Conservative think-tank Onward urges Boris Johnson to offer tax breaks for manufacturing to help 'level up' the country

Northern Conservative MPs who won 'red wall' seats in the 2019 General Election are backing calls for the Prime Minister to offer tax breaks for manufacturing as part of plans to deliver on "levelling up" the country.

Boris Johnson who was elected on a pledge to create greater economic prospects outside London, is being urged in a new report by a right-leaning think tank to set out a national plan for manufacturing, including tax breaks for factories and extra investment into technology, in a bid to expand a sector known for higher wages.

Onward's Making A Comeback report states that outside the capital, those working in the manufacturing sector tend to earn more than the average employee.

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Undated handout file photo issued by Liberty House of a steelworks in Rotherham.Undated handout file photo issued by Liberty House of a steelworks in Rotherham.
Undated handout file photo issued by Liberty House of a steelworks in Rotherham.

In 2018, median earners in the North East working in manufacturing earned 22 per cent more than the average worker, while in the North West it was 19 per cent extra - a premium of more than £2 an hour.

With manufacturing holding a greater percentage of the market in "red wall" seats - areas across the North and Midlands of England, along with North Wales, where the Prime Minister won seats in Labour's traditional heartlands at the 2019 election - the think tank has called on the Government to invest in the industry to support wage growth outside the capital.

New analysis in the paper shows that 12.2 per cent of workers in seats gained by the Conservatives at the last General Election work in manufacturing, compared with 9.3 per cent in seats they held from the 2017 election and 7.8 per cent among Labour seats.

For regions outside London, productivity is a fifth higher in manufacturing than the wider economy, the report said, with around 40 per cent of productivity growth in the West Midlands, Wales and North West between 1997 and 2017 coming from the sector.

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The document - backed by 65 Tory MPs - calls for ministers to set out tax incentives for capital investment, take action to reduce industrial electricity costs, and ensure greater 5G connectivity for smart factories.

Its authors also want to see long-term funding for manufacturing research and development institutions.

A host of Tory MPs from the 2019 intake - including Redcar MP Jacob Young, North West Durham MP Richard Holden, Barrow and Furness MP Simon Fell, Stoke Central MP Jo Gideon and Miriam Cates, MP for Penistone and Stocksbridge - have given the report their backing.

Mrs Cates said: “We can’t ‘Level Up’ without a manufacturing revival. In my constituency, the steelworks employs far fewer people than it once did, but these jobs are still some of the most well paid and highly skilled in the area.

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"This report shows why reversing the manufacturing decline in some of our most deprived regions is so important to restore productivity – and pride – to our industrial heartlands.”

The push comes after thousands of jobs were secured and created following investment announcements in recent weeks into electric car technology at Vauxhall's Ellesmere Port plant in Cheshire and at Nissan in Sunderland.

Will Holloway, Onward's deputy director, said: "Manufacturing matters because it offers well-paid, secure and skilled work. This is especially true in lagging parts of the country.

"In recent weeks, manufacturers like Nissan, Rolls-Royce and JCB have made welcome announcements of new jobs and extra investment. Ministers should build on these successes to create a manufacturing renaissance in the UK."

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A Government spokesperson said: “We are committed to levelling up every region and creating well-paid, skilled jobs across the country.

“Our Plan for Growth provides a blueprint for the UK to drive economic growth in every region and sector, including manufacturing. This will create jobs and support British industry as we build back better out of this pandemic.

“We keep all taxes under review and the Government will continue to help manufacturing to adapt and grow, including through research & development tax reliefs to incentivise companies to invest in new technology.”

Verity Davidge, director of policy at industry body Make UK, said: "Today's findings show that the UK manufacturing sector has an important role to play in reviving and rebalancing our economy in the months and years ahead.

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"Key to delivering this will be ensuring the Government's levelling up agenda focuses its investment towards the sectors that create good, stable employment, and powering local economic growth - this means prioritising the needs of the UK manufacturing sector across our different regions.

"A national manufacturing plan to take this forward is the right step to delivering sustained economic growth in the next decade."

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