UK 'should learn from Germany' to boost manufacturing

The BPIF has backed recommendations made in a government-commissioned report for new policies to reinvigorate manufacturing in the UK.

The report, by Sir Anthony Bamford, the chairman of JCB, calls for more incentives for capital investment and for the lowering of corporate and personal taxes.

Bamford also recommends a drive to break down the stereotyped view of manufacturing as "boring" and "repetitious" in schools and universities, and for the Government to employ a "Whitehall champion" who would be tasked with promoting manufacturing.

Bamford said the UK should learn from Germany, which had a manufacturing trade surplus in 2010 of +9.7% compared to a deficit of -4.7% in Britain. He added: "Germany’s focus on value-added products sets it apart. It has a manufacturing strategy, which the UK doesn’t."

BPIF chief executive Kathy Woodward agreed with the points raised by Sir Anthony and called for the development of an "all encompassing" manufacturing strategy.

She added: "Many companies have been squeezed into a low operating margin zone that leaves little room to invest in initiatives that could enhance both the profitability and sustainability of their businesses.

"At the same time the risks versus reward models have significantly changed over recent years. SMEs in particular need support to innovate and embrace changing technologies and market dynamics, and they need easy access to funding that is not unrealistically encumbered."

Woodward also called for government agencies to take into account quality and added value when procuring services from the manufacturing sector, instead of focusing only on price.

She said: "The government has the ability to impact all of these issues not only in terms of its support strategies but because it is a major purchaser. It is critical that margins in contracts fairly reflect the added value of each participant in the supply chain and support reinvestment rather than driving lowest cost propositions."

Unite assistant general secretary Tony Burke said that the union "generally welcomed" the suggestions made by Sir Anthony, and called for the appointment of a minister for manufacturing with cabinet responsibility, who would back up and promote a "robust, interventionist manufacturing and industrial strategy."

The union published its own report, entitled 2020 Vision Manufacturing Strategy, in November which suggested a range of policies aimed at fostering growth, securing investment and creating and retaining manufacturing jobs in the UK.

Burke added: "This is now a matter of national importance.  Reducing workers employment rights in the name of flexibility, rehashing youth employment schemes and 1980’s style enterprise zones do not make a growth policy.

"This government has continually paid lip service to using manufacturing to re-balance the economy and while Sir Anthony refers to Germany as ‘a powerful example to the UK of what was possible in production industries’ this statement needs to be explored in the context of why that is the case. Germany has a long-term manufacturing strategy.

"They invest significantly in manufacturing to produce economic growth; employees are involved in the decision making process and the procurement process in Germany is used to support manufacturing industries.

"Unite would recommend Sir Anthony and David Cameron read the TUC’s recent policy paper, German Lessons, which gives a clear policy direction for UK manufacturing."