Industrial Policy and Manufacturing

Neil Carmichael Excerpts

Thursday 22nd November 2012 Commons Chamber

[Neil Carmichael (Stroud) (Con)]

It is a pleasure to speak in this debate, and to follow my hon. Friend the Member for Gloucester (Richard Graham), not least because he is absolutely right about the importance of manufacturing in Gloucestershire. One in every five jobs in my constituency is in manufacturing and engineering, so, unsurprisingly, I am constantly promoting manufacturing in Stroud.

I also pleased to follow the hon. Member for Corby (Andrew Sawford), too. I was struck to learn of his connection with Ruskin college, because Jim Callaghan used that institution as a launch pad for a great debate on education when he was Prime Minister, and rightly so, as we were concerned about the performance of our schools and colleges then, as we are still.

As Lord Heseltine notes in his report, we have a productivity gap. It takes us 10 hours to do the same thing it would take an American about eight hours to do. We must address that gap, and the Government are therefore right to focus on radical reforms of education, on STEM subjects—science, technology, engineering and maths—and on making sure our colleges are up to speed in responding to the needs of business.

As the Prime Minister has said, all Governments—including all Government Departments—need to think about economic growth. To reiterate Lord Heseltine’s point, we need a grand strategy to concentrate the mind on the needs of our industry and our businesses, in order to make sure we get that growth.

Infrastructure is crucial, and it has rightly frequently been mentioned in our debate. We are going to take three years to decide whether we want a new airport, whereas the Germans are building one in Berlin now. It may well be taking a little longer than usual, and it may well be costing them a little more money than they expected, but the point is that they are building one. We need to sweep away some of our planning restrictions and some of our reticence to make such big and bold decisions, because we need to make those decisions.

Let me give an example of why that is important. I recently went to Leipzig in eastern Germany. I had visited the city as a student almost 30 years ago, when it was an economic wasteland. It was a disaster zone; I could see that whichever way I looked. Now in Leipzig there is a huge factory making Porsche cars. They are great cars—they are so good that I cannot afford to buy one. The factory’s supply chain is very effective and tight, and it is supported by an infrastructure that enables that supply chain to work. I asked the managing director if he could produce a map of the factory’s supply chain for me, and he did so right away. It served to demonstrate the value of a good supply chain and the importance in that regard of good infrastructure. We must learn these lessons, and we must be bold enough to take the appropriate action.

It seems to me that Lord Heseltine was right about localism, to the extent that we need to make sure that local structures have the necessary capacity. I am very impressed with our local enterprise partnerships. They are the right approach and are certainly a lot better than regional development agencies, but we have to make sure that all of them are up to standard and know what they need to do. Before we give them a huge bucketful of money, they must demonstrate to us that they are capable of identifying the right firms and making sure that they understand the needs of those firms. That is about knowing the skills requirements, knowing the skills capacities available and matching the difference. I hope LEPs will start to do that.

I finish with an important appeal. We should not forget the value of our technology. Recognising the added value in our product is important. We must think forward, not backwards. We should not be manufacturing what we manufactured before. We should manufacture products that are needed now and will be needed in the future. That is where the technology matters.