Norman Lamb
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
It is a pleasure to serve under your chairmanship, Ms Clark.
I congratulate the hon. Member for Stroud (Neil Carmichael) on securing the debate on an important subject. May I also say that all the key points in his contribution were excellent? He is a keen advocate of manufacturing and engineering companies, both in his constituency and nationally. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), who has responsibility for business and enterprise, is looking forward to opening the Stroud manufacturing festival on 23 April, which is an excellent initiative that will promote the case for manufacturing. The hon. Member for Stroud demonstrated the most remarkable array of different types of manufacturing in his constituency.
The hon. Gentleman also highlighted the importance of inspiring young people. I heard recently of a survey of youngsters, aged 11 or 12, on what they wanted to do when they grew up. None of them talked about manufacturing, making or designing things. We have to change to that culture and it will take a while. The National Careers Service, which is being launched in April, will work with STEMNET, a body that promotes STEM subjects in schools. It is running a scheme of STEM ambassadors—industrialists, academics and so on—who go into schools to talk to children to try to inspire them, and to think about manufacturing as an option.
Various people have raised the importance of getting women into manufacturing. The hon. Member for Stafford (Jeremy Lefroy) made a comparison with Germany. If we are to make the maximum use of the skills available in this country, we must open up engineering and manufacturing to both sexes, rather than it being the almost exclusive preserve of men.
Mr Iain Wright
Does the Minister think that the downgrading of the engineering diploma qualification is a good and positive thing that will promote engineering to our young people?
Norman Lamb
I absolutely agreed with the hon. Gentleman when he talked about parity of esteem between the vocational subjects, including engineering, and the more academic subjects. In recent years, including during his own party’s tenure in government, that has not existed—there has been no parity of esteem. The vocational, practical subjects have been downgraded in the public mind, and the Government are doing a lot to re-establish them. The university technology colleges initiative is valuable in that regard. On his particular point about the engineering diploma, it is a complex issue with the interaction of school tables. However, the principal learning in engineering—the engineering core of the diploma—will be recognised. That in itself is a vote of confidence. I therefore reject absolutely any idea that the Government do not see the importance of parity of esteem.
I want to mention the fantastic news from Nissan in Sunderland—mentioned by a number of hon. Members—which offers the potential for 2,000 jobs. The shadow Minister was generous in applauding that great news. There are a number of challenges and we hear stories that go in the other direction. However, when we have news that demonstrates a very clear vote of confidence in the UK economy, we should applaud it. The extent to which the automotive industry in this country now leads the way—hon. Members have talked about the fact that we are a world leader in motor vehicle engines—means that we have an enormous amount to build on.
The future of manufacturing is an issue being debated not only in the House, but, as we have heard, at high levels elsewhere today. My right hon. Friend the Secretary of State for Business, Innovation and Skills will address the inaugural EEF manufacturing conference today, as will the Leader of the Opposition. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford, has been speaking at the automated Britain conference this morning and will address the Institute of Mechanical Engineers manufacturing conference tomorrow. He and my right hon. Friend will make it clear that manufacturing growth is one of the highest economic policy priorities for the Government. It is important to stress that.
The UK is recovering from the biggest financial crisis for generations and the deepest recession of almost all the major economies. We are still feeling the shocks from the eurozone’s sovereign debt crisis. The recent agreement with Greece, although welcome, is not a panacea. One of our first decisions in government was to place manufacturing at the heart of our economic strategy. I reject the shadow Minister’s charge that there is any sense of drift. The Department is focused on manufacturing. The Minister of State leads on manufacturing: he devotes attention to it, and he is closely interested in doing everything he can to support growth in manufacturing.
In placing manufacturing at the heart of our economic strategy, we were under no illusion about the challenge that we faced in turning UK manufacturing around. In the UK, manufacturing as a percentage of the economy fell from just over 22% in 1990 to around 10% in 2010. The decline of manufacturing has been significant, in marked contrast with Germany, which has sustained that share of the economy much more successfully. We have learnt from the mistakes of previous Administrations
Ian Swales
I welcome the Minister’s comments about the importance of manufacturing. Does he agree that even figures such as 10% or 12% far understate the importance of manufacturing to our economy, because so many service sectors, such as logistics, energy and so on, depend on having a manufacturing sector? Will he join me in welcoming the fact that manufacturing employment in the north-east has risen every month for the past 22 months, which shows that the Government’s policies are helping?
Norman Lamb
I applaud my hon. Friend’s work promoting manufacturing, not only in his region but nationally.
Norman Lamb
May I deal with the previous intervention?
