MORE than 500,000 jobs could be created across the UK if domestic supply chains are revitalised, a report has claimed.

The Confederation of British Industry (CBI) says changes could add £30bn to the economy and deliver thousands of new posts in the next ten years.

The CBI’s report, called Pulling Together, highlights ways to reinvigorate the supply chain, citing the need to address a growing skills crisis, the weaker plastics, metals and chemicals sectors, and underinvestment in research and development.

Bosses say the Government and businesses must act together to strengthen supply chains, by focusing on innovation, better quality products and excellent customer service.

They called for research and development spending to rise to three per cent of GDP and a widening of the research and development tax credit to support the latter stages of commercialisation and manufacturing of British goods.

They also want spending doubled on the UK innovation sector, with frameworks introduced to ensure more graduates take up roles across science, technology, engineering and maths.

Katja Hall, CBI deputy director-general, said: “The molten metals of manufacturing have long coursed through the veins of our economy.

“Optimism within industry is now rising at a strong rate, and investment intentions are on the up.

“But it’s time for some fresh thinking.

“We need to see a bold strategy that breathes new life into our supply chains, and makes the UK the destination of choice for manufacturing high value products.

“This could provide a £30bn boost to the economy, and create half a million extra jobs.”

The report also advocates an increase in the number of women in manufacturing, skills funding more aligned to industry needs, and assurances the tax system encourages long-term investment across small and medium-sized companies.

Ms Hall added: “The scale of the challenge is sizeable and our competitors are powering ahead, with France outstripping our research and development investment by 40 per cent.

“At the same time, only three per cent of our graduates end up in engineering or technology jobs.

“We need policies which focus on creating long-term value, from increasing research and development spending to establishing a UK-wide materials strategy, to enable industry to play to its strengths and compete effectively on the world stage.

“This renaissance in British manufacturing will make it a byword for innovation and quality.”

Charles Davis, strategic operations partner at AT Kearney, which carried out research for the report, added: “After years of decline the UK industrial base has stabilised.

“With the correct industrial strategy, we can and should look for growth.

“This will be vital to the long-term health of the UK.”