Manufacturing and Engineering

Glyn Davies Excerpts

Tuesday 6th March 2012 Westminster Hall

[Neil Carmichael]

I thank the hon. Gentleman for that interesting intervention. Alison Wolf’s report is clear on the need for proper training in STEM subjects before beginning to worry too much about qualifications. It is right that there should be qualifications in engineering—and those are available in Stroud—but, as I have said, the STEM subjects need to be rigorously promoted in schools and colleges. Alison Wolf made a strong case for taking that line, and I hope the Government will pursue it with rigour.

I want to return to the subject of ABB, which is a member of the Enhancing Value taskforce launched by the Council for Industry and Higher Education. A report is coming out in July on how to make the most of UK research. I hope that the Government will read it and draw lessons from it, if it contains significant lessons; judging by the quality of ABB, I am sure that it will.

No discussion of engineering and manufacturing can fail to include a mention of the European Union. It is critical that we should recognise—as the Prime Minister did yesterday, powerfully—that 40% of our exports go to Europe. We are attached to Europe through all the supply chains that I have mentioned, and we must recognise that, in relation to trade development, Europe is a powerful magnet for interests and a strong promoter of our interests globally. A key point that came up in The Economist this weekend is the need to ensure that small firms can become big firms. We must look carefully at how the European Union is regulated and remove any barriers that prevent a small firm from growing.

[Glyn Davies (Montgomeryshire) (Con)]

I thank my hon. Friend for allowing me to intervene and to associate myself with his speech, almost all of which I agree with. The point he makes about small firms becoming large firms is crucial in a rural area. Manufacturing can be a key part in promoting a rural economy. I have spent quite a long time involved in this industry. In mid-Wales, the proportion of manufacturing has grown over 20 years from about 7% to 25%. In an imbalanced economy in which financial services are dominant, a concentration on manufacturing can be particularly beneficial in a rural area. Does my hon. Friend agree with that assessment?

[Neil Carmichael]

Definitely. My own constituency is rural. I have been celebrating, and will continue to celebrate, manufacturing on my patch. I have made it clear that there are still great opportunities for developing manufacturing and engineering in my rural constituency. The issue is to ensure that the right infrastructure is available, which I will come on to shortly.

Let me just finish the question on the European Union. The EU matters to us; we need to be there to promote our economic interests and the interests of our manufacturers and engineers, but the terms of the debate about Europe sometimes become confused. It is essential that we recognise, understand and promote the fact that Britain is part of the European Union and that Europe is a place in which we can and should do business in the most unregulated and appropriate way. We need to send out a signal to our businesses that we are behind them in that project.

There are one or two measures that I wanted to cover, but many of the interventions have already touched on them. One area of Government policy that has not been mentioned is the role of local enterprise partnerships. My own in Gloucestershire is doing some useful work in analysing the needs of businesses, the supply of skills, and the supply chain issues in connection with business. LEPs should work well with local authorities. As it happens, ours is coterminous with Gloucestershire county council, which is doing a huge amount of work in promoting economic development in our area.

A £100 million investment programme is under way and is geared towards focusing on better skills, which is consistent with the work of the LEP. It is also geared towards infrastructure. It has already contributed to the campaign to redouble the Swindon-Kemble line, which will improve the speed and quantity of our rail links, thus ensuring that we have infrastructure that is fit for purpose. It has also invested £7.5 million in broadband, to which I have referred. It is absolutely brilliant that our county council and LEP have a local focus. Critically, I applaud the Government for creating LEPs and for ensuring that local authorities work together and have a duty to co-operate in developing economic growth.

--- Later in debate ---

[Glyn Davies (Montgomeryshire) (Con)]

Thank you for allowing me to speak, Ms Clark. I anticipate making a short contribution to the debate. In fact, I did not intend to speak; I came here to listen to the debate, which I congratulate my hon. Friend the Member for Stroud (Neil Carmichael) on securing, as I thought it was hugely important. However, as the debate unfolded I decided that I wanted to contribute a couple of important points. The first follows up on an intervention that I made about the impact on manufacturing in rural areas. I represent and have lived my whole life in a rural part of Britain—mid-Wales. Although I am a farmer by background, I spent a lot of my life involved in regional development, or what we term rural development. I was chairman of a local authority planning department for several years, and then I was chairman of a development agency responsible for mid-Wales.

