3 things Cameron won't tell you about reshoring

David Cameron has declared he wants Britain to become a "reshore nation."

Speaking at the World Economics Forum in Davos, the Prime Minister said he wants international companies to resettle in the UK and has established Reshore UK to facilitate the process. David Cameron argued that reshoring would increase quality, shorten lead times and improve delivery performance.

However, here are three reasons why reshoring might not be all its cracked up to be.

Sellers closer to buyers is not necessarily a good thing

Proximity to the producer of goods is not always good news for consumers. The peasants of 14th century England were certainly closer to the producers of their products but this did not lead to greater supply, diversity and quality.

Many manufacturing companies outside the UK face substantially lower wage and regulatory costs. This allows them to sell a wider range of higher quality products at lower prices to British consumers.

If the price of production for t-shirts is higher in the UK than it is in India and shortening the supply chain has little impact on the cost - the only consumers to benefit from reshoring will be those willing to pay a premium for product they know was made in Britain.

Reshoring is not the key to future growth

The UK has a relatively high skilled workforce. Many of the jobs that have left the UK are relatively low skilled. If workers in other countries are producing manufactured goods and staffing call centres while UK workers produce financial products and high quality entertainment - both regions are specialising in what they are best at producing.

Whilst the promise of lower taxation and cutting red tape are positive steps for the economy the focus should not be to bring back the jobs of the past - but to create the conditions for the industries of the future.

Manufacturing jobs are no better than service sector jobs

The Prime Minister and a host of other politicians have emphasised the need for a rebalancing of the UK economy away from services and toward manufacturing.

Those who long for a return of manufacturing have yet to explain why the manufacturing jobs we have lost are more valuable than the service sector jobs we have created.

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