Composites UK welcomes Jonathan Reynolds’, the Secretary of State for Business and Trade, modern industrial strategy white paper. The Government’s commitment to an Industrial Strategy was in response to a plea from industry for clarity on the future direction of the UK and where any support available will be focused to drive business growth. The inclusion of Composites within both the Advanced Materials part of the Advanced Manufacturing Sector plan and in the Foundational Industries, which provide crucial inputs to the eight high-growth ‘frontier sectors’, recognises the importance of the UK Composites Industry to UK growth.
Composites are system-level advanced materials that provide essential lightweight, durable, and high-performance structural solutions across multiple manufacturing sectors from high value applications in aerospace and defence to high-volume, durable applications in renewable energy to deliver Net Zero, transportation and construction. Data taken from the Composites UK Industry database of over 1000 companies shows that in 2023 sector revenue for the UK Composites Industry was £13.361 Billion, employing 49,843 high value workers with a revenue per employee of £268,062. Composites UK strongly believes that there are significant growth opportunities for the UK’s Advanced Manufacturing Sector across the next 10 years that can be won through an ambitious Government and Industry Partnership that invests in UK productivity and competitiveness.
Within the Industrial Strategy the generic support offered to manufacturing business is broadly welcomed by the Composites Industry, with some specific observations we wish to discuss constructively with the Government and the Industrial Strategy Council, including:
- Reducing electricity costs, accelerating grid connections and promoting industrial decarbonisation
The offer to address the uncompetitive cost of industrial energy via price relief, through a new British Industrial Competitiveness Scheme and the British Industry Supercharger is welcomed by the composites sector which is a high energy user. However, the composites sector challenges the statement that Government recognises the need to act quickly to support sectors with high-growth potential or significant exposure to high electricity costs, and questions whether the delivery mechanisms will mean the right companies receive support. The competitiveness scheme will not be implemented until 2027 and the recent loss of companies such as Nippon Electric Glass, the biggest e-glass producer in Europe, shows that the time for action is now. The use of SIC codes, which are recognised to be problematic in identifying specific products, is to be questioned and there is also a need to ensure SMEs, not just large companies, receive this essential support.
The proposal to introduce CBAM by 2027 to give industry the confidence to invest in decarbonisation in the UK is sensible, as is the proposal to link the UK and EU Emission Trading Schemes to provide exemption from tariffs for UK companies exporting/importing to/from the EU. It is hoped that that any future extension of the current materials encompassed within UK CBAM will be done in consultation with the relevant industries.
- Promoting trade and international cooperation
The UK Government has quickly delivered on new trade deals with the US and India in an ever-changing global environment. The offer to increase international cooperation and strengthen relationships with new countries with an interest in use of composites products is appreciated, but there is also a need to support SMEs to export to countries with which we already have good trading relationships. The UK Composites Community needs a sustained and demonstrative commitment to resources to deliver the export growth the UK needs.
The composites sector hopes that the offer to unblock barriers for UK exporters extends to revision of the Government’s own mechanisms. An outdated export control list and lack of consistency in applying controls mean the UK is missing out selling technologies that are now commonplace, losing business to countries that have updated their practices and make it easy for their companies to trade.
- Strengthening our economic and national security
The composites sector is pleased to see composites included in the Foundational Sector and Frontier Industries along with the establishment of a new Supply Chain Centre, to review inputs, consider the impact of future trends on demand, and determine what action may be required. For sectors such as composites whose demand is predicted to increase to meet Net Zero and Defence demands but which faces significant international competition, it is hoped that action will be taken to ensure retention and growth of a resilient UK composites supply chain, from SMEs through to OEMs. We need to ensure that UK manufacturing is not just bolting together wind turbines, aircraft and vehicles together from parts and materials made overseas. We need to capture the increased added value to the UK from the materials and parts being made in the UK too as well as protecting sovereignty of manufacture. The “UK Composites Industry Competitiveness and Opportunities” report by Lucintel in 2020 demonstrated up to six times value is created from manufacturing materials through to end product manufacture.
- Develop a digitally literate, skilled, and inclusive workforce
Composites UK is pleased to see the commitment to work with industry, including taking recommendations from Make UK, to change outdated perceptions of manufacturing and ensure we have a healthy advanced manufacturing skills pipeline. We also strongly support the Government’s plan to establish a new Upskilling and Reskilling Programme to address the industry need to short modular training. The commitment to an Equality Charter will support the Government’s ambitious but welcome target to increase women’s representation in the UK manufacturing sector to 35% by 2035.
Unfortunately, the specific interventions proposed for Advanced Materials, and composites, within the Advanced Manufacturing Plan could miss the point of the Industrial Strategy as we understand it, which is business growth and the creation of good British manufacturing jobs. The interventions named for advanced materials, and therefore composites, focus on innovation through the National Materials Innovation Programme and the Defence Materials Centre of Excellence. There is no doubt that innovation is the lifeblood of the UK Composites Industry and the re-establishment of R&D into carbon fibre production in the UK will support the decarbonisation efforts of the industry significantly. This support for Advanced Materials, which is lead out of the Department for Science, Innovation and Technology is therefore welcomed. However, without dedicated support in the Department for Business and Trade, the Advanced Materials Sector, which encompasses Composites, will struggle to convert UK-taxpayer-funded innovation, that supports a range of sectors, into UK business growth (or even survival) and businesses and jobs will continue to move overseas where other countries are prepared to invest in manufacturing jobs. A balanced portfolio of support would include investment to commercialise innovation in the UK right now rather than spending a significant proportion of taxpayers money on new innovation for the future.
Composites UK is ready to work with UK Government to help build the Strategic Partnerships through connections to SME manufacturers (who represent the majority of the sector) required to develop innovation, investment, and high value manufacturing jobs in the UK.