiscal rules provide the Government with welcome flexibility, while remaining prudent, in uncertain times.
“The Government is right to accept the independent Low Pay Commission recommendations, as firms want to see affordable rises in the minimum wage that protects the low paid and avoids damaging job prospects.
“The Chancellor should keep a watching brief on the challenges created by higher inflation and uncertainty weighing on near-term business investment.”