Tax 'toolktit' unveiled to lure manufacturing investment

An EY study found that the UK had created a “thriving, predominantly services-based, investment culture” but had neglected manufacturing, which as a share of output has declined by over 20pc since the 1970s.

It was also suggested that the government should offer “direct support” to manufacturers acquiring new premises in the UK through an Industrial Premises Allowance.

Writing in The Telegraph, Chris Sanger, EY’s global head of tax policy, said the UK had “retained a successful manufacturing core” but that the British economy is at a “tipping point”.

“With half as many new manufacturing projects per year as Germany, the UK has plenty of opportunities for growth,” he said. “It has been a long time since the tax system actively supported manufacturers.

“EY identifies a toolkit of tax measures that would help the UK to raise its game. We believe that, with a structured tax strategy for manufacturing, the UK could potentially bridge the gap.

“The UK cannot afford to hang back and let others seize the initiative. Now is the time to be embracing a pro-manufacturing tax manifesto.”

He added: The success of areas in London over recent decades shows that gains can be made when incentives, infrastructure and the regulatory environment form a self-reinforcing cluster.

"The transformation of the Docklands from a post-industrial wasteland to a powerhouse of global financial services shows just what can be achieved."

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