"City should once again become servant of commerce and industry"

12.00.00am BST (GMT +0100) Thu 9th Jul 2009

Speaking in the House today, John Thurso the Lib Dem Shadow Business Secretary suggested that in hi-tech and advanced engineering Britain was a world leader and that this lead held out a great prospect for sustainable growth once the recession was over. The rapid development of tidal power and its potential application in the Pentland Firth was but one example of this. John called upon the Government to use the financial crisis as an opportunity to "redirect our finance, which can stop being the purview of the masters of speculation," so "the City can once again become the servant of commerce and industry."

Praising the beginnings of a Government strategy on supporting manufacturing he nevertheless warned that serious thought and discussion needed to be put in recruiting the skilled engineers the economy would need over the next three years. It is estimated that we will be around 5,000 jobs short in advanced areas such as nuclear technology, the advanced automotive industry and many other activities over that period.

Full text of John's speech below...

May I begin by reiterating the written apology that I have made to you, Mr. Speaker, and through you, to the House? I may have to leave a few minutes before the end of the debate, although our timing is such that I hope to be able to stay for the full debate.

There is no doubt that UK manufacturing has been going through a particularly difficult time and has been deeply affected by the current crisis. We should not underestimate that. Indeed, we have heard about examples of those difficulties from Richard Burden and Mr. Cawsey, who mentioned Corus. Office for National Statistics figures show that the drop in output has been worse than anticipated. Many companies are struggling, and that struggle flows through to lay-offs and redundancies. I do not for one moment underestimate those difficulties, but in the short time available to me I should like to turn to the future and to the opportunities that it presents.

It would be wrong to fall into the trap that many people fall into of regarding British manufacturing as somehow old-fashioned, outdated, ineffective, rooted in the past and of no consequence to the future. Far from it; in manufacturing, the high-tech and advanced engineering sectors, in particular, and many others are world-leading and world-beating. We should not only support them now, but nurture them into the future. As the Minister said when he gave his figures, we still have the sixth-largest manufacturing industry in the world, comprising 12.6 per cent. of the economy, by the gross value added-GVA-measure, and 3 million employees. That is important by anybody's reckoning.

Certain sectors, including the steel and automotive industries, have suffered grievously, but the quality and strength of many others, such as the high-tech and advanced engineering sectors, remain a success story that we must support. I should like to touch on two examples of such opportunities. First, the Pentland firth, which is close to my home in the north, has a tidal resource that it is estimated could deliver up to 31 GW of energy. Given current technology, that is probably a tad optimistic, but a yield of 10 to 15 GW is highly realistic.

The technology is developing rapidly. Three years ago, I was told that in aviation terms it was at the Wright brothers stage, and a couple of weeks ago I was told that it had advanced to the Spitfire stage; in a few years' time, we hope to be in the jet age. The Crown Estate has a licensing process and British-designed, British-made turbines, leading the world, will be the first in productive service. Companies such as Rolls Royce, Atlantis and International Power are all involved. We have the opportunity to be the first in the world and to centre the industry in this country, with jobs in the UK-including a few, I hope, in Caithness.

The danger is that other countries will see what we are doing and latch on to the technology. How often in the past has British innovation become somebody else's production? We must not lose the opportunity; the threat is that things will go elsewhere. I make a plea to the Government, and I am meeting Ministers at the Department of Energy and Climate Change to put this point: the Government should play the co-ordinating role that will make sure that at this early stage the bits are joined up so that the opportunity is realised.

The second opportunity on which I want to touch has already been mentioned by the hon. Member for Birmingham, Northfield; it relates to the motor sport industry. I had a fascinating meeting with the industry's representatives and I love what it is doing. There is such quality and breadth in its engineering. Everybody thinks that it is just to do with Formula 1, but it is not-it is about advanced gearboxes for articulated lorries which will reduce the amount of fuel used, about electric transmission, about the aerospace and defence industries and about £6 billion of exports. The motor sport industry, too, needs to be supported.

If there is to be support, we need three things. First, we need a clear strategy. That is not about picking winners and losers but about identifying strengths and opportunities and making sure that they are supported. The Government have made a good start and I hope to see more of the same. The second point is about skills. In the next three years, we will be approximately 5,000 jobs short in advanced areas such as nuclear technology, the advanced automotive industry and many other activities. We need to find a way of getting the skilled engineers that we need.

The third issue is finance. The current crisis in the City should be regarded as an opportunity. This is a time when we can redirect our finance, which can stop being the purview of the masters of speculation, and when the City can once again become the servant of commerce and industry. That means less debt and more equity. We need to find ways in which we can get more equity to absorb more risk into British manufacturing industry.

There is no doubt that British manufacturing is suffering today, but it is a success story to be nurtured and taken forward. As I said, it will offer a real prospect for sustainable growth once the recession is over. We should not lose sight of that opportunity.