Britain’s manufacturers are set to unlock tax and grant incentives if they embrace Investment Zones, a place-based policy established to drive enterprise growth, innovation and the creation of high-quality new jobs.
According to Investment Zones: Unlocking Growth in the UK, a new report published today by Make UK and Barclays Corporate Banking, 2/3 of the manufacturing sector back the Chancellor’s decision to extend the fiscal benefits of Investment Zones from five to ten years, saying that it makes the scheme much more attractive for UK companies.
There is however a strong case for increasing businesses’ awareness of Investment Zones with only two-thirds of those surveyed currently aware of the policy and its benefits, while a quarter are unclear whether they meet the definition of Advanced Manufacturing – a key focus sector for the zones.
Just over half (59%) of small businesses are currently aware of Investment Zones, while 68% of medium companies know about them – compared to 85% of large firms. While there is still work to be done, these findings show encouraging signs for the future of the policy, as often smaller firms lack knowledge of Government schemes, even those specifically set up to help them grow.
Investment Zones deliver a raft of benefits, including 100% Business Rates relief, Enhanced Capital Allowances, Zero Rate National Insurance Contributions and grants for Research and Innovation. The scheme also allows for grants towards skills training, local infrastructure improvement, local enterprise and business support and can provide the funding to recruit a dedicated planning team for the zone.
Some 7/10 businesses reported that they would invest more in plant and machinery if they were in receipt of business rates relief, while Zero Rate National Insurance Contributions would encourage 60% of firms to increase wages to become more competitive.
To ensure maximum benefit for the sector, Investment Zones need to form part of an over-arching long-term Industrial Strategy which is enshrined in statute so that it is not vulnerable to change with the political cycles. Government needs to continue to work with industry to find the best ways of making the manufacturing heartlands of the UK so even more good quality, highly paid jobs can be created through our vibrant sector.
Stephen Phipson
CEO, Make UK
Investment Zones have the potential to support growth in both economic output and employment across the manufacturing sector. This growth can only be enhanced by raising awareness and ensuring that manufacturers understand the key benefits. Equally, as manufacturers are encouraged to explore the value Investment Zones can bring to their operations, policymakers also have a role to play to promote their benefits and ensure they are maximised.
Lee Collinson
Head of Manufacturing, Transport and Logistics, Barclays Corporate Banking
