UK takes action to boost supply chain resilience for critical goods and back businesses

Posted on 17 Jan 2024 by The Manufacturer

UK supplies of critical goods such as medicines, minerals and semiconductors will be safeguarded, thanks to the government’s new Critical Imports and Supply Chains Strategy launched today.

The recent attacks in the Red Sea, one of the world’s most critical waterways, has threatened global trade. In response to increased geopolitical disruption, and the unprecedented challenges of recent years, like the COVID pandemic, Russia’s invasion of Ukraine and environmental disasters, the UK government and businesses have boosted their ability to manage supply chain shocks. This strategy builds on this and will further equip UK businesses to deal with global supply chain problems and access the imports they need which are essential to the functioning of the UK.

Imported goods are vital to our economy. They ensure lower prices, greater choice, and help businesses to be more productive and also enable innovation, drive growth, and are essential to the UK’s world-leading industries, from aerospace to life sciences.

More than 100 top UK firms, including pharmaceutical and manufacturing leaders like The Association of the British Pharmaceutical Industry (ABPI), the Society of Motor Manufacturers and Traders (SMMT) and Green Lithium have contributed to the strategy to ensure it helps develop resilient and secure supply chains that protect both their business and the consumers who rely on them.

Minister for Industry and Economic Security Nusrat Ghani will launch the Strategy today during a visit to Heathrow Airport, the largest import hub in the UK which handled more than £86bn of UK imports in 2022.

Minister for Industry and Economic Security Nusrat Ghani said: “There are many unpredictable events that can threaten our access to vital goods, from the pandemic, Russia’s illegal war in Ukraine, and the ongoing attacks in the Red Sea. That’s why we’re taking action to ensure crucial imports like medicines can reach consumers, no matter what happens around the world.

“With this strategy we’re equipping business so they no longer have to rely on unpredictable partners for supplies of the goods that keep our country going. By making supply chains stronger we’re helping make the UK a truly safe and reliable place to do business.”

Marco Forgione, Director General of the Institute of Export & International Trade, said: “The launch of this new strategy is good news for British businesses and the wider economy. It’s something we have been calling for, with many of our members raising issues around the supply of key components and ingredients. These have been driven by a range of factors including protectionist policies in other markets, shipping and logistics problems, sanctions and security concerns. So it’s positive to see action being taken to remedy this.

“After all, a robust supply of imports to the UK is vital. Nearly 50% of our food is imported, while the high tech and green industries depend on fiercely sought-after critical minerals and other components from overseas. Having a dedicated import strategy, bringing business into the process of advising and informing policy, combined with the ongoing digitalisation of trade,] will help our manufacturers and our supply chains boost resilience at a time of growing global instability.”

Ross Baker, Chief Commercial Officer, Heathrow said: “Heathrow connects the UK to 95% of the world’s economy and facilitates imports of the high value, time-critical goods that British industries like pharmaceuticals, manufacturing and technology rely on. We welcome government initiatives that make doing business in the UK easier and more efficient, from shoring up supply chains to streamlining cargo processes at the airport, so Heathrow can meet growing demand to import and export across the globe.”

The Critical Imports and Supply Chains Strategy will enable government to share vital information and guidance with businesses on the risks to key supply chains and the practical steps they can take to protect themselves from disruption, including regular updates on emerging supply chain risks, such as new export bans on critical everyday goods imposed by other countries.

As part of the strategy, the UK will set up a new online portal to allow businesses to quickly report red tape or disruption affecting their critical imports. The government will then work to remove these barriers wherever possible, saving business time and money.

We will also pursue further trade deals to help UK importers access the critical goods they need efficiently and affordably. This provides certainty for traders, allowing businesses to make informed decisions and reduce delays at the border, helping drive growth and streamlining costs.

The strategy sets out how the UK will use cutting edge research to understand the impacts of shocks on supply chains and how we can secure the critical goods we need in future. This will include researching how climate change will impact on our key supply chains, and how to mitigate the impact of environmental disasters.

We will also set up a new Critical Imports Council that will allow businesses and government to work together to identify risks to critical imports and develop a plan of action – ensuring that businesses have a central voice in shaping government’s work to build supply chain resilience.

Richard Torbett, ABPI Chief Executive said: “The government’s approach to the critical imports for pharmaceuticals will support our industry to maintain resilient supply chains, helping to ensure consistent access to medicines for UK patients. The medicines and vaccines developed by our industry are vital to public health and the economy. Recent global events like the pandemic have shown that our industry can manage and address global supply chain shocks, especially when working collaboratively with government, and this strategy supports our industry in doing so going forward.”

Mike Hawes, SMMT Chief Executive said: “With our success powered by complex global supply chains, the automotive industry has been pleased to help shape a new strategy that will support manufacturing agility and responsiveness. As we accelerate production of the cleanest and greenest vehicles, and the batteries they need, such a strategy is essential and we look forward to continuing this vital engagement to boost Britain’s resilience and competitiveness – essential to the continued success of the UK as a top tier investment destination for the automotive sector.”

Sean Sargent, Green Lithium Chief Executive said: “Green Lithium is pleased to support the new Critical Imports & Supply Chains Strategy. This strategy will help ensure that Green Lithium can acquire the critical minerals it requires to supply the UK’s first low-carbon lithium refinery, further advancing a UK battery supply chain and electric vehicle production. This endeavour will support the UK economy by creating sustainable employment opportunities and supply chains that are fundamental to the energy transition. In combination with the UK Critical Minerals Strategy and the US-UK Atlantic Declaration, we anticipate that this strategy will attract investment in the UK’s critical mining and refining industries and enhance relationships with key mining countries, including Australia, Canada and Brazil. We are grateful to all those involved in establishing this vital strategy.”

The government will also attract international investment to projects like lithium mining in Cornwall to make us more self-sufficient in critical goods used in industries like electric vehicles production and clean energy.

Through the strategy, we will also identify the support UK business needs to connect with new suppliers in international markets, including through our overseas network in more than 100 countries. At the same time, we will use our expertise to support developing countries build supply chains with new international markets, including the UK.

The strategy also sets out how the UK government will work with our friends and international partners to solve supply chain challenges, through steps like the Atlantic Declaration. This partnership with the US includes negotiation of a new critical minerals agreement that will bolster our vital supply chains and ensure the UK’s access to materials we need for future technologies.

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