THE PRIME Minister will today promise a pro-business regulatory environment and cheap sources of energy, in a bid to tempt British companies to bring their operations backto the UK.
In a speech in Davos this morning, David Cameron will make the case for re-shoring the nation by bringing manufacturing, call centres and head offices back to Britain, rather than outsourcing them abroad. “Whether it’s the shift from manufacturing to services or the transfer from manual jobs to machines, the end point is the same dystopian vision – the East wins while the West loses; and the workers lose while the machines win. I don’t believe it has to be this way,” Cameron is set to tell world leaders at the conference in Switzerland. Instead, he will urge UK businesses to take advantage of a new joint scheme from UK Trade and Investment and the Manufacturing Advisory Service (MAS) which will match companies up with suitable locations and provide tailored advice and support.
The Prime Minister is set to position shale gas as a key reason for companies to come back to the UK, promising savings on energy bills like those seen in America. He will also highlight the demand for better customer service as a key reason for relocation.
MAS research suggests that one in 10 small and medium-sized companies have already brought some of their production operations back to the UK in the past year. Luxury clothing brand Jaeger aims to bring 10 per cent of its manufacturing back in the next five years, citing customer demand for British products as a key factor in its decision. Air conditioning company Vent Axia has already moved its manufacturing team from China to West Sussex and the car industry believes it could re-shore £3bn of supply contracts if UK based companies could respond to the challenge.
But there are still hurdles to overcome. A report late last year by PwC warned that despite the positive trend for re-shoring, lower wages in countries like Poland could still sway businesses.