Manufacturing in the UK
Debate between Barry Sheerman and Iain McKenzie(10 years, 10 months ago)
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Mr McKenzie
I will not try the Chair’s patience by travelling down the route of an independence debate, but I and—I hope—Scotland could not agree more with my hon. Friend.
Current levels of UK innovation are insufficient to drive growth and to close the gap with key competitors. UK business enterprise research and development as a proportion of GDP has remained below that of other leading economies such as Japan, the US, Germany and France. Furthermore, there has been a slight downward trend in the intensity of business enterprise research and development in the UK, unlike in most other advanced economies. We need to combine public and private investment better to ensure that we do not fall behind.
Jason Lippitt, managing director of TMAT, which is an acoustic components manufacturer, argues that even with limited resources, smaller businesses must find a way to use research and development if they want to survive.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
My hon. Friend is making a fine speech. Would he compare the experience in his constituency with that in mine? I find that many of my manufacturing employers are worried about, first, access to finance—they are increasingly moving towards crowdfunding and crowdsourcing, which the Government are about to regulate and might destroy —and, secondly, the lack of highly skilled technicians. Yes, graduates are good, but technicians are what most of my employers are desperately looking for.
Mr McKenzie
I will explore later business demand for graduates and highly educated people to bring into the manufacturing process.
Jason Lippitt said:
“Research and development is of paramount importance. We haven’t yet invented the products we will be making in five years. Research and development is the lifeblood of business.”
How true that there are products we have yet to discover. In five years’ time, we could be dominating markets, but only if we prioritise and plan for the future of manufacturing in the UK. If we look at the phones or tablets in front of us now, could we have imagined them five years ago, or even believed how essential to everyday life they would become? Devices that we are doing without now will make us wonder in five years’ time how on earth we managed without them. With them will come new careers that we also could not imagine.
That vision is shared by Andrew Johnson, senior economist at the manufacturers’ group EEF, who said:
“There are countries on other continents that Britain will never be able to match labour costs with, but they will never be the dominant part of the selling equation if we continue to develop innovative new products and develop new technology.”
How true. What is the position of the Minister and of the Government on forming a partnership with manufacturers to invest in research and development to create new products and to win existing markets and create new markets? Government policies can either make or break a nation’s manufacturing sector.
For example, Germany has an interventionist industrial strategy. Public-private collaboration enables innovation and technology advancement and promotes talent development. Global leaders in innovation, such as the US, Japan, Germany and Sweden, have well-connected systems that enable the public and private sectors to work together to maximise the economic benefits of manufacturing and innovation.
What of the UK? The UK system would seem not to be as well connected or orientated to the needs of business compared with that of, say, the US Government, which plays a major role in shaping innovation. The USA has a systematic and comprehensive approach to driving innovation and to supporting small businesses through its small business innovation research programme. The Dutch Government, too, have introduced a new policy to promote innovation in strategically important economic sectors.
In contrast, the lack of any coherent manufacturing and industrial strategy from the Government can only prove to be a disaster for the UK economy, as highlighted by Lord Heseltine’s report, “No stone unturned”, which received a positive response from industry and the manufacturing unions and was welcomed by the Prime Minister. Nevertheless, the lack of any real Government economic and industrial growth policy and their failure to take urgent action in developing a manufacturing policy are worrying.
On the whole, manufacturing continues to suffer throughout the UK. We need urgently to see the green shoots of recovery spring to life in all parts of the UK. Research and development tax credits are a move in the right direction, as I said, but what else might the Government do? Education and stimulation of the next generation of manufacturers could be a start, and I recognise the focus placed on that by some education providers throughout the country.