Close, but no strategy

That's not to say that UK industry hasn't had some good news in recent months. In November's Autumn Statement, the chancellor made full capital expensing – a capital allowance tax scheme that lets UK companies deduct 100% of the cost of capital equipment from their profits in the year it is bought, instead of spreading the cost across multiple tax years – permanent. This is great news for businesses such as manufacturers which generally have investment cycles of five years or more and for which the original three year plan – first introduced in Spring Budget 2023 and set to expire on 31 March 2026 – had limited benefit.

To boost growth in small and medium sized manufacturing businesses more widely, the Made Smarter Adoption programme is to be expanded to all English regions in 2025-26, prior to exploring the possibility of making the programme UK-wide from 2026-27

The government has also announced £4.5b in funding for British manufacturing, with over £2b earmarked for the automotive industry and £975m for aerospace, supporting the manufacturing, supply chain and development of zero emission vehicles, and investment in energy efficient and zero-carbon aircraft equipment.

Alongside this, the government has allocated £960m for a Green Industries Growth Accelerator to support clean energy manufacturing, and £520m for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s world-leading research and development.

While these moves have been widely welcomed, anecdotally there is still a feeling that with a change in government looking likely, the funding might not materialise in the form announced, undermining the certainty that the measures have been designed to create. More widely, research by Make UK indicates that companies have found the frequent changes to policies on investment and R&D incentives in recent years have hampered investment plans.

This highlights the need not only for a comprehensive industrial strategy, but for an industrial strategy devised on a truly cross-party basis and not subject to the whims of revolving door politics and, indeed, the political cycles of fixed term parliaments. It doesn't matter how much government money is invested into the industrial sector, without a proper long term plan it is difficult to see how its full potential can be met.

Charlotte Stonestreet

Editor