Make UK endorses Labour’s industrial strategy, foreseeing a surge in UK investment and reshoring of manufacturing.
- A significant 70% of Make UK’s members anticipate accelerated reshoring due to Labour’s Invest 2035 strategy.
- The strategy proposes a stable long-term policy environment to encourage industrial planning and investment.
- Key growth sectors include advanced manufacturing, clean energy, and digital technologies, aiming for substantial economic contribution.
- High interest rates remain a key challenge, alongside calls for fiscal incentives to boost investment.
Make UK has shown strong support for Labour’s industrial strategy, citing the potential to significantly increase investment and bring manufacturing operations back to the UK. A survey from Make UK indicates that 70% of its members expect the reshoring of activities to accelerate due to Labour’s Invest 2035 strategy. This initiative promises long-term stability for business planning, facilitating strategic growth over the next decade and beyond.
The strategy outlines the creation of a standing industrial strategy council to ensure consistency in policy, aiming to eradicate the short-term changes that often disrupt industrial planning. It also targets support for eight key growth sectors, such as advanced manufacturing, clean energy industries, and digital technologies, where the UK already holds significant expertise.
According to Make UK, the strategy could be transformative, potentially increasing the UK manufacturing sector’s value from £217 billion to 15% of GDP, thus adding approximately £142 billion to the economy. Presently, industrial investment is reported at £38.2 billion annually, and the return of overseas operations coupled with increased UK-based investment could escalate this figure considerably. Fhaheen Khan, a senior economist at Make UK, expressed enthusiasm about the opportunities, particularly in automation and the recruitment of higher-skilled workers amid global competitiveness in green technologies.
The Make UK survey further emphasised priorities such as increased investment in UK facilities, greater automation, and enhanced research and development. Manufacturers identified exports, especially post-Brexit, as critical for growth. There is strong advocacy for fiscal incentives, including corporation tax reductions, expanded capital allowances for software, and extending full expensing to leased and second-hand machinery.
Despite the optimism, challenges persist, notably the burden of high interest rates. These remain a significant obstacle for many companies, who hope for Bank of England rate cuts to alleviate this pressure. There is also an urgent need for the UK to align with international efforts in green industries to maintain its competitive edge, particularly as major economies like the US, EU, and China are swiftly progressing in this area.
Make UK’s endorsement of Labour’s industrial strategy highlights a pivotal opportunity for transformative growth in UK manufacturing, contingent on overcoming existing financial hurdles.
