Manufacturers urge government for SME support

18 December 2012

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18 December 2012 | Anna Reynolds

The UK manufacturing industry has called for government-supported bank and tax relief to help SMEs compete more effectively in the global economy.

At a roundtable held last month by the MHA Manufacturing Group, representatives from 14 of the UK’s SME manufacturing and engineering businesses and members of the Institution of Mechanical Engineers discussed the challenges facing the sector in the current economic climate.

The group laid out key recommendations in a report that will be presented to business secretary Vince Cable and the Department for Business, Innovation and Skills between now and the New Year to prompt the government to take action.

The report calls for better communication from government about the help and resources available to SMEs in the sector. Chris Coopey, head of manufacturing at MHA, said: “Even where there are supportive initiatives, information about them is scattered and often not well communicated.” The report also highlighted that the Advanced Manufacturing Supply Chain Initiative, a fund to develop more competitive supply chains, has assisted only 11 supply chain projects since it was launched in March.

The research recommended a government-supported bank, but Coopey was doubtful about the ability of the government’s ‘business bank’ announced in September to lend money to SMEs. He said: “To date, detail on how it will deliver is not available. By the time the bank is established, it could be up to 18 months before we see funding from it take effect. The UK economy can’t afford for SMEs in its manufacturing sector to wait that long.”

To boost the UK’s competitiveness, the report recommended a national manufacturing body be set up, consolidating the roles of UK Trade & Investment and other government bodies to provide advice and support for available funding and successful export strategies.

It also stressed the importance of a national strategy that sees the government championing careers in the manufacturing and engineering sectors via educational institutions.

The group also called for simpler corporate tax returns to free up manufacturing companies to focus on business development, with an exemption to the requirement to submit all PAYE payments to HMRC online each time a payment is made as part of the payroll process from April 2013, rather than at the end of the year as they are now. In addition, greater clarity around the tax relief available for research and development work is necessary for manufacturers to make claims, as the current complexity puts off many businesses.

The report is available for download after registering on the MHA website.

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