Prime Minister David Cameron pledged to bring back jobs to Britain by luring companies with business-friendly regulation and lower energy prices.
Shorter supply chains and rising emerging-market costs have already led one in 10 small-and-medium-sized businesses to bring some production back to the U.K., a move the government needs to encourage, Cameron said in a speech at the World Economic Forum today in Davos, Switzerland. He used the example of the U.S. to argue that fracking, by lowering energy costs, may help bring companies back from their bases abroad.
“Here is now an opportunity for some of those jobs to come back,” Cameron said. “I believe these trends have the ability to be a fresh driver of growth in Europe too. I want Britain to seize these opportunities. I think there is a chance for Britain to become the ‘reshore nation.’”
Attracting investment has been one of the key arguments behind Cameron’s push to develop fracking for shale gas in the U.K., with the government pledging millions of pounds to local authorities that approve developments.
“Just look at what shale gas has done for America -– for American firms and American jobs,” Cameron said. “It has reduced industrial gas prices in America to about one-quarter of those in Europe and it’s set to create a million more manufacturing jobs as firms build new factories.”
Lower costs and other improvements also helped bring 1,500 manufacturing jobs to the U.K in 2011, according to a government-commissioned survey.
To coincide with Cameron’s speech, U.K. Trade & Investment, the government’s trade-promotion agency, and the Manufacturing Advisory Service announced the creation of Reshore U.K., a service designed to help companies bring production back to Britain.
“If we make the right decisions, we may also see more of what has been a small but discernible trend where some jobs that were once off-shored are coming back from east to west,” the premier said. “If we act now, we can ensure our business, our people and our societies can benefit from the next phase of globalization.”
Britain’s recovery is already showing signs of strengthening, with the International Monetary Fund upgrading its U.K. growth forecast this week by the most for any Group of Seven economy. Data on Jan. 22 showed Britain’s unemployment rate fell to 7.1 percent in the quarter through November, the lowest in almost five years.
While acknowledging economic growth was strengthening, Cameron yesterday renewed his government’s commitment to its austerity plan.
“What is welcome is that with the recovery is coming jobs,” he told BBC Television. The rebound will only be sustainable, though, “if we deal with the problems we had before the recovery came,” Cameron said.