# UK becoming less attractive for investment, manufacturers warn
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-01-10
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Survey reveals negative impact of soaring energy costs on
Meta Description: Make UK survey finds rising energy costs and political turmoil are driving manufacturers away from investing in Britain. Read more.
URL: https://financedigest.com/uk-becoming-less-attractive-for-investment-manufacturers-warn-2html

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By Andy Bruce

LONDON (Reuters) – Britain has become less competitive and less attractive to foreign investors as a result of soaring energy costs and recent political turmoil, manufacturers said in an industry survey released on Monday.

The proportion of manufacturers who think Britain is a competitive location halved to 31% from 63% a year ago, and 43% said Britain had become less attractive to overseas investors, according to the survey by Make UK, the main trade body for British manufacturers, and accountants PwC.

The survey of 235 businesses took [place from Nov](https://www.financedigest.com/glencore-to-place-nordenham-zinc-smelter-on-care-and-maintenance-from-nov-1.html "Glencore to place Nordenham zinc smelter on care and maintenance from Nov 1"). 1 to Nov. 22, when the turmoil of Liz Truss’s short-lived government was fresh in people’s minds, and 53% of [firms said ongoing political instability had damaged business](https://www.financedigest.com/pizza-firm-dp-eurasia-considers-divestment-of-russian-business.html "Pizza firm DP Eurasia considers divestment of Russian business") confidence.

This week finance minister Jeremy Hunt is due to outline plans to sharply [scale back](https://www.financedigest.com/mifid-ii-why-you-should-not-scale-back-your-implementation-efforts.html "MIFID II: WHY YOU SHOULD NOT SCALE BACK YOUR IMPLEMENTATION EFFORTS") energy subsidies for businesses.

Make UK said the plans are likely to lead to exacerbate [cuts to jobs](https://www.financedigest.com/icrc-to-cut-some-1500-jobs-as-humanitarian-budgets-seen-sliding.html "ICRC to cut some 1,500 jobs as humanitarian budgets seen sliding") and production that were already in the pipeline.

When the survey took place in November, two thirds of manufacturers expected to reduce headcount or [cut output because of high energy costs](https://www.financedigest.com/gms-cruise-to-focus-on-cost-cuts-as-it-ramps-up-robotaxis.html "GM’s Cruise to focus on cost cuts as it ramps up robotaxis").

Manufacturers in Britain have struggled of late, with closely-watched S&P [Global business surveys](https://www.financedigest.com/new-york-catches-up-with-london-to-head-citys-global-centres-survey.html "New York catches up with London to head City’s global centres survey") showing they suffered a more a severe downturn in December than other Group of Seven nation peers.

The [year ahead is going to be very challenging for manufacturers with a potent mix of factors](https://www.financedigest.com/3-factors-to-plan-for-in-2017-a-year-like-none-other.html "3 Factors to Plan for in 2017, A Year Like None Other") testing their resolve,” Stephen Phipson, chief executive of Make UK.

Ongoing supply chain disruption, access to labour and high transport costs which show no sign of abating can be added to a growing sense of [economic and political](https://www.financedigest.com/uae-plans-long-term-economic-ties-with-israel-despite-political-strains.html "UAE plans long-term economic ties with Israel despite political strains") uncertainty in their main markets.

Phipson said there was a significant [risk that British](https://www.financedigest.com/british-doctors-strikes-risk-patient-safety-minister-says.html "British doctors’ strikes risk patient safety, minister says") manufacturers will “fall through the cracks” if the government failed to match the generosity of energy bill support programmes that Britain’s competitors have in place.

The government plans to scale back energy subsidies for businesses will [see the cost of support fall by 85% during the next financial year](https://www.financedigest.com/10-year-david-goliath-crusade-finally-sees-justice-for-off-plan-spanish-property-buyers.html "10 year ‘David & Goliath’ crusade finally sees justice for off-plan Spanish property buyers"), limiting the cost to 5 billion pounds ($6 billion), the Daily Telegraph reported on Friday.

(Reporting by Andy Bruce; editing by David Milliken)


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