Opinion from Lord Digby Jones

Pipped At The Post

Published Wednesday 13 July, 2011

With all the attention, media and political, finely tuned on Matters Murdoch it is easy to forget another issue of enormous importance for all of us that happened a few days ago. Faced with an over-reliance, both perceived and real, on the financial services sector (and its huge and often-taken-for-granted tax revenue generation) this Government proudly announced an attempt to rebalance the economy with the planned production of a manufacturing strategy … At last! Something that was totally ignored by all of its predecessors, from Thatcher to Brown.

A weak currency to make exports cheaper in World markets, plus a successful transition to value-added, branded products and away from commodity manufacture, set the scene for "making things" to pick up the slack in the economy, employ the people, earn the dosh, generate the tax … with 80% being exported into getting-richer markets in this, Asia's Century.

So a Manufacturing Strategy that shows Government gets it. Skilling people fit for purpose, condemning a mood music that bleats "we don't make things anymore" and allows Lord Sugar disgracefully to say engineers don't succeed in business (tell that to Paul Drayson or James Dyson!) and using the power of Government procurement to stimulate investment in this country by manufacturers from all over the World and promote greater productivity and competitiveness.

So what happens at the first whiff of gunshot? Abject collapse of Strategy, that's what!

The Canadian investor in the UK, Bombardier, a World-class manufacturer of innovative, value-added big stuff, like planes in Belfast and trains in Derby, has a good order book, starting in two years time, for its train facility and is currently fully employed until the end of the year. How to fill the gap? How to keep 1500 skilled people making things in the UK? How to prevent the closure of the last train-maker in the Country? How to stop them making the stuff in a couple of year’s time in their facility in Italy and not in Derby? Do what the Germans or the French would do, that's how!

A good order for over a billion pounds of your and my money for trains for Thameslink is subjected to a procurement process that gives the order to the excellent Seimens Company of Germany. They are cheaper but not significantly so. Are we mad? Whatever happened to sustaining manufacturing in the long term? Why does HM Treasury know the price of everything and the value of nothing? This would just not happen in Germany or France. They can compete around the World because of their well-invested domestic base supported by their Government that shows by what it does and not by what it says that they get it.

Plugging the natural but damaging gaps in order books creates sustainable, predictable and worthwhile environments for inward investment. Now that would be smart procurement by Government. The days of British Leyland are no more. Bombardier is a World-class business. It deserves a World class Government procurement policy to work with. What a pity that it will leave these shores for good because last week showed that a UK manufacturing strategy was an illusion … brought about by a Government that ran for cover at the first challenge. "It is about EU rules" they say … really? So how do the Germans do it? "The previous lot set the rules" they bleat … so change 'em! You've changed everything else!

Oh! And while you're fiddling Mr Osborne, while you're spinning it like crazy Mr Hammond, not only has your ability to rebalance the economy gone down in flames but fifteen hundred good skilled men and women in Derby and their families plus the train-maker's supplier base will never ever believe you about anything ever again … and you just made making the UK a natural home for inward investment a whole lot harder.