UK Manufacturing Sector

Stephen McPartland Excerpts

Wednesday 5th June 2013 Westminster Hall

[Caroline Dinenage (Gosport) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Robertson.

I want to talk about strengthening the UK manufacturing sector through innovation. UK manufacturing is going from strength to strength. We have a rich heritage of advanced manufacturing, companies in a range of sectors that are competing with the very best internationally and a world-class reputation for quality innovation. There is certainly widespread recognition by business and Government that research and innovation are essential to global competitiveness and future economic growth. Despite the obvious global economic challenges, the Government stepped up to the plate and invested in science, research and development, infrastructure and skills—all the things that innovation needs to flourish. I also hope to expand on how the Government could use their enormous purchasing power to help draw the most economic benefit from such investment.

Most manufacturers understand that their future success depends on the ability to be innovative in their thinking, ways of working and approach to business, as well as in their new product development. It is all about changing, adapting and anticipating the demands of their marketplace and their customers. Huhtamaki is one of the biggest employers in my constituency. It has a dynamic attitude towards innovation—which it has to, because its industry makes paper and plastic cups, loads of them: a staggering 2 billion a year for many well-known coffee houses and fast-food establishments. Its business motto is to “lead change before you have to”, and the company is continually innovating to maintain its position as a market leader, which means embracing new print technology, experimenting with colours and textures and introducing products that are recyclable, renewable and even compostable. The managing director told me that that philosophy gives the company the edge in such a changing industry.

Innovation can be the key to a virtuous circle: investment leads to growth and efficiency, which generates revenue that can be used to achieve change and to support further innovation. The difficulty is that innovation not only requires long-term investment, but introduces a certain element of risk that some manufacturers find difficult to justify, particularly in a tough economic environment. In fact, forward-thinking innovators might even put themselves at a disadvantage in the short term compared with their competitors, who let others take the lead and then hang on to their coat tails.

For the UK to remain a world-class manufacturing hub, it is essential for the Government to do all they can to support the innovators. Where that works best is where Government and business work together in the development of and support for new technologies, and that has made a big difference in some sectors. Thus, since 2007 successive Governments have invested support in the space sector, helping British companies to become the world-leading innovators in the field. For example, Astrium, a major employer in the Portsmouth area, specialises in the mind-blowing satellite technology that has made it No. 1 in Europe and No. 3 in the world.

[Stephen McPartland (Stevenage) (Con)]

Astrium is a huge employer in my constituency, and Stevenage is now the capital of the UK space industry. Will my hon. Friend join me in celebrating Astrium’s success a couple of days ago, when it launched into space a satellite that in a few months will be responsible for beaming broadcast and communications signals back to the UK?

[Caroline Dinenage]

My hon. Friend makes an excellent point. Astrium does real James Bond stuff of the future, which is incredibly impressive. In fact, the UK space industry turns over £9 billion a year and is predicted to grow by 7.5% each year in an increasingly demanding global marketplace.

Another British success story is the aerospace sector, which is the largest in Europe and the second largest in the world, after the USA. It is worth more than £23 billion to the UK economy, and 70% of its output is exported worldwide. The sector employs directly nearly 100,000 people in the UK. Its biggest challenge is that the long-term returns from research and development make it an unattractive capital market investment.