Manufacturers have warned the Government that its ambitions to reindustrialise the UK economy risk going the way of previous initiatives such as levelling up unless ministers back rhetoric with practical action in the Autumn Budget.
Ahead of the Chancellor’s Budget statement,
Make UK has called for measures to reduce the cost pressures facing manufacturers, arguing that businesses must be given greater scope to hire, invest and grow if the Government’s reindustrialisation agenda is to succeed.
In its Budget Submission the manufacturers’ organisation says the recently published Industrial Strategy has provided a degree of certainty for industry but stresses that long-term confidence must be matched by policies that improve competitiveness in the short term.
Make UK is urging the Government to tackle high industrial energy costs by moving policy levies from electricity bills into general taxation, reduce employment costs by reversing the cut to the Employer National Insurance threshold, and extend National Insurance contribution reliefs to all workers under 25.
It also wants ministers to take a more cautious approach to increases in the National Living Wage and elements of the Employment Rights Act, while introducing 100% transitional business rates relief for manufacturers in 2026-27.
According to the organisation’s latest survey, almost half (47%) of manufacturers believe reducing industrial energy costs should be the Government’s top priority for the sector. Lower employer National Insurance costs were identified as a priority by 37% of respondents, while 32% want employment regulations made simpler and less costly and 31% favour business rates reductions.
The survey also highlighted concerns about employment legislation. Only 11% of manufacturers support the Employment Rights Act proceeding as currently planned. More than a third (36%) want the next phase paused and reviewed, while 22% would like the most burdensome measures reversed and 11% favour delaying implementation to give companies more time to prepare.
Despite those concerns, manufacturers remain broadly supportive of the Government’s industrial ambitions. More than half (56%) of respondents said they were positive about plans to reindustrialise the economy. However, businesses made clear that success would be measured by tangible outcomes rather than policy announcements.
When asked what would demonstrate that the Government was delivering for manufacturing within the next year, 43% cited lower operating costs, while 36% pointed to more competitive energy prices. A further 35% said increased investment in UK manufacturing would be the key indicator of success and 29% highlighted growth in manufacturing employment.
Stephen Phipson, chief executive of Make UK, said: “Governments are good at promising economic resets but delivering them is much harder. If reindustrialisation and growth in every postcode are to succeed where levelling up and building back better didn’t, it’s time to put some flesh on the bones of the buzzwords.
“The Autumn Budget is the first real test of the Government’s reindustrialisation agenda. The Chancellor needs to show, through action not words, what the Government’s promises actually mean.
“For UK manufacturers, that means making decisions right now to ease the burdens they face. If the Government wants our members to stay afloat, the first step is to take some of the weight off their shoulders.
“Manufacturers don’t need flashy new schemes and announcements. They need Government to remove the barriers that stop them from hiring, investing and growing.”