BCC warns UK govt on economic risks after global shocks

UK-based businesses have been left permanently bruised by the COVID-19 pandemic, Brexit, wars in Ukraine and the Middle East, supply chain chaos and US tariffs.

The British Chambers of Commerce (BCC) recently urged the government to prioritise the UK’s economic security after 10 years of geopolitical shocks have repeatedly damaged growth.
BCC’s new report, ‘Delivering Growth: Resilient Global Supply Chains’, sets out urgent steps needed to secure vital manufacturing inputs and stop British competitiveness declining in an increasingly unstable world.

BCC’s new report, titled ‘Delivering Growth: Resilient Global Supply Chains’, sets out urgent steps needed to secure vital manufacturing inputs and stop British competitiveness declining in an increasingly unstable world.

The report said that the Prime Minister must take cross-government responsibility for protecting the UK economy from external crises after years of neglect by successive governments.

Among the actions it is calling for are the creation of a ‘trade bazooka’ to allow the United Kingdom to deter economic coercion, by responding decisively to hostile trade actions; taking a robust approach to the European Union’s (EU) ‘Made in Europe’ agenda to guarantee the role of UK businesses in wider European supply chains; and making the UK’s national security a defining priority for the economy over the next decade and involving more British businesses in the defence sector.

The report argued that keeping the UK’s position as a major trading nation depends on secure access to key inputs such as energy, steel, semiconductors and growth minerals, a BCC release said.

Demand for some materials is set to rise massively over the next decade, and domestic production cannot meet future needs.

More than three-fourths of UK manufacturing exports begin with imports, underlining how exposed businesses are to disruption in global supply chains. The UK is also a highly trade-intensive economy, with imports and exports together accounting for over three-fifth of gross domestic product (GDP).

But demand pressures are rising rapidly. By 2035, UK requirements for critical minerals are forecast to increase sharply, driven by growth in electric vehicles, clean energy and advanced manufacturing.

BCC called for the creation of a new Economic Security Cabinet Committee chaired by the prime minister to coordinate policy making across government on issues from tariffs to critical imports.  

Without these smarter tools, deeper international partnerships and clearer leadership from the centre, the United Kingdom risks falling behind competitors who are moving faster to protect their supply chains, added the report.

Fibre2Fashion News Desk (DS)