Support manufacturing to boost UK productivity and ‘level up’ the regions

A recent report from Onward, the campaigning think-tank, has accused politicians and policymakers of failing to support the renaissance currently taking place in the manufacturing industry. The authors contend that more assistance from the centre now could help level up the regional economy and, crucially, close the productivity gap with the UK’s main competitors.

The report points out that many of our manufacturers are utilising highly skilled workers to make top quality products for which there is a proven international demand. The authors argue that, because productivity growth in manufacturing has been higher than across the rest of the economy – up by 0.64% between 1979 and 2019 compared to a rise of only 0.36% across the economy as a whole – there should be greater focus on supporting the sector.

Output per hour was 20% higher in manufacturing than in other sectors and, furthermore, earnings were higher across all qualification levels – not just for graduates. It has the capability to support those on low and middle-income earnings.

The argument runs that Wales, which has one of the lowest levels of productivity of any of the home nations and regions, has been crying out for support for decades. The manufacturing industry, which has the potential to provide higher numbers of well-paid and highly skilled jobs, could play a vital role in levelling up economic health between the more prosperous and poorer parts of the UK, like Wales.

One of the main recommendations contained in the report is for a new National Manufacturing Plan to be launched. This, to include greater access to long-term finance, especially for SMEs, and matched by institutional investment in the industrial roll-out of physical or digital infrastructure (such as 5G) which would facilitate growth in advanced manufacturing – as embodied in Industry 4.0 – in areas of the UK that need it most.

The report also makes the case for individual manufacturing firms to be incentivised by “better and more focused tax breaks” that encourage capital investment in new plant and equipment, and for fairer procurement rules that could also benefit firms that form a vital part in the supply chain.

The core message – one we at UnitBirwelco wholeheartedly support – is that, after years of neglect and disappointment, central Government, the devolved administrations and financial institutions should throw their combined weight behind a resurgent manufacturing industry that can provide well-paid and highly skilled job opportunities in poorer communities. That has to be good value for everyone in this country.