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The UK lacks a proper industrial strategy that will prepare the country for net zero and enable it to compete with China, the US and European Union, a senior Labour figure has said.
Stephen Kinnock, shadow minister for immigration, accused Rishi Sunak and Jeremy Hunt of being “blind to the reality of the world around them” by failing to subsidise British industry to guide it through the green transition over the next decade.
China’s state-backed manufacturing base, President Biden’s £292bn stimulus package and the EU’s plans to match the US are likely to “hoover up huge swathes of green investment and lead to the offshoring of green growth, good jobs and our economic security – yet Britain’s leadership is ideologically opposed to doing anything about it,” Mr Kinnock said.
Mr Sunak has ruled out a plan to respond to President Biden’s Inflation Reduction Act, which is ploughing billions of dollars of subsidies into home-grown green technology and businesses, because he says the UK already has a strong renewable energy sector.
The Labour MP, whose constituency of Aberavon is home to the UK’s largest steelworks, made the comments in an article for the Bright Blue think-tank’s magazine Centre Write, reproduced by i.
They come hard on the heels of a major debate in both main parties in Westminster over the future of the UK’s net zero agenda in the wake of the Uxbridge by-election, with the Prime Minister watering down green policies and giving the go-ahead to more oil and gas drilling in the North Sea.
The Government has denied however that is is not investing in manufacturing, pointing out that Advanced Manufacturing has been identified as one of five key growth sectors and that the Chancellor has asked chief scientific adviser Dame Angela McLean to conduct a review of pro-innovation regulation for emerging technologies for manufacturing. It also pointed to Tata’s £4bn investment to build a gigfactory and £1bn by Nissan in Sunderland.
Under Sir Keir Starmer, Labour has pledged to boost British industry and the path to net zero with a green investment package, although he has had to delay the scheduled introduction of the plans to the middle of the next parliament, if elected, due to high inflation.
Mr Kinnock wrote: “Biden’s Act is a response steeped in the realpolitik that we are no longer in the kumbaya world of the 1990s.
“Most national governments now understand that a strong domestic manufacturing base is absolutely essential to building the resilience and sovereign independence that a country requires to survive in this new age of authoritarianism.
“They know that manufacturing also provides an opportunity to deliver sustainable growth, good jobs and higher living standards in the face of the green transition.
“Alarmingly for the people of Britain, Rishi Sunak is just about the only leader of any Western country who is failing to understand the importance of this quest for growth and resilience.
“An industrial strategy is nowhere to be seen. The Prime Minister and his Chancellor seem trapped in a bygone era, blind to the reality of the world around them, with Sunak openly speaking out against the idea of subsidising British industry, having already scrubbed the words ‘industrial strategy’ out of the Business department.”
The Prime Minister and Chancellor’s indication that they are “ideologically unwilling” to respond to the actions of China, the US and the EU by investing and subsiding where necessary represents “a grave threat to the economic future of dozens of British industries and our country’s broader economic resilience and independence”, Mr Kinnock said.
In May, Stephen Phipson, the chief executive of Make UK, Britain’s manufacturing organisation, warned the PM that the lack of a “proper, planned, industrial strategy is the UK’s Achilles heel”.
Mr Kinnock said Labour had spent the last two years developing plans to boost investment in green businesses and create more jobs in those sectors.
The shadow chancellor, Rachel Reeves, has pledged to introduce “Securonomics” which would boost manufacturing in the UK.
In a speech in Washington in May, Ms Reeves said: “Globalisation as we know it is dead… We must care about where things are made and who owns them.
“[We need] a more active state, one that is willing to invest in building the capacity of the industries that will determine the nation’s success tomorrow.”
Shadow business secretary Jonathan Reynolds last year unveiled Labour’s industrial strategy which would include a £3bn steel renewal fund to bolster that sector.
A Government spokesperson said: “The government has shown a clear strategy for UK manufacturing with a variety of schemes that ensure sectors from auto, to aerospace, to low-carbon technologies have access to the funding, talent and infrastructure they need.
“We are focusing on providing a competitive business environment to stimulate growth, reducing red-tape and investing millions in new government funding to help manufacturing SMEs increase productivity.”
Government sources pointed to investments including a £1bn electric vehicle hub in Sunderland, a £657m Government grant towards £1.37bn investment in partnership with industry via the Advanced Propulsion Centre to develop zero emission vehicle technologies made in the UK, and £685m for aerospace R&D through the ATI Programme over the current spending review, supporting the development of zero-carbon and ultra-low emission aircraft technology.