UK treading water in the 'global race' for manufacturing goods. says TUC

By agency reporter
February 25, 2013

The UK is falling further behind its competitors across the G7 in mining and manufacturing, the Trades Union Congress (TUC) says in its latest report on the economic 'global race'.

The TUC analysis of industrial production figures since the second quarter of 2010 shows that the UK is currently ranked fifth amongst G7 countries - with Germany, the US, Canada and France all doing better, and only Italy and Japan performing worse.

Figures from the OECD show that industrial production in the UK - which includes manufacturing, mining and output from the utilities sector - has fallen by 2.6 per cent over the last two and a half years. In contrast, Germany (+9.9 per cent), the US (+8.6 per cent) and Canada (+4.2per cent) are all producing more today than in 2010.

The UK performance is particularly worrying, says the TUC, as industrial production has shrunk in every quarter since Q1 2011. The UK economy needs far stronger growth in manufacturing and mining in order to help close its trade gap and become less dependent on financial services - aims that both the Chancellor and the TUC share.

Recent TUC analyses of the 'global race' - available at - have found that the UK is also lagging behind most of its G7 competitors on exports and GDP growth.

With stronger growth needed to boost wages and support high-quality job creation, the TUC wants the Chancellor to provide greater support for key productive sectors such as manufacturing in next month's Budget.

The TUC says that recent 'pro-growth' policies, such as corporation tax cuts and limited lending schemes, are proving ineffective and is calling on the Chancellor to take a far bolder approach to supporting British industry by announcing a British Business Bank and a proper industrial strategy.

The TUC is calling for the Chancellor to give the manufacturing sector a much-needed boost in next month's budget by:

- Using the government's £238bn annual procurement budget to support British jobs and industry. This should include putting apprenticeships and help for vulnerable employees into procurement policy objectives, as well as local targets to support UK supply chains.
- Providing greater support to the UK's £95 billion energy intensive industries, such as ceramics, chemicals and steel. The TUC believes that greater reliefs and subsidies over a longer time frame are needed to bring the UK's support for these industries into line with EU competitors such as Germany.
- Setting up a state-owned and well-capitalised British Business Bank, able to raise funds by issuing bonds and whose activities would not count towards the government's fiscal targets.
- Taking up Lord Heseltine's recommendation to set up a National Growth Strategy, chaired by the Prime Minister, with concrete targets for growth across all sectors of the economy.

TUC General Secretary Frances O'Grady said: "The TUC agrees with the Chancellor that in order for the UK to compete, our economy must be less reliant on financial services and the South East.

"But the combination of demand-sapping austerity and failure to support British industry means that the UK is falling even further behind our major competitors.

"With demand for financial products understandably down on pre-recession levels, it's more important than ever that we produce more goods, rather than relying on imports.

"Manufacturing and mining have never really recovered from the hammering they took in the 1980s. The Chancellor has a chance to put right the damage done by previous Conservative governments by making a bold commitment to support manufacturing again."

She concluded: "Next month's Budget gives the Chancellor the perfect opportunity to stand up for British industry by announcing a new business bank and the kind of state-level support that our competitors already provide to their productive industries."


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