Call to the Chancellor to Prioritise Productivity Coincides with a Record Month for the Aerospace Industry
Chief executive of ADS Group, Paul Everitt, has written to the Chancellor ahead of the Budget calling for the Government to put fast-growing, high-productivity sectors at the heart of its growth agenda.
ADS represents aerospace, defence, security and space; four sectors that have seen productivity improve by more than 30 per cent during the past five years, compared with just 4 per cent across the UK economy.
The letter coincides with the publication of monthly aircraft data showing deliveries up 20 per cent on 2014. April also saw the highest number of aircraft orders and deliveries of 2015, representing a combined value of around £4bn to UK industry.
Paul Everitt said: “The strong aircraft production figures demonstrate the growing global demand for air travel and new aircraft. The UK Government's move to modern Industrial Strategies is helping businesses of all sizes to win in competitive international markets.
“We hope the Chancellor will use the Budget to build on this success and stimulate further investment to enhance productivity. ADS has identified five policies, which will help ensure the UK is a globally attractive place to innovate, export and grow.”
In his letter Paul urges HM Treasury to use the forthcoming budget as an opportunity to stimulate investment in productivity by:
1. Set the Annual Investment Allowance at £250,000 from 2016 to spur investment
Setting the AIA at £250k from 2016 (rather than the planned reduction to just £25k) would significantly boost SME and Midcap investment in productive technologies.
2. Reintroduce the Industrial Buildings Allowance to attract global investment
Reintroducing the IBA would make the UK more attractive place for companies of all sizes to invest in new, state-of-the-art R&D and production facilities across the UK.
3. Double R&D tax credits by 2020 to make the UK the best place to innovate
Relative to the US and Germany, the UK Government underinvests in R&D by almost 0.5% of GDP. Doubling the level of R&D tax credits would help close that gap and support productivity growth.
4. Maintain the two alternative options for the Large Companies R&D tax relief.
Maintaining the two parallel versions of the large companies would ensure that the UK Defence companies benefit from the R&D tax credit like all other innovative UK companies.
5. Continue to fund the successful National Aerospace Technology Exploitation Programme
Alongside other successful AGP programmes, including the Aerospace Technology Institute and Sharing in Growth, NATEP has helped over 150 SMEs commercialise new technologies. Extending funding for NATEP would help more SMEs invest in and develop high-tech exports.
The call to Government comes during a month that has seen the aerospace industry continue to increase production rates with year-on-year deliveries up 9 per cent compared with 2014 levels.
For ADS' Commercial Aircraft & Engine Data for April 2015, click here: https://www.adsgroup.org.uk/pages/83126467.asp