UK Manufacturing Industry

Lord Selsdon Excerpts

Thursday 8th December 2011 Lords Chamber

[Lord Selsdon]

My Lords, I have the great pleasure of serving on the Information Committee with the noble Lord, Lord Haskel, who has always continued to demonstrate to me the theory that people such as me all reach the level of our incompetence but never he.

I always wanted to be in manufacturing. It went probably from my academic education, which was pretty weak. I would learn:

“Abstract nouns in –io call

Feminina one and all;

Masculine will only be

Things that you can touch or see”.

I wanted to be involved in making new things. When I first went into industry, I joined a company called Universal Asbestos, which was not the sort of company to join but it was going into plastics, and I was a young chap who might learn about polytetrafluorethylene, polyvinyl-formaldehyde—all of the “polys”—and how polymers were put together.

I became a rep for a while during my training period in the north-east of England, which was a pretty depressing area at that time. Nobody was interested in new products; they were interested only in getting the old products without having to pay for them in advance. In my plastics world, I was asked, because we were looking for new products, whether I would join a company that was doing industrial and economic research into consumer durables and things of this sort. This ultimately led me into the white goods market with an Italian group called Merloni.

We were looking to co-operate in England. I wrote to the noble Lord, Lord Sugar, as you would expect, because he was a very dynamic chap in those days, offering to help. He wrote a letter which I suppose would say, more or less, “Sugar off”. I am, however, grateful to him today because, last night, Sky Television rang up and asked whether I could be interviewed on manufacturing. Then, to my great relief, they told me at nine o’clock this morning that they had got the noble Lord, Lord Sugar—they had captured a good ‘un.

Manufacturing is quite an interesting subject, but I am not sure that the term is right, because we are looking to where we create added value. I start, because of my background in trade, by reminding ourselves that we have a balance of payments deficit on visibles of £100 billion. We may have a surplus on invisibles of £50 billion, but we have a major problem on deficit with trade, which is effectively the lifeblood of the nation.

Over time, we have failed to recognise the need not only to invest more in new product research but to find that particular moment when you get from the product design—that can be years away sometimes—to it being take up. When I was in the banking world for many years, I would be approached on odd things that other people would not finance. If someone rang up, my colleagues would say, “Oh, it’s another hare-brained scheme. Go and talk to Malcolm”. That would be hovercraft or things that never seemed to get off the ground. Let us take the hovercraft industry: it was a great technology which then steadily faded away. It became no good for transport, but it was good for things like surveillance out in the Arctic or over the tundra.

Surprisingly enough, it was in the white goods field that I became quite interested. We wanted to co-operate. We could not get any co-operation from Arnold Weinstock so we bought Hotpoint. Hotpoint was originally the hot point of the iron that gave you the greatest heat which meant that it was perfect. The next company that we went and bought was called Colston. Charles Colston played squash. He found that the rubber of a squash ball got so jolly hot that a special type of rubber was needed. He then worked out that if you put a rubber seal around a washing machine, which could heat the water hotter, you would have a better machine. The Colston was used by the middle classes for ever and a day. My mother kept one for 50 years.

In all of these areas, we then found that you looked for the greatest component part or cost of something. Usually, it was the bit that always went wrong such as when button pressing came in, and when buttons disappeared, you found that the wrong electronic signals were sent so you could not make the thing work.

When one looks at the world of consumer durables, what helps everybody, ultimately, is if you can get a conditional order. Having gone into the water industry—I followed the pipe connection right the way through—I ended up working in water and sewerage and doing big sewerage projects. My favourite project was one in India where we were going to use the latest technology. In the end, our pumping station used the Archimedes screw. Archimedes had used his screw to get water out of a ship in Alexandria harbour. Then I found that my heroes were not the modern engineers; they were Archimedes, Galileo, Newton and even Einstein; who all operated on the same level as the noble Lord, Lord Haskel, which is many levels above myself.

Yet in some areas we have made big advances. The noble Lord, Lord Bilimoria, who I respect greatly, mentioned 20:20 vision. He must not worry. Some of the most advanced people in the country are in the field of retinopathy. If he has any problems with 20:20 vision, please will he come and see me?