New Onward research: Making a comeback

2021-07-12T21:48:37+00:00 July 12th, 2021|Levelling Up, Onward, Research|

This morning Onward, alongside the Levelling Up Taskforce of 65 Conservative MPs, publishes its latest research report, Making a comeback, which explores how a manufacturing renaissance can level up the country.

Read the research

  • Manufacturing accounts for an outsized share of the best paying jobs in poorer regions. UK-wide, manufacturing workers earn over £1 an hour more than average.
  • Median earners in manufacturing earned 22% in the North East, and 19% more in the North West, a premium of over £2 an hour.
  • For regions outside the capital, productivity is a fifth higher in manufacturing than the wider economy.
  • Around 40% of productivity growth in the West Midlands, Wales and North West came from the manufacturing sector, between 1997 and 2017.
  • On average, seats the Conservatives won in 2019 have a much larger share of manufacturing jobs (12.2%) than Labour seats (7.8%).

But the UK has deindustrialised more than any other G7 country. While manufacturing is a bigger share of the economy in lagging areas, it also provides an outsized share of the better paid, high productivity jobs in those places:

  • In 1970 the UK had the sixth largest share of manufacturing in the economy in the G20. Today it is second from bottom.
  • Many other rich countries have deindustrialised far less: manufacturing is about 10% GDP in the UK but about 23% in Germany.
  • In 1981, manufacturing accounted for 23.4% of employment. This fell to just 8.1% in 2018.
  • The decline in manufacturing jobs hit some places much harder than others – especially the Tees Valley, Lancashire and the Black Country, but also Barking and Slough in the South.

To reverse this, the report recommends that the Government launch a long-term National Manufacturing Plan to help drive stronger growth and higher wages in poorer parts of the UK. The authors call for Ministers to set out tax incentives for capital investment, action to reduce industrial electricity costs, greater 5G connectivity for smart factories, and long-term funding for manufacturing R&D institutions. Most of the world’s developed economies do much more to sustain a vibrant and competitive manufacturing base than the UK has historically done.

Will Holloway, Deputy Director of Onward, said:

“Manufacturing matters because it offers well-paid, secure and skilled work. This is especially true in lagging parts of the country.

“In recent weeks, manufacturers like Nissan, Rolls-Royce and JCB have made welcome announcements of new jobs and extra investment. Ministers should build on these successes to create a manufacturing renaissance in the UK.”

Verity Davidge, Director of Policy, Make UK said: 

“If the pandemic has shown us anything, it is that the UK manufacturing sector remains the UK’s economic engine, and its source of innovation, wealth and prosperity.

“Today’s findings show that the UK manufacturing sector has an important role to play in reviving and rebalancing our economy in the months and years ahead. Key to delivering this will be ensuring the Government’s levelling up agenda focuses its investment towards the sectors that create good, stable employment, and powering local economic growth – this means prioritising the needs of the UK manufacturing sector across our different regions.

“A national manufacturing plan to take this forward is the right step to delivering sustained economic growth in the next decade. Industry stands ready to work with government to put UK manufacturing front and centre of a renewed industrial base in the UK.”

Ian Muldowney MSc CEng FRAeS, Chief Operating Officer, BAE Systems Air, said: 

“Manufacturing has always played a critical role in driving innovation, productivity and delivering prosperity throughout the economy. With the right focus and investment it can play a huge part in levelling up and ensure the UK leads from the front, in respect to the Green agenda.”

“Investing in UK manufacturing will ensure we have the right skills and capabilities to boost economic growth and will help build green jobs and industries of the future.”

Chris White, Director of the Industrial Policy Research Centre, said: 

“I welcome Onward’s most recent report.  It clearly describes the link between manufacturing and the ambition to ‘level up’; the sector compares favourably with other industries on a number of criteria, from productivity to earnings.

“Manufacturing plays an important role in the UK economy as a whole, but also at a regional level, and has huge potential to deliver well-paid, sustainable jobs.  However, as the research shows, countries across the globe are starting to recognise its significance and are developing policies to support their own manufacturing base. 

“The Paper makes a series of recommendations, which, if heeded, will go some way towards building a manufacturing renaissance, not least, through emerging technologies and sectors, leading towards a resilience that will be able to withstand the shocks of the future. 

“I congratulate the authors of the report for this excellent piece of work, and hope it creates further debate on this vital topic.”

Simon Fell MP, Member of Parliament for Barrow and Furness, said: 

“This report shows not just the clear value of manufacturing to the UK, but the untapped potential of promoting and growing the sector. This report makes a clear case that with a National Manufacturing Plan, the government could bring together projects of national importance, support strategic industries, and contribute to levelling up communities across the UK.”

Jo Gideon MP, Member of Parliament for Stoke Central, said: 

“I welcome the findings of this report. Building back better must include building back our manufacturing base and adding advanced manufacturing capacity. The report identifies the key benefits: the scope for increased productivity and more opportunities with well-paid jobs in areas of the country which have been left behind – a win for levelling up the country is also a win for the UK economy.”

Miriam Cates MP, Member of Parliament for Penistone and Stocksbridge, said: 

“We can’t ‘Level Up’ without a manufacturing revival. In my constituency, the steelworks employs far fewer people than it once did, but these jobs are still some of the most well paid and highly skilled in the area. This report shows why reversing the manufacturing decline in some of our most deprived regions is so important to restore productivity – and pride – to our industrial heartlands.”

John Stevenson MP, Member for Parliament for Carlisle, said: 

“I think this report is very timely given the debate about levelling up and the importance of manufacturing. In my constituency of Carlisle manufacturing is nearly 20% of the local economy and has provided stability to the economy as well as paid jobs for many years.

“If the government is serious about increasing the nation’s productivity and improving the lives of some of our poorer communities then a renaissance in manufacturing should be at the centre of it. This report highlights the possibilities which should be seized with both hands”

Jacob Young MP, Member of Parliament for Redcar, said: 

“Having worked in the chemicals industry, and started out my career as an apprentice, I know first-hand the value that manufacturing firms provide – just like people across Redcar & Cleveland.  Onward’s research shows that manufacturing provides well-paid jobs to workers whatever stage they’re at in their career. We have shown our commitment to maintaining manufacturing, and now we must double down on our commitment to support it in the long-term.”

Richard Holden MP, Member of Parliament for North West Durham, said: 

“Onward’s manufacturing report provides a clear plan for the future. For too long, we have just accepted deindustrialisation as inevitable. It isn’t. Levelling up requires skilled manufacturing jobs in the private sector. To get those we need a plan to drive manufacturing growth and to have the ambition to achieve fundamental transformation. This report gives us an outline of how to get there.”

Katherine Fletcher MP, Member of Parliament for South Ribble, said: 

“Some of the stories in the media would have recent conservative gains being marginalised communities, but as this report shows that’s not the right way to describe many of them. They are proud maker communities with the highest % of manufacturing jobs in the country.

In my part of the world, we make stuff, we’re proud of it. I repeat what I’ve said before on Levelling up –  invest in us and we’ll pay you back –  and this report shows where the opportunity & capability to do this lies.”

Bob Seely MP, Member of Parliament for Isle of Wight, said:

“After a decade in which policymakers have been desperate for ways to boost productivity and wages, it is salutary that manufacturing not only delivers both, but does so with the greatest gains in the poorest places. I warmly welcome this report, and hope the Government turns its findings into a strategy to help thriving manufacturing centres like the Isle of Wight fulfil its potential. Making high quality products is not just a feature of Britain’s past, but a core part of our future prosperity too.”

 

For media inquiries please email will.tanner@ukonward.com