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Manufacturers call for industrial strategy to boost sector

09 May, 2023

Britain’s manufacturers are calling for the establishment of a Royal Commission to develop a long-term industrial strategy that would provide companies with a stable environment in which to invest, access talent and expand. This would be backed by an independent council to monitor the strategy, with the Cabinet Office being responsible for co-ordinating policy across Government.

The call has been made on the back of a report and survey published by Make UK, which argues that expanding the manufacturing sector to 15% of UK GDP (from the present 9%) would add an extra £142bn in annual output, as well as creating high-skill, high-value jobs.

The survey of 312 UK manufacturers finds that most don’t believe that there has ever been a long-term Government vision for manufacturing in the UK. The lack of an industrial strategy is hindering their ability to access skills, with 81% saying it puts them at a competitive disadvantage to other nations.

The report comes at a crucial time for the UK economy which risks being squeezed between the impact of the US Inflation Reduction Act (IRA) which is attracting massive investments in green technologies, and similar measures being introduced by the EU. The IRA is worth 1.5% of US GDP – an equivalent proportion invested in the UK would be worth £33bn.

Other rivals, such as France and Germany are also implementing far-reaching industrial strategies. The French government aims to re-industrialise France with €30bn set aside for technological and industrial innovation. As a result industrial start-ups have increased in recent years, while France is on track to have its first gigafactory complete by 2025.

Germany’s latest industrial strategy, launched in 2019, aims to take manufacturing’s share of its GDP from 22% to 25% by 2030.

Make UK points out that the government department responsible for managing industrial strategy has been re-organised five times in the past 15 years with 15 different Business Secretaries.

“A lack of a proper, planned, industrial strategy is the UK’s Achilles heel,” says Make UK CEO, Stephen Phipson. “Every other major economy, from Germany to China to the US, has a long-term national manufacturing plan, underlying the importance of an industrial base to the success of its wider economy. The UK is the only country to not have one. If we are to not only tackle our regional inequality, but also compete on a global stage, we need a national industrial strategy as a matter of urgency.

“There is now widespread consensus on the need for such a strategy and the specific policy areas it would address. We cannot keep flip-flopping from one initiative to another without setting these in the context of a long-term, wider plan which has consensus and is independently monitored.”

According to the Make UK report, called Industrial Strategy – A Manufacturing Ambition, eight in ten UK manufacturers feel that the lack of a national industrial strategy puts them at a competitive disadvantage to other manufacturing nations, while a quarter say it is the main reason that the sector has not grown faster over the past decade.

The manufacturers believe that technical and management skills should be the core priority of the strategy, followed by innovation, green transition and digitalisation.

Make UK:  Twitter  LinkedIn

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