[Christopher Fraser in the Chair] — Manufacturing and Employment

Part of the debate – in Westminster Hall at 10:50 am on 9th June 2009.

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Photo of Kevin Brennan Kevin Brennan Minister of State (Department for Children, Schools and Families) (also Department for Business, Innovation and Skills), Minister of State (Department for Business, Innovation and Skills) (Further Education, Skills, Apprenticeships and Consumer Affairs) (also Department for Children, Schools and Families), Parliamentary Secretary (Cabinet Office) (Third Sector) 10:50 am, 9th June 2009

It is a pleasure to serve for the first time under your chairmanship, Mr. Fraser; I welcome you to that role. I thank Mr. Prisk for his generosity in wishing me a long period in post. I am not sure that that is officially his party's policy, but I thank him in any case.

I congratulate my hon. Friend Mr. Hoyle on securing this timely and important debate on manufacturing and employment. In the very short time that I have been in post, I have already learned that he is very active in this field. He raised a number of issues, which I shall come to in my remarks, including wage subsidies and whether it is too easy to get rid of workers in the United Kingdom.

I also congratulate my hon. Friend Mr. Drew on his contribution. He gave examples of successful manufacturers in his constituency, including Renishaw and Delphi, and talked, importantly, about the help that Train to Gain has been able to offer those companies during the current economic downturn. He asked a series of specific questions. I shall have to write to him about those; I have put that on the record to ensure that it happens.

I also congratulate my hon. Friend Tony Lloyd, who made the important points that his city would not exist as we know it if it had not been for free trade, and that in supporting British manufacturing we need to ensure that we note the importance of international trade. He made very good points about procurement and about further education and apprenticeships.

This has been an important and interesting debate. The Government are deeply conscious of the importance of the manufacturing sector to all our constituencies and to the country as a whole. After all, it is what catapulted this country on to the world stage in the first place. Long before globalisation was a term in common usage, Britain was regarded as the workshop of the world, exporting more than half its iron, coal and cotton cloth. The constituency of my hon. Friend the Member for Chorley played a vital role in the cotton industry as part of that.

Of course, times have changed and manufacturing is changing with the times, shifting its base towards more and more high-tech manufacturing. Companies are developing in exciting new areas such as fuel cells, plastic electronics and Bluetooth technology. Traditional sectors have reinvented themselves through information and communications technology, software and new technologies such as robotics and materials. Nevertheless, our capability in advanced engineering remains world class.

Despite the changes in manufacturing industry, it remains in some ways the unsung hero of the British economy. The statistics only partially indicate the significance of the manufacturing industry to our economy. However, as John Thurso said, we remain a major manufacturer in world terms. We are the sixth-largest manufacturer in terms of value. At the end of 2008, the manufacturing industries in this country employed close to 3 million people and accounted for 12.6 per cent. or £157.7 billion of our national output. In addition, as my hon. Friend the Member for Chorley said, manufacturing is responsible for 75 per cent. of our business research and development. Even taking account of the global economic downturn, productivity in manufacturing has been growing at a rapid rate in the UK; it has grown by more than 50 per cent. since 1997. As the hon. Member for Caithness, Sutherland and Easter Ross pointed out, that is growth in real terms, albeit at a time when other sectors of the economy have been growing more rapidly because of the changes that we have seen in the structure of our economy.

However, we are here today because of the points that my hon. Friend the Member for Chorley made about the way in which manufacturing, along with other sectors, is suffering in the global recession. The latest data show that manufacturing output has fallen for 13 months in a row. That is also happening in other countries, but as he pointed out, that is no consolation to the hard-working men and women in our communities who have jobs in manufacturing and who are affected by those changes. Nor is it any consolation to those who have had to switch to short-time working or who have had to lose their jobs as a result of the economic downturn.

In many of the communities affected, memories are still fresh of the 1980s and '90s. Then, when there was a downturn and manufacturing was suffering, there was a very different response—some would say no response—from the Government. It was an approach not of trying to be fair to those communities, but of simply being laissez-faire in their attitude towards the economic downturn and towards manufacturing at that time. That has changed.