Billions of pounds worth of jobs could be "reshored" back to the UK from abroad, David Cameron will say today.

In a speech at the World Economic Forum in Davos, the Prime Minister will say that the car industry alone has the potential to bring £3 billion-worth of jobs back.

He will say ministers will support firms by trying to cut red tape and energy prices, but he will warn that UK businesses have to step up to the challenge.

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In the speech at the annual economic summit in Switzerland, Mr Cameron will say: "For years the West has been written off. People say that we are facing some sort of inevitable decline … we can't make anything anymore.

"Whether it's the shift from manufacturing to services or the transfer from manual jobs to machines, the end point is the same dystopian vision - the East wins while the West loses; and the workers lose while the machines win. I don't believe it has to be this way.

"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 offshored are coming back."

The Prime Minister will say a recent survey of small and medium-sized firms found more than 1 in 10 has brought back some production in the past year.

Companies which have reshored jobs to the UK include Hornby, the model train maker, and fashion brand Jaeger.

No 10 said that the car industry has indicated it could "reshore" £3bn of supply contracts.

Figures from Government agency UK Trade and Investment (UKTI) show 1500 manufacturing jobs reshored in the UK since 2011.

Labour's Chuka Umunna MP, the Shadow Business Secretary, said: "David Cameron and George Osborne have failed to deliver the stronger, balanced recovery we need to see.

"At a time when families are struggling with a cost-of-living crisis and have been hit by real wages falling by £1600 per year, we desperately need more better-paid, highly-skilled jobs in areas like manufacturing."