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Volume 718: debated on Thursday 25 March 2010


Asked By

To ask the Secretary of State for Business, Innovation and Skills what action he is taking to encourage manufacturing in the United Kingdom.

The Government are fully committed to a strong future for British manufacturing, leading the world in new technologies and the transition to low carbon. We have earmarked almost £1 billion in investment to build key manufacturing capabilities in coming years, helping to turn UK research strengths in innovative technologies into commercial manufacturing opportunities.

My Lords, I thank the Secretary of State for that Answer. Given that since his party came to power in 1997, almost 1.7 million manufacturing jobs have been lost and that manufacturing has fallen as a share of the economy by the largest amount on record under any Government—9.3 per cent of GDP—why did the Budget make no specific mention at all of manufacturing, and why were any plans to make Britain more attractive to foreign investment in manufacturing put off until the 2011 Finance Bill?

My Lords, the noble Lord must have been listening to a different Budget yesterday. If I can simply point out to him that the British manufacturing sector did not in fact contract in absolute terms during the course of the last decade— before the recession that is—its output in both value and volume has remained stable despite the fiercest possible competition. China now defines the global economy in a way that it did not even a decade ago. What is clear is that competition is going to get a lot tougher in decades to come and therefore we all have to raise our game, including in the Government, in the support that we give to manufacturing in this country.

Does my noble friend think that the unilateral imposition of a levy on the banks will assist manufacturing in this country?

I do not know anyone who supports a unilateral imposition of a levy on British banks, apart of course from the Leader of her Majesty’s Opposition—although I notice that by the end of the day, following his speech on Saturday, even he is becoming decidedly wobbly on the issue.

My Lords, I am sure noble Lords will join me in congratulating the Minister on his new self-appointed title, which he announced at the UK Space Agency launch on Monday, of “Space Mandy”. Does he agree with the report from the Space Innovation and Growth Team on a strategy to expand the industry six-fold, which it is estimated would produce 100,000 manufacturing jobs over the next 20 years and create an industry of £40 billion a year, and are the Government committed to that strategy?

We are committed in principle to the strategy and adopting the measures recommended by the Space Innovation and Growth Team, which is why on Monday at the conference I announced government funding for the new International Space Innovation Centre at Harwell in Oxfordshire. We will be following up with other measures. If he does not mind my slightly correcting his pronunciation, it was actually “Space Man-dy”.

I am delighted to hear that Lord Pooh-Bah has accepted another title in life. Is he aware, though, that the late payment of bills has now reached a record £24,000 million, which is affecting manufacturing industry in particular? Is he aware that much of this is by government bodies, including HMRC? What is he going to do about it? Does he accept that we cannot possibly go on like this?

My Lords, the Government’s record is much better than that operating in the private sector. Since I challenged my central government colleagues to reduce their payment to a 10-day limit, most of them have successfully adopted that and are now operating it. The problem really lies in the private sector where there are many large companies which simply treat the companies that are supplying them as banks and insist on a 60, 70, 80 or 90-day payment period. That is completely unacceptable. I say to those in the private sector who are operating that sort of delayed payment system that they are putting in jeopardy the future of many businesses—small, medium-sized and somewhat bigger alike. I hope that they start revising their practice and approach in the payment of their invoices.