The head of the manufacturers’ trade body has blasted Labour’s failures on defence spending and energy prices as the industry battles turbulence in global markets.
Stephen Phipson, chief executive of Make UK, said the Government must ramp up the military budget to 5 per cent of gross domestic product (GDP) as soon as possible as its current timeframe is too slow.
He said ministers had failed to do enough to address ‘hideously high’ energy costs that represent ‘an existential threat’ to the sector.
Meanwhile, a surge in youth unemployment risks ‘condemning a generation of young people’, Phipson will warn in a speech at an industry conference today.
The comments reflect growing frustration that manufacturers are being battered by rising costs – notably energy prices that are far higher than for competitors.
At the same time, the promised boom for UK defence spending has yet to materialise.
Warning: Stephen Phipson, pictured, chief exec of Make UK, said the Government must ramp up the military budget to 5% of gross domestic product as soon as possible
The Government has pledged an increase in the defence budget to 2.5 per cent of GDP, but its Defence Investment Plan
has repeatedly been delayed. Meanwhile, Britain, like other Nato countries, has agreed to a longer-term target of 5 per cent.
Phipson said: ‘Defence spending is a key driver and accelerator of growth and provider of high skills, especially in areas of the UK that need to see them.
‘The much-delayed Defence Investment Plan is already damaging confidence in the sector, delaying investments and the provision of private capital. This must be announced as soon as possible.’
The speech comes as surging energy prices caused by the war in the Middle East threaten to add to the headache for manufacturers, who already say their bills are far too high.
Phipson said an energy support scheme set up by the Government last year to address this was ‘the equivalent of taking a peashooter to a gunfight’.
The intervention comes after a monthly business survey yesterday showed a nascent recovery in the sector stalled in February, with growth slowing slightly from January.
At the same time, manufacturing firms are continuing to shed jobs, with workforces being cut for the 16th month in a row, according to the Purchasing
Managers’ Index published by financial firm S&P Global.
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