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Make UK boss calls for long-term industrial strategy and end to annual Budget statements

28 February 2024
Phipson described the lack of a
Phipson described the lack of a "modern, long-term, robust" industrial strategy as the UK’s economic "achilles heel".

Stephen Phipson, the head of Make UK, the body which represents manufacturers, called on policy makers on Tuesday to commit to a long-term industrial strategy with a target that manufacturing accounts for 15% of the country's GDP.

Speaking at the organisation's conference at the QE2 Centre in Westminster, Phipson said this would potentially add £150 billion to the UK economy.

READ MORE: Manufacturers say UK is getting more competitive

Ahead of next week's Budget statement, he also called on the Chancellor to end such fiscal statements and instead called for tax and spend policies to be set out at the beginning of each Parliament - only to be changed in exceptional circumstances.

"The fact we have two statements a year has been responsible for twenty six changes in Corporation Tax since 2019," he said, adding that a return to "political and policy stability" was needed.

"Those of you who are Finance Directors must be baffled by the ticker tape of announcements. Instead, I would urge any Government of whatever colour to announce their tax policies for the lifetime of a Parliament, which would only be changed if exceptional circumstances merit it."

Phipson described the lack of a "modern, long-term, robust" industrial strategy as the UK’s economic "achilles heel".

"Every other major economy, from Germany, to China, to the US, has a long-term national industrial plan, even Barbados has one.

"As such, the UK is an outlier and if we are to help tackle our regional inequality and, improve our competitiveness on a global stage, we need a national industrial strategy with cross party consensus as a matter of urgency. One which survives elections and parliamentary cycles," he said.

"Overall, such a strategy would have the aim of growing the contribution of manufacturing to GDP from 10% to 15% and so I am calling on all political parties to commit to this in their manifestos."

On net zero, the Make UK CEO said that the UK needed to "double down" on maximising the opportunities of a net zero economy and safeguarding UK energy security.

"The UK has a genuine opportunity to become a world leader in this area attracting billions of pounds worth of private investment," he told the conference.

On skills, he added that there needed to be a "revolution", beginning with substantial reforms of the Apprentice Levy and a "complete review" of the vocational skills system.

On spending, he said the next government must increase infrastructure spending to the Organization for Economic Cooperation and Development (OECD) average.

"This must be accompanied by ripping up the cumbersome, expensive planning system with a fast track for projects of strategic national importance.

"In addition, the fiscal rules which are preventing investment in capital spending must be changed and, if the Treasury objects to this then we need to change the rules or, split the Treasury into a Ministry for Finance and a Ministry for the Economy," he said.

Phipson also called for a "fundamental" review of defence policy and procurement policies, which favoured the UK's defence manufacturing sector.

"We need to prepare ourselves for the long haul in Ukraine, potentially without US involvement, as well as continued commitments in the Middle East," he told the assembled.

"Whoever forms the next Government needs to prepare the public that these commitments may be open ended and involve significant increases in defence spending. As a result, the current two per cent target must now become a baseline, not a ceiling…," he added.

"This must be accompanied by examining how we execute Defence procurement and, how we continue to invest in our own Defence manufacturing industry, rather than buying off the shelf from overseas."

Giles Gwinnett is a writer at The Business Magazine. He has been a journalist for more than 20 years and covered a vast array of topics at a range of media settings - in print and online. After his NCTJ newspaper training, he became a reporter in Hampshire before moving to a news agency in Gloucestershire. In recent years, he has been covering the financial markets along with company news for an investor-focused web portal. His many interests include politics, energy and the environment. He lives in Dorset.

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