Vince Cable: A recovery manufactured to last and made in Yorkshire
We keep hearing that Britain doesnt make anything any more, but it is simply not true and I saw this again first hand last week when I visited businesses in Stocksbridge, Rotherham and Sheffield.
Manufacturing today is not only one of the most important sectors of our economy, it is also set to grow even faster than the rest of our economy, according to the manufacturers organisation EEF.
In the manufacturing world, investment decisions are not based on planning for the next year or two, but for the decade ahead. This is why we now have a long-term partnership in place between government and business an industrial strategy, so that businesses can plan with certainty beyond the short and artificial political cycles and parliamentary terms.
The industrial strategy has led to Tata Steel investing £15m in a new specially-designed vacuum induction melting furnace at Stocksbridge. The new furnace is being built by local contractors and brought 15 new jobs. This is in addition to Tatas site in Brinsworth which produces 50,000 tonnes of narrow strip steel and employs over 100 people. High-alloy steel is a critical component for our aerospace industry the biggest in Europe and second largest in the world and our car plants, which are some of the most productive in Europe, are highly dependent on it.
As Business Secretary, I champion these firms in foreign markets, but what is especially encouraging is that we are now seeing manufacturing companies which had relocated overseas start to come back home. Bee Health in Bridlington is expanding from 70 UK-based staff to 200 people after winning a number of new contracts.
But if our manufacturing sector is to remain competitive and it must because it is vital for our exports and to drive innovation we need to make sure we have a workforce with the right skills. As our skilled engineers retire, finding their replacement is an urgent task. Some firms have resorted to bringing in skilled labour from abroad, but this can only ever be a temporary solution.
I met apprentices and attended a discussion on precisely this issue at the University of Sheffields Advanced Manufacturing Research Centre (AMRC). Putting apprenticeships back on an equal status with university education has been one of my top priorities in Government, and is why Ive protected the apprenticeships budget.
In places like Germany and South Korea, vocational education is taken seriously and we need to replicate this here. Since 2010, we have created 1.8 million new apprenticeships and are on the way to hitting our two million target this autumn.
If the apprentices I met in Sheffield are anything to go by, we are on the right track to a model of quality technical education that combines applied and academic knowledge. And it should be remembered that an apprenticeship shouldnt be treated as an alternative to university a Higher Apprenticeship can actually include a degree. It was especially good to hear Rolls Royces Director of Global Manufacturing say that if he was a 16-year-old now, he would choose to do the AMRC apprenticeship.
The other problem that needs solving if were to sustain growth is making sure businesses can get the finance they need to grow. I visited GW Energy in Sheffield, a micro firm making voltage optimisation boxes so businesses like Sainsburys, Amazon, Unipart and Panasonic can reduce electricity consumption and cut costs. It borrowed £50,000 from the internet peer-to-peer lender Funding Circle after failing to secure the cash from its high street bank, and is now set to create more jobs.
The British Business Bank, which I set up last year and is also based in Sheffield, is working hard to solve access to finance problems by helping alternative lenders like Funding Circle to grow, and by providing guarantees for debt finance to challenger and high street banks to encourage them to lend more.
I would strongly recommend any small business turned down by their bank not to give up, but to look at other potential sources. The Business Bank recently produced a guide on potential alternative sources which can be downloaded at http://british-business-bank.co.uk/bfg/.
Our northern cities have the potential to create a new economic centre for the UK. I am sure the manufacturing sector will be at the very heart of it. Of course, faster and more reliable east-west rail connections across the Pennines are needed, but the reality is this change has already begun.
In the meantime, my focus remains on making sure that this recovery is based on growing, successful businesses and exports, not a recovery based solely on City wealth, or a metropolitan housing bubble that will surely burst.
From what I have seen for myself in Yorkshire, the picture is starting to look encouraging.
Vince Cable is the Business Secretary. Born in York, he is a Liberal Democrat MP.
Article first published on the 3rd July 2014 in the Yorkshire Post.