Manufacturing’s Coming Home? Manufacturing Under the Next Labour Government

Keir Starmer, Rachel Reeves and Angela Rayner inside a factory

Having seen and experienced working life within UK manufacturing, from my father’s clothes manufacturing plant through to large multi-sited organisations providing goods to the food, pharma, retail and technical markets, I am a firm believer in UK manufacturing and the potential it offers.

A Labour government can only shape the future by recognising opportunities to boost economic growth. The surest way to do so is by revamping major economic sectors such as manufacturing to increase capacity and efficiency.

The Fourth Industrial Revolution

History is at a turning point, and in times of crisis the role of government is more important than ever. We need to go beyond crisis management and build our manufacturing in a constructive way for prosperity in our communities.

The world is embracing the 4th industrial revolution, where the lines between physical, digital and biological spheres are being blurred. Manufacturing has been the UK’s economic engine and is the world’s workshop. To help us help ourselves, intervention in the manufacturing sector is necessary to achieve continued economic growth.

Most manufacturing developments are happening in China, the US and leading European nations such as Germany, France and Italy. This is due to changes in the use of technology in manufacturing. This shift in approach gives us an opportunity to restore economic growth and productivity to the UK by incorporating the technological advances of the 4th industrial revolution into the manufacturing process.

We know it can be done thanks to initiatives like the Covid-19 ventilator challenge. In around three months, UK manufacturing went from producing 50 ventilators to making 14,000 new machines to save lives on the NHS frontline. For all the problems with how it was run, it show how governments can build a country’s manufacturing capacity and use technology to meet societal needs and objectives.

With Labour supporting new technology into the industry we can increase capacity, innovation and growth.

Why is this important?

Manufacturing arguably is the sector that can deliver shared and inclusive growth across all regions, something a Labour government should make an immediate priority. To do so successfully, a Labour government will need to make the UK one of the most attractive places in the world to set up manufacturing plants.

By backing manufacturing, we can strengthen our income for the country from export and revenue through taxation, which we invest in our public services. Manufacturing has delivered a model for shared wealth and growth across our regions and economy. A boost to our domestic supply chain and manufacturing will also meet Labour’s levelling-up agenda of work and community prosperity

After Brexit, Covid-19 and now the Russian invasion of Ukraine, we need to be concerned about the resilience of the British economy to future macroeconomic shocks. To help increase resilience, we need to move away from just in time methodology and offshoring our manufacturing base.

Considering high inflation and a struggling UK economy, manufacturing can be the key to rebalancing investment and industry across the country, driving higher levels of GDP growth, creating more well-paying jobs, and increasing British exports abroad. A Labour government can support already thriving industries in the manufacturing sector while encouraging small businesses to boost regional levelling-up.

Reshaping the economy

In 2022, the government announced a £25.1bn Research and Development (R&D) budget for the three financial years 2022/23 – 2024/25. This is meant to finance the government’s innovation strategy but lacks a clear focus. A Labour government must go beyond simple investment and leverage opportunities beyond R&D to envisage products and resources for selling and using tax revenue and National Insurance (NI) contributions from workers. Science and R&D need to be about end-to-end manufacturing.

To fully benefit from this opportunity, we need to reshape the existing structure of skills and training. The impact of digitisation brings challenges and opportunities. Reskilling and upskilling the workforce is critical to adding value and competing globally to attract both consumers and producers. Technological capital and labour working together to complement each other can drive the economy forward.

A Labour government should focus on output and resilience, utilising our comparative advantages in education and infrastructure. From my experience in manufacturing and delivering apprenticeships and recruitment, we need to deliver vocational courses through training, tailored towards high growth, high-tech green industries of the future. We need industry-specific outputs and productivity-driven training. The best approach is to deliver this in conjunction with our use of research to develop mass-scale production and export opportunities.

Manufacturing here in the UK needs to be predictable and reliable. Lean and just-in-time supplies, and offshoring are volatile, uncertain and vulnerable to supply chain disruptions. The government can provide support to eliminate gaps in the supply chain and on the other hand, accept that quality control is extremely difficult to achieve with offshore manufacturing. A Labour government can promote investment and support to start-ups and small and medium-sized enterprises (SMEs) to increase local manufacturing.

A Labour government can lead the way in the form of investment, leadership in governance and core values. Its role will be to empower communities and businesses to build a fairer, more inclusive and prosperous community. It’s all about how we can be productive and produce high-quality products with low costs, higher sustainable wages and profitable businesses.

Labour can energise the British economy by backing manufacturing efforts, creating high-skilled job opportunities and increasing productivity, thus boosting economic growth in a sustainable way.

For more on how the next Labour government can utilise cutting-edge technology to generate economic growth, see ‘Future Industries: Technology Led Growth For Britain In The 2020s​