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Will Holloway is the Deputy Director of the think tank Onward and a former Special Adviser.

One of the striking lessons of the last 18 months is that a country’s ability to produce goods has proved invaluable. In the early stages of the pandemic, manufacturers retooled production lines across the country to make ventilators and diagnostic kits – boosting the UK’s initial response to Covid-19 and saving lives. Our ability to make things improved our response in a time of national crisis. And the truth is the benefits of manufacturing are much broader in normal times as well.

Onwards’ new research, published today, shows the difference that manufacturing businesses can make in terms of pay packets and output.

Across the UK, manufacturing workers earn £1 an hour more, on average, than comparable workers in other industries. That pay premium is significantly higher in some parts of the country than it is in others. For example, workers employed in manufacturing firms in the North East and North West earn around £2.50 more per hour than people employed in other industries – worth £95 per week to somebody on a full time contract.

Alongside wages, we also found that productivity is higher in some parts of the UK than others. Outside London, output per hour in manufacturing was a fifth higher than the economy as whole. In growing the economies of areas like the North West, West Midlands and Wales, manufacturing is doing much of the leg work. Between 1997 and 2017, manufacturing made up around 40 per cent of overall productivity growth in those areas.

For these reasons, manufacturing is likely to be particularly important for the levelling up agenda. One way the Government could show it is serious is by launching a National Plan for Manufacturing. This could set out tax incentives for capital investment; take action to reduce industrial electricity costs; introduce greater 5G connectivity for smart factories, and include long-term funding for manufacturing R&D institutions.

The UK has a great history as one of the workshops of the world, but the role that manufacturing plays in our society, our national identity and economy has gradually declined. While many richer countries have de-industrialised since the 1970s, almost none has done so as much as the UK. In 1970 the UK had the sixth largest share of manufacturing in the economy in the G20. Today it is second from bottom.

Countries as diverse as South Korea and Ireland have caught up or overtaken our living standards while growing the share of manufacturing in their economy. Rising countries like India and China have grown their share. Yet today manufacturing is less than 10 per cent of GDP in the UK but about 22.5 per cent in Germany.

Even before the onset of the pandemic, most of the world’s developed economies were doing much more to sustain a vibrant and competitive manufacturing base than the UK has historically done.

In 2011, the Indian government published its National Manufacturing Policy that aimed to increase manufacturing to 25 per cent of GDP by 2025 and increase employment by 100 million. In 2012, the United States launched the National Plan for Advanced Manufacturing to accelerate advanced manufacturing investment and research and development spending.

In 2013, Ireland launched “Making it in Ireland”, which set out an ambition to have 43,000 more people directly employed in manufacturing by 2020. While in 2019, the South Korean government published I-KOREA 4.0, aiming to boost advanced manufacturing and automation.

The Government has already taken steps to support UK manufacturing, through the Made Smarter programme, the High Value Manufacturing catapult and the Super Deduction. But it needs to go much further. If ministers can marshal policies that would promote manufacturing further – as our international competitors are doing – it would pay political dividends.

On average, seats the Conservatives won in 2019 have a much larger share of manufacturing jobs than Labour seats. Just over 12 per cent of workers in newly gained seats by Conservative candidates at the last general election are employed in manufacturing, up from nine per cent of workers in incumbent seats and almost eight per cent in Labour held constituencies.

In an emblematic trend of the broader re-alignment of British politics, there are almost the same number of Conservative seats with 15 per cent or more of the local labour market employed in manufacturing than Labour seats with five per cent or less.

This both presents an opportunity for the Conservatives and a threat. If the Government can boost investment in manufacturing it is likely to disproportionately benefit voters in the party’s new electoral alliance. But if the Conservatives cannot halt the decline of manufacturing in recent decades, workers in Red Wall seats will more likely be at risk.

Recent weeks have seen great successes. From investments in Sunderland to Ellesmere Port to Derby to the banks of the Humber, thousands of manufacturing jobs have been secured and created. The Government should build on these decisions – creating a manufacturing renaissance – and reverse the historic decline in manufacturing in the UK. Doing so would increase earnings and productivity in some of the areas that need it the most, turbo charge levelling-up and maintain public support in the process.