Business coalition calls for resource efficiency drive to boost weak UK productivity

Top UK business organisations and green groups have called on the UK Government to close the UK's regional productivity gap and rebalance the economy by backing resource efficient manufacturing.

Office of Budgetary Responsibility (OBR) economic forecasts are set to reveal that productivity growth has been far worse than expected

Office of Budgetary Responsibility (OBR) economic forecasts are set to reveal that productivity growth has been far worse than expected

Led by the Green Alliance, the group proposes that resource efficiency should be the heart of the Government’s upcoming Industrial Strategy. This would entail a manufacturing upgrade programme backed by low-cost loans and a Government procurement policy which increases demand for high green standards of production.

According to a new report from the coalition, which includes the British Chamber of Commerce and the TUC, this could boost the manufacturing sector’s profits by £10bn, reduce emissions by 4.5% and support growth in regions which have relatively low overall productivity, such as the North and Midlands.

“The UK’s Industrial Strategy must help British businesses keep up if they are to retain their competitive advantage post-Brexit,” Green Alliance senior economist Angela Francis said. “There are huge economic opportunities here which could help to reinvent manufacturing in the North.”   

‘Welcome step’

The proposals come as the Office of Budgetary Responsibility (OBR) prepares to update its economic forecasts in November, which are set to reveal that productivity growth has been far worse than expected. And while around half of manufacturers’ costs are on resource inputs, the majority of manufacturers have reportedly only managed a 10-15% reduction in energy usage over the past decade.

Manufacturers across the UK have told the British Chamber of Commerce that they are faced with rising input costs that threaten their competitivenes, according to the body's director of research and economics Mike Spicer.

“As the most successful firms know, improving resource and energy efficiency is essential to meeting that challenge,” Spicer said. “A comprehensive upgrade programme for manufacturing, taken forward by the new Industrial Strategy and supported by Government would be a welcome step in the right direction.”

The report highlights a 24% increase in institutional investors asking and action on information about resource risks between 2003 and 2015. The study calls on the Government to provide manufacturers with a long-term view of these risks, and an understanding of the role of technology in improving efficiency, through the use of alternative materials, optimised processes and recovered materials.

TUC deputy general secretary Paul Nowak said: “Improving the energy and resource efficiency of British industry is not only a necessity, it’s a great opportunity. It will mean the kind of investment that creates great quality jobs, and closes regional gaps in productivity. And it will help keep British manufacturing competitive in the global economy, so it can be a source of great jobs in the future.”

Manufacturing insight 

The key sustainability drivers, challenges and opportunities facing UK manufacturers have been explored in a new industry-focused edie insight report. Case studies from the likes of BMW, Coca-Cola, AkzoNobel and Unilever are combined with exclusive commentary from organisations such as Adnams, Dell and The Climate Group in the 23-page report, which concludes with a look at some of the latest technologies and innovations which are shaping the manufacturing business models of the future.

George Ogleby


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