When I was holding strategy discussions with senior officials about how I would begin to do that job, the British economy was becoming increasingly focused on financial services and the service sector. We did not think it was possible to develop the economy in mid-Wales, or indeed to transform it. It was in serious decline after the loss of jobs in agriculture and steel in neighbouring areas. The view that we took was that manufacturing was the route on which we should concentrate.

Over about 20 years—I gave the figures earlier—the proportion of manufacturing jobs in mid-Wales increased from about 7% or 8% to about a quarter of the work force, dramatically changing it. While the Government had a policy of intervention, which they do not have now, and while there was a Development Board for Rural Wales and a Welsh Development Agency to support it, the whole environment of mid-Wales was transformed. It became a dramatically important place, and we managed to do that on the back of manufacturing. There was no other way that we could have done it.

Another great benefit was that because mid-Wales is a sparsely populated area, the strategy involved growing very small manufacturing companies. That can be done in rural areas. It involved one and two-man businesses. They were success stories for us. We grew them. That is another fundamental platform on which a manufacturing industry can be based.

[James Morris]

I come from a constituency that contrasts with that of my hon. Friend—the black country in the west midlands. It was a great area for steel-making and industrial capacity, and is now having to be revived. Does he agree that one way that we can re-energise the manufacturing base is through enterprise zones? That is a good policy implemented by the Government. We should be looking to extend those enterprise zones and provide further enhanced capital allowances to encourage manufacturing investment.

[Glyn Davies]

Indeed. I thank my hon. Friend for that intervention. It is not only about enterprise zones but about learning from them and perhaps extending the principles underpinning them across the country. As Ministers often mention, we have ended up with an imbalanced economy in Britain, because for decades we have not concentrated enough on manufacturing. We have looked to financial services and the service industry as the answer, but manufacturing has not been given its proper place in our economic strategy.

I will comment briefly on the biggest threat to manufacturing in my constituency. Policy on manufacturing is devolved to the National Assembly for Wales—I will not cover that in this debate—but that is not the biggest threat by a long way. Every business that I talk to now is worried about the impact of onshore wind development in mid-Wales. A huge project is proposed, and the whole manufacturing sector faces the prospect of the roads of mid-Wales being completely clogged up for the six, seven or eight years after the mid-Wales connection project is approved.

I cannot overstate the impact that the project will have. Businesses are already discussing moving out, because they will not be able to develop. At least three companies—manufacturing businesses that depend on transport—have written to me already to say that if the project goes ahead, they will not be able to function in the area. The impact of the project must be part of the Government’s understanding here at Westminster of what they are doing when they consign mid-Wales to becoming little more than an onshore wind farm landscape.

My final point is one that my hon. Friend the Member for Stroud referred to in his introduction. Again, I draw on my experience as chairman of a planning authority, which was my first venture into public life. I did that job for seven years, and I realised that it was crucial for the body responsible for the planning process in a local authority to have a close connection to economic development. Apart from dealing purely with planning regulations, looking at a chart and saying yes or no, we have to inject into the process the impact that plans will have on the local economy.

Yesterday I went to a business that wanted to change the use of its site. It would be hugely important for the town where I live, Welshpool. The planning authority is concerned about access. The business has satisfied the authority on access but the authority is insisting on a complete revamp of the whole site. The authority will therefore make it impossible for the business to continue on that site, and the company has said that if it cannot get what seems to be a sensible change-of-use agreement, it will have to move out. That is happening purely because those responsible for dealing with the planning application are not charged with any responsibility to promote economic development. There has to be a close link between those two objectives of a local authority if we are to have a sensible approach that will enable us to maximise the benefits that our nation can get from manufacturing.