Andy Burnham officially became the United Kingdom’s fifth Prime Minister in four years on July 20, 2026. He is immediately faced with urgent demands from the manufacturing sector, which is keen to see his plans for the industry.
The industrial landscape has endured a tumultuous period. Manufacturers grapple with persistent supply chain disruptions, soaring energy expenses, and critical skills shortages. This instability at the highest levels of government has only exacerbated existing pressures on businesses of all sizes.
Andy Burnham’s Vision for British Manufacturing
Prime Minister Andy Burnham has clearly articulated his commitment to re-industrialising Britain. He aims to enable each region to develop “clear and credible industrial ambitions,” fostering “world-beating British manufacturers” focused on innovation and exports.
His strategy includes strengthening domestic manufacturing through strategic public procurement. Burnham advocates for government contracts to prioritise UK-based suppliers, moving beyond the sole consideration of the lowest-cost overseas options. This approach ensures that “every pound raised from taxpayers will work harder.”
Procurement as an Industrial Tool
Public procurement policy under Prime Minister Burnham will now embed “proper social value weighting” for eligible public contracts. This change is designed to give British firms a competitive edge in securing work, directly supporting local economies and supply chains. The Defence Investment Plan, a significant area of public spending, will also adopt this new approach.
Burnham also identifies critical national capabilities, including steel, defence, energy, food, and farming, as sectors requiring protection. He stresses the importance of safeguarding sovereign manufacturing and production capacity to prevent further industrial decline. This echoes the previous Labour government’s move to nationalise British Steel.
Regional Focus and Devolution
Drawing on his experience as Mayor of Greater Manchester, Burnham champions place-based industrial investment. He has proposed “Good Growth Funds” for regions and increased devolution of powers over skills, transport, and economic development. This aims to cultivate manufacturing clusters across the country.
His commitment to regional growth is further cemented by the establishment of ‘No 10 North’ in Heron House, Manchester. This location will function as “the government’s new situation room for growth,” where Burnham expects to work weekly. He also reinstated and chaired the first meeting of the National Economic Council (NEC) from this northern hub in July 2026, including regional mayors.
Industry’s Urgent Demands on the New Government
The manufacturing sector has presented Prime Minister Burnham with a clear set of urgent demands. These priorities aim to restore competitiveness and confidence, allowing businesses to invest, grow, and create jobs rather than contend with political slogans. UK manufacturing leaders are unified in their call for practical action.
A primary concern is the reduction of high business costs. This includes industrial energy prices, business rates, and employment costs. The sentiment from the sector is that talk of an increased commitment to industry must now translate into tangible relief from these financial burdens.
Energy Cost Imperative
Manufacturers specifically require measures to significantly reduce energy costs to bolster competitiveness. Requests include accelerating grid connections and reducing non-commodity costs, ultimately ensuring internationally competitive electricity prices. Every pound diverted to excessive energy bills is a pound withheld from investment in new equipment, technology, or personnel.
The government previously announced a British Industrial Competitiveness Scheme, aiming to cut costs by up to £40 per megawatt-hour for over 7,000 manufacturing firms from 2027. An expanded British Industry Supercharger scheme also intends to cut network charges for approximately 500 energy-intensive firms, such as those in steel, chemicals, and glassmaking. These initiatives are critical for the sector.
Bridging the Skills Divide
Tackling the pervasive skills gap remains a top priority. Kate Ambrosi, Chief Executive of the Baker Dearing Educational Trust, noted Burnham’s strong support for technical education during his mayoral tenure. She expressed hope he would bring this enthusiasm to Whitehall, advocating for parity between academic and technical education routes.
The sector needs clearer pathways into manufacturing, engineering, and other technical careers. This requires a stronger emphasis on apprenticeships, vocational routes, and technical university places. Government contracts, for example, will now obligate companies to offer in-work training for young people, addressing a crucial need for future talent.
Sir John Lazar CBE FREng, President of the Royal Academy of Engineering, emphasised engineering and technology’s role, contributing over a third of the UK economy and supporting 8.5 million jobs. He highlighted a challenge where over half of UK engineering and technology firms haven’t adopted advanced technologies like AI, despite the UK leading in research and innovation with many spinouts and start-ups.
Industry Leaders Demand Action
Stephen Phipson CBE, CEO of Make UK, commented that manufacturers welcome the Prime Minister’s ambition to re-industrialise Britain and foster growth in every postcode. He stressed the immediate need for turning this ambition into action through the effective implementation of the Industrial Strategy.
