Business

UK manufacturers urge ministers to draw up an industrial strategy


British manufacturers have called on ministers to stop “flip-flopping” and urgently draw up an industrial strategy, warning the absence of a long-term plan is holding back growth and damaging the UK’s competitiveness.

The appeal by trade body Make UK highlights increasing frustration across industry at the lack of government efforts to help a crucial sector of the British economy ever since the decision to drop the last industrial strategy in March 2021.

“A lack of a proper, planned, industrial strategy is the UK’s Achilles heel,” said Stephen Phipson, the trade body’s chief executive, adding that the UK was the only major economy not to 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 . . . 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.”

Further delay in developing a policy risked Britain losing out on critical green investment given the scale of US subsidies available and plans by the EU to follow suit.

Make UK said ministers should set up an independent inquiry in the form of a Royal Commission as a starting point to develop a new plan. It should also re-establish the Industrial Strategy Council, which was also axed in 2021, underpinned by statutory status, with the job of monitoring the new strategy.

It also said responsibility for policy co-ordination across government should be given to the Cabinet Office rather than the business department.

Governments have in the past appointed Royal Commissions to address high-profile social concerns or matters of national importance such as gambling or the long-term care of the elderly, but the procedure has fallen out of favour in recent years.

Make UK argued a Royal Commission would ensure an industrial strategy was put in place for the long term and would be less affected by short-term political decisions of whichever party was in government.

In a report published alongside its recommendations on Tuesday, the trade body underlined the piecemeal approach taken by successive governments, which have produced six plans for growth since 2012. Moreover, the department responsible for managing industrial strategy has been reorganised five times in the past 15 years and the same number of business secretaries over the same period.

Almost 60 per cent of manufacturers said the government has never had a robust vision for manufacturing, while two-thirds said the lack of an industrial strategy was hindering access to skills, according to the report.

Eight in 10 companies believed the absence of a strategy was putting them at a competitive disadvantage compared to other manufacturing nations.

Manufacturing last year accounted for about 9 per cent of total economic output. Make UK said it wanted to see the sector’s contribution grow to 15 per cent of GDP, which it said would add an extra £142bn to output annually, creating high-skill, high-value jobs.

The government said it had “shown a clear strategy for UK manufacturing with a variety of schemes that ensure sectors from auto, to aerospace, to low-carbon technologies have access to the funding, talent and infrastructure they need”.



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