According to a new report by the EEF, the Chancellor of the Exchequer can help solve the UK’s productivity crisis by targeting Government spending in areas that support growth in high-value manufacturing.
The report claims that, “with the right policies in place, manufacturing is poised to deliver 40% of Britain’s productivity gains over the next decade”.
According to the EEF, the Manufacturing a solution to the productivity crisis report “shatters the myth” of an under-performing sector by claiming that, in the years running up to the financial crisis, UK manufacturers were increasing their productivity at a rate in line with “the best in the world”.
Since 2007, “the sector has remained ahead of most EU competitors, including Germany — in some cases, by a significant margin”.
EEF director of policy Paul Raynes said: “Ministers’ welcome commitment to improving productivity requires their forthcoming policy paper on productivity to focus on further investment in innovation, skills and infrastructure and to avoid flat-rate across-the-board cuts for investment and public services.
"It will be tempting for the Chancellor to ‘swing the axe’ equally across all unprotected departments. Instead, he needs to cut with a surgical laser to make sure that the Government’s real contribution to future productivity growth can be preserved.
“Ultimately, the private sector — and manufacturing in particular — will deliver ‘the lion’s share’ of the UK’s productivity improvements, but the state can be a crucial partner.
"Manufacturers already lead investment in research and innovation, and they want to carry on working with universities and innovation hubs such as the Catapult centres, as well as their supply chain. They must also be fully involved with developing apprenticeships and engaging with young people about industrial career opportunities.”
Meanwhile, a new report by the Oxford Economics group says that British manufacturers are forecast to increase their productivity by 15.5% over the next five years, helping to increase the value of exports by 35%.
Commissioned for the International Festival for Business 2016, the report says that productivity will increase across all sectors by 10.7%; this will cause disposable incomes to rise by a total of 12.4%.
Festival chairman Max Steinberg says: “It’s clear that the economic recovery is about to turn another corner, with rising productivity driving a surge in disposable incomes and in our international competitiveness.
"At next year’s festival, we will celebrate Britain’s collective economic strengths, showcasing our capabilities to the world during three weeks of events and deal making. This report makes it clear that we have a great deal to offer.”
The festival will take place from 13 June to 1 July 2016 at the Liverpool Exhibition Centre.