Labour’s tax-grabbing Budget has eroded any remaining goodwill from Britain’s battered manufacturing sector, industry chiefs say.
As small and medium size businesses reel after National Insurance and wage hikes squeeze bottom lines even further firms are anxious about a future under Chancellor Rachel Reeves.
Launching a ferocious attack on Chancellor Rachel Reeves and the Labour Party, car industry titan Steve Morley, now President of the Confederation of British Metalforming [CBM], said: “Former Labour Prime Minister Harold Wilson famously coined the phrase ‘a week is a long time in politics’. Well, I think we can now say that a day is a long time in politics.
“All of the optimism following the election, and the promise of an Industrial Strategy, has been wiped away with the ill-thought-out budget.
“The tax hikes forced on businesses could have a devastating impact on SMEs, who are still grappling with the impact of inflation and energy prices far higher than their European counterparts.
“This additional burden – estimated to cost our members tens of millions of pounds – is another whammy to an already under siege sector, with the stagnation of the EV market leaving the UK market in a state of purgatory.”
He added: “Going forward it begs the question can we trust Labour with the Industrial Strategy? It is one thing introducing one, but it’s the content that counts especially for SMEs, who are constantly overlooked.
“Who is really speaking for small to medium-sized firms in manufacturing?”
The CBM represents the interests of UK manufacturers of precision sheet metals products, a large proportion of which ends up in the car industry.
Declining sales of EV vehicles and the Zero Emission Vehicle (ZEV) mandate, which is going to start taxing car makers if they fail to hit targets for electric sales by 2025, is sending shockwaves through the sector and this is being felt throughout the supply chain.
What was heralded as a stimulus is having the opposite effect and both Ford and Stellantis have both quoted the “EV pathway” as a reason for factory closures and job cuts in the past few weeks.
Mr Morley said: “Business Secretary Jonathan Reynolds has said there will be an urgent consultation, and this has to happen before more self-harm is inflicted.
“There was an opportunity for the UK to lead the world in this space, but the incentives and the stimulus were not continued in the concerted way they should have been – now our desire to be the first to meet EV targets is threatening the very existence of the sector.
“It’s not too late, but Labour needs to listen hard and make sure that the voice for small and medium-sized manufacturers is heard and integrated into the development of the Industrial Strategy. If they achieve this, then some small crumbs of optimism may return.”
