Manufacturing in the UK

Caroline Dinenage Excerpts

Tuesday 14th January 2014 Westminster Hall

[Mr McKenzie]

I note and accept my hon. Friend’s points and will develop them later in my speech.

The town of Greenock was not only the manufacturing birthplace of the personal computer back in the early 1980s but the innovation centre for surface-mounted technology and multi-layered processors, which have led to the powerful hand-held IT devices many of us rely on today. Sadly, that manufacturing base has moved to continents that can offer cheaper labour costs to satisfy the need for ever-reducing product prices, with the short-term justification of the need to maintain a healthy profit margin.

[Caroline Dinenage (Gosport) (Con)]

The hon. Gentleman is being generous in accepting so many interventions. As he says, innovation is the key to the future of a successful manufacturing industry. Does he agree that by incentivising R and D tax credits we are holding on to British manufacturers that might otherwise have gone overseas?

[Mr McKenzie]

I will go on to describe that as a positive step forward later in my speech.

The manufacturing base moved and was lost when investment and encouragement in research and development stopped, and that is not the first time we have seen this. Indeed, history could be said to be repeating itself. My constituency suffered greatly when shipbuilding manufacturing went into steep decline.

--- Later in debate ---

[Mr McKenzie]

I agree fully with my hon. Friend, but I fear that this debate is not the one in which to comment on the failures or otherwise of the Scottish Government to stimulate manufacturing or business.

In the past, universities did basic science, while companies worked separately on applications for commercial use. Today, such boundaries have blurred, and successful research and development often involves co-operation throughout the innovation process. Design and, more importantly, quality in design will also give a manufacturer the edge in competitive markets, as we have heard. We have also witnessed improvement by Jaguar Land Rover in quality and design. That is how important design and recognised quality in design are in improving market share. Furthermore, I dare say that Mr Dyson is not resting on his laurels and will continue to show competitors a clean pair of heels through design improvements.

What of the process of manufacturing itself and the innovation there? I was always told by my previous employer to take inspiration from and look no further for success in process change than the high jumper Dick Fosbury, whose revolutionary approach to high jumping is now the accepted method, or process, by which all athletes approach the bar. Similarly, many of our innovative manufacturing processes, such as constant flow, “just in time” and fully integrated supply chains, are now accepted methods.

That brings me to the importance of manufacturing clusters and supply chains. Clusters such as IT in silicon valley or high-performance cars in southern Germany can be located in a particular region within a larger nation and sometimes even in a single town. Clusters affect competitiveness in three broad ways. They increase the level of productivity at which constituent firms can operate; they increase the capacity for innovation and productivity growth; and they stimulate and enable new business formation that further supports innovation and expands the cluster.

[Caroline Dinenage]

Will the hon. Gentleman give way?

[Mr McKenzie]

I thank the hon. Lady, but I will push on.

What are the Minister’s plans for and position on mounting a sustained programme of cluster development to create a more conducive environment for productivity, growth and innovation? That would of course bring employment opportunities throughout the United Kingdom. More of our large companies should be encouraged to expand the number of UK-based companies in their supply chains. Also, what is the Minister doing to encourage the establishment of manufacturing supply-chain associations throughout the UK?

Labour is committed to implementing a comprehensive industrial strategy to form the cornerstone of how the UK will build competitive businesses in the long term, and that has been welcomed by the CBI and others. We are an industrial nation, a nation that still has much to offer the world through invention and innovation, and a nation that has a future with manufacturing, but only if we plan for manufacturing in the future.