In the letter to Industry Minister Chris McDonald MP manufacturing industry leaders called for government action to reverse what it describes as a sustained loss of domestic industrial capacity.
Industries represented included Fuels Industry UK, Make UK, the Chemical Industries Association, the Energy Intensive Users Group, Offshore Energies UK and the Carbon Capture and Storage Association.
Together, these sectors underpin the UK economy, supplying the energy, materials and technologies required for construction, defence, transport, advanced manufacturing and clean energy. However, the associations warn that these industries are now at a critical point.
Site closures, declining investment and falling domestic production across multiple sectors are being driven by an uncompetitive economic environment in the UK, with higher energy costs, carbon costs and regulatory burdens pushing production overseas and increasing reliance on imports.
This challenge has become more acute in recent weeks. Instability in the Gulf is already driving volatility in global markets, underlining the risks of increasing reliance on imports for the energy, materials and industrial inputs that underpin the UK’s economy.
Recent developments highlight the scale of the challenge:
- Closure of Grangemouth and Lindsey refineries, resulting in the loss of one-third of the UK’s refining capacity in the past year
- At least 25 chemical manufacturing site closures in recent years
- Declining North Sea oil and gas production, leaving the UK a net importer of energy
Exposed and reliant
The wider trend is clear – the UK now imports £706 billion of manufactured goods annually and more chemicals than it exports, while also importing over half of its refined fuels.
This is not only an economic issue, but a strategic one.
Elizabeth de Jong, CEO of Fuels Industry UK said: “The UK is steadily losing the industries that produce the essential materials, energy and products our economy depends on. That is leaving us increasingly exposed to global instability and reliant on imports for critical supply.
“What we are seeing in the Gulf is a clear warning. In an unstable world, relying on overseas supply chains for the essentials of your economy is a vulnerability. Without urgent action, we risk further industrial decline and deeper dependence at precisely the wrong time.”
Key priorities
The group of associations is calling on Government to take action in three key areas:
- Industrial competitiveness – addressing the structural cost disadvantages facing UK industry, particularly high industrial energy costs
- Unfair competition – introducing effective measures to prevent carbon leakage and ensure imports do not undercut domestic production
- Long-term investment – creating stable policy conditions to enable industries to modernise, decarbonise and expand in the UK
Warning that existing policy frameworks do not yet reflect the scale of the challenge facing UK industry or the strategic importance of maintaining domestic industrial capability, the group has urged Government to strengthen its current approach,
They have formally requested a meeting with Industry Minister Chris McDonald MP to discuss how Government and industry can work together to halt industrial decline and strengthen domestic supply chains.
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