Business, Innovation and Skills written question – answered at on 23 May 2012.
To ask the Secretary of State for Business, Innovation and Skills what assessment he has made of the report, Manufacturing the Future, by BDO LLP; and whether he plans to implement the recommendations of the report relating to (a) the establishment of an industrial bank, (b) working with the Department for Education to ensure the education system develops the skills needed for manufacturing and engineering, (c) more patriotism in the awarding of Government contracts and (d) greater innovation by his Department in providing funding support for the manufacturing and engineering sector.
We are grateful to BDO LLP for their contribution to the debate on how we grow manufacturing in the UK. The Government fully recognise the importance of manufacturing, its vital contribution to the growth of a more sustainable UK economy and its key role in rebalancing the economy, which is why it remains central to the Strategy for Growth. In respect of the specific areas highlighted by the hon. Member, the Government are acting as follows:
(a) Ensuring that businesses are able to access the credit they need to start and grow is a Government priority. Discussion about an industrial bank is not new. It is right that the Government actively consider all of the available options to support the economic recovery.
(b) BIS works closely with the Department for Education to ensure Government policies to attract students to science, technology, engineering and mathematics (STEM) subjects throughout their educational careers are coherent. BIS's partnership with the Department for Education (DFE) also looks to ensure that the education system delivers the skills needed by the manufacturing and engineering sectors. For example at a meeting on
(c) On procurement, the Government have a responsibility to purchase high quality goods and services which offer value for money for the UK taxpayer. But we also want to do this in a way that supports UK-based business in key growth areas. We believe the current framework is well suited to help us do that.
In November, we announced that we would take a new approach to procurement that takes greater consideration of its impact on UK-based businesses. We published a forward programme of work across a number of sectors, updated with an additional £70 billion in April, and we will continue to expand upon this. This will provide greater certainty to industry. But we will also use this information to develop sector strategies in partnership with industry, to strengthen supply chains in the UK.
We want the public sector to be a responsible customer and develop a collaborative long-term relationship with our supply chain. This can help businesses plan for and develop the long-term capabilities the UK needs.
Further information can be found at:
(d) The best ways in which the Government can support the manufacturing and engineering sectors is at the heart of a range of ongoing discussions between Government and industry which inform all our activity. We have already hosted two manufacturing summits, and through joint industry/government councils and other forums, we are developing strategies in key sectors, including Automotive, Aerospace and Maritime.
In the Budget we were able to respond to some of the issues raised in these discussions with:
An ambition to increase exports from £488 billion in 2011 to £1 trillion by 2020 as part of the National Export Challenge;
Investment of £60 million to establish a UK centre for aerodynamics to open in 2012-13 to support innovation in aerospace technology and commercialise new ideas;
Funding of £100 million to support investment in major new university research facilities, bids in 2012-13 with co-investment from the private sector;
The final two Catapult Centres, in Transport Systems and Future Cities;
A cut in corporation tax of an additional 1% this year so that it falls to 22% by 2014, meaning the UK's main rate will the lowest in the G7 and the 4th lowest in the G20;
The Patent Box, which will be introduced from April 2013, will give a reduced rate of 10% corporation tax on profits from patents and certain other similar types of intellectual property.
It is vital that we rebuild manufacturing supply chains. We have already committed £7 million for supply chain activity to the Manufacturing Advisory Service,
www.mymas.org which was relaunched in January. And following the second manufacturing summit in February we launched the £125 million Advanced Manufacturing Supply Chain Initiative, which will be used to improve the global competitiveness of UK advanced manufacturing supply chains by supporting innovative projects where the UK is well placed to take a global lead. The competition has two funding streams with deadlines for applications falling in June and September. More details can be found on the Technology Strategy Board website:
http://www.innovateuk.org/content/competition/advanced-manufacturing-supply-chain-initiative.ashx
At the manufacturing summit in February, we announced an additional £1 billion for a further round of the Regional Growth Fund—taking the fund total to £2.4 billion. Manufacturing is one of the biggest winners so far, and was allocated around £420 million in the first two rounds. More information can be found at:
The closing date for applications is
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