An engineering bosses’ group forecast that a well-executed Industrial Strategy could spark billions of pounds in investment to bring manufacturing back to Britain.
According to a survey conducted by Make UK, the leading trade association for manufacturing and industrial products in the UK, 70 percent of respondents believe that “reshoring” will increase as a result of Labour’s green paper on industrial strategy.
The document, Invest 2035 The UK’s Modern Industrial Strategy has promised to allow businesses to “plan not only for the next year, but for the next 10 years and beyond”, supported by a permanent industrial strategy council that will prevent policy changes and slashing.
It has pledged to support “the eight sectors that will drive growth in the UK tomorrow and excel today”: advanced manufacturing and clean energy industries; creative industries; defence, digital technology, financial services and life sciences.
Make UK estimates that the potential prize for British manufacturing is huge. It estimates that manufacturing is worth £217billion to the economy. Growing it to 15% of GDP (a measurement of the size and scope of the economy), would add £142billion. The industrial investment currently amounts to £38.2bn per year. Continued investment in UK assets and re-shoring overseas activities can add significantly to this.
Fhaheen KHAN, Make UK’s senior economist, said: “Manufacturers have positioned themselves at the starting blocks of the government unleashing the benefits that investment will bring when the long-awaited Industrial Strategy is fired.”
“It is clear that this will have a range of benefits, and assist companies who are increasing their use of digital technologies and automation. This will also increase the recruitment of higher level skills.
The UK must match the US, Europe, and China’s efforts to increase investment in green technologies.
The Make UK member survey revealed that industrialists prioritized greater investment in UK infrastructure, automation, and research and developments as well as an increased push to increase exports into the European Union.
More than half of the manufacturers stated that they were also looking for fiscal levers. A reduction in corporation taxes would have the greatest impact on investment. Closely followed by the expansion of capital allowances, which includes software, and the extension to second-hand and leased machinery of the full expensing, which allows the entire tax to be refunded.
The survey concluded that high interest rates are the greatest obstacle to investment, and called for Bank of England rate reductions.
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