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The Rt. Hon. Patricia HewittInstitute of Public Policy & Research Manufacturing Project Speech |
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Thank you to Peter for that introduction. It's wonderful to be here - with old colleagues from the IPPR – which, of course, I helped to set up. As well as with Martin from the EEF and Ian of the TUC. Both partners who I work with extremely closely. In recent months, we've worked together closely as we've developed our manufacturing strategy – the first manufacturing strategy produced by any Government in over thirty years. And also on the broader issue of the reorganisation of working time. Working out how to maximise efficiency in core hours so we don't need to rely on overtime working to mask poor productivity. Both Martin and Ian have been involved in our partnership tours. Which have taken us to the US, and Germany and the Netherlands just last week. Seeing different ways that companies are reorganisation their working practices to promote efficiency. But the issue of today is of course manufacturing. I am delighted with the train of work and events that the IPPR now has in hand. The publication of our Manufacturing Strategy signalled a step change in government approach to manufacturing. Manufacturing matters There is sometimes a perception that in the first term the Government somehow let manufacturing down. Quite inadvertently, we let the impression build up that we were only interested in something called the "new economy" – the dotcoms, the internet and all that. And that we weren't interested in traditional manufacturing – which was part of the old economy. With not future in the modern economy. This is nonsense. I saw very clearly as E Commerce Minister how in fact developments in Information and Communications Technologies were transforming every sector – and that manufacturing was at the heart of this. The perception was wrong. Manufacturing matters hugely to this Government. As well as to the people who work in it and to all of us who, as consumers, enjoy its products. And of course high value added manufacturing is central to our vision of a highly productive, high wage, highly skilled economy. Manufacturing creates a fifth of our national output. Employs four million people. And produces more than half of all our exports. So saying our future is in services, not manufacturing, is completely to miss the point. The two are inextricably linked. Manufacturing Strategy We published our strategy very much on the basis of the partnership that we have built between Government, industry and employees. Built on the basis of our discussions; on the TUC/CBI partnership on productivity; and on the outcome of the Manufacturing Summit I chaired in Birmingham last December. Our strategy won the support of all the key industry stakeholders. The TUC, CBI – and indeed Martin, on behalf of the EEF. The aim of the strategy was clear. In Britain we have some of the best manufacturers in the world. But we need to help more manufacturers move up the value chain and reap the benefits of high skilled, knowledge intensive manufacturing operations. Last week in Leicester, I saw two manufacturing companies. Both operating in textiles. One of them produced plain white cotton fabric. Used to make T-shirts. The owner told me that in Tasmania they are able to produce the fabric for £10 a kilogram less. The owner was asking me whether there were any grants or loans the DTI could offer his business. And the way he was asking made me wonder how long he would stay in business. The other business produced yarn. High specification. Used for the insides of cars. Business was thriving. Knowledge intensive. Highly skilled. And this is the sort of journey we need to make. There's no point setting our sights low. We can't compete on the basis of low wages. And we don't want to. We want high skill, high wage jobs in this country. Because we know British manufacturers can be the best. We already match the best in the world in new product development, innovative production process, marketing and services – all the elements of the increasingly complex value chain of manufacturing. Take steel. 70% of steels used in cars today did not even exist 10 years ago. Or car production – now at historically high levels. Over the last five years we've exported, on average, over a million cars a year. A fivefold increased in real terms since 1986. And we're building great new products like the new Mini (which I have had the pleasure of driving), Peugeot's 205, the new Range Rover and the X type Jag. So we have many examples of excellence. But we need to move more to this level. We've identified seven pillars to our strategy – seven areas where government, industry and all key stakeholders must act in partnership
And the one I want to focus on today is science and innovation. In May's CSR, we added to the billion pounds committed in the first term with an extra £300 million to fund expansion in scientific research and technological development. The Spending Review also included an injection of £100 million by 2006 to improve the flow of skilled scientists and engineers into the economy. Today I can announce that I am appointing David Hughes as the new Director General for Innovation in my Department. David joins us from BAe Systems. His expertise and knowledge of modern manufacturing will provide crucial value for my Department. Getting us even better at understanding the issues facing manufacturing. Even better at promoting the value of innovation. Bringing us closer to industry more generally. So we have the strategy. We have the strengths. We have the partnership. Things are looking better than they have for a long time. There have now been a steady flow of forward looking surveys, including the EEF's own, pointing to a gradual recovery. We will keep our eye on the long term goals – instead of being forced into knee-jerk reactions in response to short term problems. So we'll keep our strategy on track. Raising productivity in manufacturing is a key part of my Department's overall productivity challenge, and our aim of prosperity for all. If we matched the levels of productivity in manufacturing of France, Germany and the US, all else being equal, the economy would be £70 billion better off each year. Making 4 million jobs safer. Our manufacturing industries less vulnerable to losing out in global decisions. This is a huge prize. I look forward to continuing to work with you all on meeting this goal. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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