Whilst this years’ budget was inevitably dominated by the coronavirus efforts that the government would be putting in place, there were still some key takeaways for manufacturing firms. As expected, there weren’t wholesale changes, but there were some announcements that will have a profound effect on the manufacturing industry in years to come.
Here, we take a closer look at some of the major announcements that were made in the 2020 budget and analyse their effect on the UK manufacturing industry.
R&D Tax Credit Rise
One of the biggest announcements for manufacturing firms during this years’ budget was the rise in R&D Tax Credits from 12% to 13%. It is expected that the average claim in the next year will rise to £2,400. This move was obviously welcomed with open arms by all manufacturers, as R&D is essential for the growth and development of any manufacturing firm.
It’s also worth noting just how important R&D is to the wider UK manufacturing industry, as it plays a vital role in guaranteeing our nation isn’t left behind by other countries from around the world. With the UK leaving the European Union, it’s more essential than ever before for our manufacturers to continue blazing a trail when it comes to being at the forefront of global manufacturing, so investment in R&D really is essential in 2020 and beyond.
R&D Spend To Rise By 2027
The government also announced that R&D spend in the UK will rise from 1.7% to 2.4% GDP by 2027. This is a significant announcement for manufacturers and is a huge step forward for UK manufacturing as a whole. The budget outlined that research and development investment will increase by £22bn annually, which equates to a 15% rise in the next year.
All of this is absolutely essential for the growth of manufacturing firms in the UK, and makes our manufacturers among some of the most well-funded in the world. It’s up to our businesses to take the right steps to guarantee that we are spending the research and development budget we are allocated on the right things.
At European Springs & Pressings, we give our team plenty of time to come up with new and innovative ways of carrying out our existing processes. We firmly believe that there is always a better way to do things, and with the introduction of smart factory technologies and Industry 4.0 over the last few years, it’s essential that all manufacturers take the time to find out more about how these technologies can work for their business.
Investment in Infrastructure
Whilst this doesn’t directly affect the manufacturing industry, there is almost certainly benefits to be had for the sector. Major spending was announced on roads and infrastructure around the UK, with a further £5bn funding for gigabit broadband in 20% of the country. Along with this, more funding will be put into reliable 4G mobile signals for rural areas. All of this means that manufacturers from around the UK, both big and small, will find it significantly easier to operate on a day to day basis.
More reliable and faster broadband speeds are probably the most exciting announcement in this section of the 2020 budget, with advancements in smart factory technologies and IOT coming faster than ever, it’s essential that the infrastructure is in place to deal with the ever-increasing demands of the technologies.
Investment in Electric Vehicles
No matter what news website you are use, you’ll probably have come across electric vehicles on your preferred choice at least once in the last month. There is a real surge in the popularity of electric vehicles, and there is good reason for this. As more and more individuals and businesses become increasingly environmentally conscious, many will look to make the switch to electric vehicles.
The government announced that there will be a £900 million investment in nuclear fusion, space, electric vehicles and life sciences this year, and we expect a significant portion of this investment to go into electric vehicles.
It will be interesting to see just how quickly businesses pick up the use of electric vehicles for their main operations in the coming years, those who adopt early are likely to see the biggest benefits in the long run. There’s absolutely no doubting that electric vehicles are the future, and with increased funding going into these technologies, we can expect many manufacturers around the UK to be switching their attention to creating and distributing parts for these vehicles in the coming years.
Here at European Springs & Pressings, we are keeping a close eye on how this years’ budget affects the manufacturing landscape, so be sure to check in on our blog regularly. Our team of expert spring manufacturers have vast experience within the manufacturing industry, so we are perfectly placed to comment on all of the very latest developments within the sector.