Election reaction: Government must embrace a long-term industrial plan

Terry Scuoler
CEO, EEF – The Manufacturers’ Organisation

As we begin a new Parliament, manufacturers will be asking themselves what the next five years will bring. Having begun the previous five on the back of the financial crisis they will certainly be hoping that the stable platform created in recent years through a number of positive measures will be allowed to bed down and bear fruit.

A stable platform is indeed to be welcomed. Under previous governments the churn of Business Secretaries has been a hindrance. In contrast, the most recent Business Secretary, Vince Cable, has been the longest serving Minister for Business, and the longevity and stability he presided over has been a key factor in delivering a real industrial policy agenda.

The stability means the coalition’s school report marks welcome progress in some key areas. There has been support for research and development, funding for innovation and the highly successful Catapult centres, and, the sectoral strategies are welcomed by most as boosting big industrial sectors and future technologies.

The coalition has also made progress in education with more emphasis on core science subjects and mathematics and with injecting greater rigour in the system. Support for apprenticeships has been inspirational and we must ensure that employers are firmly in the driving seat on these initiatives.

So where do we go from here? If Britain is to compete globally – or to borrow the terms The Chancellor used in the March Budget ‘be the world’s wealthiest nation’ – fine words will not be enough. We must invest, invest and invest again to finally tackle the UK economy’s poor record on productivity.

A key driver of productivity is, of course, people. Employees of all ages need to be highly skilled, well led, motivated and ready to learn new ways of working and new capabilities, whatever their age. At EEF we are working with Government to develop a new National College for manufacturing, which alongside other institutions, will train the experts who will drive our economy towards the kind of global powerhouse we aspire to. These are the sort of initiatives that are needed to help boost our nation’s productivity.

Some of the measures announced in the recent Budget, if carried through, will encourage further innovation and research and development, support for world class technologies and offer easier access to research and development tax credits for small firms.

All parties, however, must embrace long term planning for our economy and our industrial future. So these are my top priorities for the new Prime Minister.

First, if it isn’t broken please don’t try to fix it. We have elements of an industrial strategy in place which have, to date, successfully supported sectors of manufacturing and help them to thrive, the most obvious example being the car industry. We have funding in place for centres which specialise in supporting innovation between industry and our top universities while support for exporters is being boosted to improve our trade performance.

In essence, a new administration must avoid the temptation to tinker with what’s working well.

Second, Government can make it much easier to do business by ensuring we have world class infrastructure. Despite considerable promises, one of the blemishes on the coalition’s record would be a failure to deliver significant improvements in our infrastructure, especially our strategic road network. We also have to stop dithering on key decisions such as how to expand our airport capacity, especially in the South East of England, a key requirement for manufacturers.

Third, red tape. I recently spent time in Brussels with the Commission’s First Vice President, Frans Timmermans. Having inherited some 400 legislative proposals he is on a mission to persuade the EU to do less. The implication being that everything the EU does should be about supporting growth, jobs and an industrial renaissance. He has taken a lead on this from the British example and I hope a new British Government will continue to attack EU bureaucracy and unhelpful red tape.

Finally, we may or may not be about to engage in a referendum on Britain’s future in Europe. Manufacturing businesses large and small could not be clearer that Britain’s continuing membership of the EU creates vital jobs and wealth. Instead of sniping at Brussels, which wins us few friends, the new government should be leading the drive from within for a reformed EU. At the same time, it should also throw its full weight behind helping the EU bring home a trade deal with the US, which would unlock billions of pounds worth of opportunities for British business.

So, my message to the new Prime Minister, whoever he may be is this. Invest, invest and invest again in Britain’s manufacturing industries and, you and we will reap the rewards in the transformation of the British economy.