The UK has 200,000 fewer manufacturing jobs than in 2010, a fall of 7 per cent, according to an analysis of OECD figures by the Trades Union Congress, which has called on Andy Burnham to restrict foreign goods to encourage the production and use of British-made products.
The TUC said that had the UK kept pace with the EU average, it would have created an extra 276,000 manufacturing jobs over the same period. Several of the Continent’s largest economies have relied on manufacturing to generate growth and jobs.
According to the analysis, investment in manufacturing as a share of GDP in the UK stands at 1 per cent, compared with 3.5 per cent in the European Union. Manufacturing generates about 10 per cent of total UK GDP.
The figures underline the scale of the challenge facing the prime minister’s drive to reindustrialise the economy.
Paul Nowak, general secretary of the TUC, said: “Manufacturing communities powered the UK economy for generations … now we’re at the bottom of the league table compared to our European peers.”
Nowak called on the prime minister and John Healey, the chancellor, to introduce restrictions on foreign goods to stimulate manufacturing job creation, replicating the Made in Europe scheme under consideration in Brussels.
The EU package is officially called the Industrial Accelerator Act, which the European Commission says is designed to increase demand for low-carbon, European-made technologies and products. It has been introduced at least in part to protect the Continent’s manufacturing industry from overseas competition, especially from China.
“The prime minister has said the right things about reindustrialising Britain so far,” Nowak said, adding that “he needs to make reindustrialisation a national mission and match our EU partners by introducing a UK Industrial Accelerator Act”.
The recommendation follows Healey’s call to European finance ministers last week to let the UK join the Made in Europe scheme.
Manufacturing trade bodies have urged the chancellor to set out the detail of the prime minister’s reindustrialisation plans at the budget on 28 October.
Economists generally believe that restrictions on trade harm industries over the long term, although tariffs and other protective measures can help smaller industries survive the early stages of development.
Verity Davidge, director of policy and public affairs at Make UK, said: “Manufacturing represents around 10 per cent of the economy, supports 2.6 million jobs and accounts for 42 per cent of UK exports … there cannot be an economic revival in this country without it.”
Make UK has previously warned that energy prices are pushing production offshore, with a survey earlier this year finding that one in four UK manufacturers had moved or were considering moving production abroad.
Separately, economists at the Institute of Economic Development have written to Burnham and Healey urging them to define their mission to deliver good “growth in every postcode” with identifiable economic metrics, so that the government can be held to account.
The letter said ministers must “establish a definition of “good growth” that goes beyond GDP and jobs, to consider equality of opportunity, quality of employment, environmental outcomes and the distribution of benefit within places, including who gains and where”.
A government spokesman said: “Our manufacturing industries are vital to the UK’s success and economic growth and our industrial strategy places them at its very heart.
“That is why we have announced significant support for key sectors including chemicals and ceramics, while backing steel and automotive manufacturing.
“The UK also continues to attract major private investment, with companies such as Nissan and McLaren announcing hundreds of millions of pounds of investment over the past week alone.”
McLaren Automotive last week set out a £500m programme to expand its UK operations, which it said would create at least 1,000 direct and indirect jobs by 2032.
Paul Jones
Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media's automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.
