Up for discussion

The event, which was supported by the EEF, saw Vince Cable MP, EEF CEO Terry Scuoler and Mr O'Donnell debate what the Liberal Democrats could offer to manufacturing in front of a packed audience.

Dr Cable led his remarks with an outline of the Industrial Strategy that he has set out over the last two years. This has enabled several high profile sectors to put long-term investment in place for skills and technology development. Both Mr O'Donnell and Terry Scuoler welcomed the Industrial Strategy and said they hoped it boded well for a long-term cross party approach to manufacturing.

Mr O'Donnell's points were knitted together by the thread of investment. Manufacturing is marked out by the need to invest, to a relatively high degree, in people, research and development, and technology.

In manufacturing, investment in people often takes the form of apprenticeships. The Government's targets are welcome as is its intention to put funding into the hands of employers but Mr O'Donnell raised concerns about the quality of some apprenticeship provision and the challenges that taking ownership of the funding model might present to some SMEs.

On research and development there is a pretty good story to tell with R&D Tax Credit working well for the sector and evidence of high technology companies using Patent Box to keep work in the UK. Mr O'Donnell also drew attention to the increasingly widespread adoption of the High Value Manufacturing Catapult and hoped that the Liberal Democrats would look on further funding for the network as a priority.

The Government's record on Capital Allowances, central to the investment case for plant and equipment, has been mixed. They were initially rolled back, but in recent years – after much pressure from the MTA, the EEF and others – the Annual Investment Allowance has been increased to £500,000. This is very welcome but Mr O'Donnell raised two concerns: firstly the rate is only temporary, and business needs long-term certainty to invest; and secondly there is evidence that underlying rate at which assets are written down has, as technology develops, fallen out of step with real world depreciation.

MTA
www.mta.org.uk