Former Minister of State for Trade Investment tells audience at the IET that manufacturing, trade and apprenticeships hold key to economic progress and reducing the budget deficit.
As public sector cuts and inflationary concerns continue, Lord Digby Jones of Birmingham, told a packed lecture hall in London on Tuesday that the best way for Britain to solve its economic problems is through trade. He told the audience that business is the only real source of tax revenue in the UK, adding that increasing trade will create jobs and tax in the private sector which will benefit the public sector and help to close the budget deficit.
Speaking at the Institution of Engineering and Technology’s (IET) Sir Henry Royce Memorial Lecture at IET London this week, Lord Jones suggested that as the economies in countries such as China and Brazil continue to grow, the UK risks being left behind permanently. He recommended that as disposable income grows across the world, Britain must increase its manufacturing presence in aspirational goods to capitalise on this opportunity. He went on to emphasise that skilling people properly will be key to this, citing the importance of Apprenticeships and increasing their availability.
But Lord Jones also stressed the need for support from all sides to encourage this growth in skills, manufacturing and business. “The attitude of the media to business must change as we need them to help young people realise that a career in manufacturing is viable and sustainable,” said Lord Jones. “Instead of just reporting problems with UK business, such as when redundancies are made, the media should be championing our manufacturing and business successes much more.”
The need to rebalance the UK economy was a major theme of the lecture. With financial services accounting for around 12%-13% of the UK’s entire tax take, Lord Jones – who is chair of the International Business Advisory Board of HSBC – suggested that it is important not to drive financial services away but to grow other British industry sectors, especially manufacturing, given the vast opportunity for the sale of goods globally.
“However, it’s clear that Britain cannot compete with other nations on the production of price-based commodities, so the focus must be on innovation and aspirational goods. This is where up-skilling is needed,” continued Lord Jones. “Without skills we cannot exploit globalisation or really have a truly cohesive society.”
Lord Jones went on to identify the important steps that the UK and European Union must look to take to develop the necessary skill sets for manufacturing and business growth as well as diverting cash back into the economy:
• Drastically increase the number of apprenticeships available – Small businesses need to offer apprenticeships as much as possible and taxes used where necessary
• Minimum wage workers shouldn’t pay tax – Income tax should not be applicable to those at the bottom end of the earnings scale to allow them disposable income that they can put back into the economy
• Legislation from Brussels – European Union legislation should focus less on protecting people in work and more on getting the unemployed into work
• Abolish Employers National Insurance – Employers National Insurance is simply a tax on employing someone and is the only tax in business not related to making money. If this was removed, there would be less of a barrier to small businesses employing more people
• Elevate vocational qualifications – Vocational qualifications are key to developing the skills that British workers are lacking and these should be elevated to the same standing as a degree
The full Sir Henry Royce Memorial lecture can be viewed here www.IET.tv.