Heading towards a crossroads
By Stephen Phipson CBE, Make UK CEO: Our country is at a crossroads. We have a proud legacy of being an industrial nation, the first country to industrialise, the country who invented many of the technologies we use every day to live in an advanced 21st century economy.
We are now in grave danger of being left behind in the global race to decarbonise and transform to a more sustainable future. It is clear that there is now a global race to transform. Huge new industries are emerging in the race to net zero from electric transportation to a green hydrogen-based economy and the UK is being left behind. The government has shown courage and foresight in the past. We have created one of the largest wind generation programmes in the world through this foresight however this momentum is stalling, and we need to reset our vision for the future.
The core problem in the UK is the lack of an industrial strategy. The current government has relied heavily on the free market creating supply chains and that is exactly what is happening. Passing legislation to create a massive market for electric vehicles is one thing but without a comprehensive industrial strategy progress on battery production which represents 50% of the cost of these vehicles or the UK automotive supply chain moving from making internal combustion engines to parts for electric vehicles has been painfully slow. The result is that many manufacturers are now sourcing batteries from European gigafactories.
The free market does work. As the US and EU governments race to create massive financial programmes to attract investment in these new sustainable industries these markets will attract the investment, skills and technology required and the UK will lose out.
The UK cannot compete with such huge financial packages however we do have a key advantage, our innovation in technology is world leading. What we need to do is to recognise that the world is not a free market it is skewed by initiatives such as the inflation reduction act but we can and must compete with this by setting out a comprehensive industrial strategy which clearly lays out our priorities and supports these with policy, regulation, education and incentives for investors to be confident in the long term, converting our key advantage in innovation to products services and jobs. Of course, the problem here is that it must be longer term than our political system currently accepts.
The government needs to act now to ensure we are not left making the horse drawn carriages of the 21st century.