Manufacturing

John Stevenson Excerpts

Thursday 24th November 2011 Commons Chamber

[John Stevenson (Carlisle) (Con)]

I am delighted to have the opportunity to take part in this important debate, and I congratulate the Members on both sides of the House who secured it. The subject is central to the economic well-being of this country. Manufacturing matters both locally and nationally.

On the local scene first, in my constituency of Carlisle there are five major manufacturing plants, as well as many smaller manufacturing businesses. Those five major plants are big employers; between them they employ between 3,000 and 4,000 staff, producing for national and international markets world-class products, such as Pirelli tyres, Carr’s water biscuits, Quality Street—whose tins of sweets we all have at Christmas—and, most important of all, the humble custard cream. Manufacturing also matters nationally, as it is a key part of our past and must be a key part of our future. We have to start making things again.

It was interesting to hear the shadow Minister, the hon. Member for Hartlepool (Mr Wright), talk about being an optimist and a pessimist, because before this debate, I concluded that our country has reasons to be pessimistic, reasons to be realistic, and, most important, reasons to be optimistic. If we are pessimistic, we can look back and consider that in 1980 manufacturing accounted for 24% of our economy, but the figure now is just 11%. Over the last 14 years we have lost 1.7 million jobs in manufacturing. We now rank between the sixth and the ninth largest manufacturing country, and we are sliding down that list. We rank 18th highest for machine tools investment, which is lower than Mexico. Germany has nine times more investment in plant and machinery than the UK, and many areas of our manufacturing have completely disappeared or have greatly reduced, such as textiles.

We have to be realistic. This country has less than 1% of the world’s population and we are no longer the engine-room of the world. Other countries will inevitably grow their manufacturing sectors and become larger manufacturing producers than us, and we have to accept that. We also have to accept that low-cost countries are hard to compete with in many ways. Technology and productivity also mean that fewer workers will often be required to produce the same amount of output. Although we must not lose sight of the fact that manufacturing is only part of our economy, it is important. Our trade gap was £100 billion but that reduces to about £37 billion when we take into account the surplus from services.

We have reasons to be optimistic about the future of manufacturing: Britain remains a major manufacturing country; manufacturing contributes £140 billion a year to our national economy and provides 55% of our exports; we remain a major force in aerospace and pharmaceuticals; and our manufacturing industry is innovative. We often forget about the food and drink industry, but it is our largest manufacturing sector, producing 15% of our output. It also produces 8,000 new products annually and it has survived the recession extremely well. Indeed, by 2017 it will need to recruit about 137,000 people just to replace those retiring.

We also need to take into account investment. There is investment going on in this country: £500 million from BMW; £192 million from Nissan; and the £55 million that Coca-Cola announced just yesterday. Business does want to invest in manufacturing and it wants to invest in Britain. I am pleased to hear the Minister being positive about manufacturing and demonstrating that the Government are interested in manufacturing and want to be proactive. I congratulate them on the “Make it in Great Britain” campaign, which is to be warmly welcomed.

We must also remember that the nature of manufacturing is changing. It is becoming more high-tech and more skilled, and that might be favourable to a country such as ours. In the future, there will be growing markets. We have talked about the BRIC countries—Brazil, Russia, India and China—but other countries in Asia give us opportunities for the future. As countries become wealthier, there is a diminishing gap between the emerging and the mature markets. That also gives us an opportunity to be more competitive in the global market and to tackle the new markets that are being created. So I believe that there are reasons to be optimistic about the future. To misquote Mark Twain, the reports of the death of manufacturing are greatly exaggerated.

What can we do and what do we need to do to ensure that British manufacturing has a prosperous future? Clearly there is no panacea, but a combination of issues and ideas can help manufacturing. Undoubtedly, the Government have an important role to play and it is good to be reassured by the Minister that they are aware of the issues in manufacturing and want to support it. I am talking about things such as reducing unnecessary regulation, adopting a sensible tax regime, the Government supporting, talking about and promoting manufacturing, and helping the supply chain and helping with energy costs. The Department for Business, Innovation and Skills is to be congratulated on its support for that.

We have had real successes. On skills, apprenticeships are being created up and down the country. The number has increased by 300 to 1,000 in my area, and that is to be welcomed. We have also seen the expansion of the university technical colleges and the targeted funding through the regional growth fund—for example, £2 million is going into Pirelli, with its plant in my constituency. Central Government form just one part of government; local government, which is another part, also has a role to play, for example, through the planning system. I welcome the changes in that area, but local government must take those opportunities, and be sensitive to business and help it. Local authorities are often property owners and they also have an opportunity to help business and support its development. Industry must also help itself. It must take responsibility for research and development investment, long-term planning and the training of its staff, and it must help to promote its own image. Engagement by the industry with councils, schools, colleges and universities is equally important.

I shall conclude by saying three things. First, I fully support and endorse the idea of my hon. Friend the Member for Hexham (Guy Opperman) that there should be a Minister for manufacturing. Such a person would be the champion for manufacturing, working across Departments and ensuring that manufacturing is heard and has a loud voice within government. Secondly, education and skills are vital, and I know that the Government are working hard in that area. I am talking about skills that industry actually needs: the skills that will help us to develop our manufacturing sector for the future. Finally, probably the most important thing we need is a cultural change. We need it in Government at a national and local level, in schools, in the press and in the public’s view of manufacturing. If we have a national cultural change, I believe that manufacturing can have a prosperous future.