EEF – Autumn statement fails to send signal for business to invest05 December 2013

Chancellor of the Exchequer George Osborne was right to stress the risks to recovery in his Autumn sttatement, but has done too little to support the investment to secure it, according to manufacturers' organisation, the EEF.

Chief executive Terry Scuoler (pictured) said: "While the Autumn statement contained some useful measures on apprenticeships, skills and business rates, it failed to send a clear signal to industry that now is the right time to invest and create new jobs.

"In particular, it failed to address the growing threat to investment from energy prices that are squeezing margins and racing ahead of our competitors."

He added: "Industry, especially energy intensive users, will be dismayed that government has failed to address the genuine concerns surrounding the uncompetitive price of energy for UK manufacturers. Companies looking to invest and create jobs in the UK need a long-term commitment by government to control costs increases and compensate those most affected. Without this commitment, making the case in global boardrooms to invest in the UK will get increasingly difficult."

Businesses had, according to EEF director of policy Steve Radley, long been calling for a revolution in how apprenticeships are funded, and today their calls have been heard.

He said: "Placing funding in the hands of the employer will create a truly responsive, relevant skills system that delivers high quality apprenticeships. Employers now need stability and certainty on Apprenticeship funding. Government must build a system that is made to last and resistant to the constant chop and change we have seen in the past.

"As industry seeks to create more skilled jobs, extra higher apprenticeships and increased funding for science, technology, engineering and mathematics (STEM) subjects at higher eductaion will help ensure demand is matched by supply."

He said cutting national insurance payments for employers who hired young people would also help to make inroads into youth unemployment and help firms bring new skills into their business.

And the decision to speed up increases in the state pension age was the right one and was backed up with measures to support saving for retirement, according to Tim Thomas, head of employment policy at the EEF. He said: "The government now needs to look at whether it has the right package of measures on training, careers and rehabilitation to allow older employees to prolong their working lives."

However, City & Guilds Group chief executive Chris Jones warned that policies announced in the Autumn statement put apprenticeships at risk. He said: "It's not the focus on employer ownership that's risky - that's something we actually welcome. It's the assumption that employers have the time - and indeed the will - to cope with the additional bureaucracy these reforms will entail. Rather than incentivising employers, I fear they'll be put off by what's been announced and decide it is simply not worth the hassle. That would be a disaster, and another generation of young people in this country would lose out.

"All employers, regardless of size, will feel the effects. The reforms will require additional resource. There will be even more hoops to jump through to establish an apprenticeship. Where is the incentive there? Employers should certainly be in the driving seat for apprenticeships. But without enough involvement from educators and awarding organisations, the road ahead is bumpy.

"We cannot afford to let this happen. We know that apprenticeships are core to filling skills gaps. We know that for many, they are that first step towards a career. I hope that we will be able to work with Government to find a flexible, workable solution which gives employers control but also support."

Ian Vallely

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