Rt. Hon. Margaret Beckett - Former Secretary of State for Trade and Industry (May 1997 - Jul 1998)

The Engineering Council's Annual Conference

I would like to thank Dr Alan Rudge, Chairman of the Engineering Council, for inviting me here to address you today. I am delighted to be able to do so particularly, as some of you may know, my background is in engineering.

I must congratulate you on your choice of theme for today's conference. The UK?s prosperity depends on our companies being able to sell goods and services in an increasingly globalised and competitive marketplace. This in turn requires an industrial policy built on partnership - a partnership involving Government, business and organisations like the Engineering Council. Indeed I am very pleased to note that the Memorandum of Understanding between the Council and Government specifically provides for the Council to give advice to Government on industrial competitiveness. Our competitiveness agenda is not just for Government, but the whole economy.

Competitiveness policy of course goes far beyond what the formal role of my Department covers. Crucial areas include macroeconomic stability, a successful education system and a well functioning transport infrastructure. Government can enhance prosperity if it gets that framework right and that is why we are giving the highest priority to these areas.

I am well aware of the fundamental contribution that engineering has made, and is making, to the development of modern Britain. Even by the narrowest of definitions the engineering sector accounts for over 8 per cent of the UK's gross domestic product. However, engineering and engineers are the key to the success of virtually every sector of the economy.

I am convinced that engineering and the skills and creativity of engineers can, as the title of the conference says, provide "the competitive edge".

Britain's interests and future prosperity require us, as a country and as a people, to strive to be the best in the world. As a nation we must promote investment, skills and creativity. We must compete on quality, not just on cost. And we must be ready to face the challenges of the future. Only in a modern, competitive economy - strong in both manufacturing and in services - can companies be profitable, invest in and develop new ideas for the market and create high quality new jobs. This Government regards the competitiveness of business as crucial to the success of Britain.

My competitiveness strategy rests on three pillars: strong markets, modern companies and an enterprising nation.

Open and fair markets in which our companies can compete on equal terms are good for business as well as for the consumer. Government has a clear role in ensuring such markets exist. This role includes international trade and investment policy, and competition policy. The Competition Bill currently before Parliament will introduce a prohibition - based approach to UK competition law for the first time and create strong deterrents to anti-competitive practices. We are considering other measures in this crucial area which were increasingly neglected by the previous Government. We will only have strong markets if we ensure that regulation does not hold things back. We will act to make sure that regulations are transparent and efficient and take the needs of all businesses, especially SMEs into account.

The Government also has a role in building a framework for ?modern companies'. There is a growing consensus about the characteristics of successful, modern companies.

They are companies whose leaders have a clear vision that inspires the whole company to exceed their customers' needs and expectations.

They are companies that work with all their employees, realising their full potential, rewarding performance and placing a high premium on initiative being taken at all levels.

They are companies that are open with their investors, building long-term relationships to promote long-term strategies for the profitable growth of the business, rather than simply short-term policies for higher dividends.

And they are companies that work in vibrant supply chains, actively helping their suppliers to improve performance and supporting innovation at all stages of the chain.

While the impetus to become a modern company must come from within, Government can help such companies and encourage more of them to adopt the most modern methods. We can promote innovation and best practice in all aspects of business, particularly among smaller companies, many of which find it hard to devote resources to this activity and are unaware of the benefits.

Equally important is a sensible and transparent framework of company law. That is why I announced earlier this year, a fundamental review of this area. In this review, we will examine each aspect of company law and corporate governance and to see whether it helps or hinders growth, investment, accountability and transparency. This is an important area and one I hope the engineering community will be fully involved in.

Government also has a responsibility to set decent standards for example in employment practice through the National Minimum Wage Bill, the Working Time Directive and the provisions of the Social Chapter to which the UK is now a signatory. These are not only part of building a fairer society but a clear signal that competitiveness cannot be achieved through low wages and bidding down employment rights. Far from it.

The third pillar of our competitiveness strategy focuses on fostering an enterprising nation - creating awareness of opportunities, a strong, vibrant science and technology base and a society competent in the use of information technology while helping business to rise to the challenge of environmental change. It is very much about helping SMES, something that in my view the Government - and my Department - failed in the past to give enough attention to, whatever the rhetoric. This is a challenge we are determined to meet.

As part of my Department's Competitiveness UK initiative and with the aim of building a genuine partnership with business, I have established six business-led Competitiveness Working Parties to help develop proposals to feed into the Competitiveness White Paper to be published in the Autumn. John Battle, the Minister for science, energy and industry is chairing the Encouraging Innovation Working Party, and he has been very delighted by the enthusiasm and commitment shown by the members. That Working Party's remit includes looking at how to encourage companies to invest in R&D, how to change business attitudes to the application of new technologies and to be aware of the importance of design and marketing.

All the Working Parties have now presented their findings to me and it is interesting to see the common themes that are emerging - for example, the importance of stimulating widespread cultural change in business; the value of informal business networks; and the need for Government support to business to be more coherent, more closely matched to the real needs of firms and better targeted. The Innovation Working Party has also agreed that engineers as well as designers and qualified scientists need a higher profile and greater rewards including more effective participation at board level to attract and retain the best.

