Government fund to boost UK’s role in supply chains

Component makers in the aerospace, auto and chemicals supply chains are to be supported by a £125m government fund to repatriate work to the UK.

Announcing the measures in a trip to the West Midlands, Vince Cable, the business secretary, said there was an increasing preference for businesses to collocate key elements of their supply chains with UK manufacturing operations.

“A lot of the companies would bring it back and we’re giving them the incentive to do that,” Cable told the Financial Times.

Supply chains have been rocked several times this year by both economic shocks and natural disasters, such as the tsunami that struck Japan in March, and flooding which recently devastated Thailand.

However, Cable did acknowledge the measures are unlikely to reverse a several-decades trend, which has seen UK supply chain companies close and manufacturing outsourced or moved to lower-cost environments.

Elsewhere, the business secretary will have been buoyed by news that October set a record for UK exports, which rose to £26.5bn, closing the goods deficit sharply to £7.6bn.