Economy: Manufacturing

Lord Wade of Chorlton Excerpts

Tuesday 30th November 2010 Grand Committee

[Lord Wade of Chorlton]

My Lords, I also thank the noble Viscount for introducing this debate and for drawing our attention to the manufacturing industry, which is possibly the most important thing in this country. I come from the north-west of England and shall draw your Lordships’ attention to some of the issues relating to the manufacturing industry in that part of the country. In the 18th and 19th centuries, the north-west drove the manufacturing industry of the world, not just the UK. I should like to see a return to those times when the innovation, ideas and enthusiasm of individuals could flourish.

Most of the information that I shall give comes from the North West Manufacturing Institute, which represents, or shows the interests of, the north-west manufacturing industry. We have some 18,200 production- driven manufacturing companies in the north-west of England and they make a major contribution to our economy. Output grew by 4.8 per cent from September 2009 to September 2010. In the mechanical and equipment manufacturing industries, it increased by 21 per cent. Therefore, there has been an enormous increase in activity and growth in our manufacturing industries in the north-west. The food and drink industries in the north-west have seen an increase of 6.6 per cent. The noble Lord referred to the importance of the food and drink industry. It is an industry in which I was involved for most of my life. I refer not to the drink side—I shall leave that to the noble Lord, Lord Bilimoria—but the food side. It has been a very important part of the north-west’s economy for a long time and it is still growing at a considerable rate. Some of our most innovative companies are in the food industry. They have contributed to a considerable increase in exports and development in other countries, and I am very proud of some of our major food industry companies in the north-west of England.

I am patron of the Society of Dairy Technology and should declare an interest in that regard. We are trying to improve innovation, particularly in the dairy industry. Our membership covers the whole of Europe and is part of a European structure that enables many companies now to be driven by new investments and new developments. I shall make the point now while I have the opportunity that I favour the large dairy units that are now being considered in this country. I would encourage the whole of Europe to accept new technologies in farming, agriculture and growth. They will be essential if we are going to compete with the rest of the world. We must stop burying our heads in the sand and thinking that we can continue to farm and grow and manufacture food in the way that we did in the previous century.

One of the issues in the north-west to which I would like to draw the Committee’s attention is that, as I understand it from the information I receive from the institute, we will need to replace 550,000 employees over the next five to six years in the north-west alone. That gives some indication of how the manufacturing industry is going to provide extra employment in the coming years. The Government’s policy of encouraging that and of moving people from the state sector into manufacturing industry will be one way of generating much more wealth. In the engineering sub-sector alone, it is hard to fill vacancies. We will require around 18,000 jobs per year, and the estimated lost GVA through lack of recruitment comes to approximately £823 million per annum. That is an important aspect that we have to be aware of.

I draw the Minister’s attention to some of the issues that concern people most. One is the shortage of skills. There is a north-west factory that is trying to recruit 800 specialist engineers and finds it impossible to do so. Another company has had a 170 per cent increase in its exports to China and is looking for 100 new managers and quality people, but it cannot find them. A company that I chair, Rocktron Limited, is a specialist engineering company and is finding it extremely difficult to get the right quality of electrical and processing engineers and craftsmen—welders and the like. There is an enormous shortage, which is handicapping the growth of these industries.

Finally, if I ask businessmen what they want, they say that they want government to leave them alone, to say yes when they want to do something and to encourage officials, particularly at local government level, to stop making hold-up decisions rather than saying “Get on with it and do it”. There is a great hold-up between what the Government at the top are saying about what they want to encourage local officials to do and what is happening at ground level. There is an awful lot of inertia in the system at the moment that needs stirring from the top. I look to the Minister to be the one who might carry out that action and stir people up. When business wants something, it is not money, but someone to say, “Yes, get that built, get that planning passed, get that decision made, get that done”. If that is done by government, business and manufacturing industry will always respond.