UK Manufacturing Industry

Lord Dykes Excerpts

Thursday 8th December 2011 Lords Chamber

[Lord Dykes]

My Lords, it is a great pleasure to follow the noble Lord, Lord Sugar. Although he will not remember it, I vividly remember that we first met about 13 years after he started his first factory in 1971. It was when I was visiting Dixons Group in the Edgware Road, which was on the edge of my constituency when I was the MP for Harrow East. Even then one admired someone who was a genuine manufacturer, as he has outlined today. I, too, thank the noble Lord, Lord Haskel, who has immense experience of this subject. He is the ideal person to open this debate. I shall be very brief, partly because the Chamber is dotted with some very interesting and impressive entrepreneurs; some have already spoken—the noble Lord, Lord Bilimoria, among them—and some will speak later.

We have a manufacturing history in Britain and the territories historically associated with Britain, so we see lots of ideas springing up and innovative suggestions being made. There is now a feeling that, at long last, it is time for everybody to give a boost to manufacturing in both the traditional sense and in new products that will be commensurate with the amazing electronic revolution. Many people say that we do not do enough of it, and I agree.

I declare an interest as a representative of the all-party group that supports the Food and Drink Federation. On Tuesday night, Dods hosted a meeting at the Institution of Mechanical Engineers, just across Parliament Square, of leading manufacturers in Britain. Some of these manufacturers were originally foreign-owned. Finmeccanica was originally an Italian company but is now one of the major defence equipment producers in this country as well. There was a panoply of very good examples of what can be done in this country. The combined food and drink sector is one of the most successful examples. Some of these companies are very small and manufacture both food and drink. Some are extremely successful and very well known. They are going from strength to strength and employ huge numbers of people.

I try not to do too many factory visits because it stops me being busy in the Chamber, which is the job of a full-time working Peer, which is my classification. However, I recently went to Coca-Cola’s wonderful and amazing factory in Edmonton. It was a great pleasure. It was immensely impressive to see the amazing electronic revolution that has taken place in its packaging and bottling plant. However, the sober truth is that that huge warehouse in Edmonton employs perhaps only four to seven or eight technicians and engineers who watch the computer screens and occasionally do repairs when an electronic machine goes wrong.

It is no wonder that there is youth unemployment on a massive scale. We cannot solve this problem other than by boosting manufacturing, which requires many people to perform many of the processes involved. We shall otherwise have to rely on retail, which is a huge people sector and excellent for creating business posts. However, the jobs created in this sector are not always skilled. I do not wish to criticise those in the retail sector who would consider themselves at least semi-skilled if not skilled, but many of the posts are not skilled. For the young unemployed, in particular, but also for other unemployed people, including older ones, stacking supermarket shelves is no substitute for finding a decent job in the new, innovative manufacturing sectors of the future.

I was a member of the Stock Exchange for many years. The large institutional firm of which I was a partner—a modern firm with a modern outlook—had a policy of always visiting factories. We did many factory visits every week. In those days, in the 1960s and 1970s, one vividly saw the decline of British industry. It was mainly the management attitudes that dismayed me—and not because I was a left-wing radical, far from it. I was much more of a traditionalist in those days and liked many of the traditional aspects of British industry, whatever sector it was. However, there was an attitude of condescension to the employees.

The idea that trade unions caused the difficulties in manufacturing is totally ludicrous. One saw that company directors were often the weakness. I vividly remember visiting BSA when it started to decline. When I went to British Leyland the visit started at 11 am; we had a visit of an hour and a half and then it was lots of gin and tonics and a huge boardroom lunch, which I think finished at 3.30 pm with one of the directors saying, “I’ve got to go and play golf now. If only the workers in this company would work harder, we’d solve our problems”. Six weeks earlier I had visited Volkswagen at Wolfsburg. The visit started at 7 am; we had black coffee and then a huge factory visit. Lunch was in the canteen with the employees. The directors and the employees sat together and ate together. I was an MP then, and when I came back I had a cup of tea in the House of Commons Tea Room with a very traditional Tory MP. I explained the difference and how shocked I was by it. The British motor industry was in decline then, and the fantastic German motor car industry was a good example of employee participation. The MP was a Tory old buffer—I will not say who it was to save his family embarrassment—and he said to me, “I think I prefer the British way of life”. That was the dismal lesson in those days.

There is no reason for that now, because British industry is very modern and egalitarian in its attitudes. We need more examples in manufacturing of the John Lewis philosophy, in which employees participate as equals. We need fewer glitzy, spivvy takeovers, which are the norm in Britain, as opposed to the long-term Mittelstand development that you see in Germany. I was at a party in Germany where somebody said that they were an engineer, and people crowded around. I heard someone at the Groucho Club say that they were an engineer, and people started walking away. They were really worried about being contaminated by meeting an engineer. Attitudes are hugely important, and that is the beginning of our innovation.