British manufacturers increase pressure on the government over its industrial strategy
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Manufacturers have warned that the UK government must deliver on its promise of an effective industrial strategy to offset soaring employment costs imposed by chancellor Rachel Reeves in last October’s Budget.
A post-budget survey of senior manufacturing executives found that 57% believe a long-term industrial strategy will lead to increased investment, despite near-universal concerns about energy costs. higher quality and salary.
Make UK, the manufacturers lobby, warned: “The pressure on the upcoming industrial strategy will now be even greater to provide investor confidence on the way forward.”
High expectations for the industrial strategy come as Whitehall prepares for what government officials expect warned will be a brutal spending review, as the UK’s public finances came under increasing pressure from the bond market last week.
A senior Whitehall official said there was a growing risk of a mismatch between industry expectations of industrial strategy and what could be delivered, given the government’s lack of funding. seeds outside of core missions, such as reaching net zero or boosting defenses.
“Unless it’s for tanks or windmills, there’s basically no money,” the Whitehall official said.
The survey of 161 manufacturing executives echoes surveys of other leading business groups, including CBI and British Chamber of Commerceby highlighting the impact of Rachel Reeves’ decision to increase employer national insurance contributions.
More than 90% of respondents said employment costs will be their highest expense next year due to increased NICs, expanded rights to work and increases in the national living wage.
Therefore, the survey shows that businesses will look for ways to cut costs and increase prices, creating more inflationary pressure for the economy. Make UK added: “This will be painful for both customers and their staff.”
However, despite the gloomy outlook, the survey identified “high optimism” that the planned publication of the industrial strategy in the spring could prove “a game changer in invest”.
Labor Government announce it industrial strategy last October, announced plans targeting eight sectors, including advanced manufacturing, clean energy and life sciences, in an effort to increase investment and promote economic growth.
A senior executive at carmaker Nissan said the publication of its industrial strategy was “vital for the future” of UK car design and manufacturing.
“Global investment competition is at an all-time high and it is clear that UK manufacturing is at a turning point. Countries that can demonstrate a clear long-term strategy, supported by policies that promote an attractive investment environment, will be first in line,” the Nissan executive added.
The strategy will be overseen by a 16-member Industrial Strategy Advisory Council chaired by Clare Barclay, managing director of Microsoft UK. Other members include Rolls-Royce chairman Dame Anita Frew and Greg Clarkformer Conservative Party business secretary.
Whitehall insiders say the consultation on the shape of the industrial strategy, which ends in November, has attracted great response from businesseswith more than 3,000 responses sent to the Ministry of Business and Trade.
Make UK chief executive Stephen Phipson said more detail was needed in areas such as skills and regional devolution policy.
He added: “The Government has taken a positive and important first step but must now back this up by setting immediate and important priorities that will deliver very clear benefits that manufacturers believe it will deliver.”
Industry Minister Sarah Jones said she welcomed the confidence shown in the potential of the industrial strategy. She added: “We will continue to do everything we can to promote the UK’s cutting-edge industries to global investors.”
Data visualization by Amy Borrett
