British manufacturing has changed almost beyond recognition in the 30 years since I began as an engineering trainee at the British Rail research department, but two things haven’t. We are still sent into a state of national self-examination about the loss of a heavy industrial icons such as Redcar steel works, while industry and government continue to fret about how they can attract more of our brightest brains, especially the female ones, into engineering careers.
Listening to the engineering apprentices at the Spectator/BAE forum on manufacturing talking about the same issues provoked a remarkable sense of déjà vu. Here was a small group of single-minded individuals who in some cases had had to resist pressure from peers and teachers pushing them towards more fashionable arts and humanities courses at university. Delegates moaned about the lack of connection between the university courses on offer and the job opportunities available upon graduation. In fact the spread of courses at some universities now seems to be so linked to ambitions inspired by the latest TV hit that I wouldn’t be surprised to see an explosion in baking courses in next year’s prospectuses.
It was all very much like the angst of the 1980s, when industry and politicians first began to worry that many of the brightest graduates were being diverted into banking and the law. Iain Wright, chairman of the House of Commons Business, Innovation and Skills Committee and a former Labour education minister, dreams of the day when the kind of parents who pay for education at leading independent schools boast at dinner parties, that one of their children has won a place, not at Oxbridge, but on a BAE apprenticeship scheme.
But have we really become such a deindustrialised country? True, the blast furnaces have mostly gone, Longbridge has become a supermarket and Manchester’s cotton mills are now fashionable apartments. But the loss of highly visible heavy engineering disguises the true picture. Manufacturing may have declined to 9.4 per cent of the economy by value but, more importantly, it accounts for 44 per cent of our exports. We are not so aware of this because much of the manufacturing that goes on now is of high-value specialised products. One of the UK’s biggest engineering firms is IMI, but you would struggle to find anyone on the street who knew that name and still fewer who could tell you what its main business is: making valves, nozzles and other parts which don’t feature in the public consciousness in the way that cars and aeroplanes do.
We get a false impression of industrial decline because too often it is measured in terms of lost jobs. Yet one reason why manufacturing employment has fallen from 22 per cent of jobs in 1980 to 8 per cent now is because employment as a whole has grown. Another is because manufacturing itself has become a lot less labour-intensive. The number of people employed in manufacturing will continue to fall, according to Sir Roger Carr, chairman of BAE Systems, but only because year on year it is becoming possible to make more stuff with fewer hands
Neither is it true, as is often asserted, that British manufacturing is not investing and spending on research and development. That was certainly true in the 1970s, when Sheffield steel firms were found to be still using machinery taken from Germany in reparations after the first world war — the Germans were more than happy to do without them because they had retooled several times since. But it isn’t true now. Manufacturing now accounts for 15 per cent of all business investment and a whopping 69 per cent of all research and development spending. Nor is manufacturing part of Britain’s lousy productivity record. In 2014 it rose by 3.4 per cent in manufacturing, compared with just 0.2 per cent in the economy as a whole.
Yet despite all this, manufacturing has failed to live up to what George Osborne described in his 2011 budget as the ‘March of the Makers’. After a brief increase in its share of the economy coming out of the past recession, manufacturing growth has stalled and, as usual, it is booming services which are driving economic growth. Vicky Pryce, chief economic adviser for the Centre for Economic and Business Research, observes that this is partly due to the relatively strong pound and partly due to the failure of global trade to recover as it did after previous recessions. Given the reliance of UK manufacturing on exports, this has seriously curtailed growth in the sector. More than ever before, UK manufacturing depends on the promotion of free trade — the very opposite of what some people seem to think as they demand protectionist help for the British steel industry.
One important element of Osborne’s March of the Makers was the encouragement of apprenticeships. They were once on the verge of extinction as the Major and Blair governments obsessed instead with getting people to university, regardless of how well-matched courses were to job opportunities. But apprenticeships are now very much back in vogue. What suits manufacturing is the combination of university and a commercial environment. Sheffield University, for example, has a tie-in with Boeing, which has apprentices manufacturing parts for planes while they study.
There is a danger, though, that setting a target for three million apprenticeships will provoke the same reaction as Tony Blair’s target to get 50 per cent of school leavers into university: any training course will be labelled an ‘apprenticeship’ in a desperate attempt to reach the target, and the meaning will be lost. A real apprenticeship is one which combines work with a serious amount of study. Many genuine apprentices in top engineering firms will end up going to university to study for a degree after all, only with their fees paid for by their companies.
My own career in engineering didn’t last long. I was assigned to the department that had engineered British Rail’s famous tilting train, while the train itself was sitting in the sidings waiting to be scrapped. The 1980s was a depressing time to be entering British engineering as the lure of more money and glamour drew people into finance, the law, media and other booming service industries.
Now we know that careers in finance are not always rewarding or long-lasting, and that the law, media and many other services also underwent serious contractions during the downturn. And manufacturing doesn’t seem such a bad career option after all.