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Peter Luff MP: How the next Conservative government can ensure that Britain's manufacturing base is strengthened

Picture 16 Peter Luff is Conservative MP for Mid Worcestershire and Chairman of the House of Commons' Business, Innovation and Skills select committee. He recently started Tweeting.

We’ve been here before.  In the bad economic times of the past, everyone always started saying how much manufacturing mattered, and then, when the good times started rolling again, we all sat back and enjoyed the frothy tax revenues of asset bubbles and financial services.

We mustn’t make that mistake again.  A new Conservative government must make strengthening our manufacturing base a real - and continuing - high priority.

But what does that easy phrase mean?

Well here are a few suggestions over and above the obvious and urgent need for better infrastructure (including telecommunications as well as roads and railways), simplification of and reductions in corporate and employment tax, and tackling the regulatory burden.

First, commit to keeping a powerful Business department.  It doesn’t need to spend a lot of money to be powerful, but it needs to have real influence in Whitehall. The only good thing about Lord Mandelson at BIS is that we all know he has that influence in the machinery of government - and that’s what makes Ken Clarke such a good choice to be our Business secretary.

Second, stop talking manufacturing down.  I get more than a little irritated when politicians and journalists lazily talk of the decline of manufacturing. Yes, I know manufacturing’s share of GDP has shrunk, but in absolute terms we are making more things than ever.  We are the sixth largest manufacturing nation on the planet. We are number two in the world in aerospace. We are number two in the world for life sciences. We are number one in the world in motorsport – and that’s a huge and highly specialised industry employing thousands of engineers. We have the second largest premium car industry in the world. And we have a lot of more traditional industries too – chemicals, metals, bricks and so on that can still flourish in a globalised carbon-conscious economy.

We should be saying that manufacturing should have done and could still do even better – and we should be encouraging more young people to get into manufacturing and engineering by talking up the opportunities and giving them better careers advice in schools. There are great careers to be had in manufacturing and engineering.

Third, tackle the skills nightmare.  The complexity of the system is staggering and getting worse.  No wonder employers feel bamboozled and disengaged.  We need to set much higher aspirations too – modern manufacturing needs NVQ Level Three on the shop floor, not Level Two.  Rationalise university courses, too many of which are in soft generalised subjects, not the specialised engineering that businesses need. And do more to encourage girls to go into engineering – they are often actively discouraged at school and that’s wrong.

Fourth, reform the RDAs radically but do not abolish them.  Strip them of their overseas pretensions, take away the regional planning powers, remove them from the skills agenda but leave business-led organisations as a focus for the delivery of business policies for areas that are bigger than local authority areas but smaller than the whole of England.  Give local authorities more of a voice within them by all means and allow some geographical flexibility in their arbitrary structures, but every business organisation from the FSB to the CBI says they help the economy. Abolition would send completely the wrong message.

Fifth, promote British exports overseas better.  Support the work of UKTI, don’t sell the prestigious embassies and high commissions that give us real comparative advantage in many markets, and have more senior ministers leading trade missions to priority countries and regions like India, China, the Middle East and Brazil.

Sixth, send consistent messages to the industries of the future about our intentions – and in particular on nuclear power.  I am confident we’ve fully got over our little wobble on that one but the risk of the lights going out is all too real in about 2017 or 2018 and we need to diversify away from imported carbon sources into both nuclear and renewable technology – especially marine and tidal energy – as a matter of real urgency.

Of course there’s more we need to do – but on the whole it needn’t cost much. It just needs us to believe that manufacturing has a real future and then to set the policy framework in which that can happen.

This time, don’t let’s forget manufacturing during the upturn, whenever it comes.


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