Reindustrialisation Must Not Become the Next Levelling Up, Manufacturers Warn

The Government must put “some flesh on the bones of the buzzwords” if its ambitions for reindustrialisation and growth in every postcode are to succeed where levelling up and building back better fell short, according to UK manufacturers.

Ahead of the Autumn Budget, Make UK has urged the Chancellor to focus on reducing the cost pressures holding manufacturers back from hiring, investing and growing, warning that ambitions for reindustrialisation will fail unless businesses are first given room to breathe.

The organisation also stressed that the Government’s commitment to reindustrialisation must build on the certainty provided by the recently published Industrial Strategy.

Manufacturers need long-term stability and confidence to invest, alongside practical measures that improve competitiveness today.

The organisation is calling on the Government to:

• Address the UK’s uncompetitive industrial energy costs by moving policy levies from electricity bills into general taxation.
• Reduce the cost of employing people by reversing the cut to the Employer National Insurance threshold and extending NIC reliefs to all workers under 25.
• Keep National Living Wage increases sustainable by limiting rises to 3.7% and delaying the extension of the National Living Wage to 18-year-olds until the impact on youth employment can be properly assessed.
• Take a more proportionate approach to the Employment Rights Act, particularly around guaranteed hours and implementation timescales, to avoid making it harder for manufacturers to recruit.
• Introduce 100% transitional business rates relief for manufacturers in 2026/27, giving firms breathing space from recent increases in rates bills.

The proposals are backed by Make UK’s latest survey of manufacturers, which found that 47% believe cutting industrial energy costs should be the Government’s top manufacturing priority, followed by 37% who want lower Employers’ National Insurance costs, 32% who want employment rules made simpler and less costly for businesses and 31% who want business rates reduced.

The research also highlights growing concern about employment regulation. Just 11% of manufacturers believe the Employment Rights Act should continue as planned, while 36% want the next stages paused and reviewed, 22% want the most burdensome measures reversed and a further 11% want implementation delayed to give businesses more time to prepare.

While 56% of manufacturers say they feel positive about the Government’s ambition to reindustrialise the economy, they say success will ultimately be judged on outcomes. Asked what would show Government was delivering for manufacturing in a year’s time, 43% chose lower operating costs, 36% more competitive energy prices, 35% more manufacturers increasing investment in the UK and 29% more manufacturing jobs being created.

Stephen Phipson CBE, CEO at Make UK, commented:

“The Autumn Budget is the first real test of the Government’s reindustrialisation agenda. The Chancellor needs to show, through action not words, what the Government’s promises actually mean.

“For UK manufacturers, that means making decisions right now to ease the burdens they face. If the Government wants our members to stay afloat, the first step is to take some of the weight off their shoulders.

“Manufacturers don’t need flashy new schemes and announcements. They need Government to remove the barriers that stop them from hiring, investing and growing.”

Read more news on Make UK.