Industry warns of slow-lane if Spending Review cuts support for innovation and exports

Britain risks entering the industrial slow-lane if support for innovation and hi-tech research is slashed in the forthcoming Spending Review, manufacturers have warned.

Publishing its submission, the manufacturers’ organisation EEF has warned that an increasingly fragile outlook for the sector means the important job of balancing the books must not be allowed to derail industry’s long-term prospects by creating uncertainty or add to the cost burden for globally-exposed manufacturers.

In particular, EEF is cautioning against any reduction in the support government provides to back some of the nation’s most advanced industries. To do so would send out the wrong message to companies who are responsible for more than two thirds of the UK’s research and development activity and almost half of exports.

EEF Chief Executive Terry Scuoler says: “The Chancellor has a lot of boxes to tick in his Autumn round-up of announcements from reducing the deficit and supporting stronger productivity growth to delivering more efficient government and quality public services. Manufacturers stand behind these goals, but a much more challenging growth outlook since the summer means the Chancellor’s statement must also deliver a stable and supportive business environment for our vital industries.”

Industry is calling on government to increase backing for Innovate UK, the body which supports business research and hi-tech development and is urging the Chancellor to ensure UKTI, the export support agency, receives adequate funding support to ensure it is able to give tailored advice and guidance to companies wishing to sell goods abroad.

Mr Scuoler adds: “Government has a successful track record of working closely with businesses to support innovation. This backing is vital to research programmes which help keep British businesses at the forefront of new ideas, and critically, able to transfer those ideas into commercial successes. While we recognise the difficult fiscal environment the government faces, reducing spending on innovation would harm efforts to improve productivity, which is the key to longer term economic stability.

“Most manufacturers either export or are involved in supply chains that lead to exports. If we want to get more of our companies exporting to more countries the expert advice network established by UKTI must be maintained and where possible enhanced. This is a good example of the way government works side-by-side with industry to deliver tangible results that boost our economic strength.”

EEF’s submission to the Treasury includes warnings about the impact of the proposed apprenticeship levy on businesses, among other recommendations. EEF is calling for clarity and reliability in terms of channelling all levy funds back to businesses, ensuring anything they pay into the system they can draw down to pay for training.