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Red wall Tories back call for extra cash and tax breaks for manufacturing sector

Right-leaning think tank Onward said wages in the industry outside of London tended to be higher than average.

Prime Minister Boris Johnson
Prime Minister Boris Johnson

Conservative MPs who won seats in the so-called “red wall” are backing calls for the Prime Minister to offer tax breaks for manufacturing as part of plans to deliver on “levelling up” the country.

It comes as a group of 50 Tory MPs also demanded the Prime Minister start levelling up the North “at pace”.

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.

In 2018, median earners in the North East working in manufacturing earned 22% more than the average worker, while in the North West it was 19% 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% of workers in seats gained by the Conservatives at the last general election work in manufacturing, compared with 9.3% in seats they held from the 2017 election and 7.8% among Labour seats.

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

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 Peninstone and Stocksbridge – have given the report their backing.

Manufacturing jobs outside London tend to be higher paid, Onward's report found
Manufacturing jobs outside London tend to be higher paid, Onward’s report found (Peter Byrne/PA)

The Northern Research Group of 50 Tory MPs, meanwhile, have called for infrastructure investment in the North, with group chairman Jake Berry noting the region had been in lockdown “longer than any other area of the country”.

“It’s time for the Government to show the North some love with a summer of levelling up,” the Rossendale and Darwen MP told the BBC.

“It’s time to start delivering an ambitious programme at pace if we are going to see real progress this summer,” he added.

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.

Mr Holden said: “Onward’s manufacturing report provides a clear plan for the future.

“For too long, we have just accepted deindustrialisation as inevitable. It isn’t.

“Levelling up requires skilled manufacturing jobs in the private sector.

“To get those, we need a plan to drive manufacturing growth and to have the ambition to achieve fundamental transformation. This report gives us an outline of how to get there.”

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.”

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.

“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.”

A Government spokesman 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.”

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