A Redditch manufacturer has called on the Chancellor to tackle rising energy costs, reform employer taxes and address the industrial skills gap ahead of the next Budget.
James Leng, managing director of precision engineering specialist
Pre-Met, said manufacturers do not need new government support schemes but instead require action to improve competitiveness and encourage business growth.
“We don’t need new schemes; we need the cost of making things in Redditch to stop rising faster than our competitors,” he said.
Energy remains the company's largest operating expense, with Mr Leng urging the Government to extend support available through the British Industrial Competitiveness Scheme (BICS) to a wider range of manufacturers.
“Energy is our biggest cost line, so we would ask the Chancellor to urgently widen the British Industrial Competitiveness Scheme (BICS) to all manufacturers, bring it forward and move policy levies off bills into general taxation,” he commented.
Mr Leng also highlighted the impact of employment taxes on small and medium-sized manufacturers, arguing that current policies risk discouraging recruitment.
“As an employer, every job I create costs me tax before it costs me a wage and that must change. There is very little incentive to drive employment. Instead of accelerating growth, the government has put the brake on recruitment.”
He believes increasing the National Insurance Contributions threshold from £5,000 to £7,500 would provide a positive signal to employers and help SMEs reconsider future hiring plans.
The managing director also warned that skills shortages continue to threaten the long-term prospects of UK manufacturing. While he welcomed fully funded apprenticeship training for under-25s at non-levy-paying employers, he questioned what support is available for older workers seeking to retrain.
“The ‘young starter’ offer is working and that’s great news. However, what about the older workers, who may need to retrain from an experienced press operator to become a setter or a toolmaker? Who is going to help fund this transition?”
Based on Studley Road in Redditch, Pre-Met employs 64 people and supplies metal pressings, stampings, wire forms, springs and welded assemblies to customers in the automotive, aerospace, rail and defence sectors.
Ylva Oertengren, chief operating officer at UK asset finance specialist, Simply, added her demands for the chancellor John Healey.
She said: “SMEs need a Budget that makes it easier to act on their growth plans. The Chancellor cannot fund growth alone, but the Government has the ability to reduce the costs and practical obstacles that suppress productivity.
“For a smaller manufacturer, financing new machinery is only part of the running costs: it also needs to make ends meet with employment, compliance and energy costs. Asset finance might spread the cost of an upgrade, but owners still need confidence that they can afford the ongoing commitment outside of their everyday costs. Access to finance and help with operating costs need to work together if firms are to realise their ambitions.
“The real test of this Budget is whether it brings lasting relief to the everyday cost of doing business, not just a short-term fix. Energy bills, taxes and borrowing costs are the pressures SMEs feel week in, week out, and easing them in a meaningful way would free up time, cash and confidence. If the Chancellor can make running a business more affordable for the long term, firms will be in a far stronger position to plan ahead, protect jobs and invest when the time is right.”
Pic: James Leng, managing director at Pre-Met