Britain’s manufacturers have launched their business manifesto ahead of the general election and called on all political parties to focus on a better quality of debate surrounding the future of manufacturing, rather than constantly blaming each other when job losses occur.
Publishing the manifesto, EEF the manufacturers organisation believes that, too often, politicians only take an interest in manufacturing when bad news occurs. Instead, they should focus on the importance of manufacturing in a high value, high skill economy and its value in creating wealth.
EEF Director-General, Martin Temple, said:
“We don’t hear nearly enough from the political parties about the future potential and importance of manufacturing. Too often we only hear a debate when bad news occurs and a national icon such as Rover is under threat.
“It is in this context that the political and economic debate should be set as to how the UK can substantially increase its level of investment in technology and develop the people to use it.”
EEF also warned of the need to avoid own goals and that business must not be seen as an easy target for any tax increases in the next Parliament, which would only serve to damage the competitiveness of the UK as a manufacturing location and accelerate the number of jobs being lost overseas.
EEF believes that the UK is losing its advantage as a low tax economy. It backed its view by releasing analysis of OECD figures showing between 1997 and 2006, the revenue raised by government from the UK economy will have increased from 39.2% to 42.1% in the UK, while falling from 39.1% to 37.1% across the OECD. Only Iceland and Korea will have seen a larger increase in the tax burden. In addition, while the euro area's tax burden is still higher (45.3%), the UK's advantage will have narrowed by five percentage points between 1997 and 2006. (1)
Business has borne more than its fair share of tax increases, with the total tax burden rising by £7.7bn since 1997. Particularly worrying for manufacturers is that the bulk of these taxes have affected their cost base and are hard to pass on to customers. A combination of higher national insurance payments and environmental taxes mean cost based taxes have increased by £5.5bn. (2)
The manifesto, published together with five other major trade bodies across the manufacturing spectrum, comes ahead of the launch of the Labour and Conservative business manifestos. It focuses heavily on a positive agenda on skills, investment and science & innovation which EEF believes are fundamental to the future of a high value UK economy.
Mr Temple added:
“Whilst Industry has the prime responsibility for improving its performance, Government has a vital role to play in ensuring that UK has the best environment to manufacture and trade and remains flexible and dynamic.
“In this respect all political parties should be aware that tax rises are not an option. Business must not be seen as an easy target to raise revenue as any further, self-inflicted increase in costs could have potentially damaging consequences for the UK as a manufacturing location.”
The top ten key priorities for the next Government are to:
1. Maintain a stable economic environment, promoting manufacturing competitiveness.
2. Support manufacturing investment by ensuring a competitive UK tax regime and by introducing a capital investment tax credit.
3. Improve the UK’s innovation performance by promoting greater investment in R&D, improving business and academic links and instigating more intelligent government procurement.
4. Drive forward a coherent energy strategy which addresses climate change whilst maintaining business competitiveness
5. Provide strong and effective business support at regional, national and international level.
6. Reduce the regulatory burden and put better regulation at the heart of policy development in the UK and Europe.
7. Increase the supply of science, technology, engineering and maths (STEM) skills and ensure young people have quality access to all career options
8. Deliver a sustainable solution on pensions and avoid measures that add burdens to occupational pension schemes
9. Develop and occupational health and safety strategy that is focused on rehabilitation, based on sound science and rewards performance.
10. Take forward a pro-business agenda in Europe.