Britain’s manufacturing sector will get a £4.5bn shot in the arm, weeks after it emerged there was the biggest downturn since the financial crisis.
Funding was announced by Chancellor Jeremy Hunt this evening, ahead of the much-vaunted Autumn statement next Wednesday.
The Treasury said the £4.5bn would include a £960m lump for clean energy, as millions of Brits hope their bills don’t go through the roof during the cold winter months.
Earmarked for so-called ‘strategic manufacturing sectors’, it will be pumped into eight different areas across the economy, and available from 2025, for five years.
The government is due to call the next general election by early 2025 and is far behind in the polls.
This comes after the latest figures from the Chartered Institute of Procurement & Supply (CIPS) the UK manufacturing purchasing managers index (PMI) recorded 44.8 in October, with the 50 mark separating growth from contraction.
This meant the manufacturing sector was engulfed in the deepest downturn since the 2008 financial crisis as market uncertainty depressed activity.
With a bid to pump more investment into the economy, Hunt has committed more than £2bn for the automotive industry, £975 for aerospace and £520m for life sciences.
The Treasury said manufacturing makes up for 43 per cent of all UK exports and employs 2.6m. Critics of the Brexit vote, claim severing ties with the European Union damaged British exports because trading with our closest neighbour became more expensive.
The announcement comes before the second Global Investment Summit later this month.
Chancellor of the Exchequer, Jeremy Hunt, said: “Britain is now the 8th largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading.”
“Our £4.5 billion of funding will leverage many times that from the private sector, and in turn will grow our economy, create more skilled, higher-paid jobs in new industries that will be built to last.”
After having signed multiple international trade deals, including with Australia and New Zealand, business and Trade Secretary Kemi Badenoch said: “The UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace and maritime sectors.
“This package builds on recent investment wins, such as the £4bn gigafactory, and the £600m invested to build the next generation of electric Minis, and ensures that the government can continue to help create jobs, grow the economy, and secure the future of great British manufacturing.”
Within the new tranche of investment, is a green industries growth accelerator, pumping cash into the expansion of home-grown energy supply, including carbon capture and offshore wind.
Energy Security and Net Zero Secretary Claire Coutinho said: “Today we are announcing nearly £1bn to back our green industries. While we’ve already attracted £200bn in low carbon investment since 2010, with another £100bn expected by 2030, this will unlock even more. We have long been energy pioneers in advanced manufacturing, and this will allow us to carry on that great British tradition.”
The announcement of fresh funding was also welcomed by the chief executive of Britain’s main manufacturing organisation, Make UK, Stephen Phipson.
Meanwhile Jonathan Reynolds, Labour’s shadow secretary of state for business and trade said: “While the Government scrambles to catch up in the race for green jobs Labour has been making the case for a modern industrial strategy to back British business for years.
“Under Labour our industrial heartlands will get the backing they need with an industrial strategy built to last supporting our plan for green steel, new gigafactories and GB energy. Labour’s British jobs bonus will make sure that investment is directly targeted at the energy workers and communities who will power our future.