It is clear that engineers and engineering have a key role to play in developing the Competitiveness of the UK particularly in support of modern companies and an enterprising nation. The UK's future prosperity lies in producing high quality, high 'value added' goods and services. And yet too often the complaint is heard that the British are good at research but less good at applying the results to the market place.

I am keen to see that British excellence in basic science gets translated into British business success - which is where engineers really come into their own.

It is engineers who develop new manufacturing processes and products. They create and manage energy and transport and communication systems. They prevent new and solve old environmental problems. They create pioneering health care devices.

In general, it is engineers who make technology work.

Earlier today you heard from Professor Sweeting from Surrey Satellite Technology Ltd. In the thirteen years since it was formed by the University of Surrey, SSTL has become a recognised world-leader in the field of micro-satellites. It has a host of export customers including Chile, South Korea, France and the USA. The company serves as an excellent example of how innovation, first class engineering and the ability to find its market - wherever that might be in the world - can help small, dynamic firms gain a competitive advantage.

This is exactly the kind of effort required by firms in the UK if we are to turn our vision of "an enterprising nation" into a reality. It is no wonder therefore that SSTL was the only non-US firm selected by NASA last year for its Rapid Spacecraft Acquisition Program. SSTL should be extremely proud of its achievement.

You have also heard today about Eurofighter, the new agile fighter produced by the UK, Germany, Italy and Spain, which the RAF will use to replace the Jaguar and a variant of the Tornado. Eurofighter embodies some of the most advanced technology yet devised. This European collaborative programme epitomises the fusion of technologies required to be at the leading edge in high technology projects. This is also a superb example of the UK's capability in engineering project management and system integration.

Of course, it is essential that business has access to a supply of young engineers with the right skills - and the right spread of skills - for modern companies and an enterprising nation. We also need to recognise that changing, and new, technologies are an inherent part of all our lives and that there is a need for life-long learning.

This Government regards education as the single most important factor in revitalising the economy. We are absolutely committed to raising standards in literacy and numeracy. Mastering these skills at an early age underpins a child's future success, and current levels of achievement are simply not good enough. We have set ambitious national targets for literacy and numeracy for 2002. We are confident that this opportunity to raise the standards of the key skills at an early age will give pupils a head-start as they progress on to secondary education.

We also recognise the importance of responding to increased demand for higher education to meet the needs of both individuals and the economy. It is important we take a broad and coherent view of further and higher education. Wherever courses are located, we want to see high quality provision that is accessible and related to employers' needs.

Although, the establishment of a high quality educational base is of paramount importance and is a key role for the Government, it is essential that the engineering profession creates a vision of engineering for the 21st century that will make the brightest and best see it as an attractive and rewarding career. As you know, all too well too often the young think of motor mechanics and the like when they think of engineers. You must set out to present to young people the realities of engineering today, and the challenge and excitement of a career in engineering. To do so, of course, you need to appeal to your target audience.

You will need to look forward to the challenges of tomorrow, to sustainable development, to the way technology is altering the very concept of work, to the way engineering will solve problems and not just backwards to the great days of the Victorian engineers, great as their achievements were. We still have heroes (and heroines) in engineering, such as those you heard from earlier and Tim Berners-Lee whose invention of the WorldWide Web may prove to be one of the seminal innovations of the past decade with immense implications for the next Millenium.

I was therefore delighted to learn of the proposals being developed by the engineering institutions and industry, under the banner of Quinco, to mount a long term campaign to reposition the way in which the UK engineering profession presents itself .

I am pleased too that a key part of this is a proposal from the Engineering Council together with the Engineering Employers' Federation and the Engineering and Marine Training Authority for a marketing campaign, and that my Department was able to provide support and funding for the development of its first phase.

The environmental challenge faces all of our industries, manufacturing and services, big companies and small firms. But with that challenge comes opportunity. I do not see it as a question of competitiveness versus sustainability. I see both objectives as complementary.

Increasingly the companies which succeed will be the ones which integrate sustainability into their strategic thinking. It is essential that the engineering profession, too, follows suit. And the Engineering Council can take a lead in ensuring this.

On 4 February, John Prescott announced the Government's sustainable development initiative calling for public views on creating a "fairer, greener and richer Britain". Engineers and the engineering profession have a major contribution to make to this debate. I know that the Council is working on a substantive response, building on the excellent "future life" report produced by the Institution of Chemical Engineers and I look forward to seeing it. Not only is this environmental sense but it is going to be increasingly good business.

The engineering profession faces as many challenges, if not more, than the rest of economy. For the sakes of ourselves and our children and their children, it is vital that you succeed in addressing them. The Government and my Department will do everything we can to support you and work with you.

Thank you.

Other speeches by Rt. Hon. Margaret Beckett - Former Secretary of State for Trade and Industry (May 1997 - Jul 1998)

(the following are available from the archive)
• Seminar "Preparing Businesses for the euro" (05/05/98)
• G8 Energy Ministerial Conference (01/04/98)
• The PIRC Annual Conference (04/03/98)
• CBI Annual Conference (11/11/97)
• CBI Launch of the National Manufacturing Council Report (23/09/97)
• Competitiveness Summit (23/07/97)
• "UTILITIES 2000" Conference (30/06/97)
• Competitiveness UK (04/06/97)