Advanced manufacturing must play a major role in growing and rebalancing the economy

A review of manufacturing commissioned by Labour says the UK needs to avoid damaging economic short-termism.

A review of manufacturing commissioned by Labour says the UK needs to avoid damaging economic short-termism

The Labour Party-commissioned ‘Wright Review of Advanced Manufacturing in the UK and its Supply Chain’, published today, makes it clear that the UK needs to strengthen the role of advanced manufacturing in the UK and carries a clear message that a future Labour government needs to develop a long-term, active industrial policy and avoid the short termism which has blighted the economy and damaged the UK’s manufacturing base.

The review highlights the UKs successful automotive, aerospace and life sciences sectors as key sectors and it also warns of the dangers of skills shortages and the of lack of investment in research and development:

“We’ve made really good progress if you take the automotive sector and see how that has been turned around in the last few years. But the job isn’t finished. Other countries see this sector as equally important and are pouring massive political and economic resources into improving their competitiveness,” said Mike Wright, executive director at Jaguar Land Rover.

Wright also highlights the need to support the re-shoring of the supply chain and the need for a British Business Bank to provide “meaningful amounts of funding that is not available through the mainstream banking sector. Decisions should be reached quickly, and in the case of positive decisions funds must flow quickly”.

He points out that

“a strong domestic supply chain matters for the success of UK advanced manufacturing. We should be trying to capture more of the value of finished goods, with knock-on benefits for our national balance of payments. Perhaps most importantly, the proximity of domestic suppliers will help advanced manufacturing innovate in terms of products and processes, be more flexible and responsive to customer demand”.

On EU membership, Wright says:

“One of the most important markets for UK advanced manufacturers is Europe. We now export over £100bn of manufactured goods to the EU every year, and the stock of UK direct investment in Europe is similar in size. Manufacturers have a very clear view about our membership of the European Union, as expressed by the Engineering Employers Federation:  Britain must remain part of the EU to ensure its future long term economic growth….we should not put our current membership at risk to try and secure uncertain and marginal gains. While changing the EU is critical, manufacturers’ support for Britain’s membership is not conditional on this change.”

Mr. Cameron please note!

Importantly Wright makes it clear that good industrial relations and decent jobs are vitally important too, saying that employers have a responsibility to provide

“good quality employment, where exemplary health and safety sit alongside high productivity and constructive relationships with employee representatives…these are not burdens that good businesses want to avoid”.

He goes onto say:

“There is also an important role for unions, both representing their members’ interests and facilitating or safeguarding investment decisions. UK manufacturers are not competing on the basis of labour costs with emerging economies, but labour flexibility remains extremely important.”

Wright also says:

“Industry has responsibilities to invest, to train, to act responsibly, to provide good employment, to support communities and to help meet our big challenges like environmental sustainability.”

Unite made a detailed submission (along with the TUC) to Mike Wright’s review, and many of our ideas and policies contained in our manufacturing strategy ‘Made In Britain’ are reflected in Wright’s final review.

There is much to digest – especially on the question of skills and apprenticeships, but as the review states, advanced manufacturing will play a major role in growing and rebalancing the UK economy in the long run and we cannot miss this ‘once in a generation’ opportunity to compete and succeed in one of the world’s most competitive sectors.

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