Lord Borwick
Main Page: Lord Borwick (Conservative - Excepted Hereditary)
Lord Borwick (Con)
My Lords, making things is great fun, and the joy that one gets from seeing a finished product in the hands of a contented customer is one that a lawyer or accountant will never feel. Despite the eyebrow-raising assertion of my noble friend Lord Lyell that there is nothing that an accountant cannot do, I doubt that the feeling that they have is the same. I have spent most of my working life manufacturing different products. I have manufactured London taxis and metal parts for other makers too. I thank my noble friend Lady Wilcox for raising such an important issue.
In order to strengthen the sector, it is important to think about what manufacturing is. When I was manufacturing taxi cabs, our products were decorated with a “Made in Coventry with Pride” sticker on completion. In this context, the word “made” does not really mean anything. Much like Humpty Dumpty said to Alice in Through the Looking Glass, a word means,
“just what I choose it to mean—neither more nor less”.
“Made” is not the same as “manufactured”.
Consider the best-selling shop-bought pizza in Italy. It is the same as the UK’s best seller, and it is made by a company called Dr Oetker. It is also the best-selling frozen pizza in 33 other countries around the world. That product is made by a German-owned food company on an industrial estate in Lancashire. Who really makes that product is an open question. Manufacturing is a series of processes that usually happen in several locations. There are the ideas, the design and development and the assembly of the product. We must ensure that the sector in the UK is adding value along the way.
We should remember some basic principles if we want a strong manufacturing sector. They are lower taxes and less regulation. The Government have been doing great things. Cuts to corporation tax are making the UK more competitive. However, we must stay on the tax-cutting path. Competitive tax rates are offered elsewhere, particularly in developing countries. In a global economy, manufacturers can make the rational choice to go elsewhere and cut their costs.
We must also avoid introducing other damaging taxes. For instance, when the carbon floor price was introduced, the aluminium smelting plant in Lynemouth, in the north-east of England, announced that it was closing, mainly because of the Government’s decision. Some 515 jobs were lost as a result. It is not only the level of taxation that is the problem—it is the maddening complexity of it all, too. Businesses have to cope with that. It means paying higher administrative costs for paying the bills. As I said, the Government are moving in the right direction, but lower and simpler taxes will help strengthen the sector.
When I was running my own manufacturing firm under the previous Government, I had several discussions with the quangos that were set up to help business. I remember only two things from those conversations: that they wanted to take credit for my success, and that I would not employ any of them. They were useless. However, I understand that my noble friend Lord Livingston of Parkhead has brought a genuine sense of purpose to his role as Trade Minister. The people whom the Government hire to operate in these roles are important and he has sought those who have business experience to drastically improve this process. Joe Greenwell, who leads the Automotive Investment Organisation, is a good example. As the former chairman of Ford UK, he is the right person to help create a friendlier environment in which to do business in the car industry.
Overall, more work on stripping out bureaucracy and cutting tax would be the quickest and best ways to strengthen the sector. Despite the commonly held belief that manufacturing is on the decline, the truth is rather different. However, one thing that does worry today’s manufacturers is that the younger workforce lacks the skills needed. That is a genuine cause for concern. I believe that, as with most things, developing a strong manufacturing sector starts at childhood. Children often have a natural affinity for manufacturing. Lego, Meccano, play dough and many other toys are fantastic training tools for young people with a knack for making things. I fear that that is drummed out of them at school and by computer software. Young people with a skill for making things are often lumped together on vocational courses at school. The perception of these vocational courses is that they are inferior to university degrees and that the children taking them are less intelligent, which, of course, is not always the case.
Attempts by the Government to encourage more apprenticeships mean that the senseless drive to send the majority of school leavers to university will not leave youngsters with other talents behind. However, there is still work to be done. GNVQs, for instance, often separate business courses from manufacturing courses. This makes the teacher have to answer the reasonable child’s question: “What’s the difference between manufacturing and business?”. Teachers, who often have no experience of either, have to distinguish between them. They seemingly say: “Business is things like travel agencies and tourism, where you get to travel the world; manufacturing is holding a spanner fixing things in a drab factory”. It is no wonder that young people would choose business over manufacturing. The joy of making things, and how that fits into the manufacturing process more widely, should be encouraged at school. That would help strengthen the sector for years to come.