Baroness Wilcox
Main Page: Baroness Wilcox (Conservative - Life peer)
Baroness Wilcox
That this House takes note of the case for strengthening the United Kingdom’s manufacturing sector, stimulating investment and innovation in new technologies, and encouraging young people to seek a career in manufacturing.
Baroness Wilcox (Con)
My Lords, I shall try to stick to time. I am glad to have this chance to offer some thoughts on UK manufacturing. I have spent much of my life in manufacturing and the food industry. I ran my family business in the West Country. I sold fish to the Japanese, which took quite a long time—longer than I would have thought—but was well worth doing in the end. I became a director of Cadbury Schweppes for 10 years and learnt the difference between selling fish and manufacturing chocolate. It all came down to flow systems in the end.
The assumption, still alive in too many parts of the world and, indeed, within this country, that the UK no longer makes anything has always frustrated me. For, despite the grim commercial environment ushered in by the recent financial crisis, UK manufacturing remains a vital element of our economy and is responsible for more than half our exports. It is vital in another sense too. Manufacturers, large and small, are very much in the vanguard of recovery. The Office for National Statistics released the index of production figures last month, revealing the biggest quarterly growth since 2010, with manufacturing output up a full 2%. This Tuesday, the survey company Markit reported the sector hiring people at the highest rate for more than three years.
We must of course continue to treat such evidence with a degree of caution. Manufacturing output is still significantly below the pre-recession peak in 2007. Nevertheless, with exports also on the increase—9% above 2007 levels in real terms—there are grounds for guarded optimism.
The greater part of the credit for this turnaround must go to the manufacturers themselves and to their employees for their fortitude and flexibility in difficult times. However, the Government also deserve recognition for taking concerted steps, in partnership with industry, to secure the long-term future of our manufacturing base. Like me, many noble Lords will have vivid memories of the 1970s, when high-profile government interventions in the industrial sphere went so badly wrong. Those poor decisions overshadowed policy-making for decades and that does much to explain why support for our manufacturers was mostly inadequate thereafter. The result was production hived off overseas, domestic supply chains eviscerated and vast numbers of jobs destroyed. It is astonishing to recall that, in 1975, manufacturing employed more than 7 million people—over 30% of the total workforce.
Two years ago, however, the coalition resolved to address these problems, all of which had long been common knowledge. The industrial strategy, led by my former department but involving the whole of government, set out a clear path to drive investment and growth, not for the next year or two, but beyond the current Parliament. For years, business has been crying out for long-term certainty, which is the absolute prerequisite for planning and investment. Via the process of agreeing 11 sector strategies, covering areas as diverse as automotive, healthcare, renewable energy and construction, industry leaders were equal partners with government in establishing priorities and agreeing sector-specific plans of action. Above and beyond these strategies, the Government are addressing shortcomings that affected the growth prospects of all types of business, including manufacturers: in particular, access to finance, support for innovation and the skills shortages. Perhaps I may briefly illustrate these.
On finance, clear issues remain regarding capital availability for business. The Government have taken significant steps to alleviate the situation. I would highlight the regional growth fund, providing £3.2 billion for companies to spend on capital investment, R&D and training. Two new institutions, the British Business Bank and the Green Investment Bank, are now up and running, working respectively to diversify sources of lending and to accelerate our transition to a green economy, with all the opportunities that that must present. There is also specific support for manufacturing now, recognising that we need a sustainable network of specialist suppliers to keep industry on track. The advanced manufacturing supply chain initiative has made £345 million available to encourage the repatriation, anchoring and growth of these firms.
On innovation and R&D, the past few years have seen a couple of major co-investments: £2 billion over seven years for the Aerospace Technology Institute and £1 billion over 10 years for the Advanced Propulsion Centre—its mission to bring low-carbon technologies to market and to create safeguards for some of our 30,000 jobs in that area. It is worth noting that, although our manufacturing sector accounts for about two-thirds of UK R&D spend by businesses, fully one-third of that comes from just 10 companies. Hence, the catapult network was created—I am very keen on the catapult network—with long-term, public-private funding worth £1.5 billion. Its purpose is to make research expertise and facilities readily accessible to smaller firms. In that network, the High Value Manufacturing Catapult, which is spread across the UK, has already engaged in more than 1,500 individual projects with small and medium-sized enterprises, the ones from which we will see our large companies grow in the future.
