LONDON, Jan 9 – Britain has become less competitive and less attractive to foreign investors due to soaring energy prices and recent political unrest, manufacturers said in an industry survey published on Monday.
Britain has been drastically loosing its charm among foreign investors due to several reasons and growing instability in the country.
The proportion of manufacturers who think Britain is a competitive location has halved to 31% from 63% a year ago and 43% said Britain has become less attractive to foreign investors, according to a survey by Make UK, the main trade body for UK manufacturers . and accountant PwC.
The survey of 235 businesses was conducted between November 1 and November 22, when the upheaval of Liz Truss’s short-lived government was fresh in people’s minds, and 53% of firms said continued political instability had damaged business confidence.
This week, Chancellor of the Exchequer Jeremy Hunt is due to outline plans to significantly cut energy subsidies for businesses.
Make UK said the plans were likely to worsen job and manufacturing cuts already in the pipeline.
When the survey was conducted in November, two-thirds of manufacturers expected to cut staff or reduce production due to high energy costs.
Britain’s manufacturers have struggled of late, with closely watched S&P Global trade surveys showing they suffered a more severe decline than other Group of 7 peers in December.
“The year ahead will be very challenging for manufacturers with a strong combination of factors testing their resolve,” Stephen Phipson, CEO of Make UK.
“Continued supply chain disruptions, access to labor and high transport costs, which show no sign of abating, may be added to a growing sense of economic and political uncertainty in their core markets.”
Phipson said there was a significant risk that UK manufacturers would “fall through the cracks” if the government failed to match the generosity of energy bill support schemes put in place by UK competitors.
The government plans to cut energy subsidies for businesses, with support costs falling by 85% over the next financial year, cutting costs by £5 billion ($6 billion), the Daily Telegraph reported on Friday.