Queen’s Speech

Baroness Wall of New Barnet Excerpts

Monday 13th May 2013 Lords Chamber

[Baroness Wall of New Barnet]

My Lords, I, too, will quote from Her Majesty’s gracious Speech, even though when you are almost 40th on the list, I guess there is nothing new that one can say. I quote in particular the statement:

“My Government’s first priority is to strengthen Britain’s economic competitiveness. To this end, it will support the growth of the private sector and the creation of more jobs and opportunities”.

I want to focus on what that really means for businesses operating in a global economy, be they large companies or small and medium-sized enterprises.

Manufacturing is still the third-largest sector of our economy and generated £126 billion in gross value added in 2012. The United Kingdom is still the world’s ninth-largest manufacturer and, despite some popular misconceptions, still makes things that the world wishes to buy. However, I suggest that not only will any amount of expansion in manufacturing depend on the success of British manufacturing in designing new products and continuing to increase productivity—both of which are hugely important—but that there is a role for government to play in creating the environment for manufacturing to grow and prosper.

Like other noble Lords, I am going to quote from the interesting report of the noble Lord, Lord Heseltine, No Stone Unturned: In Pursuit of Growth, in particular the chapter in which he refers to his vision for a new business support infrastructure. He says:

“Each country provides support in its own way, but what is striking is how unusual the UK is amongst advanced industrial countries in not having a strong and stable business support infrastructure. We should address this deficiency”.

I understand that the Government have welcomed this report, to which many other noble Lords have referred, so I would be interested to know, in addition to what the noble Lord, Lord Deighton, said at the beginning of this debate—many hours ago—just what the Government are intending to do to address the deficiency referred to by the noble Lord, Lord Heseltine.

This is still work in progress but the Government should aim to address the concerns of the businesses that I visit and support. One is that all government departments should have the same focus on “Made in Britain” that BIS does, and should have a culture of checking every policy they work with by asking: will this support businesses to grow and prosper? The UK cannot and indeed should not hide from international competition. What manufacturing businesses want is a levelling of the playing field, an understanding of the challenges that UK manufacturers face, policies to ensure that, wherever possible, manufacturing is supported in government policy, and for policymakers to heed the Hippocratic oath—which exists in my other interest, the health service—“First, do no harm”.

Many businesses are striving to sustain their market share in a still-fragile economy, but those businesses that have really grasped the well quoted saying that the workforce is the most important component in a successful business are those that despite—or perhaps because of—these difficult times have focused on skilling and re-skilling their valued employees. They realise that doing this ensures that they have the talent and skilled workforce to seek out opportunities—as few as they are in some sectors—and to be in a fit state to take on challenging contracts in pursuit of growing their businesses.

The understanding of the need to keep manufacturers competitive has also been recognised by the British trade unions. My noble friend Lady Turner, who I worked with for many years in the trade union movement, referred to this. Many trade unions have worked closely with employers to support business competitiveness, by achieving flexible working patterns, encouraging and supporting the apprenticeship programmes and by constructive resolution to any disputes between business and their employees.

I am sad that my noble friend Lord Hanworth is not in his place. He bemoans the privatisation of many companies but I can give him examples of companies —BAE Systems, part of the aerospace industry he referred to, Jaguar Land Rover, Siemens and others—that have had this successful relationship, employing many thousands of people in the UK and further afield, all of whom are getting great skills and advancing their own individual opportunities.

I congratulate the Government on continuing and re-emphasising the focus on skills, in particular apprenticeships. This was started by the Labour Government, who put several millions of pounds into getting this off the ground. I was employed for many years in a major chemical company in the north-west where having apprentices was a way of life and the whole business was surrounded by young men, very often carrying the can for tradespeople. Nevertheless, apprenticeships were a way of life. We are now getting back to what I think is the best of all worlds by having apprenticeships revived. The evolution of apprenticeships is exciting and necessary for business services.

The level of skills required by UK manufacturing businesses has increased. According to the UK Commission for Employment and Skills, by 2017 the percentage of manufacturing jobs that will be in the employers’ “high end”—mostly degree-level employment —will rise from 27% today to 37%, meaning that there will be about as many people in high-end occupations in manufacturing as in low-end occupations. That is aspirational; it is wonderful; and we should all aim to support those who want to rise from the low end to that high end in all their businesses.

The recent focus on higher apprenticeships is making a huge difference to large businesses. As well as recruiting graduates to their management training programmes to carry forward talent and leadership skills, as they have in the past, they are focusing on expanding this talent pipeline by offering existing skilled employees the opportunity to gain additional leadership and management skills, thereby bringing them along that same route to senior management and senior supervision positions. Many businesses doing this say that those employees who have already served skilled apprenticeships will have the added bonus of knowing the business from the shop floor to the boardroom.

It was feared that SMEs would not see that higher apprenticeships were for them. However, many of them—when supported, for example, by Semta, the sector skills council for science, engineering, manufacturing and technology with which I work—are realising that they add huge value to their business opportunities, particularly in the supply chains within which they operate. Having people with skills, vision and leadership gained through the higher apprenticeships ensures that they stay competitive and, very often, punch above their weight.

Government must not let this visionary and sustainable policy be just another flavour of the month. They should continue to support employers to recruit more so as to retain the true value of the whole apprenticeship programme and not allow it to be diluted, leading to the devaluation of these important levers. Although the increase in the number of apprenticeships and the money that is brought with it are welcome, I ask the Minister to reassure us that the quality of apprenticeships is hugely valued.

The funding allocation from government via the Higher Apprenticeship Fund, which was created to develop a range of higher-level apprenticeships and fund 10,000 apprenticeships, was enthusiastically received. However, as I have identified the pressing need for advanced skills in our economy, the Government need to consider doubling or trebling this level of support so that the quality of our apprenticeships increases as numbers rise. Employers need to support that by providing matched funding in many cases.

There is a growing momentum and ambition across the manufacturing business world to get out of this recession. Government must capitalise on this moment and on the consensus among political parties about the importance of manufacturing. The consensus, too, around the importance of apprenticeships must not be wasted. We must take this opportunity to reshape our economy and put it on a more sustainable footing.