With regard to skills and inspiring the next generation, arguably the most deep-seated issue facing manufacturers is the lack of job-ready employees, particularly now, with unskilled factory positions largely a thing of the past. Manufacturing today could not be further removed from those tired images of metal-bashing. It is all about satellites, robotics and pharmaceuticals, and 50% of capital expenditure goes to intangible assets such as design and branding.
The most substantial response to this challenge has been the unprecedented growth in apprenticeships, backed by record public investment. I particularly applaud the attention given to higher-level apprenticeships, which are necessary for demanding technical roles. This, too, has been very much a project in partnership with industry, with employers setting rigorous apprenticeship standards appropriate to the needs of their sectors. Manufacturers have especially welcomed the confirmation of a new £18 million college located in the Manufacturing Technology Centre in Coventry—set to become a beacon of excellence for vocational training.
At the same time, repeated surveys have shown that manufacturing simply fails to register among the career aspirations of young people. This is particularly true of girls. Tackling this persistent mindset—permanently changing the views of parents and of teachers too—is where we must direct our fire-power. There is a lot of evidence to show that when teachers talk about careers with children in schools, particularly with girls, if a girl comes forward and says that she has three A*s at A-level, the teachers usually think, “Well, you’re going to university then, aren’t you?”. We have evidence of young girls who want to do engineering, particularly wanting to take apprenticeships with some of our biggest companies, and being told by a teacher in their school, “Well, I don’t know anything about that. You’ll have to ask someone else”. This has to stop.
Something which has recently become an annual fixture is See Inside Manufacturing. I encourage your Lordships to go and see this if they get a chance to do so. Last year, more than 6,000 pupils and teachers visited manufacturing sites, and this gives them a better understanding of manufacturing. I have been pleased to hear about another new initiative, Inspiring the Future, which sends volunteers into schools to discuss the great jobs that exist in science, engineering and manufacturing. I really do hope that more and more of your Lordships will do the same thing. We must grab the attention of young people at the earliest opportunity.
The policies I have mentioned by no means represent the full range of support for our manufacturing companies. There is substantial help for manufacturers with energy bills, for example, with a £7 billion package announced in the Budget. There is also the reconstituted Manufacturing Advisory Service. There is an awful lot of help out there ready to take us even further.
I hope that this intervention has sketched the broad outlines of the coalition’s partnership with our manufacturing base and that it has communicated my support for this agenda. Working together with industry has always been the best way to go. It is clearly a world away from what occurred under the previous Government, when manufacturing halved in size through a combination of neglect, inconsistency and stifling regulation. Uncertainties inevitably remain—our ability really to address endemic skills shortages and the scale of competition posed by countries both emerging and fully emerged, to name but two. However, there is now real cause to believe that good days lie ahead for manufacturing. I congratulate UK businesses on their resilience and I have every faith in their ability to succeed, with appropriate support from government at last.
Baroness Wilcox
My Lords, I take the opportunity that I am given to thank everybody for taking part in this debate today. I particularly thank the Minister for such a full response. I do not think that he missed out anybody who spoke so there is no reason for me to pick up in any way on individual speakers. I have been walking with giants today. I have been sitting here, listening to manufacturing being described in various ways. I did not know or recognise some of them but was happily reminded of others.
I have only two regrets today. First, I missed out the role of trade unions. The noble Lord, Lord Monks, should take it as a compliment that I did in as much as I did not see them as sitting on the other side of the net from me. It has always been thought that from this side we are not going to listen and from the noble Lord’s side they are going to ask for everything. But where I worked in my business we had to work together as a team. If you got people into a fish-filleting factory at 3 am to fillet 30 tonnes of mackerel and someone started having an argument before we could get it out of the door, it was in everybody’s interest to fix it. Modern industry has to go forward and things will change so fast that we cannot entrench positions. I apologise that I did not mention the trade unions but it should be taken as a compliment that I felt we were all singing from the same hymn sheet at this stage.
Secondly, I am also sad that I was the only female to put her name down to speak in the debate. That shows us that we really have to work a bit harder at 50% of the population to see whether they can understand what manufacturing actually means. Perhaps we can get a few more soaps on the television to show girls taking part in such very exciting and good careers. I am very grateful to my noble friend Lady Trumpington for making her intervention as it meant that I was not alone. Thank you very much indeed to everyone.