Leaders and manufacturing

Posted on 30 Apr 2010 by The Manufacturer

In the third and final live leaders’ debate last night, Messrs Brown, Cameron and Clegg faced questions on how each plans to revitalise manufacturing.

All pictures accredited to BBC

Audience member Jean Simpson said: “(The Birmingham) area used to be full of companies making things,” she said. “So many of them have now been shut down (or) sold off and moved abroad. I want to know how you propose to rebuild the country’s manufacturing industries. We can’t just have offices and shops.”

After pointing to the fact that his constituency of Sheffield enjoys a strong industrial heritage, Liberal Democrat leader Nick Clegg said the priorities should be getting banks to lend again – he referenced a light fixing manufacturer in Warrington he visited which can’t access finance – and investing in “what we need in the future”, namely affordable housing; green and renewable energy; and public transport, to provide jobs for young people, help manufacturing and improve infrastructure.

Prime Minister Gordon Brown said on Wednesday he had visited an advanced precision manufacturer exporting to China and Asia and referenced 400,000 UK jobs in low carbon industries, 500,000 in digital industries, and 100,000 in biotechnologies and advanced manufacturing.

“As a government we’re investing with the companies in the equipment they need,” he insisted. He then pointed to the decision announced in the Budget to appoint an arbitrator to oversee banks’ lending to businesses and said Labour would keep capital allowances and regional development agencies which would be abolished by the Tories.

Conservative leader David Cameron said Birmingham was once known as ‘the city of a thousand trades’ but in the last 13 years, the UK has lost 60,000 job in manufacturing and is now losing its manufacturing base faster than in the 1980s – something he described as a “tragedy”. He said rebuilding must begin by investing in science, universities and apprenticeships and advocated 200,000 more of the latter.

“But you can’t ignore the basics of making it easier for businesses to employ people,” he said. “If you keep putting up the cost of one person saying to another ‘come and work for me’ you’ll never have more employment. So its science, technology, apprenticeships, raising the status of science teachers, making sure we reward entrepreneurship and having low taxes for business – that’s part of getting them here and keeping them here.”

Clegg agreed that technology and getting young people into vocational training are important issues but harked back to bank lending as the key enabler.

“Unless you make banks lend, it’s extremely hard for companies to expand their businesses and factories, and invest in new jobs. Who would have thought, in Birmingham of all places, that RBS, a bank that you own – taxpayer bailout – would have been involved in helping Kraft the US food company, takeover of Cadbury, leading to job losses in Britain. When you lent money to the bank did you think that money would be used to put people out of work in Britain. It was wrong.”

Brown said Labour has trebled the number of apprenticeships from 70,000 in 1997 to over 200,000 now and wants “to raise that number considerably in coming years.”

“At the same time there are more students than ever going to university and I’m pleased to say now that the majority of students are now women. To help manufacturing the regional development agencies have the power to help businesses, and there are more than 20,000 firms in this region receiving help with cashflow under our programme Time to Pay.

The problem is now we can’t take money out of the economy now as David proposes and rely on orders, we’ve got to get money in the economy. You can’t take investment allowances away from businesses to pay for his corporation tax cuts for banks as David is proposing without manufacturing suffering, and you can’t help a region if you take away the RDAs. So we have to act now, got to support manufacturing, and not withdraw the support that David would do with his policies.”

“Gordon Brown doesn’t seem to understand that to get the economy going, you’ve got to help businesses employ people, you’ve got to cut red tape and regulation,” retorted Cameron. He said one thing that could help would be to provide a quarter of all government contracts to small companies.

Clegg and Brown then clashed on offshore wind turbines with the Liberal Democrat contending that the government isn’t doing anything to support the manufacture of these and similar technologies in the UK. He referenced the closure of the London Array scheme as testimony for this point.

Brown said four companies, including Siemens, have announced that they’re going to invest in wind power in this country as a result of to government incentives.

Responding to Brown’s charge that by cutting corporation tax there will be less money garnered from large firms to support small ones, Cameron said: “I want to cut corporation tax for small firms, for every firm, whatever they do so they can keep more of their profits, to reinvest, to expand, to take people on – that’s what a growing economy needs, right now we’re stuck.”

“Why are you cutting investment allowances for manufacturing industry?” asked Brown. “Why are you also stopping the RDSs and scrapping the functions? What does that do for the West Midlands that wants investment in manufacturing and wants the RDA to work for them?”

Cameron replied that start up firms shouldn’t have to pay National Insurance for first 10 people they take on. “That’s the sort of thing to get the economy moving,” he said. “Instead with the Labour government you have these vast regional bureaucracies paying themselves huge sums of money and not actually helping the businesses that will really get our economy moving.”