Finance Bill

Lord Rooker Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Lord Rooker (Lab) [V]]

Before I was elected to the Commons in 1974, I spent my working life in the manufacturing industry, producing products from machine tools to motor cars, weighing machines and loudspeakers. Only one of the factories I worked in still exists. In the 1970s, manufacturing was around one-third of the economy; today it is 10%. While we remain in the top 10 countries in the world by manufacturing output, our unbalanced economy has created regional disparities. This is due to substantial deindustrialisation—greater than most, if not all, advanced economies.

It is not surprising that a key finding of the annual manufacturing report for 2019 was that two-thirds of the British people do not understand the importance of manufacturing to the economy. The brilliant House of Commons briefing paper on manufacturing, published in January, made it clear that manufacturing productivity has grown better than the whole economy.

These aspects of our debt-ridden economy, which is heading for stagnation, are neatly brought together by John Mills in part three of his Civitas Covid-19 review, The Road to Recovery: Reviving Manufacturing after Coronavirus. I cannot even begin to set out the case in three minutes, but with an overreliance on services, low growth, a high exchange rate and banks reluctant to lend to the manufacturing sector, we need a plan for turning things around and getting manufacturing up to 15% of GDP. We must not prop up only the existing companies but encourage manufacturing across the board; get the exchange rate to support manufacturing at the expense of services; and aim for 2% extra growth up to 3.5% and create the conditions for this.

We also need to rebalance society. Improving productivity is easier in manufacturing than in services. I strongly encourage a serious read of The Road to Recovery. I was told by the Minister yesterday at Oral Questions, in response to a question about PPE, that there are not thousands of UK domestic producers capable of producing the PPE that we need. That says it all. The choice is between export and investment-led growth, or imports and debt-led stagnation. We need a better policy.