The John Mills Institute for Prosperity (JMI) has today called on the Government to put manufacturing at the heart of its economic policy ahead of the Autumn Statement.
JMI advisory board members Sir Vince Cable and Stephen Kinnock, as well as founder John Mills, have thrown their weight behind this intervention. Specifically, they called on the Government to back UK manufacturing to grow the economy and improve living standards for Britons.
The intervention comes at a critical moment for the UK as the Government sets out its economic strategy amidst a financial crisis and the toughest squeeze on citizens since the 2008 global financial crisis. Stagnant growth has been recognised as a key contributor to the UK’s dire economic situation and yet the Government is offering no growth strategy, says the Institute.
JMI says the UK economy has suffered stagnant growth for years, and that this is making people poorer. Rising governmental costs such as health and social care and the climate crisis will pile further pressure on an already struggling economy in the coming years. The Institute says if its growth target of around three per cent per annum isn’t achieved, living standards will continue to slide over the next decade.
The Institute is calling on the Government to implement a robust industrial strategy that supports manufacturers and encourages investment in the sector, through measures such as a competitive exchange rate policy, tax incentives, and support for training and education.
It wants to see manufacturing contribute at least 15 per cent of UK GDP, up from less than 10 per cent now. Manufacturing is the sector with the greatest potential for increased productivity, and thus the Institute believes it is the best tool the UK has to grow the economy. It would also bolster the economy outside of London, thus reducing regional inequalities, and creating thousands of well-paid and highly skilled jobs.
Sir Vince Cable said: “The Government faces extremely difficult choices in its Autumn Statement. Unfortunately, some of those measures may involve significant tax increases and spending cuts. As part of the measures it will outline, the Government needs to ensure that we have an industrial strategy that protects education, training, and innovation which are crucial to long-term future growth and growing our manufacturing sector.”
Stephen Kinnock said: “The British economy is suffering from a decade of low growth, higher inflation, and low productivity. Austerity is not the answer to Britain’s economic problems. We need a comprehensive industrial strategy to revive British manufacturing, support key industries such as steel in my constituency and to reduce our strategic dependency on authoritarian countries.”
John Mills said: “The British economy faces a bleak future based on high taxation, austerity, and low growth. Living standards are set to fall for many people in this country already facing soaring inflation. The Government needs to focus on growing the size of the British economy to pay for the public services we all need, and to increase living standards. Exploring a competitive exchange rate policy and creating conditions where investment in technology, automation, and power, the drivers of productivity, are front and centre will achieve this.”