Manufacturing

Debate between Lord Willetts and Thérèse Coffey

Thursday 24th November 2011 Commons Chamber

[Mr Willetts]

The hon. Gentleman says that he is not convinced. I think that if the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford, who has responsibility for business and enterprise, were here, he might have shed a quiet tear at that, because there he is, doing all this work in the Government and being responsible for all these sectors, including manufacturing and delivering the advanced manufacturing growth review. There are arguments about the titles that people should have, but the reality is that he does an enormous amount for manufacturing.

On strategy, if the hon. Gentleman looks at the growth review that we published with the Budget, he will see that there was a range of specific commitments, ranging from our advanced manufacturing review to commitments across a host of manufacturing sectors. We are doing further work on the future of manufacturing through the foresight exercise that my right hon. Friend the Secretary of State is leading. Manufacturing was a crucial strand of the growth review and there is now a forward-looking exercise in the foresight framework.

I will briefly take the House through some of the things that we are doing to strengthen manufacturing, which as I said were covered in the Government’s “The Plan for Growth”. Lowering business taxes is fundamental. That is why we are planning to cut corporation tax year on year. Although some people have criticised our decisions on the structure of corporation tax, it is worth remembering that we have legislated to extend the capital allowances and short-life assets scheme for plant and machinery from four years to eight years to improve the tax incentives.

We are also backing innovation. Several Members from both sides of the House have referred to the importance of the research and development base. I am particularly pleased that we have been able to draw on the lessons from Germany, which has been referred to favourably on both sides of the House, and to learn from its Fraunhofer institutes. Those were a model for the technology innovation centres that we are setting up with £200 million, even in these tough times. We have already identified some of those centres, notably in advanced manufacturing. Indeed, my right hon. Friend the Secretary of State is opening the National Composites Centre in Bristol today. That is the new home of world-class innovation in the design and manufacture of composites. We have also announced that there will be technology innovation centres in cell therapies and offshore renewables, and that there are more to come. We are trying to plug the gap between the pure research in universities and the commercialisation for which individual companies are responsible—the so-called valley of death. The technology innovation centres are one way in which we can plug that gap.

We are also committed to improving our performance on exporting. That is why we launched the national export challenge, a series of initiatives to help SMEs take the first steps to break into new markets. Currently, only one in five companies in Britain export. We want to increase that to one in four. That means reaching out to mittelstand businesses, or SMEs, that have not thought about exporting. That is why we have set UK Trade & Investment the target of doubling its client base to 50,000 businesses in the next three years.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I have heard a lot of compliments about UKTI. However, when I met my local enterprise partnership earlier this week, the concern was expressed that UKTI reacts to requests, perhaps from bigger companies, rather than having a proactive strategy. Do you have any thoughts on how that might change?

[Mr Willetts]

In the absence of Madam Deputy Speaker responding to that challenge, I will. The Prime Minister urges all of us in his Government to be as proactive as possible whenever we go abroad, ensuring that we are properly equipped with a sense of the key business opportunities that are relevant to the particular mission that we are on. We have asked UKTI to set out what we call a high-value opportunities programme to identify really big projects around the world where there are opportunities for British companies and suppliers to invest and provide. We are systematically reviewing the high-value opportunities provided by large-scale projects around the world, which we believe British companies can take advantage of by going out and battling for contracts. We are improving the tax system, we are backing R and D and innovation and we are committed to improving our performance on exports.