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Government announces new UK Advanced Manufacturing Plan

Posted on 28 Nov 2023 and read 726 times
Government announces new UK Advanced Manufacturing PlanBusiness Secretary Kemi Badenoch

Plans to build on British excellence in advanced manufacturing to secure long-term private investment and create high-skill jobs have been unveiled by the Business Secretary Kemi Badenoch this week. The landmark Advanced Manufacturing Plan (AMP) sets out the Government’s initiative to position the UK as the best place in the world to start and grow a manufacturing business.

As outlined by the Chancellor in his Autumn Statement last week, the Government will offer certainty to business by committing more than £4.5 billion in targeted funding to back the long-term future of the UK’s world-leading manufacturing industries – automotive, aerospace, clean energy and life sciences. This includes support for batteries and industries undergoing fundamental changes to remain at the forefront of the global transition to ‘net zero’.

The plan outlines the key measures to improve the business environment and attract investment, including faster grid connections, full expensing and more apprenticeships. It will ensure the UK uses its competitive advantage in manufacturing to become a world leader in the development of zero-emissions technology, taking advantage of the thousands of jobs on offer. Our world-leading track record of decarbonisation makes us well placed to seize opportunities in the new global ‘green’ economy.

This package builds on recent investment wins including up to £2 billion investment from Nissan in Sunderland, the £4 billion Tata gigafactory, the £600 million electric Mini investment from BMW and Boeing unlocking £80 million of aerospace manufacturing investment in Sheffield, and ensures that the Government can continue to help create jobs, grow the economy, and secure the future of UK manufacturing.

Competitive advantage

Business Secretary Kemi Badenoch said: “The UK recently overtook France to become the world’s eighth largest manufacturing economy. The Advanced Manufacturing Plan will build on that success by targeting funding at where we have a competitive advantage. Industry wants a stable, long-term plan that has support for cutting-edge technologies and a trade policy that delivers.”

Prime Minister Rishi Sunak said: “We are going full throttle to back British businesses and make the UK a world leader in manufacturing - which already makes up over 43% of all our exports and employs 2.6 million people across the country. This plan will not only give the industry the long-term certainty they need to grow and invest further in the UK, but it will also lay the foundations to create more jobs and opportunities for people across the country.  

“Global companies are already choosing to invest in the UK and for every pound of Government investment in the future of manufacturing, we are leveraging five pounds of additional private sector investment. The Advanced Manufacturing Plan will build on this success and ensure we’re creating the right conditions for manufacturing to flourish, and that bureaucracy does not get in the way of investment.

“To boost growth in small and medium-size manufacturing businesses more widely, it has also been announced that the Government will expand the Made Smarter Adoption programme, offering the scheme to all English regions in 2025-26 before working with the Devolved Administrations to explore expanding the programme further from 2026-27.”

Industry Minister Nusrat Ghani said: “Growing the battery industry is vital to positioning the UK as the best location in the world to manufacture electric vehicles, and building on the confidence we’ve given our supply chain through recent successes such as the investments from Tata, BMW and Nissan, plus the wealth of Government support available to businesses.

“I wanted to be ahead of the curve in working with industry to produce a Battery Strategy. This will help businesses become more innovative and productive, future-proofing our economy and supporting our ambition towards a cleaner, greener future, and forms a crucial part of our Advanced Manufacturing Plan to back British industry for the long term.”

The plan focuses on:

Investing in the future of UK manufacturing — A new Hydrogen Taskforce will maximise investment opportunities for the UK manufacturing of hydrogen propulsion systems. Hydrogen is expected to represent a crucial part of the UK’s future net zero energy system and is critical to supporting the UK’s energy security. The Government’s Hydrogen Strategy sets out ambitions to reach up to 10GW of hydrogen production capacity by 2030, with at least half coming from electrolytic or ‘green’ hydrogen.

Building supply chain resilience — The prize in getting our battery industry right alone is worth 100,000 jobs by 2040, with thousands of further jobs available in the wider sector. The UK’s Battery Strategy will seek to invest £50 million in developing the UK’s battery world-class capabilities, emphasising the importance of developing the batteries of the future by leveraging the UK’s world-leading research and innovation, securing a resilient UK manufacturing supply chain, and enabling the development of a vibrant and sustainable sector.

Reducing costs and barriers to business — At the Autumn Statement, the Chancellor announced further measures to back businesses and remove barriers to investment. This includes making the Full Expensing scheme permanent so businesses can invest for less – delivering an effective permanent tax cut of £11 billion a year for businesses who invest in IT equipment, plant and machinery. The move is set to boost business investment by £14 billion and help grow the economy.

With the tax cut now permanent, the UK will continue to have both the lowest headline corporation tax rate in the G7 and the most generous capital allowances in the OECD group of major advanced economies, such as the United States, Japan, South Korea and Germany. Since the introduction of the super deduction – the predecessor to full expensing – in 2021, investment in the UK has grown the fastest in the G7.

The Advanced Manufacturing Plan also builds on existing support for the sector that includes the British Industry Supercharger ensuring energy costs for key industries like steel, metals, chemicals, and paper producers are in line with other major economies around the world and the Industrial Energy Transformation Fund supporting the deployment of technologies that is enabling hundreds of businesses with high energy use to transition to a low-carbon future.

Industry reaction

SMMT chief executive Mike Hawes said: “Decarbonising road transport is essential if‘ ‘net zero’ is to be achieved, and that transition must be ‘built in Britain’. The Government’s Advanced Manufacturing Plan sets out measures to support the UK automotive supply chain as it undergoes the most significant transition in its history.

“The plan, together with a new battery strategy to support the development and production of this critical technology, is essential if the UK is to compete in the face of fierce global competition. These initiatives can only help to attract the investment necessary to seize the growth opportunities a ‘net zero’ economy offers.”

ADS CEO Kevin Craven said: “ADS and our members welcome the Advanced Manufacturing Plan, reaffirming long-term backing for our world-leading advanced manufacturing sectors, including UK aerospace. This is a very timely intervention given the growing pace of aerospace recovery, huge aircraft order backlog and industries’ continued commitment to ‘net zero’.

Our aerospace sector provides high-skilled jobs throughout the country, and set against a backdrop of increasing global competition, the continued commitment towards aerospace R&D is significant. These measures will provide a boost to continued investment in innovation and advanced manufacturing in the UK, in turn securing the future advantage of our industry.

Make UK CEO Stephen Phipson said: “A battery strategy is very welcome and much needed. Having a joined-up battery plan in place will be critical for the UK economy to benefit fully from new technological opportunities going forward, and we must ensure that manufacturing involves the entire supply chain, right from design to manufacturing and recycling, closely connecting car and battery industries.”

He concluded: “Recycling will also be very important to recover those critical materials that are essential for the low-carbon economy, and this joined up Advanced Manufacturing Plan will help deliver better coordination across the whole of the clean energy sectors. Make UK and industry will continue to work with the Government on the practicalities of this plan, including how to incorporate manufacturing supply chains. These supply chains have a key role in supplying components and services for clean energy in the future low-carbon economy and we must ensure that the full potential is delivered to enable our companies to compete on the global stage.”