Summer Statement: industry reaction

5 min read

Chancellor Rishi Sunak has today (8 July) unveiled a raft of policies to help boost the post-COVID economy.

Amongst the policies announced was a £2bn 'kickstart scheme' to encourage 16-24 year olds into work by creating jobs across all sectors, including manufacturing. For each job under the scheme, the government will cover the cost of 25 hours' work a week at the National Minimum Wage - £4.55 for under 18s, £6.45 for 18 to 20-year-olds, and £8.20 for 21 to 24-year-olds. Companies will be able to top this amount up if they wish.

Also announced was a pledge to provide 30,000 new traineeships for young people in England, giving firms £1,000 for each new work experience place they offer.

A £3bn green investment fund to help dedcarbonise public buildings and homes was also announced.

Industry has been quick to react.

Stephen Phipson, Chief Executive of Make UK

“Industry will applaud the Chancellor’s bold intent which will spur the process of rebuilding business confidence and healing the economy. Manufacturers were already at the forefront of a new digital era and the crisis has shot them forward into a future economy where there will be new jobs which will require new skills.

“As such, the emphasis on protecting jobs which already exist, whilst safeguarding and preparing young people with the skills for future jobs which may not yet have been invented is a strategy that companies will fully support. In particular the funding for Apprenticeships is especially welcome and will help boost employers’ investment in their future workforce.

“This is not the beginning of the end of this crisis, however, but perhaps the end of the beginning as far as the economy is concerned. Moving forward, just as industry has shown how flexible and innovative it can be at a time of national need, then Government will need to be equally flexible and innovative in dealing with the after effects which will undoubtedly require further action at some stage. Manufacturers stand ready to work with Government to do whatever it takes to boost growth and livelihoods across the whole of the UK.”

Bekki Phillips, Managing Director of In-Comm Training

“Any funding that goes directly to companies to encourage them to take on apprenticeships is welcome, but we need to see the full details to see what a difference this will make to businesses and their recruitment intentions.

“Firms are already receiving a £1000 grant to take on 16-18 year-old apprentices so we’re presuming the £2000 announced is on top of that or does it replace it? Likewise, can this be used in tandem with the Kickstart scheme, designed to get more young people back into work? If it can be, then this really is a gamechanger.

“With over 700 apprentices currently being trained at our three academies, we wanted to see specific support about protecting those currently studying so their jobs are safeguarded.

“The bonus for bringing a furloughed worker back could help in a small way, but I think we needed a bit more. We also wanted to see the Government look at funding a programme-led approach to apprenticeships, where we could train young people up to Level 2 and then find them an employer at the end – hopefully when the economy has picked back up again.”

David Nicklin, Managing Director at Nicklin Transit Packaging

“Given his big-ticket economic interventions to date, there were always going to be high expectations of the Chancellor today. Many manufacturers continue to struggle with cashflow issues right now so the job retention bonus scheme is a welcome move that will go some way to help employers protect jobs that otherwise may been under threat due to cost pressures.

“The key now will be for the Chancellor to build on these measures at the forthcoming Autumn Budget. Manufacturers face a rocky road ahead over the coming months and are sure to need access to further support down the line as they look to rebuild supply chains, shore up order books and get to grips with a range of new commercial realities, especially with the UK’s exit from the EU looming on the horizon.”

Others were less positive about the Chancellor's statement, saying it didn't offer enough support to manufacturers.

Rowan Crozier, CEO of Brandauer

“It feels like manufacturing has been forgotten…tax reliefs for innovation, encouragement for consumer spending, industry stimulus packages, where are they?

“On the points the Chancellor made, I think the furlough scheme closing is a good call as it will encourage companies to make decisions and not prolong the uncertainty. The retention bonus is a good idea, but not sure it is a big enough bonus to make employers think twice about letting people go.

“£2k for new apprentices is very welcome and has made our mind up on taking on two more in February next year. This, along with the Kickstart Scheme, is fantastic for young people, but what about older workers? They will be affected as well by the economic instability and, in some cases, probably worse off due to their commitments.

“The Green investment doesn’t really hit the spot for manufacturers. We need to drive technology adoption and new innovation, not focus on retrofitting.”

Paul Morris, CEO of Addmaster

"As a business that is crucial to the fight against Covid-19 with our antiviral products, I was particularly interested to hear the statement from the Chancellor.

"It does feel like a lot of paper shuffling, rather than actual new proposals and more of a popularity parade than making the right choices to bring the UK out of this recession.

"I am therefore very confused why the stamp duty threshold was increased when the housing market is busier than ever – any estate agent will tell you the pent up demand is causing a massive boom….so why give away tax to something that doesn’t need help? Did they simply look at stamp duty payments from March to June, and ‘presume the market had slowed or have they actually talked to Estate agents?

"In a time when the government is threatening to increase tax to claw back the support payments, I do question their logic."

Sabby Gill, MD of Sage UKI

“The Chancellor has made for a strong summer of ‘bricks and burgers’ but the absence of a great digital led growth agenda was a missed opportunity to accelerate a plan for all seasons.

“The Government has failed to grasp the inspiring power of opportunity - without a strong package of measures to stimulate entrepreneurship, such as incentives for digital investment, British SMEs stand exposed to future crises and a potential second wave despite the bold steps they are taking to fight back. We need resilient and innovative SMEs to drive global trade and promote growth in the long term.

“SMEs require urgent action and cannot wait until the Autumn Statement, when many are fighting for survival at this moment. We hope to see more on the following measures in the coming weeks to get the economy back to full health as quickly as possible:

“Firstly, with Brexit looming many SMEs want to increase their revenues from trade and reach new markets. The Government must urgently start to prepare SMEs for Brexit with simple steps they need to take, it should extend the new Export Academy for tech sectors to other sectors with propensity to export more and should fund regional export strategies.

“Secondly, we are encouraged by the ‘Plan for Jobs’ announced today which may go some way to temper the growing furlough ‘bubble’, with as many as 9.3m jobs at risk once the scheme comes to an end in October. However, the Government must find other routes to create jobs, for example by encouraging entrepreneurialism and equipping the unemployed with essential business skills to get a business up and running by the apprenticeship levy.

“Lastly, businesses’ moves to recovery depends on access to the technology that will underpin a successful recovery. Immediate support to invest in technology will improve productivity and create jobs in the long term. There are a number of ways Government could do this. For example offering businesses digital vouchers or grants, linking loan repayment relief on CBILS and Bounce Back Loans to technology investment or allowing them to claim a reduction against their tax bill of 200% of the value of the investment.”