Manufacturing

Debate between Lord Evans of Rainow and Adrian Bailey

Thursday 24th November 2011 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

I congratulate my hon. Friend the Member for Hexham (Guy Opperman) on securing the debate. Apart from a brief spell stacking shelves in my local Co-op in Poynton, I have worked in the manufacturing industry for my entire career. Interestingly, my first manufacturing job as a young man was working for BAE Systems on the mark 3 airborne early warning Nimrods. After a lot of taxpayers’ money, that was rightly cancelled because it was over budget and out of date and did not work.

When Britain was described as the workshop of the world nearly a century and a half ago in 1870, the UK accounted for almost half—46%—of the world’s manufacturing output. Today, that title has been bestowed on China, which produced a fifth of the world’s manufactured trade in 2007. The term seems to have lost some of its meaning over time, as has the notion of Britain as an industrial nation.

Everyone appears to believe that the UK is doing fine when it comes to manufacturing, citing the fact that we are the fifth largest manufacturer in the world in terms of value of output. That attitude has bred complacency and allowed successive Governments to believe that they are doing enough to maintain that position. However, that belies the truth. If we measure manufacturing in terms of per capita value added, we realise that Britain is only around 12th in the international league tables, and suddenly the picture changes dramatically.

It is clear that if we are to rebalance our economy, much more must be done to push us up the rankings. That means providing support for all forms of manufacturing, rather than just the high-tech sectors that seem to be so fashionable at the moment. It has been calculated that those sectors make up only 14% of British manufacturing and it has been argued that the support for manufacturing should be based on value, not the complexity of the product. For example, the UK still produces basic metal turbine blades, but they are cut by some of the most precise machines on the planet. The product is simple but very high value, thanks to the advanced production process.

There is no question but that such a shift must take place. The financial crisis made most people aware that the UK cannot rely on the financial services trade surplus to prop up the industrial trade deficit. However, it is less well known that, according to the Office for National Statistics, even the financial sector’s maximum export volume of £55 billion in 2008 was eclipsed by manufacturing’s £195 billion of exports.

The problem is twofold. First, our manufacturing ability is only rivalled by our insatiable appetite for other people’s goods. That has led to the latest trade in goods deficit of almost £100 billion—a new record. Secondly, Britain has grown complacent. Our manufacturing output has remained constant for the past 13 years under Labour, which is a reduction of £3.5 billion per annum in real terms.

Where did it all go wrong for UK industry? Contrary to popular assumptions, although some deindustrialisation did occur under Margaret Thatcher, the bulk of the factory closures came later. Indeed, when Labour took office in 1997, manufacturing comprised exactly a fifth of the UK economy. By 2007, it had declined to an eighth. In comparison, under the whole of the Thatcher Administration, the decline was 3.3%. The loss of our manufacturing capabilities is a very recent concern, which should fill us with a certain level of optimism.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

So far, the debate has been conducted on a reasonable cross-party basis. However, given the fact that the hon. Gentleman has made a political assertion, can I point out that in the black country, at least four huge manufacturing employers—Round Oak steelworks, Patent Shaft steelworks, Bean Cars and Cannon—were closed during the Thatcher era? That had a devastating impact on the level of employment in the black country.