Manufacturing plays a crucial role in the UK growth story – CBI

In a new report, the CBI has urged the Chancellor to support Britain’s manufacturing sector by tackling the corporate interest cliff in its autumn statement and extending the Industrial Energy Transformation Fund beyond 2025.

With business tax rates set to rise 10% in April 2023 in line with inflation, the CBI is urging the government to address tax rates before a significant number of manufacturers face a tax cliff – one that will hurt their business and growth at large UK could slow down economy. Tackling business rates would also free up investment to build new factories, hire more workers and focus on net zero.

Extending the Industrial Energy Transformation Fund beyond 2025 would help boost energy efficiency measures and reduce demand.

Matthew Fell, Chief UK Policy Director at the CBI, said: “The Chancellor needs to go and chew gum in his autumn declaration: he needs to simultaneously stabilize the economy and create a credible platform for growth.

“The manufacturing sector plays a huge part in the UK’s growth story. For every £1 million invested in the sector, the industry generates an additional £1.5 million for the wider economy. To unleash this investment, the government must address the corporate interest cliff. Without serious action before next April, many companies will face staggering increases in their business rates.

“Of course, another major cost pressure at the moment is energy. Improving energy efficiency is an important part of the toolkit for companies to manage these costs over the long term. Extending the Industrial Energy Transformation Fund beyond 2025 into 2030 would give the sector the capital to invest and make its buildings and operations more efficient.”

Brian Holliday, Chair of the CBI Manufacturing Council said: “It’s great to see the CBI supporting UK manufacturing. The sector is key to the growth and resilience of the economy as a whole and critical to the development of green technologies. If the country is to avoid the worst effects of the recession and reduce carbon emissions, manufacturers need confidence to invest.

“The government can help in the short term by allowing finance to flow into projects by freezing corporate interest rates while expanding targeted policy tools like the Industrial Energy Transformation Fund.”

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