Government warned to act over growing risk to material supply
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Escalating costs are threatening the UK's supply of essential materials, according to the EEF. It warned that three quarters of European manufacturers had seen material costs increase since 2000 and these represented around 40% of their operational costs.
The EEF called upon the government to act to protect the UK's supply of essential materials. It said the global growth in middle-class consumers, higher demand for commodities, and an over-reliance on China for strategic supplies was leaving the UK vulnerable.
It added: "While other manufacturing nations have strategies in place to shield their economies from resource risks, the UK is lagging behind."
An EEF report – Materials for Manufacturing: Safeguarding Supply – comes ahead of the Resource Association's annual conference on 9 July, which will debate resource issues. The EEF explained: "It digs behind concerns raised by UK manufacturers that volatile material prices and security of supply pose a threat to growth and confirms that the UK does indeed face escalating risks."
The EEF has urged the government to help mitigate material supply risks by establishing an Office of Resource Management to strategically co-ordinate action across Whitehall.
It also called upon Whitehall to thoroughly and regularly assess material supply risks and vulnerabilities, provide stronger incentives for resource efficiency "to help overcome market failures", and regulate waste "so that we extract more economic value from what we discard".
Susanne Baker, senior policy advisor at EEF, added: "As we approach the end of an economic era we cannot afford to be left underprepared and overexposed. Manufacturers have sounded the alarm over the growing risks to material supply and others are now picking up the clarion call. But while competitor nations are already taking evasive action, our Government is in danger of burying its head in the sand.
"Resource security is dynamic and complex. It requires a flexible response working in close cooperation with industry and other stakeholders. But key to this must be a joined-up, thought-through approach across relevant policy areas. Given how crucial material supplies are to the UK's wealth and economic stability, there is clear case for a new Office of Resource Management to act as a central hub of expertise, data and stakeholder liaison and to co-ordinate the UK's response to these risks."
