The chancellor’s investment in future productivity growth, via a £23bn National Productivity Investment Fund over the next five years, was praised by EEF, the manufacturers’ organisation and the Confederation of British Industry (CBI). They said his budget provided enough incentives to drive growth.
EEF chief executive Terry Scuoler said: “Business was looking for reassurance from the chancellor at a time of considerable uncertainty and he has helped calm nerves with the right level of pre-Brexit tonic.
‘Walking a fiscal tightrope’
“He is walking a fiscal tightrope, but his pragmatic statement provides enough stimulus in key areas vital to improving productivity, whilst holding back some fiscal firepower if, as the [Office for Budget Responsibility] suggests, the economy stutters.”
CBI director-general Carolyn Fairbairn said: “The chancellor has prioritised a pragmatic down payment on future productivity growth. His emphasis on research and development, 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.”
Fairbairn said the measures should 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.”
‘Out of step’ business rates
However, both organisations said they were disappointed with the lack of movement on the “out of step” business rates. Fairbairn said business rates were becoming a “growing burden” for manufacturers and retailers.
EEF chief economist Lee Hopley said Hammond’s lack of action on business rates was a “missed opportunity to support long-term capital investment and improve the attractiveness of the UK as a competitive location for manufacturing”.
She 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.”
Meanwhile, law firm Coffin Mew said the manufacturing productivity gap compared with the rest of Europe was highlighted in the Autumn Statement, but questioned the “radio silence” surrounding the controversial Apprenticeship Levy.
What they say about the Autumn Statement:
- Food and Drink Federation director-general Ian Wright said: “The £23bn funding for productivity is the right commitment at the right time. For food and drink, the chancellor’s support for the productivity agenda and extra funding for innovation more broadly means better skilled jobs, more sustainable manufacturing processes, and greater capacity for research and development.”
- EEF chief executive Terry Scuoler said: “The boost to science and innovation is vital if we are to be at the forefront of the fourth industrial revolution, whilst 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.”
- CBI director-general Carolyn Fairbairn said: “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.”