London, UK – The Institute for Prosperity, the cross-party campaign group pushing for a manufacturing resurgence, has today published a new report that lays out a raft of policies to turn the UK into the developed world's fast-growing economy.
The report, titled Manufacturing Unlocked, finds that enlarging the UK's manufacturing base is key to driving the country's economic growth, given the sector's role in raising productivity. The research calls on the government to introduce several urgent policies to support its growth.
The Institute's recommendations include introducing new tax allowances to support manufacturing investment; a new Government-backed finance scheme for manufacturers, and financial incentives to encourage long-termism.
Rt. Hon. Caroline Flint, Chair of the Institute, said: "The UK has been mired in low growth for the last decade. This report shows that a policy programme to promote manufacturing can not only get the country growing again but make us the fastest growing country in the developed world by 2030."
The research also calls for a renewed focus on manufacturing skills and training in education and laser-focused action to tackle the UK's high energy costs. It also suggests protective measures to prevent the offshoring of R&D, targeted Government investment in infrastructure, and reforms to the planning framework to support the construction of industrial premises.
The UK has struggled with low growth rates for over a decade, and the hollowing out of our industrial communities up and down the country has led to rising levels of disenfranchisement, inequality, and inequity of job opportunities across the country. Over the last 30 years, manufacturing as a percentage of GDP has fallen to less than 10%. It’s about 20% in Germany, Singapore and South Korea.
Rt. Hon. Sir Vince Cable, an Advisory Board member at the Institute for Prosperity, said: "Having spent five years overseeing an industrial strategy in government, I recognise many of the supply-side problems which this paper identifies. Its suggestions are constructive and helpful.
"Manufacturers usually operate on longer timeframes, so supportive government policies and a sense of long-term stability and continuity are important. It is essential, therefore, that there is cross-party consistency. This approach fits very well in that context."
John Mills, Founder of the Institute, added: "While these policies may not be sufficient on their own, blended with a sensible monetary policy, they have the power to give the UK economy the important shot in the arm it needs.
“We desperately need to rebalance the economy. We can become a powerhouse economy – the fastest growing economy in the west – if we expand our manufacturing base to around 15% of GDP per annum.
"For much too long, we have complacently accepted rates of about 1.4% of GDP per annum. Singapore has grown at levels as high as 5 per cent over recent years. Why? Because it still has a strong manufacturing sector paired with its important financial centre."
The research follows fast on the heels of a report from the Institute published last year, The Elephant in the Room. It described how consecutive governments' economic policies have led to Britain's rapid and destructive deindustrialisation.