Employers need consistent message on manufacturing
Today’s report from the Institute of Mechanical Engineers, showing the concerns of manufacturers towards the Government’s growth strategy, is important and timely. Trade unions have been concerned at the paucity of the Government’s approach to growth and we were doubly concerned when this year’s Budget, offering carrots to business in the form of lower corporation tax and less regulation, was so heartily welcomed by the CBI.
I would expect the CBI to want lower business taxes. The trouble is, George Osborne dressed up these tax cuts and lower regulation and called them a growth strategy. And deliver growth they won’t. Today, the IMechE highlights why.
According to the IMechE’s survey of 1,000 manufacturers, 31% agree that the Government is adopting the right strategy to rebalance the economy, compared to 54% who disagree. Their biggest concern, as if you couldn’t guess, is skills. 43% of manufacturers think the Government is performing fairly or very badly on education and skills policy, compared to 14% who think it is performing fairly or very well. 35% think cuts to corporation tax, the centrepiece of the Government’s growth strategy, will be neither effective or ineffective.
More manufacturers (64%) think increasing R&D Tax Credits would be very or quite effective and 79% say the same about funding for more apprenticeships. 82% say that, in light of the planned rise in tuition fees, courses which cost more, such as engineering, should continue to be subsidised by the Government.
Of course, the Government cannot take serious steps to introduce a proper growth strategy because it is cutting spending left, right and centre. Deficit reduction at breakneck speed, not rebalancing the economy for the future, is the priority. That isn’t a necessity, it is a political choice, and employers should be careful not to put themselves in the firing line.
By making it sound as if tax and regulation hold the keys to growth, employers will hardly be able to complain if, in the light of tax cuts and lower regulation, they are expected to deliver. They should keep speaking up for industry. And no amount of sweeteners from the Treasury should be allowed to drag them off message.