I was honoured to speak at the Make UK 2022 Conference this afternoon about working in partnership with the manufacturing sector on an industrial strategy to maximise innovation and growth.
Manufacturing provides not just jobs, but good jobs – the kind of job you can raise a family on. Labour will never be passive about what needs to be done to retain and grow jobs like these across the UK.
You can read the full speech below:
Thank you friends for the chance to address you at this conference today, and can I also thank Stephen and the whole Make UK team for the support and engagement you have given me since I got this job.
I have enjoyed our roundtables, I’ve enjoyed the visits you’ve help me arrange, and I particularly enjoyed making my debut recently on manufacturing TV.
I do think I have had an advantage coming into this role, which is that Stalybridge & Hyde, where I live and represent in the House of Commons, is of course a significant manufacturing area.
We have Stepan in chemical production, Smurfit Kappa in packaging, the Stamford Group in plastic moulding, Kerry Foods in food production, and many others.
I know all MPs love their own parish, but I am proud of those firms.
Proud of what they do, and I’m proud of what they mean for my local area. They provide not just jobs – but good jobs. The kinds of jobs you can raise a family on.
So I can tell you, at the outset – that I will never be passive, about what needs to be done to retain and grow jobs like these, and I will always be prepared to listen, and to act for you, when it comes to what you need from a UK Government.
In meeting with manufacturers across the country, one message has come across loud and clear – you need a Government that gets it.
You want Government policy to show long-term commitment, not introduce an industrial strategy only to drop it after two years.
You want recognition that issues like high energy costs are not special pleading, but a real danger to the competitiveness of this country.
You want Government to understand, that price and value, aren’t always the same thing – which is why we’re currently paying 1.7million a week to store unusable Covid PPE.
You’ve told me when you engage with BEIS, in good faith, you want to know the whole Government is signed up to that, rather than the frequent situations where you agree something with one department, only to be told the Treasury just doesn’t agree.
None of these things is unreasonable.
But more than that – I believe overcoming problems like these, is essential to fixing the biggest problem this country faces: which is poor economic performance over the last decade, in terms of growth, productivity, and wages.
And that is what I want to talk to you about in this speech.
I do also want to get something off my chest and you are an audience which appreciates this.
But I do get frustrated when I do some events, and I talk about chemicals, or steel, or plastics and someone will say to me: ‘Great Jonathan, but what about the sectors of the future?’
I know the manufacturing sector has done a great deal of work promoting what modern manufacturing is, and looks like, but I still find that too many people don’t understand that there can be no electric vehicles without batteries, and batteries require chemicals.
Or that steel, in particular, is not at all a sunset industry, but actually integral to any modern economy.
When I talk about manufacturing in my area, I’m not being nostalgic. This is about the future.
And when we look at how the pandemic has challenged global supply chains, and made us reassess some of our own sovereign capabilities, I think the future could be very bright indeed.
But what is needed to capture these opportunities is a partner for this sector in Government – and to be frank, Conference, I would like to apply for that job.
The reason this is so important, is it is central to the UK’s economic performance.
Academics amongst you will know that the trend rate of growth in the UK economy since 1850, was 2% a year.
I know that sounds like quite a dry statistic
But it means the UK economy has roughly doubled in size every 35 years.
That’s fundamentally the reason each successive British generation, has been better off than their parents.
That’s certainly true of my family.
Today, for the first time, that’s no longer true for most.
With growth at 1% or 1.5% there is a real risk we can’t leave our children that better future, or pay for the retirement an aging population deserves.
Higher growth requires better productivity – there are no shortcuts around that – but our productivity growth is the worst it’s ever been.
And that was before we’d left the Single Market, which obviously will have a further impact.
And this is, I believe the central challenge.
This is the big question that politicians, business leaders, academics – need to focus on.
And what animates me, is that doing this job, I get to see a whole range of UK businesses that are truly world class.
Already, in the first few months of this job, I’ve been able to get out and see some incredible things we are doing in the UK.
Electric cars in Sunderland, new innovative glass products in St Helens, green hydrogen being made in Sheffield.
And it genuinely excites me for the future.
