| I am delighted to be here today in Bolton. Thank Bryan
Gray for personally inviting me here and giving me the opportunity to
meet the North West's finest.
Glad to be here on a platform where government, business and trade
unions can come together to discuss how we can get what we all want to
achieve: a high-tech, successful and sustainable manufacturing sector in
the North West.
The size of this gathering and the impressive list of companies
represented here today demonstrates unquestionably the breadth and
quality of manufacturing in the North West.
Manufacturing has always occupied an important position in the region
and that trend still continues today. Today the region boasts 16,500
manufacturing companies and houses the largest number of manufacturing
employees in the UK at 446,000.
A sector of this size has a considerable impact on the rest of the
region, contributing 25 per cent of regions GVA and accounting for over
60 per cent of its exports.
A sector that contributes so much deserves to be properly valued. As
a government we see the value of manufacturing and know how crucial it
is to our country's future prosperity.
Some people are concerned that in our first term in government, we
were only interested in something called the 'new economy'
Whether or not that was a fair representation, I am keen to emphasise
that manufacturing matters. It matters to the Government because it
matters to the country.
- Creating a sixth of our national output;
- Employing three and half million people directly - and millions
more through the supply chain;
- Producing some 60% of our exports;
- Driving innovation in the rest of our economy through advances in
technology, new goods and processes,
- Offering enormous potential through productivity improvements for
a major boost in the performance of our economy
It is central to our future as a high technology, high value
successful economy. To continue as a leading economy, we must have a
world class-manufacturing sector. Germany does it. Japan does it and we
can do it. In many areas, the best of our industry is amongst the best
in the world. We don't really need to look far to see examples of this.
Here in the North West there is
- Pilkington with their world leading glass manufacturing plant at
St. Helens
- Avecia in Manchester, with Europe's largest privately owned
speciality chemicals company
- BNFL at Sellafield and Springfields
- Astra Zeneca's research and development campus at Alderley Edge
To name but a few.
Whilst celebrating success, we also recognise that manufacturing is
going through a difficult time, with world trade growth still weak,
global competition fierce and manufacturing output flat.
It is difficult to do much about these short-term but intense
pressures. Though maintaining the macro-economic stability we have
established is vital. It would be disastrous if interest rates and
inflation went back to previous levels. We must give UK manufacturing
the best base to respond to any upturn in world demand and
opportunities.
But we are determined to change the long-term position of
manufacturing.
That is why we published the Government's Manufacturing Strategy in
May last year. The first for over twenty years and built on a shared
vision developed with key partners at the First Manufacturing Summit.
There was a clear consensus amongst the partners brought together to
frame the strategy. The aim is clear. We cannot compete on the basis of
low cost, low skill, low margin goods. We are utterly vulnerable to
competition from low cost economies. Our response must be innovation.
Higher value added products. Faster and better production processes. A
virtuous circle of investment, skills and innovation.
We are taking practical steps to help more manufacturers to do this.
You are closely familiar and involved with them. We have made
considerable progress against all of the seven pillars set out in the
Manufacturing Strategy.
The strategy has provided the principles that will guide the future
of UK manufacturing. It is crucial that these principles are developed
at a local level.
In particular, each region has its own strengths, weaknesses and
needs. It is only by working with these that any strategy has a chance
of success.
Getting it right on the ground will be critical and that's why we
have sharpened up our delivery.
The RDAs are key to the delivery of the Manufacturing strategy, and
their performance against the 7 pillars is crucial.
I understand Bryan has already outlined the NWDA achievements against
the Pillars and having spoke to him earlier I understand they are making
considerable progress
It is to build on this progress that we have strengthened the role of
Regional Development Agencies, giving them more resources with funding
set to rise from £1.7 billion to over £2 billion by 2005/6, and more
flexibility than ever before over how they spend it. They have a crucial
role to play in taking forward the manufacturing agenda by engaging
local industry in innovation, developing key business clusters and
sectors and promoting workforce development amongst employers.
We have seen the successful roll out of the Regional Centres for
Manufacturing Excellence (RCME). All ten centres are fully operational
and delivering specialist hands-on advice - the Manufacturing Advisory
Service. Many have been recruiting extra staff to cope with demand.
Here in the North West the RCME - which is hosted by the
Manufacturing Institute and delivered in partnership with the North West
Development Agency (NWDA) - is working tirelessly promoting its services
and helping the region's manufacturers to improve their productivity. -
And recent figures show that MAS has been a success. Since the launch
in the North West, some 11,000 companies have received assistance, and
productivity increases, totalling £9.6 million, have been delivered. I
hope many more manufacturers across the region will take advantage of
this excellent service.
It gives me great pleasure, therefore, to be able to announce a
significant expansion of the RCME programme. Over the next 3 years, the
aim is to assist an extra 2,500 manufacturing companies, and to achieve
productivity increases totalling £50 million.
This project will cost around £18 million, with funding coming from
the NWDA, ERDF and the private sector.
