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Rt. Hon. Lord Mandelson, First Secretary of State, Secretary of State for Business, Innovation & Skills, Lord President of the Council
Unite Supply Chain Conference, London, 22 June 2009
I want to really welcome UNITE’s decision to hold this conference and in particular its theme. Namely: how we translate the huge economic and technological – and social – shift that will come with climate change into innovation and jobs in Britain. This is one of the top two or three priorities I have in the new Department.
The roots of UNITE lie in the last industrial revolution. Its founding organisations were created to give a voice to the workers who built industrial Britain, and made the goods it shipped around the world.
Now it is carving out a voice for people living and working in a global economy – bigger, louder and more complicated - learning to compete in new ways and on new skills. And of course, preparing for a revolution in the way we work and live.
I want to pay tribute to Dougie Rooney, who has always been passionate about something that I am also passionate about, which is the excellence of British manufacturing and its capacity to compete and win in a global economy.
It’s fallen out of fashion to see our economic future as a shared endeavour rather than just the sum of the actions of sixty million busy individuals. But I think that’s how we have to see the process of climbing out of this recession and preparing for the upturn. Renewing our economic strengths for a future global economy that is going to test our people and our companies more than ever before.
Along with our native British enterprise and entrepreneurialism we need a government that values and invests in knowledge and science and skills and innovation and infrastructure, including through the downturn. We are not making the mistake of previous recessions – retracting rather than holding our nerve.
Because these investments will make the difference between people with the knowledge and confidence to adapt and prosper and people who fear change because they haven’t been given the chance to turn it to their advantage. It will be the difference between a British economy that maintains the standards of living, social mobility and opportunity we want, and one that can’t.
The new Department of Business, Innovation and Skills is in essence the department for these things. It is a department for knowledge, in people and technology, in products and skills. A department that puts the key policy levers that affect our learning, enterprise and innovation in one place. With a clear remit to invest in our economic future.
The transition to low carbon is a vital part of that – because it’s going to involve huge change, as well as huge opportunity. It’s going to make many existing technologies and business models redundant. But it will bring new ones to provide fresh sources of value and productivity.
From one point of view it is a hugely exciting time. The race to decarbonise air and road travel is going to be one of the defining engineering challenges of the century. Something which no doubt keeps our friends at Rolls Royce up at night. With excitement, rather than worry!
We’ve got to capture this sense of opportunity. The only way to really make the politics of climate change something positive, rather than something that frightens people or turns them off, is to make sure those opportunities are real. That they mean new, well paid, smart jobs here in Britain.
Obviously there are opportunities across a whole range of technologies and sectors in how we change the way we generate energy and produce carbon. Carbon Capture and Storage. Wind and wave power. Green vehicles. Industrial Biotechnology. Composites and plastic electronics and lightweight materials.
But I want to focus today on the nuclear industry, not least because this is clearly somewhere where the potential signs for Britain are good. We have a nuclear heritage, with a strong skill base in this country. We’ve been building, managing and now decommissioning reactors for more than forty years. The sector employs some 33000 people across the UK.
It’s a growth market, and a global market. The IAEA believe that at any one time between now and the year 2030 there will be up to 50 reactors under construction around the world. That’s a massive growth industry and we need to be part of it.
In Britain, all but Sizewell B of the current fleet of reactors will be retired by 2023. This means, if we are to take nuclear in the energy mix we have today into the future, we can expect to see at least 8 new reactors built in this country in the near future. And as we move to decarbonise energy supply further, I do not see why there would not be more after that.
The reactors for the UK are realistically going to be Westinghouse and Areva designs but the supply chain that will maintain them offers a considerable opportunity for technicians and for UK-based firms capable of producing the complex components required.
There are a number of things that the government can do in partnership with industry to help ensure that those supply chain jobs come here. And that they power a genuine nuclear renaissance in this country – one that sees us exporting skills and technologies as well as servicing plants in the UK.
The first we have already done, if somewhat belatedly - which is simply to commit to a nuclear future for the UK. To say: this is an essential part of our future energy mix, it is part of our future. The capital investment this sector requires is substantial and it is impossible without that kind of long term certainty.
We also recognise that the key area where the UK and the world lacks supply is in forging capacity for ultra large components and reactor pressure vessels. There are only a handful of such forges in the world and a UK-based facility would be an immense commercial asset to this country. We are looking carefully at both private and public sector options for encouraging the development of such capacity in the UK.
We are also working with the Regional Development Agencies on plans to establish a national network of businesses and universities, including the existing Advanced Manufacturing Centres and the Nuclear Laboratory at Sellafield. This group will represent a source of excellence that will help constantly drive up the quality of the civil nuclear industry in Britain to meet the demanding standards of the nuclear supply chain.
This quality was testified to again last week when Areva announced that it had added 8 new UK companies to its approved vendor list. That’s a recognition of the expertise and potential in this country – and investors should take note.
As well as Areva, an exceptional line up of top tier companies have chosen the UK to build their civil nuclear strengths: Rolls Royce, Doosan Babcock, Westinghouse, EDF, BAE. Over the next few months I want to engage further all these firms to work with other UK-based firms, especially SMEs, in building up the wider nuclear supply chain in the UK. We’ll use our Low Carbon Industrial Strategy in July to set out proposals.
Lastly of course, we’re going to invest in the people who actually make a nuclear supply chain possible. The Office of Nuclear Development is working with a range of bodies including my department and the Skills Academy for Nuclear to determine the gaps in the nuclear engineering skills base, and we will produce a strategy for closing that gap.
This April we published a Government policy framework entitled New Industries, New Jobs. I’m sure you’re all familiar with it, so I’ll paraphrase. Its basic argument is that industrial success in the twenty first century needs governments that understand the need for stable, long term frameworks for private investment and which are capable of aligning all their policies to achieve key, strategic industrial outcomes. For too long in Britain we have interpreted Government’s belief in markets to mean there is nothing we can do to make them work better. That a reluctance to interfere means sitting on the sidelines doing nothing.
But I believe Government can act to remove barriers to market in individual sectors where they are holding back the competitive potential of UK firms. Much of it is about investing in our basic strengths as a country. Our infrastructure. Our science and knowledge base. Above all, our people and their confidence, adaptability and skills. It is also about getting our planning decisions right. Making sure there is finance available for innovation and growth. Just as Government must not get in the way, it must not abdicate either.
The title of this conference basically sums up the challenge: new energy, new opportunities, new UK manufacturing, new UK jobs. I can’t really sum up our ambition any better than that.
But our ambition must be properly organised, every advantage seized. And that’s the message I want to go out from this Conference today.
