The axis of incompetence threatening to destroy British industry

This could be a pivotal year for our sector, but our messaging must come with a healthy dose of reality.

I admire the work of Mark Weymouth, Andrea Wilson, Christopher Greenough and Stuart Whitehead, who consistently champion manufacturing through positive, practical support and weekly LinkedIn posts. That level of dedication should not be underestimated.

Manufacturing is a cornerstone of GDP. We should promote the wins loudly and proudly, even when it feels like we are successfully operating, despite the Westminster bubble, not because of it. It is equally right that we call out government, past and present, when required.

There are others higher up the ‘food chain’ who work tirelessly on our behalf. Many would like to speak more openly but cannot, understandably, because they are closer to government and must toe a more diplomatic line.

The axis of incompetence?

We’re over eighteen months into a new government, elected on a mandate for growth, and the picture isn’t looking good, and that’s without the 15 U-turns that are fast becoming a consistent occurrence.

There have been some shining lights. Minister for Industry Chris McDonald MP has been very supportive on several occasions and still is, whilst Labour MP Sarah Coombes continues to go above and beyond in supporting manufacturing in the Black Country and beyond.

Despite a positive meeting in December, the jury is still out on Secretary of State Peter Kyle. The recently launched Steel Strategy came with a direct promise to reflect the requirements of the entire sector, not just to pander to the needs of TATA.

Sadly, the reduction in quotas, coupled with an increase in tariffs, will hammer downstream manufacturers. Not exactly the growth and protection trumpeted in the press announcement.

Serious questions continue to be asked about the wider economic direction. The Prime Minister’s judgement has been challenged in areas outside business, but it is his choice of two key Cabinet ministers, Chancellor Rachel Reeves and Energy Secretary Ed Miliband, that many in industry see as forming the axis of incompetence.

This was a party elected on growth. Yet the only clear growth we have seen is in the cost of employing people, particularly young people. Unemployment has risen to 5.2 per cent, an increase of 0.7 per cent over the past year. Latest figures show no improvement - at best, growth is stagnant, at worst, we’re technically teetering on the edge of a recession.

That’s before the outbreak of war in the Middle East, which Rachel Reeves has quickly used for her political advantage. In fact, Usain Bolt would have been left standing at the pace she has acted. Make no mistake, conflict is going to have an impact. However, it can’t be used as camouflage for what went on before it and what we were about to face, regardless of Trump’s antics.

We cannot lose sight of the fact that before the war, businesses were braced for the triple impact of increased business rates, the full effect of the Employment Rights Bill and further energy price rises due to take place in April. All of these would have added cost and administrative burden to an already hard-hit manufacturing sector.

The rise in energy could prove the most damaging of all. The pace and cost of the net zero transition are being driven through in a way that risks forcing the burden onto businesses, especially high-energy users, and, in truth, the figures are eye-watering. However, these increases weren’t to fund direct energy costs but rather the transition costs to net zero to meet self-imposed targets that, in the short term, will cause more harm than long-term advantage.

Whatever one’s view on climate change, the route to net zero should not come at the expense of industrial competitiveness and jobs, as it makes deindustrialisation a genuine risk. This is something I warned about a year ago, and a concern repeatedly repeated by Unite General Secretary Sharon Graham. That’s a line l never thought l would write!

Miliband and Reeves pointed to energy support measures being extended in 2027, but these will cover only a fraction of the 7000 qualifying companies and only a small percentage of their costs.

The war gave time for a reset, yet amazingly, the government doubled down, insisting that their ‘climate change policy’ gave a clear route to our own energy security and brought in some support for those who need it most.

If we agree on the destination, it’s the journey that then matters. The timetable for change is unsustainable and has been further burdened by broader fiscal and energy decisions made by this government.

Every avenue needs to be explored. Can the North Sea's gas and oil supplies cover the cost of our energy transition whilst also providing some form of energy security? The destination doesn’t need to change; how we get there certainly does, as manufacturing cannot sustain these costs.

We were promised growth, but our current and future energy costs make us globally uncompetitive, even before you add in our labour costs. These policies are so damaging that we could see thousands of jobs impacted, as we saw with the demise of the mining industry. This would have been unthinkable under the previous Labour government.

None of us wants to see this, but more companies will be lost, along with the skilled jobs that go with them. That is certainly not the growth we were promised.

Reasons to be cheerful

I have great respect for Rain Newton Smith, CEO of the CBI, who argues that hope, confidence and optimism can accelerate UK growth. I sincerely hope she is right, especially as we see these qualities every day in manufacturing.

Over the past six months, I have witnessed first-hand some of these characteristics. The resilience of the supply chain following the JLR cyber-attack is a recent, prominent example. Initial shock dented confidence, but resilience carried firms through, restoring confidence and ultimately optimism.

In the Midlands, companies such as Hadleys, Sertec and Somers Forge continue to invest, whilst a recent visit to Sheffield was genuinely invigorating, listening to CBM members talking positively about their futures.

These are not abstract concepts. This is real confidence, backed by real capital, supporting real jobs.

So, can confidence win?

Confidence alone cannot overcome poor policy.

But confidence, combined with relentless advocacy, clear-eyed realism, investment in capability, collaboration across the supply chain and constructive challenge to government, can absolutely shape outcomes.

Manufacturing has always been resilient. The question is not whether we have confidence, but whether policymakers will match it with competence and act quickly enough.

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Stephen Morley is President of the Confederation of British Metalforming.

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