This blog forms part of a series of guest blogs on investment. You can follow the debate on twitter with the hashtag #bizinv
Stuart Fell is Chairman of Metal Assemblies Ltd
We need the government to encourage those companies who want to invest to do so. We are in an investment race with our competitor nations, and we are not keeping up. Those companies that understand this are the ones who have the best chance of surviving, but there are numerous calls on their cash and investment is only one of them. It is clear that the tax regime in this country is not as favourable for capital investment as some of our competitor nations. Instead the government has concentrated on getting a low rate of corporation tax, as if this were some kind of virility symbol. However, this does not seem to be encouraging some of the largest companies operating in the UK to pay any tax at all, since they seem to be able to offshore large parts of their revenue at will without HMRC seeming to bat an eyelid.
Things are rather different if you are an SME. I don't want to move my production to the far east or eastern Europe, and I can't move my intellectual property to Eire or the Bahamas, so I am stuck here.. The Capital Allowance regime in this country does not allow me to claim anything approaching the real cost of capital investment against my corporation tax bill, with the result being that I have to find the cash to pay for the investment as well as the tax. So the rate at which I can invest is limited by comparison with my foreign competitors.
Osborne and Cameron seem to like their military metaphors and we have heard much of the new global marketplace in which we operate and the importance of national resurgence. But, as one of the foot soldiers in this struggle, as I walk towards the gunfire that is global manufacturing, I look around me and I see that, while we may no longer be the “Limp of the Lepers”, we are yet far from being the “March of the Manufacturers”. When I look into the far distance behind us I can see Mr Osborne. He is performing the “Tiptoe of the Timid”.
Please note: these blogs contain the views of the author and are not necessarily those of EEF