But the question I ask myself: is knowing we have success like this, why should we accept a future of anaemic growth, poor productivity, and ever higher taxes as a result of that?
The reason the tax burden, under this Conservative Government, is the highest it’s ever been, is because we’ve had low growth Governments.
And the recent rise in National Insurance is case in point.
The bill, for UK manufacturing alone, because of that rise was £895m.
Nearly a billion pounds that otherwise could have gone towards investment or wages.
Your industry, like firms across the country, is facing a tidal wave of rising costs.
The current headwinds, of inflation and energy prices, are the worst that I have ever seen.
And so it cannot have been the right thing to do, to add to those with headwinds, by proceeding with the National Insurance rise.
The Government has to appreciate the scale of what we’re facing.
We need an emergency budget – and we’re clear what should be in that budget:
Real help with energy bills for struggling households;
A tax cut for small businesses by lowering their business rates bill;
A contingency fund for those industries struggling the most, like steel and other energy-intensive firms.
We want action that is commensurate with the scale of the challenge, and that gets people and businesses through this crisis.
Because once business confidence goes, it is much harder to get it back.
And then we must look to the future.
I do intend to bring back a clear industrial strategy if I become the Secretary of State after the next election.
I believe that central to our poor economic performance, is the fact we have the lowest rate of private investment in the G7.
I’ll of course want to work with you in drawing that industrial strategy up.
But I propose there’s already some good things we should build on – such as the existing sectoral groups and the Catapult network – makes sense to include those.
We do need, however, to learn the lessons of the past and embed the strategy in UK’s architecture: a reformed Industrial Council should be setup on a statutory basis, and a play a role comparable to the Bank of England’s monetary policy committee, or the Committee on Climate Change.
That industrial strategy should cover all parts of the economy, but recognise that what a sector like manufacturing requires is different to hospitality or retail.
Meeting our net zero objectives should be an essential part of that industrial strategy, but we should be frank and transparent on what that requires – including publishing UK emissions on a consumption, as well as a geographic basis.
If we look at a sector like steel, for instance, net zero cannot mean we become the first developed country without a domestic steel industry.
We’ve already said we will co-fund the investment that is required to deliver Green Steel, similar to what we’ve seen recently in Sweden.
We want to buy, make and sell more in Britain – not through protectionism, but with a plan to raise standards, award more public contracts to British businesses, and bring the jobs of the future to the UK.
And of course, the most fundamental part of this is having a workforce equipped to do it.
That means giving people skills they need. Under the Conservatives apprenticeships have declined by a third since 2015. We want to fix that.
That’s why Keir Starmer announced Labour’s Council of Skills Advisors, to work with us and businesses on reforms to make the levy work for employers and for people looking to retrain and upskill, in particular refocusing on level two and three apprenticeships to give people the basic skills on which they can build and grow a career.
I hope that both today and in our engagement with Make UK and its members, you feel we’re talking about and are focused on the things that are relevant to you,
And you recognise our desire for engagement is genuine and sincere.
If I was asked to sum up British politics over the last few years, from a business perspective, I would say: “Labour have changed – so too have the Conservatives”
The change in Labour, is certainly for the better. We are unashamedly a pro-business, pro-worker party. That’s not a soundbite. It’s based on the fact that when I visit a factory, in a sector like yours, what the union reps tell me is 90% the same as the management: on industrial strategy, energy costs, skills training and the rest. And I’m listening.
The Government we want to be after the next election, cannot achieve what we want, without a meaningful – two-way – relationship with business to solve some of the problems I’ve talked about today.
I’m not for the status quo. I want to be ambitious for the future. And I believe the UK needs big reforms to get to where we need to be.
But my offer to businesses is work with us on our policy agenda to do exactly that.
I want a manifesto full of commitments on science, investment, rates reform, skills, and infrastructure that will provide the foundation for a new era of prosperity and national success.
And I want a new consensus on industrial strategy that will mean you can invest for the long-term with confidence.
I am certain it can be done.
Because, through you, I know just how good we can be.
That future we could have, would be of major benefit to the UK, but it would also be transformative for places like Stalybridge and Hyde, and I look forward to working with you in partnership to make that happen.
Thank you Conference for the invitation today, but also for all your support, engagement, and friendship.