Economy: Manufacturing

Lord Denham Excerpts

Thursday 3rd July 2014 Lords Chamber

[Lord Broers (CB)]

My Lords, I, too, compliment the noble Baroness, Lady Wilcox, on obtaining this important debate. I regret that I have to catch a plane this afternoon and will not be able to stay until the end of the debate, and I apologise to the House for that. However, I was not going to miss this opportunity to support the noble Baroness in her campaign for manufacturing, which has been so effective, and to encourage her to continue it.

I must say that it is interesting to find the noble Lord, Lord Jenkin, for whom I have huge admiration, giving the speech that I normally give. As an engineer I sometimes feel modest—or not—about that, or that I am claiming too much for engineers. Of course, the noble Lord is absolutely right.

I shall address two topics that are very much in resonance with what the noble Baroness, Lady Wilcox, was saying. I shall talk about the catapults, which are already contributing to innovation, and the need to increase the number and quality of workers with STEM skills to meet the needs of our engineering and science-based industries, and I think that all noble Lords have touched on that.

There are now seven catapults, of which there are two with which I am especially familiar: the High Value Manufacturing Catapult, which the noble Baroness, Lady Wilcox, mentioned, which is already contributing to a broad range of manufacturing technologies, and the transport catapult, which was officially opened by the Secretary of State, Vince Cable, two weeks ago. I declare an interest: I chaired the TSB’s Transport Knowledge Transfer Network which generated the proposal for that catapult. The transport catapult, among other things, is exploring the opportunities that modern communications and processing technologies present for co-ordinating different forms of transport and providing faster and more convenient end-to-end transport. Both catapults have attracted outstanding leaders and have already built very strong research and development teams. The point that I wish to make is that the establishment of these technology transfer institutes is a long-term project, and the Government—in this case, the TSB—must be prepared to sustain their support and be prepared to scale it up to match industry’s involvement, should the catapults prove even more successful than predicted.

The development of modern technologies can take up to 10 years, and a planning horizon of five years is essential. The High Value Manufacturing Catapult is already facing this situation, and although it is early days for the transport catapult it is also gaining industrial involvement at a level above what was predicted, which is very encouraging. Let us not make the mistake that has been made in the past with initiatives like that recommended by the Alvey commission, whose initial initiative was to rebuild the UK’s microelectronics industry; after a strong start that initiative was basically abandoned, leaving that technology, which underpins all manufacturing and modern technology, to others. Support for the Fraunhofer-Gesellschaft is long-term and sustained, and to a certain extent it was the model for our catapults.

My second topic is the supply of people with STEM skills. Cranfield University recently published a White Paper on UK manufacturing productivity to coincide with the national manufacturing debate organised by Professor Rajkumar Roy at Cranfield in May, which I chaired. The White Paper contains a 25-year analysis of the issues affecting manufacturing productivity in the UK, as reported in news articles. The most important of the 12 issues identified is the skill and education of the workforce. The second is investment, and so on, but I want to concentrate on skills and education. This topic also arose in several of the presentations at the debate from leaders of industries ranging from automotive to information technology and communications, and of course it has arisen endlessly in this debate. The issue concerns training and education at all levels, from shop-floor employees to the creative engineers who conceive and design products, and includes the continuing education of the workforce as well as initial tertiary education. It includes apprentices, technicians and engineers and the ability of workers to progress through those categories during their careers. Somewhat controversially, it was suggested that our university sector, which now includes some 150 universities, does not contain enough institutions that specialise in producing graduates with professional STEM skills and that there are too many universities that aim to be liberal arts universities—to use the American description—rather than institutes of technology such as MIT and Caltech. David Willetts, Minister for Universities and Science, spoke at the debate very eloquently in support of the need for a strong manufacturing sector; however, he did not agree with that suggestion.

Leaving aside the discussion of whether our university sector supports our industrial needs optimally, there is a huge problem looming in the supply of an appropriately trained workforce. In 2012 the Royal Academy of Engineering estimated that in the UK we could have a shortfall in STEM graduates of about 0.5 million by 2020. Overall, less than 50% of our students actually enter STEM industrial jobs each year, building towards that 0.5 million. Perhaps even more troubling is the prediction that many of the brightest will enter the financial sector, where they will spend their time evaluating what others do rather than producing something themselves.

[Lord Denham (Con)]

There is slight unhappiness that the noble Lord, who is probably speaking for longer than the permitted limit, will not stay for the end.