Industry chief calls for 15% GDP target for manufacturing

27 February, 2024

On policy stability and abolishing annual fiscal statements, Stephen Phipson will say: “We need to see a return to political and policy stability, as well as a debate about some very serious choices we need to make as a country. But, five Prime Ministers in eight years and fifteen Business Secretaries in fifteen years is no recipe for this. Nor is the fact we have had six plans for growth in little over a decade, while the department responsible for industry has been re-organised five times in the same period. Any of you running businesses this way would have gone bankrupt.

“The fact we have two statements a year has been responsible for twenty six changes in Corporation Tax since 2019. Those of you who are Finance Directors must be baffled by the ticker tape of announcements. Instead, I would urge any Government of whatever colour to announce their tax policies for the lifetime of a Parliament, which would only be changed if exceptional circumstances merit it. No changes to investment allowances, Corporation Tax or Green targets for five years would really help.”

On skills, Stephen Phipson will say:

“As part of an industrial strategy, we need to see a skills revolution, beginning with substantial reforms of the Apprentice Levy and a complete review of the vocational skills system. This must be a national endeavour to equip the current, and next, generation workforce with the digital skills they will need for the many jobs of the future that have yet to be invented. This revolution must also start within the education system so that we have a constant pipeline of talent to fuel the expansion of manufacturing.”

On infrastructure spending, Stephen Phipson will say: “The next Government must increase infrastructure spending to the OECD average. This must be accompanied by ripping up the cumbersome, expensive planning system with a fast track for projects of strategic national importance. In addition, the fiscal rules which are preventing investment in capital spending. Must be changed and, if the Treasury objects to this then we need to change the rules or, split the Treasury into a Ministry for Finance and a Ministry for the Economy.

“The decision to cancel HS2 was deeply frustrating and a prime example of our failure to invest in a long-term asset for the country’s balance sheet. It also sends the wrong signal to overseas investors about the UK’s ability to manage large projects. Cancelling it was the ultimate in political short termism and, failing to invest in such a strategic project for the future is something I have no doubt we will come to regret.”

On net zero, Stephen Phipson will say: “We need to double down on maximising the opportunities of a net zero economy and safeguard UK energy security, the biggest, transformational issue we face. The UK has a genuine opportunity to become a world leader in this area attracting billions of pounds worth of private investment. Rather than arguing over a specific sum, we need to see policy certainty and clarity from whoever forms the next Government so that business can maximise the substantial opportunities green transition presents.”

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