Why Rishi Sunak’s ‘Super Deduction’ Isn’t As Great As It Seems | Economic news

In a factory somewhere on the outskirts of Birmingham is a machine that tells you enough about the British economy and where it is going.

This machine, made by the Japanese company Yamada, cuts and presses tiny pieces of metal from a sheet of copper alloy fed into it.

Brandauer, the company we are in, manufactures small, precision-cut and pressed metal components. Having started life a century and a half ago as a manufacturer of pen tips, today they make parts that go into everything from plumbing tubes to electric car motors. If you have a face mask, there’s a good chance the piece of metal that fits over the bridge of your nose was made by Brandauer.

But this machine, the one we’re talking about, makes something else: a tiny electrode small enough to balance on your fingernail. After being pressed, plated and finished here, the electrode will be shipped to another company in another country that manufactures rear view mirrors for cars, where it will be part of the circuit that helps the mirror to darken automatically in the event of sudden glare. Brandauer’s electrodes are present in 55% of all cars sold today, so the next time you’re driving and someone behind you flashes their headlights, you have to thank Brandauer and that electrode.

And part of the explanation of why this company is able to supply so many of these small parts – a small cog in a vast automotive supply chain that includes pistons, seat belts, engines and, notoriously, right now, semiconductor – comes back to this machine. . Using this press, Brandauer can produce a whopping 300 million electrodes every year, which is just as good because it turns out that people are buying a lot of cars right now.

The machine costs £ 230,000, and until recently the company had tested it but weren’t sure whether to buy it. Then came the March budget. Rishi Sunak has announced a host of new policies, including an extension to …