The government is mulling introducing tax breaks for firms that “buy British”, according to government insiders.
Chancellor Rishi Sunak is also considering measures to counteract the impact of a scheduled increase in corporation tax from 19% to 25% next April.
This could include slashing the tax for firms that invest in new machinery and tech or those buying British kit.
The policy could be announced during the budget later this year.
Government insiders told the Sun: “Tax breaks are being looked at for companies that invest. But also, one thing being considered is tax breaks for firms that buy British. We want to boost business here at home.”
However, they added that the move is “not certain” but “is being talked about”.
The move comes as many companies continue to reassess their supply chains, with priorities shifting from ‘just-in-time’ to resilience and sustainability.
Businesses are sourcing suppliers closer to home and even bringing some production back to the UK, reports the Times.
“Some companies no longer want any part of anything that has to come across an ocean,” said John Anton, pricing and purchasing director at S&P Global Market Intelligence. “There’s a lot of momentum for reshoring and that will continue; people are exploring it now, and will start doing it.”
Companies are also looking to technology to strengthen their supply chains, looking to artificial intelligence, machine learning and other digital tools.
According to Taofeeq Ibn-Mohammed, head of sustainability research with the University of Warwick’s International Manufacturing Centre: “We don’t have superpowers to see into the future and predict what will happen; the only thing you can do is rely on technology.”
Digital trade is also coming to the fore as firms look to cut costs, according to IOE&IT director general Marco Forgione.
“Customs and supply chain is as much about data as it is about moving products,” he said. “All the information on the products, from producer to retailer, is secured, with visibility to all the actors. You are no longer reliant on paperwork.”
Help for makers
British manufacturers have called on the Treasury to urgently provide more support to help them “weather the immediate storm” of rising costs and stifled output opportunities, reports the Guardian.
A survey by Make UK, the trade body for manufacturers, found that over two-thirds of companies (67.8%) said rising energy costs were causing catastrophic or major disruption, with 71.9% saying increased raw material costs were a similar threat and 66.8% facing rising transport costs.
Make UK’s CEO Stephen Phipson said immediate measures were needed to “help shield companies from the worst impact of escalating costs and help protect jobs”.
“The government moved swiftly to implement the furlough scheme two years ago; it would be a wasted investment if the jobs saved then are lost now,” he said.