The key to this project is that it is demand led - based on what
companies need and it will build on what is successful. Tailored
programmes tightly focussed on weaknesses, identified in the Regional
Manufacturing Strategy, such as low skills levels, investment,
innovation and R&D.
- The RCME team will increase from ten to thirty expert advisors
leading to increased market penetration.
- Companies will receive an additional twenty days support a year
(current level of support is ten).
- Skills development activity will include work in schools and a
project to encourage the attraction of graduates to Northwest
manufacturing companies.
This is an ambitious programme which will give key players in the
region the impetus, support and framework to build a strong and
sustainable manufacturing base and I congratulate the Manufacturing
Institute, the North West Development Agency and their partners for
their vision and commitment.
As well as investing in the regional delivery we have taken national
action in other key areas. A clear message that I hear from
manufacturers around the country is their need for the right people with
the right skills to drive productivity improvements.
In July we published the Skills Strategy White Paper involving
important and unprecedented joint work between DfES and DTI. This will
help manufacturing by, for example, expanding the Sector Skills Council
network and strengthening Modern Apprenticeships, in which we have
invested an additional £180 million (during 2001-2004). We are
investing in the development of foundation degrees. And we are bringing
together a new 'Skills Alliance' to ensure delivery of the Strategy,
establishing a strong employer voice articulating demand and putting
employers' needs centre stage.
Here in the North West, the Alliance for Skills and Productivity pilot
is an exciting and innovative partnership that will enable the region to
maximise the contribution of skills to the raising of regional
productivity, economic competitiveness and sustainable employment.
Another area where we have focused our attention is our investment in
science - which is universally accepted as a catalyst in the development
of new products and new processes. Today's breakthroughs in research
will become tomorrow's new products.
Over the next three years we will see spending on the UK Science
budget increase by 10% per annum. By 2005/6 the Science budget will have
more than doubled from since 1997/8. And we are already seeing the value
of this investment.
- The number of spin-off businesses from UK universities is up by
22%
- The number of patents filed by HEI's is up by 26%.
We have further extended the Research and Development tax credit to
all companies, which will overwhelmingly benefit manufacturers. And they
are responding. In 2001 - 2002 we paid out £150 million in R&D tax
credits for SMEs.
Here in the North West, the NWDA and the NW Science Council have
developed and used the NW Science Strategy to help to secure major
science opportunities and facilities and to create new business
opportunities. Already the region has scored some major successes, such
as the National Biomanufacturing Centre in Liverpool, the UMIST Transco
High Voltage Research Centre in Manchester, and the 4GLS centre to be
housed at Daresbury Park.
NWDA are stimulating science, spreading good practice and bringing
innovation to the region's manufacturers through established networks,
regional supply chains and some new industrial clusters.
The work of the North West Chemical Initiative exemplifies this. It
is an excellent example of the DTI cluster policy in the Competitiveness
White Paper being practically implemented in a region. It is
industry-led and supported by the NWDA, local authorities, academia and
the DTI - a true partnership between the public and private sectors
designed to make a contribution to the economic development of the
region.
Coupled with this, one of the regions giants in the chemical
industry, Ineos Chlor, has recently been awarded a £50m RSA package
which will help modernise the company's Runcorn facility, directly
safeguarding 2,000 jobs and a further 8,000 jobs in associated
businesses.
In the North West, this is in addition, over the last year to
Regional Selective Assistance of £ 64 million that has levered in
capital investment of over £200 Million and directly created and
safeguarded nearly 6000 jobs.
By developing such initiatives and providing the type of support
offered to Ineos Chlor, we and the NWDA are really leading the way in
fostering an excellent science base that is responsive to the needs of
NW manufacturing
This is encouraging progress, but there is more we need to do on
innovation. Innovation is the key to producing the products and services
that people want to buy, and doing so in a more efficient way. That is
why the DTI is leading the government's review of innovation policy and
we expect to publish proposals later this year.
But we have already established Innovation and Growth teams across
key UK industries, such as the automotive, aerospace, biosciences and
the electronics industry to address the long-term development and
prosperity of these sectors.
These teams assess the challenges individual sectors face from
increasing global competition and rapidly developing market, and make
specific recommendations for the long and short term for the sector
And again we are seeing results. For example, work is well under way
to implement the recommendations of the Automotive Innovation and Growth
Team (AIGT). £45 million has been committed over 5 years to support the
delivery of three of the recommendations, including an Automotive
Academy that will help the whole of the UK to achieve highest levels of
training and development for the automotive industry.
The importance of manufacturing is established for this government -
it is a key element of building prosperity for all. The strategy gives
us a focus on agreed priority areas and I welcome the work of NW
partners - particularly in developing the ambitious, but practical
action plan to turn the strategy into reality in the North West.
By creating the right infrastructure, promoting investment,
developing the support systems and fostering the spirit of collaboration
and innovation I know manufacturing can continue to evolve and flourish
in the North West.
I look forward to working with you in that task in the years ahead
for the benefit of the North West, our manufacturing sector and the
future prosperity of the whole UK.
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