UK Manufacturing Industry

Lord Sugar Excerpts

Thursday 8th December 2011 Lords Chamber

[Lord Sugar]

My Lords, I am grateful to the noble Lord, Lord Haskel, for securing this debate on manufacturing. The noble Lord, Lord Lee, should be comforted by the fact that I am a manufacturer; I know that he is looking for manufacturers in the Chamber today.

I have spent the whole of my business life in the electronics industry. I started my first factory in 1971. It would be fair to say that in those days it was possible for someone to start up a small knife and fork factory and produce electronic consumer products. I am sure that the same can be said for many other commodities including clothing and textiles. In the building in Great Sutton Street, London EC1, where I occupied a floor, the upper floors were occupied by garment manufacturers. The irony is that in Great Sutton Street today the same buildings are occupied by the new-world media industry of web designers and social networking companies.

Some may argue that this is progress, but I argue that while these new-world industries employ some people, at the end of the day and near the end of the line people have to buy hard products. The buck must stop somewhere and there is a limit to where providing services can take us. I think that it is fair to say, with regret, that we have lost manufacturing industry for high-volume consumer products in this country, but fair also to say that design and intellectual property, mentioned by the noble Lord, Lord Cope, are also important and retained by British companies. A classic example is the Dyson company that the noble Lord referred to, which has been very successful in the vacuum cleaner business. The cleaners were produced in this country until manufacturing was taken abroad to a low labour cost territory. Of course, Sir James Dyson will point out that he employs a large number of people in the research laboratories at his headquarters.

Manufacturing of the famous brand Burberry was carried out in the UK but has long since migrated to the Far East. The irony is that prestigious brands such as Burberry are sought by the newly affluent population of China and in Japan. This brings me to my point: while I accept that low-cost commodity items can no longer be produced in the UK, high-quality merchandise can be. The demand in the lucrative export markets is very high for prestige brands where price is not necessarily the issue. The companies that I spoke of could still produce some of their flagship products in the UK and employ quite a few people and set the example of a British brand manufacturing at home, which would create employment and earn valuable export revenues.

The noble Baroness will be pleased to hear that I am not here to criticise the Government. However, I have a couple of suggestions; I am a bit of a detail man. The first is that some of the money in the recently announced £125 million advance manufacturing supply chain fund should be allocated to what I call incubator factories. So many empty premises and industrial estates throughout the country could be converted into specialist factories, where core infrastructure could be installed. This is applicable to various industries; be it electronics or textiles, it does not really matter. On the periphery of the main factory there could be small units where start-up businesses can do their stuff, design their products and utilise the core facilities, paying their way for the utilisation of the equipment and occupancy. Here they could sample their products and make small production runs.

My second idea is based on the lack of patriotism in this country, at the point of purchase. We need to educate the public to buy products that are produced or at least assembled in Britain. We need to change the mentality of the public so that when they go shopping they can help in their little way by purchasing products that are made or assembled in Britain. In the back of their minds should be the thought that, somewhere down the line, their purchasing decision is assisting employment. This new mentality needs to be instilled into the British household. For example, a logo should be produced that states: the product you are about to purchase is British.

The Government need to consider an initiative whereby—in association with, say, the federation of British industries—they come up with a certification scheme for manufacturers and producers of food, clothing, furniture or whatever. That certification should be accompanied by the aforementioned logo. The Government themselves should dip their hand into their pocket and promote this with some form of advertising. I am sure that some noble Lords will tell me that that might infringe all kinds of EU regulations, but I do not particularly care about that—I am sure that there are ways to deal with it. I remember that there was a time when “Made in Britain” was a very proud statement for manufacturers. It meant that the item was a quality product. I believe that we are still capable of producing quality products in this country.