Whilst there were no game changing announcements for the manufacturing sector, there were some highlights in the Budget that should have a positive impact on the sector in the long run.
- The increase in R&D Expenditure Credit rate for large companies or SMEs carrying out grant funded or subsidised work from 11% to 12% in January 2018 is likely to benefit a broad range of companies in the sector.
- The focus of Enterprise Investment Scheme and Venture Capital Trust investments on more knowledge intensive companies (and a diversion away from investment where the investment is underpinned by property backed assets) will help to encourage investment into higher risk, early stage, manufacturing companies.
- The extension of the classes of assets which qualify for Enhanced Capital Allowances and also the extension of the period in which companies can surrender the tax relief for a cash credit (until 2023), will encourage further investment in green technologies and encourage investment in lower energy consumption in the sector.
- An aspect which is both a benefit and also a challenge for companies within the manufacturing sector is the increase in the National Living Wage and some of the National Minimum Wage thresholds from April 2018. This is a benefit for the employees in our region, but also a challenge for employers, who may struggle to pass on the costs to customers (and so the changes can also have the unintended consequence of reducing the ability to create new jobs).
- The focus on supporting business funding via the British Business Bank, the National Productivity Investment Fund, and exports via the UK Export Finance guarantee, should all assist companies in the sector.
Finally, a welcome theme in the Budget for the manufacturing sector is the commitment to the education system, to encourage teaching of maths, computer science and also seek to balance the participation in STEM subjects by both genders.