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ResPublica’s new report, Make or Break: Why Britain needs a manufacturing resurgence and how we can help it to take place, sets out how Britain can better help manufacturing contribute to UK-wide economic prosperity, productivity and opportunity. We argue that a new focus on foreign investment can power economic growth and support a geographical and sectoral rebalancing of the British economy.
Report authors Phillip Blond and Edward Douglas were featured on BBC Radio 4 and Share Radio respectively, while the findings were also extensively covered in City AM. Lord Bilimoria of Chelsea, who spoke at the launch, also advocated the report in remarks to Parliament. The full launch event can be found on our Youtube channel.
The report found that the recent collapse of the British steel industry has demonstrated the problems of an economy reliant on services and external financing and has made this an issue of urgent national concern. As UK manufacturing’s competitiveness has declined – partly due to a strengthening pound – regional imbalances have grown, productivity has sagged and economic growth has been sluggish.
Sterling’s strength has been caused in part by inflows of foreign capital that finance our current account deficit but often do not increase the productive capacity of the economy – such as the Chinese Investment Corporation’s purchase of stakes in key UK assets. The long-term economic security and prosperity of all regions of the United Kingdom depends on a new, more holistic approach to economic and industrial policy that addresses this issue.
In Make or Break, we set out the steps needed to rebalance and grow the economy. We argue that the only way to do this is through a new policy approach to foreign investment – one that prioritises investment in productive areas of the economy such as manufacturing.
Backing the report, Seema Malhotra MP, Shadow Chief Secretary to the Treasury, said: “Manufacturing is so important to the UK’s prosperity. Each job lost – and in steel we have seen thousands in the last few weeks – takes stability and security away from another family.
“So I warmly welcome ResPublica’s timely report and its recommendations. The Conservatives’ policy of selling off UK assets to the highest bidder is, as this report demonstrates, having a disastrous impact on our manufacturing sector. With another £5 billion of asset sales announced in the Spending Review this week, this is now an issue of urgent national concern.”
Lord Bilimoria, Founder and Chairman of Cobra Beer, said: “ResPublica’s new report sends the strongly welcome message that manufacturing can tackle our low productivity, boost our export performance and secure economic growth around the country.
“Manufacturing is crucial to the British economy. My joint venture partner Molson Coors has recently invested £80 million in the biggest brewery in the country, in Burton-on-Trent, where we brew Cobra beer. This kind of investment will bring with it huge productivity gains and will make a really positive impact on the regional economy.
“But more needs to be done to build on the world class manufacturing capabilities and institutions we already have, and encourage more domestic and foreign investment in the productive capacity of the sector. That’s why I urge the Government to give serious consideration to ResPublica’s recommendations with regard to Britain’s productivity.”
Mark Field MP, former Shadow Financial Secretary to the Treasury and Chair of the APPG on Venture Capital and private Equity, said: “For too long, the UK political class has failed to grasp that much of our structural and current account deficit is funded by foreign direct investment. ResPublica’s report could therefore not be timelier – and it gets to the heart of the issues we need to address if we want a balanced economy and sustained growth.
“The disposal of public and private assets to fund our current account deficit is not sustainable. ResPublica’s welcome contribution to this critical economic debate sets out how a new focus from policy-makers on the nature of financial inflows can boost economic growth and rebalancing.”
Anna Turley MP, Member for Redcar said: “The Government has failed to support the steel industry in Redcar with the loss of 3000 jobs – and it’s time for an economic strategy equipped to prevent further industrial closures and support the growth of new manufacturing firms and jobs.
“This report looks at the key issues that we face – not just in manufacturing but in the economy as a whole. We have seen in Redcar how central manufacturing industries are not just to UK’s current account but to the overall health and vibrancy of local communities.
“That’s why I strongly support the recommendations in ResPublica’s report. This is a crucial moment for British manufacturing and the steel industry – ResPublica have made a timely and welcome assessment of where we are and where we need to go.”
Rt Hon Cheryl Gillan MP, Member for Chesham and Amersham and a former Secretary of State for Wales and former Conservative spokesperson for trade and industry, said: “Since 2010 the Conservatives have put the economy back in the right direction. But this report is a timely reminder of the work we still need to do to rebalance the economy, increase our exports and bring prosperity to all parts of Britain.
“I welcome ResPublica’s report on examining ways in which to boost the economy in the long term by encouraging more investment in our manufacturing sector and improving the competitiveness of the sector globally.
“I hope colleagues will also welcome this thoughtful contribution to the national debate.”
Nicholas Comfort, journalist and author of The Slow Death of British Industry, said: “I strongly welcome ResPublica’s report that sets out a vision of how British manufacturing can flourish again. For too long the importance of sterling exchange rate to British manufacturing has been underappreciated and this report sets out to address this.
“It is a timely report on a fascinating topic. The steady decline of British manufacturing is one of the key factors hindering a balanced development of our economy.
“The British economy is skewed towards financial services and manufacturing companies are encouraged to sell themselves off rather than grow and reports like this are essential in highlighting this problem and suggesting ways to rebalance the UK economy.”
Edward manages ResPublica’s housing programme. He has written extensively on housing, planning and regeneration. He also works on employment, skills, enterprise and finance policy. He is the author of Great Estates on regeneration, and co-author of Going to Scale on...
Phillip is an internationally recognised political thinker and social and economic commentator. He bridges the gap between politics and practice, offering strategic consultation and policy formation to governments, businesses and organisations across the world. He founded ResPublica in 2009 and...
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