Britain must launch an industrial strategy and stop “flip flopping” on initiatives if it is to avoid a global downturn, manufacturing bosses have warned.
Make UK, which represents 20,000 manufacturers across the country, has warned British businesses are at risk of losing out to companies elsewhere in the world due to the government’s lack of a long-term plan for the industry , while Joe Biden’s $369bn (£292bn) Inflation Reduction Act is not good. high investment.
In a scathing attack on successive Conservative governments for “flip flopping from one initiative to another,” it called for the creation of a royal commission to develop a long-term , modern industrial strategy to support companies across the UK.
Under Theresa May the government launched an industrial strategy in 2017, focusing on increasing jobs and investment outside London and the south-east after the Brexit vote. However, the strategy has been scrapped under Boris Johnson, with a powerful council of business leaders and advisers tasked with monitoring investment in regions under pressure from Britain.
Stephen Phipson, the chief executive of Make UK, said the UK was the only leading country in the world without a comprehensive, long-term industrial plan. “If we not only face regional inequality, but also compete on a global stage, we need a national industrial strategy as a matter of urgency,” he added.
“The lack of a proper, planned, industrial strategy is the achilles heel of the UK. Every other major economy, from Germany, to China, to the US, has a long-term national manufacturing plan, which underlies the importance of an industrial base to the success of the wider economy.
Car industry bosses fear the UK will be left behind by its failure to secure investment in a large battery factory for electric cars.
Adrian Hallmark, the chief executive of luxury carmaker Bentley, told the Financial Times that other countries offer incentives that are “an order of magnitude more attractive than the UK”.
The Crewe-based carmaker is owned by Volkswagen of Germany. Hallmark said that major car companies were tempted by incentives in “Canada, Spain, Poland, Belgium, even Germany – one of the highest prices in the European market”, to build battery factories.
“It’s surprising, if not a little about that it isn’t [electric vehicle] The manufacturer or battery manufacturer chooses the UK over any other location as an investment destination,” he said.
Underscoring the push for a new industry strategy, Make UK says around 80% of companies in a survey of 312 manufacturers believe that the lack of a plan puts their company in a competitive disadvantage of businesses in other countries.
Almost 60% said they thought the government did not have a strong vision for manufacturing, while as many as a quarter said it was the main reason the sector did not grow. rapid growth in the last decade.
Make UK will launch its report on Tuesday at an event with Greg Clark, the May government’s business secretary who launched its industrial strategy, and Andy Haldane, the Bank of England’s former chief economist who led of the Industrial Strategy Council tasked with monitoring it. development.
The report comes as British manufacturers risk being caught in the middle of a race with other governments in advanced economies to boost investment in low-carbon and hi-tech industries. In the US, Biden’s investment package was launched to support green projects, while France and Germany launched far-reaching industrial strategies.
Make UK says the IRA alone accounts for 1.5% of US GDP, which, if the equivalent amount were invested in the UK, would be worth £33bn. The lobby group says if Britain’s manufacturing base is increased from its current level of around 10% of national output to 15%, it will bring an extra £142bn to the economy and create highly-skilled , high paying jobs across the country.
Phipson said: “There is broad consensus on the need for such a strategy and the specific areas of policy it will address. We cannot continue to flip flopping from one initiative to another without putting it in context in a long-term, broader plan that has consensus and is independently monitored.