As the UK heads towards a general election on 4 July, the policies proposed by the major political parties outline differing visions for the future of the British manufacturing sector, and approaches to the challenges and opportunities that exist. Made in Britain CEO John Pearce takes a closer look.
Labour Party
Labour’s manifesto highlights a strategic, mission-driven approach to industrial policy, aiming to boost investment and provide stability for manufacturing companies. They propose establishing a National Wealth Fund, capitalised with £7.3bn, to support growth and clean energy. The fund will directly invest in industrial clusters, ports and hydrogen infrastructure – aiming to rejuvenate the manufacturing sector across the country.
Labour is also planning investments in automotive gigafactories and the steel industry to ensure these sectors lead in innovation and sustainability. Furthermore, their commitment to decarbonise the economy includes a carbon border adjustment to level the playing field for UK manufacturers.
Labour also plans to implement extensive workers’ rights reforms under its new Plan to Make Work Pay. This includes protections against unfair dismissal from day one, banning compulsory zero-hours contracts, entrenching flexible working options and strengthening maternity, parental leave and sick pay rights. These measures are designed to improve workplace conditions, which Labour believes are essential for increasing productivity and supporting sustainable business growth.
Conservative Party
The Conservative Party’s manifesto focuses on innovation and competitiveness. They propose increasing public spending on research and development (R&D) to £22bn annually, which will significantly benefit manufacturing companies by fostering innovation and new technologies.
A key aspect of their policy is the Advanced Manufacturing Plan, which includes a £4.5bn investment to secure strategic manufacturing sectors such as automotive, aerospace, life sciences and clean energy. This plan is likely to create a more stable and supportive environment for high-tech manufacturing industries, ensuring long-term growth and sustainability.
The Conservatives also emphasise reducing red tape and regulatory burdens, which could streamline operations for manufacturing companies. Their approach to net zero includes supporting domestic steel production and introducing import carbon pricing mechanisms to protect local manufacturers from cheaper, less environmentally-friendly imports. This balance of innovation support and protective measures could enhance the competitiveness of UK manufacturing on the global stage.
Liberal Democrats
The Liberal Democrats propose a comprehensive Industrial Strategy to encourage investment in new technologies and address the productivity crisis. Their plan includes abolishing business rates and replacing them with a Commercial Landowner Levy, which could lower costs for manufacturing companies and incentivise investment in innovation.
Their commitment to environmental standards is reflected in their push for a circular economy, aiming to reduce waste and pollution. This focus on sustainability could drive the development of new manufacturing processes and products, enhancing the sector’s competitiveness and environmental footprint.
Additionally, the Liberal Democrats plan to support small and medium-sized enterprises (SMEs) through local banking initiatives and improved access to finance, which could help smaller manufacturing firms scale up and innovate. Their emphasis on international trade and reducing barriers for SMEs aligns with their goal to boost exports and integrate UK manufacturing into global supply chains.
Reform UK
Reform UK’s manifesto focuses on deregulation and reducing costs for businesses. They propose freezing all non-essential immigration to boost wages and reduce pressure on public services. For the manufacturing sector, this could mean a tighter labour market and potentially higher labour costs, but also an emphasis on investing in local talent.
The party’s economic plan includes significant tax cuts and reductions in government spending, with a focus on slashing waste and bureaucracy. This could lower operational costs for manufacturing companies and improve efficiency. Reform UK also plans to support the energy sector by unlocking the UK’s oil and gas reserves and scrapping net zero policies, aiming to reduce energy costs for manufacturers.
Overall, Reform UK’s policies are designed to create a more favourable business environment through deregulation and tax cuts, potentially stimulating growth and investment in the manufacturing sector.
Green Party
The Green Party’s manifesto is centred around sustainability and transitioning to a green economy. They propose significant investments in research and development focused on tackling the climate crisis, which includes funding for sectors like energy storage, carbon-neutral production and recycling technologies.
Their policies support small and medium-sized enterprises (SMEs) by promoting regional mutual banks and providing grants for businesses to decarbonise. This local approach to financing and support could help manufacturing companies transition to greener practices and technologies.
The Green Party also emphasises the importance of fair markets and community ownership, advocating for structures that support a fair transition to a zero-carbon economy. This could create new opportunities for manufacturing companies involved in sustainable and community-focused projects.
Click this link to view the Made in Britain Manufacturing Barometer (June 2024), shares UK manufacturing companies’ views and voices on the economy and industry.
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