How the New Labour Government Can Boost Productivity in UK Manufacturing

So, the Labour Party came to power for the first time in over a decade with a majority victory on the 4th of July. This has given rise to optimism, with Keir Starmer’s party having outlined an industrial strategy and the reform of planning rules to support the digital and tech sectors. But how much impact will this political change have on the adoption of automation and tech innovation in the UK manufacturing industry?

Read on as we explore the Labour Party’s policies and the likely impacts on productivity in UK manufacturing. 

Political Context and Vision

With just two weeks having passed since Starmer was elected as Prime Minister, the Labour cabinet has already taken shape. Peter Kyle has been appointed the new tech secretary and has already set his sights on making the Department for Science, Innovation, and Technology (DSIT) the “digital centre” of government. Other key roles have been assigned to the likes of Patrick Vallance, Maggie Jones, and Chris Bryant.

The newly appointed ministers will be expected to take the lead in realising Labour Party pledges, such as:

• Updating the national planning policy so that the “planning system meets the needs of a modern economy, making it easier to build laboratories, digital infrastructure, and gigafactories”
• Creating a new regulatory innovation office to ensure that “regulation doesn’t unnecessarily slow down innovation”
• Supporting the development of the “new AI sector and removing planning barriers to new data centers”
• Overhauling the regulatory system so that businesses can take more immediate advantage of innovation opportunities
• Removing barriers to AI deployment across the professional and public sectors.
  

There seems to be a clear commitment to fostering a progressive and forward-thinking industrial environment, focused on technological advancements and innovation.

Increased Focus on Automation

The Labour Party manifesto has come under some criticism, given the relatively cautious nature of the pledges. However, the published document does identify “advanced manufacturing” as an area of strength, with an outline of funding for the automotive and steel sectors. There’s a focus on stability, and it’s hoped that this will benefit the manufacturing sector, attracting higher levels of investment.

Labour has also set out plans for increased collaboration between the state and the private sector. As an example, the new Industrial Strategy Council will encourage the involvement of industry experts and academics. There’s also bound to be increased investment in priority areas such as automotive and clean energy. This will be supported by the National Wealth Fund, which has been allocated £7.3 billion for investment in transformative UK initiatives.

Boosting Productivity and Economic Growth

There’s clear evidence that automation can significantly increase productivity in the UK’s manufacturing sector. For instance, the UK’s Manufacturing Technologies Association has revealed that automation could boost productivity by up to 30%. It offers the potential for saving time, raising revenue, and increasing customer retention.  

An increased focus on automation is also likely to drive economic growth, making the UK manufacturing sector more competitive on a global scale. According to the Centre for Economics and Business Research, it could contribute an additional £275 billion to the UK economy by 2030. 

Of course, there are fears that the rise of automation will bring mass worker displacement and job losses. However, such concerns are largely misplaced, as emphasised by Automate UK’s Manifesto for Automation. It’s time to switch the narrative from “robots take jobs” to “robots fill vacant jobs”; many of which fall into the dull, dirty, and dangerous category. 

Such automation offers the exciting potential for job creation and the development of new workforce skills, which will contribute to overall economic growth. The Labour Government can take the lead in supporting automation for greater productivity, job safeguarding, improvement of workplace conditions, and salary growth.

Support for Businesses

Labour’s manifesto has pointed the way to various forms of support for a successful transition to increased automation. As mentioned, there are plans for collaboration with the UK’s employers, universities, and industry bodies as part of the “industrial strategy”. Investment in such areas as advanced manufacturing, construction, and artificial intelligence, is bound to allow for greater research and development. This will be supported by the National Wealth Fund, with £1.8 billion allocated to the upgrading of ports and development of supply chains, £2.5 billion to rebuild the steel industry, and £1.5 to the building of gigafactories.

The arrangement of grants, tax incentives, and training programmes could help in building a conducive environment for businesses to invest in and benefit from automation. This should be viewed as a positive opportunity for change.

Sustainability and Innovation

From improving productivity to minimising waste, automation can lead to more sustainable manufacturing practices. Freeing up human workers for activities that make optimal use of their high-level knowledge and skills, such technologies allow for greater efficiency and reduced resource consumption. For instance, the Advanced Manufacturing Research Centre (AMRC) has revealed that automation offers the potential to reduce waste by up to 90%.

Recognising the growing concern over climate change, the Labour Party has set ambitious plans to reduce carbon emissions and raise investment in renewable energy sources. Aiming to achieve net zero by 2030, Keir Starmer’s party is focused on energy sector transformation, green job creation, and support for those workers directly impacted by the move away from fossil fuels. The realisation of these aims will go some way to supporting the growth of the UK economy and positioning the manufacturing sector for future success.

Potential Challenges and Solutions

Automate UK’s Industry Insights Survey has revealed the variety of challenges that must be overcome for the successful adoption of automation. In particular, the UK’s manufacturers have faced serious supply chain issues, with geopolitical tensions preventing the access of materials and forcing the closure of major trade routes. There are also concerns over the lack of skilled workers and difficulty in maintaining awareness of the latest technological developments.

Again, the Labour Party can play a key role in mitigating such challenges and ensuring a smooth transition to automation. There’s an obvious need for technological training and development in partnership with the UK’s businesses and academic institutions. Technological investments can also be encouraged with financial backing and tax system reconstruction. Such initiatives are bound to make for positive change and growth across the manufacturing sector.

The Power of Partnership

While these are early days, there’s good cause for optimism over the Labour Government’s approach to automation. With future-focused leadership and the major injection of finance, businesses should now be looking to embrace innovation, increase productivity, and drive economic growth. 

Believing in the power of partnership, Automate UK will continue to play a leading role in the support of automation suppliers and end users across the fields of processing, packaging, robotics, and machine vision. We urge our members to stay informed of policy developments and consider the best ways of leveraging change to their advantage.

What do you think about the prospects of the UK’s manufacturing sector under Labour leadership? Are you keen to explore the potential for automation and build for the future? Share your thoughts and stay up to date with Automate UK, you can connect to us on linkedIn.