Association calls for Government action

A BEMA product story

Edited by the Engineeringtalk editorial team Aug 20, 2002

BEMA (Bristol and Western Engineering Manufacturers' Association) is urging the Government to take prompt action to arrest the decline in UK manufacturing.

BEMA (Bristol and Western Engineering Manufacturers' Association) is urging the Government to take prompt action to arrest the decline in UK manufacturing.

With small and medium sized manufacturing businesses continuing to struggle in the current economic climate and the prospects for a turnaround bleak, BEMA wants to see a more considered approach from government.

BEMA's Director, John Whitlow stated: "The Government must take action to help manufacturing become more competitive.

The majority of existing support seems to come in the form of training initiatives.

Whilst these are beneficial in the long-term, manufacturers desperately need help that will create a more immediate impact.

In short we need to look at investment in equipment as well as investment in people".

With the strong pound making UK exports look unattractive, and the inability to compete with lower labour and regulatory costs enjoyed in the Far East and Eastern Europe, Whitlow feels that the government should be helping firms invest in modern capital equipment in order to help UK manufacturing improve its productivity and competitiveness.

Dr Robert Davies, Chairman of Bristol-based City Engineering and a former lecturer in Economics at Bath University, added: "The government, through its various bodies, offers millions of pounds worth of advice to the manufacturing sector.

Doubtless it will continue to do so through the newly created Manufacturing Advisory Service - but it's not just advice that SMEs are looking for - it's hands-on support! In the 1980s government schemes were in place to help manufacturers invest for the future and improve their efficiency, with grants of 33% available for the purchase of plant and machinery.

This type of support no longer exists".

Whitlow continued: "BEMA itself is heavily involved in training schemes which yield long-term benefits to employers.

However, if the government does not take prompt action to help SMEs in the short-term there simply won't be a long-term, as many more businesses will make redundancies or go under.

Subsidised capital investment will at least allow businesses to compete globally and generate income.

An additional benefit is that it will enable firms to diversify and thus strengthen the sector's long-term stability".

The organisation also wants the government to look at existing tax incentives.

Currently companies investing in computer and IT equipment can write-off 100% of the cost of this expenditure against its profits (in the year it is acquired).

BEMA believes that this should also be the case for shop floor capital expenditure by manufacturing firms, as it is still effectively investment in technology.

The beginning of this month (August 2002) has seen the CBI publish two reports on the state of manufacturing in the UK.

From a countrywide perspective the South West has shown the biggest drop in new orders, while SMEs generally have fared worse than their larger counterparts.

Whitlow ended: "It's one of the toughest times we have seen in the region.

Redundancies and closures are becoming so commonplace that even the newspapers no longer report such events".