💡 Capital, people and ideas - the Chancellor sets out his vision

The former gave us an idea of what kind of economy the Chancellor is trying to build, post-pandemic, and the latter signalled that we are now very much post pandemic. Each was incredibly important in its own right but with the Chancellor’s expected fiscal statement fast approaching in March, we were keen to understand what his plans were, and what role the UK manufacturing sector could play in delivering it.

The productivity puzzle is a long-standing issue, but it’s one Chancellor Rishi Sunak focused on addressing during his speech at the 2022 Mais Lecture. Outlining his vision of a ‘New Culture for Enterprise’, he wanted to prioritise three things in a bid to tackle the UK’s infamous low productivity:

Capital because UK manufacturing is capital-intensive and requires manufacturers to be able to invest in order to drive efficiency and productivity. People because our research shows the average manufacturing worker produces £61.71p per hour in output making them 54% more productive than the average UK worker. And ideas because two-thirds of UK research and development comes from the UK manufacturing sector.

Make UK have long argued that initiatives such as the Super Deduction were positive as it increased investment in the immediate term, but digging into the data, what it was doing was bringing forward existing investment plans. In order to address long-term issues, it needs to be extended to be available for 5-10 years - giving manufacturers the certainty to make sizable investments.

And the theme of thinking longer-term also applies to the apprenticeship levy. Reluctant to make any significant changes to the Apprenticeship Levy, instead tweak around the edges of policy, we have seen apprenticeship starts tumble. Rethinking the pipework behind the Levy system is a must if we are to have an Apprenticeship Levy that is financially sustainable.

We’ll be submitting our response and ideas to the Chancellor ahead of this with our calls of Government.

Well, the Government has finally set out its response and begun to act on the recommendations outlined in the review. The original review is wide-ranging but the key part that caught our eye is the additional detail on the new Lifelong Learning Entitlement (LLE).

If we are to build resilient workforces and workplaces we need to embrace a culture of lifelong learning. But at the same time, recognise that our education system is not currently set up to encourage modular, bitesize learning throughout our careers. The LLE is certainly a step in the right direction and could potentially be a solution to our Level 4 and 5 skills gap in the manufacturing sector.

Last Thursday the Government announced that all Covid-19 restrictions had been lifted - namely people in England who test positive for Covid-19 will no longer be legally required to self-isolate. And this decision to remove all legal requirements to isolate if you test positive for Covid-19 does raise some serious questions.

Current SSP regulations and self-isolation guidance mean employers have a reasonable argument in saying that an employee is unfit for work and pay sick pay if the employee cannot work from home and they have tested positive.

But here is the difficulty, the Covid-19 specific SSP provisions only apply until 24th March, after this date the eligibility for SSP for employees with Covid-19 will be subject to the normal rules (i.e. SSP will only be available after the three waiting days and only if the employee is actually unwell).

The self-isolation guidance applies until 1st April and the position on pay for employees who test positive for covid-19 - and who should therefore isolate in accordance with the guidance, but cannot work from home - in the intervening period between 25 March and 1 April is therefore unclear. 

Last week we published our 2022 Manufacturing Facts digital platform. We were blown away by the fantastic coverage and engagement. If you haven’t already, check out the Facts, and tweet your favourite using #BackingManufacturing.

Finally, to support businesses who trade with Russia or Ukraine, the Department for International Trade have setup a export support team to answer any question. You can make contact using the details below for guidance and support.

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Copy editor: Bhavina Bharkhada, Make UK Head of Policy & Campaigns