Britain simply cannot afford the devastation that is sweeping its manufacturing base. The seriousness of this issue cannot be overstated. We need a genuine partnership approach, and we need action now. The DTI must be at the cutting edge of government strategy. Manufacturing employs 3.8 million people in the UK and generates nearly twenty percent of national income: nearly twenty times the proportion of Britain’s national income generated by agriculture. Yet the £7 to 8 billion of annual subsidies to farmers – much of it paid for out of the taxes of manufacturing employees – is worth some 75 times the amount per person that manufacturing employees receive in DTI support.
The DTI needs to start punching its weight across Whitehall and secure the redeployment of resources to where they are really needed. The government was absolutely right to appoint a Minister for E-commerce, but e-commerce is not a substitute for a thriving manufacturing sector. The dotcom boom has become a dotcom bust.
Most dotcoms are selling things, either a service or a product. If it’s a product it needs to be manufactured. If it’s not manufactured in Britain then that means bad news for Britain’s overseas trade balance. Alongside the Minister for E-Commerce, we need a high-profile Minister for Manufacturing to co-ordinate a partnership response from employers and employees to the productivity challenge confronting industry.
The DTI must tackle the situation where UK workers have less capital behind them than manufacturing workers in competitor countries. UK labour productivity lags behind the USA by 59 percent and behind Germany by 30 percent. Closing the productivity gap with Germany could generate £50 billion more output over the next ten years. We need longer-term thinking on all sides, particularly on investment in technology and in the skills base of employees – in France and Germany 60 to 65 percent of the population have qualifications equivalent to NVQ level 2 or above compared to 40 percent in the UK.
The DTI should be ensuring overseas investors get the support and encouragement they need, particularly in terms of the problems caused to those exporting to the eurozone by the volatility of the pound. It should be expanding the successful launch-aid scheme. And it should prioritise incentives for British-based companies to invest in the future rather than eating the seed corn at the first sign of a bad harvest.
The DTI must not be afraid to get out there and encourage people to buy British. It needs to roll up its sleeves and get its hands dirty, to stand shoulder to shoulder with employers and employees and help British industry ride out the storm. Just as importantly, we need to ensure British industry is better prepared to ride out a storm like this in future.
It is not about bailouts, it is about recognising the importance of manufacturing in the British economy and giving it the environment it needs to survive now and to thrive in the future. It is not about charity: it is about solidarity. If the manufacturing meltdown that now threatens is not tackled before it is too late, the cost to Britain will make the billions spent by taxpayers clearing up after foot and mouth, BSE and the billion pounds worth of additional damage visited on the Britain countryside by agribusiness every year look like chicken feed.
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