Industry chief calls for 15% GDP target for manufacturing

27 February, 2024

Addressing the Make UK National Manufacturing Conference at the QE2 Centre in Westminster, CEO Stephen Phipson will also set out five key priorities for the next Government, as well as call for a fundamental review of defence policy and, procurement policies which favour the UK’s defence manufacturing sector.

Ahead of the Budget Statement next week, Stephen Phipson will also call on the Chancellor to announce that this will be the last such statement and that, from now on, the next Government should announce there will be no annual fiscal statements of any kind. Instead, in order to provide business with greater stability, Stephen Phipson will call for tax and spend policies to be set out at the beginning of each Parliament and only be changed in exceptional circumstances.

Stephen Phipson will also call for the next Government to commit infrastructure spending to match the OECD average, with the planning system being torn up and current fiscal rules on capital spending changed. He will also call on the next Government to double down on policies on net zero and safeguard energy security.

On industrial strategy and the 15% GDP target Stephen Phipson will say: “The lack of a modern, long-term, robust industrial strategy is the UK’s economic achilles heel. Every other major economy, from Germany, to China, to the US, has a long-term national industrial plan, even Barbados has one. As such, the UK is an outlier and if we are to help tackle our regional inequality and, improve our competitiveness on a global stage, we need a national industrial strategy with cross party consensus as a matter of urgency. One which survives elections and parliamentary cycles.

“Overall, such a strategy would have the aim of growing the contribution of manufacturing to GDP from 10% to 15% and so I am calling on all political parties to commit to this in their manifestos. Some may see this ambition as fanciful but, as globalisation shifts, why not aim to produce more here so we are less dependent on others for everything from our food to our energy and security. If we were to achieve this ambition, over time it would add around one hundred and fifty billion pounds to our economy, help tackle regional equality and to pay for the public services we all want to see.”

On a review of Defence policy and procurement, Stephen Phipson will say: “We need to prepare ourselves for the long haul in Ukraine, potentially without US involvement, as well as continued commitments in the Middle East. Whoever forms the next Government needs to prepare the public that these commitments may be open ended and involve significant increases in defence spending. As a result, the current two per cent target must now become a baseline, not a ceiling, and the next Government must commit to an immediate fundamental review of defence policy. This must be accompanied by examining how we execute Defence procurement and, how we continue to invest in our own Defence manufacturing industry, rather than buying off the shelf from overseas.”