Britain’s Industrial Base

Lord Hunt of Chesterton Excerpts

Tuesday 9th October 2012 Lords Chamber

[Lord Hunt of Chesterton]

My Lords, I welcome this debate and thank my noble friend Lord Adonis for introducing it. I also welcome the noble Lord, Lord Marland, to his new role. He made a tremendous commitment to nuclear energy and I hope he has passed on the message to his successor at DECC. You cannot have all sweet—a little sour is necessary—so I have to remind him of when he got rather agitated at an all-party meeting on energy-intensive industry and suddenly loosed off. He said, “The UK should become the corner shop of the world”. We wondered about that as it was an unusual ambition, and one hopes he meant the laboratory and workshop of the world. That is what I want to refer to.

Following the focus of the noble Lord, Lord Selsdon, on national laboratories and technological centres, all countries of the world have hitherto regarded them as an essential part of a technological economy, but not the UK. I worked in an industrial lab in the 1960s. At that time, we had fantastic, world-leading laboratories in electricity, gas, water resources, railways and hydraulics. They are all gone. Since the 1990s, we have lost the Royal Radar Establishment, the Royal Aircraft Establishment and the United Kingdom Atomic Energy Authority. They all played an essential role in providing advice and development, in testing new technology and in stimulating thousands of small companies. A few national centres have survived, such as the National Physical Laboratory, the Laboratory of the Government Chemist, Cefas, the Building Research establishment, the Culham laboratories and, I am glad to say, the Met Office. You can read about why the Met Office survived and about its history in the House of Lords Library.

However, a similar story also took place in the major industrial laboratories, which were world leading. We had two major oil company laboratories, one in Cheshire and one in Surrey. I am glad to hear that BP has now reversed its policy and is expanding its strength. We had amazing electrical engineering laboratories in Leicester, Stafford and Essex. I remember an advertisement in the 1960s for English Electric laboratories. It said, “Come and solve the Navier-Stokes equation and the problems of fluid mechanics”. That does not happen now. As other noble Lords have emphasised—but not very many—we still have the world-class Rolls Royce centre and its remarkable network of university laboratories. Its approach was very different from elsewhere, and other countries have copied it. It is true that university research has expanded greatly in the UK, as in other countries, and we have new high-tech companies—in which I declare an interest as chairman of a small high-tech company—but these institutions are not the same as the technological base. The exception, perhaps, is Warwick’s engineering centre, which has the roles of national technology base and university.

What is the future of our technological industrial base? There is no plan or even principle that one can discern, and one asks whether the UK will become a major technological economy again. The evidence is that the greatest success comes through international collaboration. We are, in fact, part of Europe and some of our major laboratories are now collaborations. One way of looking to the future is by looking at the market opportunities, such as aviation, in which we have Rolls Royce and Airbus. One of the interesting points about the 1960s—and I refer to the noble Lord, Lord Hennessy—is that there is a general statement that there were great mistakes about electronics and aviation. The French say that building Concorde was the essential breakthrough to persuade the Americans that Europe could produce an aeroplane that flew regularly and safely to America, and that without Concorde we would never have had Airbus. In Britain, Concorde is often regarded as an industrial mistake, but in France it was regarded as the way to enter the market. High technology enables you to enter markets.

The other point of the House of Lords Committee concerned why we have a very good software industry. The answer is Harold Wilson because he said that we not only had the white heat of technology but that we wanted to have transputers. Nobody had ever heard of them in the 1960s, but that was the basis of our extraordinary software industry. That is the reason why governmental and department initiatives are important, as well as research centres.

The other important point, which other noble Lords have mentioned, is that we must look forward to the long-term needs which will have strong technology input. My noble friend Lord Adonis referred to infrastructure for dykes, roads and buildings. The extraordinary thing about the Netherlands is that they put them together and put windmills on their dykes, which saves 40% of the cost of the windmills. We need energy, whether wind or nuclear. This Government have been very strong in advocating space. We now essentially have a government lab—it is a European government lab in Harwell—for making use of space. Looking forward, are we simply to rely upon industry and universities to provide the technological base, or should we reconsider establishing a new technological base, making use of them but, in addition, making use of government resources?

Finally, I emphasise the importance of good graduate engineers, which other noble Lords have mentioned. I was talking to colleagues this morning. The difficulty in the UK is that we have some universities with an extremely demanding curriculum producing extremely good engineers, but too many schools and universities do not have such a demanding level and German companies say that they do not correspond to the standards in Germany. In Germany, engineers are paid almost as much as lawyers. In Britain, engineers are paid half the salary of lawyers. Lawyers work extremely hard at university because of the high pay at the end of it. How are we going to solve that? I do not know. I leave that to the Minister.