UK Manufacturing Industry

Lord Young of Norwood Green Excerpts

Thursday 8th December 2011 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I, too, congratulate my noble friend Lord Haskel on what I can only describe as a panoramic contribution on a vitally important issue. He reminded us about the scope of manufacturing and how it links with services and the importance of design. I, too, watched with breathless admiration that recent programme on the making of a jet engine, which was a stunning advertisement for British engineering at its finest. We also had an interesting foretaster debate on cycling earlier, and just down the road from where I live is the Brompton Bicycle factory—another outstanding British success story—which exports all over the world. It produces a high-quality product, which I use every day.

I have thrown most of my intended contribution away because there have been so many fascinating contributions from around the Floor of the House, but an area that has not been covered is the importance of creating hubs—Formula 1 is a good example of this—where a number of manufacturers gather together. I cite that only because it seems to me that it has not been mentioned today, although the noble Baroness, Lady Randerson, made a point about the importance of supply chains. I would welcome comment from the Minister on what steps the Government are taking to encourage the creation of hubs. There is another example in the east of London, in the Old Street area, where we have another potential silicon valley. Hubs require good infrastructure, and these days high-speed broadband is perhaps at the heart of infrastructure. The Government are doing something in that area, but not, I believe, enough.

It will not surprise the noble Baroness that I want to focus on the question of skills. I was very interested in the contribution of the noble Lord, Lord Jenkin, when he talked about the lack of skills. There are some problems in this area and I would not want to deny that, but there is a sort of puzzle as well. For example, British Telecom advertises for 300 apprenticeships and gets 25,000 applications, so I do not think that it has much trouble in filling those.

Clearly, education is a key point, and it is profoundly important to ensure that we create enthusiasm in schools and colleges for design and technology. This raises a question mark about this Government’s concentration on the EBacc, the English baccalaureate, which seems to focus on the classics. There is a real danger, if we are not careful, not that we will be pointing schools and colleges in the wrong direction, but that it will not be inclusive enough. We know it is important to encourage people early on to have an enthusiasm for the importance of manufacturing and the excitement of design. I think the noble Lord, Lord Jenkin, talked about schools and companies and the interrelationships between them. He is absolutely right. Every school in this country should have a relationship with the local business community, and it does not particularly matter which way round it happens.

Career advice is another really important area. Unfortunately, as someone who was a member of the last Government, I cannot ignore the fact that we focused so much on the question of getting 50 per cent into university, which seemed to create the view that a vocational choice was a second-class choice—it certainly is not.

Obviously, I cannot resist the question of apprenticeships, because that is part of the skills equation. I was reading the briefing pack on this debate supplied by the House of Lords Library—again, a really good document—which talks about the barriers to innovation, growth and internationalisation. There is a paragraph in there that I would welcome the Minister giving some thought to. It says:

“For example, firms may under-invest in important skills if they are unable to fully appropriate the benefits of their investment in training because some of the benefits spill over to other firms. The dynamic nature of modern manufacturing may also make it difficult for employers as well as employees to accurately predict the skills sets that could be required in the future”.

That is a bit of a coded paragraph. I had an example of this when speaking recently to one of the sector skills councils. What it is actually saying is that when Nissan, for example, trained its apprentices, it was only to find that at the end of that training period they were poached by another firm offering them a higher wage. Well, other firms would do—they did not have to pay for the training. It is a serious point.

Although I appreciate the importance that this Government give to apprenticeships, we still have to crack the problem that only somewhere between 4 per cent and 8 per cent of British firms have apprentices and only one-third of FTSE 100 companies have them. I have said time and again to the coalition Government that they really need to get companies to lead by example. One way in which to do that is with procurement contracts. The Government keep shying away from that, and I do not understand why because it will not cost them anything and it is not illegal. We managed to do it, and I invite the Government once again to consider that. The Government need to create a climate where it is the norm for all companies to have apprenticeships. They ought to encourage the bigger companies to ensure that their supply chains take on apprentices. We did that with Rolls-Royce, Jaguar and Land Rover. They should encourage the use of group training associations. I have rehearsed these arguments on a number of occasions before, but they are a key part of this question of getting the right skills as part of the manufacturing equation.

So many good points have been made that I have very little time to cover them. My noble friend Lord Bhattacharyya talked about the importance of procurement decisions. We have heard references to Bombardier, the defence sector and the importance of new British products—as my noble friend said, not just the life sciences but all the applied sciences.

As my noble friend Lord Haskell said, there is also the importance of encouraging not just short-term investment but longer-term investment. We heard of a number of examples of family-owned firms that seem to understand the importance of that. The noble Lord, Lord Lee, made reference to that.

My noble friend Lord Sugar talked about high-quality manufacturing. I reflected on that and thought of one example of a British success story that might not have come automatically to mind, although it would to the Minister—that is, Mulberry handbags. They are British made, a British product and a British design, and I am sure that she can manage one on her ministerial salary. It is an important example of a British high-quality success story, and the importance of things being made in Britain that my noble friend addressed.

Another area to which the noble Lord, Lord Dykes, referred was the importance of food and drink manufacturing. That is a huge area. Then there is farming. Agriculture itself is another important area, and we should do anything that we can to encourage not only production but the processing of the products that farmers produce.

My noble friend Lady Donaghy made a particularly insightful contribution and again talked about the importance of having hero engineers. I absolutely agree with her, and I think that the QE prize is an interesting and important development.

I sum up what the Minister may have to say in her difficult task of responding to this debate. First, there is what the Government are going to do in encouraging the creation of more hubs. Secondly, there is the question of apprenticeships and procurement.

Once again, I thank my noble friend Lord Haskel, for creating this opportunity.