Phipson added that manufacturers demand urgent progress on issues impacting their ability to invest and grow. He identified the high costs of doing business, including energy, business rates, and staffing, alongside critical skills shortages, as top priorities. Make UK research shows business confidence at its lowest in four years, with a quarter of manufacturers considering moving production overseas due to the UK’s high cost base.
Make UK and SMMT Perspectives
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), congratulated Burnham, noting Labour’s prior commitment to automotive manufacturing. He stated that the sector can be a powerful engine for growth, delivering investment, innovation, and high-value jobs across the UK. Hawes stressed strengthening competitiveness and supporting the net-zero transition to drive reindustrialisation.
The manufacturing sector, as a whole, stands ready to contribute to a stronger, more prosperous, and resilient economy. However, leaders reiterate that this requires a government that facilitates investment and growth, rather than creating additional hurdles. Confidence to invest is currently low, hampered by ongoing high costs and a general climate of uncertainty.
British craftsmanship and circularity are key aspects of this renewed industrial push.
SME Challenges and Solutions
Chris Greenhough, Managing Director of Westley Engineering, echoed calls for tackling the skills challenge. He proposed a Training Tax Credit to encourage businesses of all sizes to invest in apprenticeships, upskilling existing staff, and developing future talent. He argued that training remains too expensive and time-consuming for many firms.
Greenhough also pointed to the complex trading landscape, including mechanisms like the Carbon Border Adjustment Mechanism (CBAM), tariffs, and export compliance. Many Small and Medium-sized Enterprises (SMEs) lack dedicated compliance teams. He called for simplified guidance, practical support, and streamlined processes from the government.
For SMEs, navigating the defence sector also presents significant barriers. Despite increased defence spending, complex procurement processes often exclude capable smaller manufacturers. Greenhough asserted that these businesses bring innovation and agility, but the high entry barriers hinder their contribution.
The Path Forward: Consistency and Implementation
Andy Burnham committed to the previous Labour government’s fiscal rules in May 2026 and reaffirmed this in his first speech as Prime Minister on 2026-07-20. This commitment signals a desire for fiscal stability, an element manufacturers desperately need to plan long-term investments. Chancellor John Healey announced a budget statement for October 28, 2026, promising to decentralise “money and power out of Westminster.”
The long-term industrial plan, a ten-year strategy Burnham promised to unveil later this year, is particularly significant. Manufacturing businesses operate on investment cycles far longer than political terms. They require consistent policy and clear direction to invest in new technology, sustainable production, supply chain resilience, and workforce training. Advanced manufacturing automation relies heavily on such long-term planning.
Sunny Prakash, Managing Director of WERIT UK, highlighted how Burnham’s vision of devolution, reindustrialising Britain, and a ten-year plan resonated deeply. Prakash believes that decisions made closer to manufacturing operations, combined with strategic public procurement, can better align with local employer needs and regional economies. This approach provides the confidence businesses need to invest.
The previous Labour government’s Modern Industrial Strategy 2025 (MIS2025) encompassed dozens of industries, with eight “Growth Sectors” and 37 “Frontier Industries,” alongside “Foundational Industries.” This comprehensive strategy involved over 350 separate interventions across critical areas such as skills, technology adoption, regulation, planning, data, and research and development.
Despite these past efforts, business confidence among food and drink manufacturers registered at -31% in Q2 2026, marking nine consecutive quarters of negative sentiment. Eighty-eight percent of respondents in a survey reported deteriorating business conditions since Labour came to power.
This underscores the urgency for Burnham’s government to translate ambitious plans into tangible, positive outcomes that reverse negative trends and restore investor confidence across the sector.
Looking Ahead: Realising Industrial Ambition
Prime Minister Burnham’s ambitious task now involves transforming his vision into practical action. His emphasis on greater regional decision-making, strategic public procurement, and long-term industrial planning offers a genuine opportunity. Delivered effectively, these policies could strengthen Britain’s manufacturing base, improve competitiveness, and foster lasting economic growth across the country.
The manufacturing community will be closely observing the government’s industrial strategy as it develops in the coming months. The expectation is clear: policies must support manufacturers of all sizes to compete, innovate, and grow, ensuring the UK remains a hub of industrial productivity and engineering excellence.