My hon. Friend the Member for Redcar (Ian Swales) is right to stress the importance of manufacturing in its own right and in respect of services. If we are to get out of economic difficulties, building exports partly based on smart manufacturing is essential. I am conscious that time is tight and I have already given way to the shadow Minister—
Norman Lamb
I would prefer to continue to make my points, despite the hon. Gentleman’s tempting.
There is an absolute necessity to shift activity away from consumption and public expenditure, towards investment and exports. The hon. Member for Montgomeryshire (Glyn Davies) made a good point about rural areas and small companies that can grow. In my very rural constituency, more people are employed in manufacturing than in agriculture. Manufacturing is important in all communities throughout our country.
One of the first things that we had to do as a Government was deal with the deficit. There is a divide on this matter between this Government—the coalition parties—and the Opposition. We believe that to re-establish confidence in the UK economy it is essential that we deal with the deficit effectively. We are clearly starting to succeed in that effort. On those foundation stones it is possible to rebuild. The actions we have taken have helped to restore stability and consolidate the UK’s triple A credit rating, which in turn will make this country more attractive to investors. Our job is to help manufacturers maximise their competitive advantages, thereby stimulating economic recovery and reanimating the spirit of industrial enterprise in this country.
Hon. Members have mentioned the importance of finance. In that regard, there are comparisons to be made with Germany, again, which has a large number of local banks, as does America. The concentration of banking in just a few hands in this country is a problem that is well identified. We have to ensure that our successful growing businesses have access to the finance that they need, including equity finance—another matter mentioned by the hon. Member for Stafford.
Hon. Members, including the hon. Member for Montgomeryshire, mentioned the importance of planning. The Government are taking steps to reform radically our planning system, introduce a presumption in favour of sustainable development and ensure that local authorities recognise the importance of facilitating growth in that way.
Last year the Government issued a plan for growth alongside the Budget, which set out a range of actions to stimulate growth in the manufacturing sector, and over the past year we have made progress in a number of areas. I want to deal quickly with some examples.
We are supporting the technological innovation that underpins competitiveness, which is critical. First, we are setting up a network of technology and innovation centres, known as catapults, to smooth the path from original research to commercial success. The first catapult, launched by the Secretary of State at the Technology Strategy Board’s innovate conference last year, is focusing on high-value manufacturing, funded with £140 million over six years. Catapults for offshore renewable energy, an important sector for the UK economy, were launched last month and will be created in 2012, along with catapults for cell therapy, satellite applications and the connected digital economy. The full network of seven catapults will be completed and fully operational in 2013. Many of these initiatives are in accord with Sir Anthony Bamford’s report, which we welcome and are considering. There is a lot of common ground in that report and what the Government are doing.
Secondly, we have modernised the manufacturing advisory service and increased its funding, including an extra £7 million to support supply chains, as mentioned in the debate. The revamped service will work with businesses, especially small firms, to improve their productivity, which is still a challenge for this country.
Thirdly, we have introduced a £125 million supply chain initiative, working with major UK-based manufacturers to rebuild capacity and ensure that more of the components and associated services they require can be sourced in this country. Fourthly, we have introduced a £250 million support package for energy-intensive industries, which the hon. Member for Stafford and my hon. Friend the Member for Redcar mentioned, to help offset the costs of the carbon price floor. The Government want to ensure that those industries can remain in this country and remain competitive.
Finally, we are establishing the Green investment bank, an innovative and exciting new concept, and expect to make an announcement about its location shortly. The bank will invest up to £3 billion, initially in five priority areas: offshore wind power generation, which is essential for this country’s energy security; commercial and industrial waste processing and recycling; energy from waste generation; non-domestic energy efficiency; and the green deal.
Norman Lamb
I have not got time.
On exports, the hon. Member for Stroud mentioned engaging with the EU and ensuring that our largest market—the single market—is exploited effectively by this country. Whatever our views about the EU, we must recognise the importance of taking every opportunity we can to export through the EU. We must also focus on emerging markets, where there is enormous potential to grow our exports.
Let me mention the regional growth fund. An important element in rebalancing the economy is the use of limited public funds to leverage in private investment in areas of the country that have relied too heavily, under previous Administrations, on the public sector. Nissan is a perfect example of how a bit of public money can leverage in substantial amounts of private funding for this successful initiative.
We are working hard to encourage and support British manufacturers and create an environment where they are free to thrive and compete in a global marketplace. Two weeks ago, we held a second manufacturing summit, which gave ministerial colleagues and me the opportunity to discuss and agree what more should be done to help us meet these challenging ambitions. We want UK industry to be our partner in achieving economic transformation and recovery. This strategy places world-class manufacturing at the heart of a healthy and balanced UK economy.