Seemingly, the global growth in middle-class consumers, increased demand for commodities and over-reliance on China for strategic supplies, is leaving the UK vulnerable. While other manufacturing nations have strategies in place to shield their economies from resource risks, however, the UK is lagging behind.
The report cautions that we are coming to the end of an era. During the 20th century, resources became progressively cheaper and this underpinned global economic growth. At the same time, growing demand was offset by expanded supply and increases in productivity. This no longer appears to be the case – the past decade has reversed a 100-year decline in resource prices as demand for commodities has surged.
Globally, the consuming middle classes are expected to swell from 1.8bn people to 4.9bn by 2030. Demand for all commodities is expected to rocket by 30 – 80 per cent by 2030. But the UK’s supply of essential materials – ranging from silicon metal and rare earth elements through to coking coal – is concentrated.
Competitor nations, such as Germany and the USA, have already implemented sophisticated resource strategies seeking to minimise supply risks, enhance resource productivity and regulate waste for economic value. The UK Government has so far responded weakly.
EEF is urging the Government to move to mitigate material supply risks by:
- Establishing an Office of Resource Management to strategically co-ordinate action across Whitehall;
- Thoroughly and regularly assessing material supply risks and vulnerabilities;
- Providing stronger incentives for resource efficiency to help overcome market failures; and
- Regulating waste so that we extract more economic value from what we discard.
Susanne Baker, Senior Policy Advisor at EEF, says: “We cannot afford to be left underprepared and overexposed. 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.”
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