News & Analysis

Business and Trade Secretary launches plan for UK Advanced Manufacturing

27th November 2023
Paige West

Business Secretary Kemi Badenoch revealed plans aimed at leveraging British excellence in advanced manufacturing to secure enduring private investment and generate well-compensated employment opportunities.

The unveiling of the Advanced Manufacturing Plan (AMP) signifies the government's commitment to positioning the UK as the premier global destination for initiating and expanding manufacturing enterprises.

Following the Chancellor's recent announcement, the government pledges over £4.5 billion in targeted funding to underpin the enduring prosperity of the UK's manufacturing sectors, encompassing automotive, aerospace, clean energy, and life sciences. This financial commitment includes support for batteries and industries undergoing transformative changes to remain at the forefront of the global shift towards net zero emissions.

The plan details crucial measures to enhance the business environment and attract investment, encompassing expedited grid connections, comprehensive expensing, and an increased focus on apprenticeships. Its objective is to capitalise on the UK's competitive advantage in manufacturing, propelling it to a leadership position in zero-emission technology development, thus capitalising on the myriad employment opportunities this sector offers. The UK's track record in decarbonisation uniquely positions it to exploit opportunities in the burgeoning global green economy.

This comprehensive package builds upon recent investment successes, including Nissan's commitment of up to £2 billion in Sunderland, the £4 billion Tata gigafactory, BMW's £600 million investment in Electric Mini, and Boeing facilitating £80 million in aerospace manufacturing investment in Sheffield. These achievements reinforce the government's capacity to foster job creation, economic growth, and secure the future of British manufacturing.

In the words of Business Secretary Kemi Badenoch: "The UK recently surpassed France to become the world’s eighth-largest manufacturing economy. The Advanced Manufacturing Plan will build on that success by targeting funding where we have a competitive advantage." Industry's demand for a stable, long-term plan supporting cutting-edge technologies and an effective trade policy finds fulfilment in the Advanced Manufacturing Plan, securing future high-skilled jobs and driving economic growth.

Prime Minister Rishi Sunak expresses full-throttle commitment to backing British businesses, propelling the UK into a global manufacturing leadership position. The plan not only provides the industry with the certainty required for growth and further investment in the UK but also establishes foundations for job creation and opportunities nationwide. As the UK hosts a global investment summit, backed by a £4.5 billion commitment, it sends a resounding message that the UK is open for business and an integral part of the economic growth strategy.

The Advanced Manufacturing Plan underscores the potential for the battery sector alone to create 100,000 highly paid and skilled jobs in the UK. The government simultaneously unveils the UK’s inaugural Battery Strategy, outlining plans to attract investment and establish a globally competitive battery supply chain by 2030. With global companies increasingly choosing to invest in the UK, the government's £1 investment leverages £5 of additional private sector investment, providing a substantial boost to the industry.

Mike Hitmar, Director at e2open, said: “The UK's Advanced Manufacturing Plan indicates that governments are fast recognising the need for more battery plants, a necessity if EV manufacturers are to quickly address surges in demand. Automotive supply chains will need to be flexible to ensure reliable inventories and product availability in this rapidly expanding market.

"Despite big players like Jaguar Land Rover already devoting entire sites to building EVs in the UK, new vehicle requirements and ongoing global shortages remain a challenge.

“As cars get smarter and more electrified, automotive supply chains can follow suit to mitigate the risk of stalling on the industry’s recent growth. A multi-tiered, connected supply chain and supporting technology that brings data together in one platform will help businesses to forecast potential disruption and take proactive action. This visibility will feed into inventory optimisation, where leaders can create aligned plans and make the best adjustment decisions in real-time.

“Ultimately, short-term fixes need to be combined with longer-term planning, allowing automotive leaders to effectively balance suppliers and future-proof their supply chain.”

To foster growth in small and medium-sized manufacturing businesses, the government announces the expansion of the Made Smarter Adoption programme. This initiative, set to encompass all English regions by 2025-26, precedes collaboration with Devolved Administrations to explore further expansion from 2026-27.

Industry Minister Nusrat Ghani emphasises the critical role of growing the battery industry to position the UK as a premier location for manufacturing electric vehicles. The Battery Strategy aligns with the Advanced Manufacturing Plan's long-term support for British industry, promoting innovation, productivity, and a cleaner, greener future.

The plan strategically focuses on key areas:

Investing in the future of UK manufacturing

Establishment of a Hydrogen Taskforce to maximise investment opportunities in hydrogen propulsion systems, crucial for the UK's future net zero energy system.

Ambitious Hydrogen Strategy aiming for up to 10GW of hydrogen production capacity by 2030, with at least half from electrolytic or 'green' hydrogen.

Building supply chain resilience

The UK’s Battery Strategy commits £50 million to develop world-class battery capabilities, emphasizing leveraging UK research and innovation, securing a resilient manufacturing supply chain, and fostering a sustainable sector.

Reducing costs and barriers to business

Permanent implementation of the Full Expensing scheme, providing businesses with a permanent tax cut of £11 billion annually for investments in IT equipment, plant, and machinery.

The UK maintains the lowest headline corporation tax rate in the G7 and the most generous capital allowances in the OECD group of major advanced economies.

The Advanced Manufacturing Plan builds upon existing sector support, including the British Industry Supercharger and the Industrial Energy Transformation Fund. These initiatives align energy costs for key industries and support the transition of high-energy-use businesses towards a low-carbon future.

Stephen Phipson, CEO of Make UK said: “A battery strategy is very welcome and much needed. Having a joined-up battery plan in place will be critical for the UK economy to benefit fully from new technological opportunities going forward, and we must ensure that manufacturing involves the entire supply chain, right from design to manufacturing and recycling, closely connecting car and battery industries. 

“Recycling will also be very important to recover those critical materials that are essential for the low-carbon economy, and this joined up Advanced Manufacturing Plan will help deliver better coordination across the whole of the clean energy sectors. Make UK and industry will continue to work with the government on the practicalities of this plan, including how to incorporate manufacturing supply chains. These supply chains have a key role in supplying components and services for clean energy in the future low-carbon economy and we must ensure that the full potential is delivered to enable our companies to compete on the global stage.”

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