Britain’s trade union and manufacturing leaders have warned that major international manufacturers are holding back investments in the UK until Labour shows it is committed to boosting the industry.
A month after Keir Starmer’s landslide victory, the heads of the Trades Union Congress (TUC) and Make UK, which represents 20,000 employers across the UK, have joined forces to warn the government that rapid action is required to launch a long-term industrial strategy, or risk losing billions of pounds in investment abroad.
While welcoming the government’s commitment to industry, made in last month’s king’s speech, they said the UK was at a critical moment in a global race for investment.
In a joint interview with the Guardian, Stephen Phipson, the chief executive of Make UK, and Paul Nowak, the general secretary of the TUC, said that putting good jobs at the heart of a robust and speedy industrial strategy would help employers and workers.
“Please make this a priority,” said Phipson. “They [the government] have got thousands of things to do, we can see that. And they’re enthusiastic and all the rest of it. But they need to get on with it, because we can see the opportunity.
“It’s been great messaging so far, and I can’t fault the amount of enthusiasm and engagement. But we’re just trying to remind them this has got to be a top priority.”
Nowak said: “Seize the goodwill, people have been waiting. You’ve got a 172-seat majority, now you can take some decisions for the long term, with employers and unions weighing in behind you.”
Ahead of the general election, Labour had committed to launching a modern industrial strategy, aiming to redraw a comprehensive plan for the economy after the previous Conservative government ditched its version, to the dismay of industrial groups.
Overseen by the business secretary, Jonathan Reynolds, the government is committed to relaunching the Industrial Strategy Council – a body established by the last Tory government in 2018, then scrapped in 2021. Key planks of the industrial strategy have also been announced, including a £7.3bn national wealth fund and the creation of Great British Energy.
However, Phipson suggested large global manufacturers were delaying investment in the UK until they had more clarity. “I’ve heard first-hand from some of the big names you will know. They say we have plans in Spain, in Germany. But they’re saying, where’s the plan for the UK? Why would I invest until then?”
Speaking together in Nowak’s office in central London, in the 1950s headquarters of the TUC, the union leader and boss of the UK’s largest manufacturing body said further reforms and investment were needed as part of the industrial strategy to support apprenticeships and training.
Launching a joint report calling for a robust plan, they said Britain was at a critical moment on the road to becoming a greener economy, with manufacturers facing a “perfect storm” of rising occupational ill-health, early retirement, and an ageing workforce, alongside a lack of digital skills required for businesses to adopt new technologies.
The joint intervention comes amid concern among some business leaders over Labour’s plans to strengthen workers’ rights, which the Confederation of British Industry (CBI) lobby group has pushed to soften after warning it could hit jobs and growth.
However, Phipson said Make UK was “not in the same place as the CBI”, as manufacturers had good relationships with trade unions and believed that better pay, terms and workplace conditions could help industrial companies to be more productive.
“The manufacturing sector is paying above average, we don’t tend to use zero-hours contracts, and we find discussions with Angela Rayner and her team really pragmatic around that,” he said.
It also comes among unease on the left of the Labour party that Starmer’s government is prepared to cede ground to business interests, while the chancellor, Rachel Reeves, has cut infrastructure projects and warned that the state of public finances will require further revenue-raising tax and spending measures in the 30 October budget.
A spokesperson for the department of business and trade said: “Our new industrial strategy will deliver long-term, sustainable, inclusive growth right across the UK by driving investment into our economy.
“It will play a key role to maintain the highest sustained growth in the G7, increasing opportunities for all, and making Britain a clean-energy superpower. We will work in partnership with the private sector to support industries across the whole country.”
