Economy: Manufacturing
Debate between Lord Horam and Baroness Deech
Lord Horam (Con)
My Lords, I do not want to intervene in this controversy. I will carry on with what I intended to say.
It is often said that in Bill Clinton’s campaign manager’s office there was a sign: “It’s the economy, stupid”. I often think that government Ministers—and, indeed, shadow Ministers—ought to have a sign in their office: “How are we going to earn our living?” It was forecast some time ago in the 20th century that in the 21st century China would do all the manufacturing, the United States would produce all the food, the Middle East would produce all the energy—and what would Europe do? We would be the museum that all the other continental members would send their tourists to see.
I am glad to say that it has not quite worked out like that; but there is no doubt that over the last 30 years there has been a relative decline in the share of manufacturing in the UK, as in other countries. As the noble Lord, Lord Shipley, pointed out, there was a time when everyone said that it did not matter and was irrelevant; we would all earn our living through financial services or other things. However, the fact is that the great recession has put paid in spades to that argument. Many of the profits earned and the growth made during that period has proved to be an illusion. We are back to the reality that manufacturing does matter.
The noble Lord, Lord Monks, said that there was not much left. He ought to read Evan Davis’s excellent book Made in Britain—perhaps he has—which indicates that there is quite a lot of manufacturing left in this country. It is not only high-end manufacturing. I am a fellow of my old college at Cambridge and go to Cambridge quite often. What is happening there in the knowledge industry is staggering, quite frankly, and is hugely beneficial to the country.
I do not know what they are doing in Oxford, by the way. It seems mainly to produce politicians—but never mind; Cambridge is doing a fantastic job on the science and engineering side. It is not just a case of new industries. The other day I met a man who was in the textiles industry—an old industry from my old part of the world, the north of England—who was doing a marvellous job of producing suits with gold thread in them. The gold thread was often imperceptible, in some cases entirely so, but people in the Middle East love them and that man is doing a fantastic job of reviving the textiles industry.
The fact is that we rather like manufacturing. My father was in the car industry, to which my good and noble friend Lord Carrington referred in his excellent speech, as did my noble friend Lord Young. That industry has been revived as a result of his efforts, those of the late Lady Thatcher and of my noble friend Lord Tebbit. He, too, played a part. My father loved his time in the car industry and loved being a mechanic down on the shop floor.
Like my noble friend Lady Wilcox, who initiated the debate, I was involved in the food industry. She was involved in the food industry in her youth—although she is, of course, still young. My noble friend worked for Schweppes while I worked for Rowntree’s. A lot of research went into developing new products and I still take great pride in the products that we manufactured. If noble Lords ever sink their teeth into an After Eight thin mint, I hope that they will think of me as, in a small way, I was one of the people involved in developing such products, which now sell worldwide. I think that 57 billion Kit Kats are sold worldwide, which is a staggering performance by British industry.
Of course, it does not really compare with all the magnificent products that the company of the noble Lord, Lord Bamford, produces, but it still contributes to our manufacturing output and I am very pleased that for that short period of my life I at least did something and was not purely a politician. Therefore, I think that the Chancellor’s rather clunky phrase, “the march of the makers”, is absolutely apposite and I am grateful to my noble friend Lady Wilcox for bringing this issue to our attention and for setting out some of the things that the coalition has done.
It is very important at a very serious level to see the bigger picture here. Noble Lords may have read the excellent book published recently entitled The Fourth Revolution, by the editors of the Economist, my old newspaper. The authors point out that the threat from the East in terms of state-directed capitalism and authoritarian modernisation—the threat is epitomised by China but is also a feature of many other Asian countries—is a very serious one for this country’s economy and way of life. We need to respond to it urgently.
How do we respond? First, we need more consistency in our approach. It is vital to have continuity of thinking on education between, say, the noble Lords, Lord Baker and Lord Adonis, and now Michael Gove. Education has been touched on a great deal in this debate. Whatever Government come to power after the next general election, it is important that we maintain this continuity of thinking.
As regards infrastructure, even if the Conservatives do not win the next election, I hope that HS2 will go ahead and that a Labour Government will maintain that infrastructure spending. There has been far too much chop and change by government. Further, it would be helpful to have fewer blunders by government. I am going through my reading list at the moment. There is an excellent book entitled The Blunders of Our Governments by Anthony King and Ivor Crewe, which is very relevant to the point I am making.
Four blunders in the book occurred under the Conservatives, six under Labour and two under both Governments. I am afraid to say that there is probably one under the coalition as well. Some of the blunders that Governments made have had a seriously negative impact on the establishment of a coherent strategy to challenge the continuing development of the eastern model.
Finally, we need better governance not just at the UK level but, as the noble Lord, Lord Monks, hinted, at the European level. What Europe has done in relation to the euro is not an example of good governance, and America has not handled its debt well. I come back to where I started: we have to place a high priority on how we earn our living.
Baroness Deech (CB)
On a point of order, I wonder if the noble Lord has left the House misinformed about the relative contributions of Oxford and Cambridge. Oxford, once the home of car manufacturing, is now at the forefront of new technology and turning biological and pharmaceutical inventions into drugs that benefit the whole world.