Engineering

HC Deb 11 March 1988 vol 129 cc762-80 9.37 am

Mr. Patrick Thompson (Norwich, North)

I beg to move, That this House urges that consideration be given to the steps now required to build on recent success in United Kingdom engineering industries and to develop engineering performance up to and above the standards of leading industries overseas. I welcome the opportunity to open the debate. I am pleased to have the support of hon. Members and of the all-party group for engineering development. It is particularly good to see the chairman of that group, my hon. Friend the Member for Harwich (Sir J. Ridsdale) in his place. He will say more about the aims and work of the Committee.

This is the first full-scale debate on engineering since 4 December 1980. Therefore, it is not surprising that I have been inundated with a mass of helpful advice and information from organisations and institutions, many of which I shall not have time to refer to. I shall address two main points: first, the crisis in the supply of professional engineers; and, secondly, the need for industry to train its employees more effectively. Other hon. Members will talk about the exciting challenge and opportunity provided from 1992 by the European single market. I shall also briefly illustrate some points by referring to the engineering industry in Norwich, and in particular in my constituency of Norwich, North. I shall be assisted by the publication of a recent report prepared by Peter Townroe and his team from the University of East Anglia. Some of the points in that report are directly relevant to the debate and to the engineering industry.

In the motion we are asked to recognise the impressive progress of United Kingdom industries in terms of productivity and profitability. It is a measure of the success of Government policy since 1979 that the debate is held against a bright background. That is in sharp contrast to the dark mood that prevailed during the debate in 1980. It is intriguing to note that the spokesman for the Government in that debate was my hon. Friend the Member for Hampshire, North-West (Mr. Mitchell) who is now Minister for Public Transport. In his reply he referred to the need to control inflation, the need for realism and the need to get rid of the "them and us" attitude from the workplace. It is good to be able to feel that since 1980 real advances have been made towards those objectives.

The economic performace of the engineering sector since 1980 has been remarkable. Although the overall size of the work force fell by almost one third between 1978 and 1985, output was higher at the end of that period than in 1980 and has continued to rise since then. Productivity per head rose by 31 per cent. between 1980 and 1985. The most spectacular gains were in electronics and office and data equipment, where the volume of production rose by over 80 per cent. in the years between 1978 and 1985. Significantly, the percentage of professional engineers, scientists and technologists employed in the engineering sector more than doubled over that same period.

Too many of the shortcomings described in the 1980 debate are still with us today. That is why the motion calls for steps to develop engineering performance up to and above the standards of leading industries overseas. The need is urgent because as the income from North sea oil continues to decline, so we have to become more successful as an exporter of engineering products.

I should like to quote from a speech which says: It is internationally acknowledged that Britain is a country rich in inventiveness and creative talent. Yet, with some eminent exceptions, these inventive talents have not been harnessed effectively by manufacturing industry because, compared with Continental Europe and the large part of the world which has followed its lead, there have been neither the cultural nor the pecuniary rewards in this country to attract sufficient of the brightest national talents into engineering in industry.

Mr. Peter Thurnham (Bolton, North-East)

Has my hon. Friend had an opportunity to look at the list of the 200 wealthiest people in the country which was published by Money Magazine the other day? I believe that it was significant for the people it left out as much as for the people it included. I looked at that last night and was pleased to see that at least 12 people listed were engineers.

Mr. Thompson

I am as grateful to my hon. Friend for that intervention and I support the sense of what he said. I was in the process of quoting from a speech and I shall say where it comes from in a moment. The speech goes on: Great prestige is attached to science, medicine and the creative arts, so that to be associated with their activities is to share in that esteem, but there is no cultural equivalent in Britain, and hence no basis for according similar esteem, to the European concepts conveyed in German by 'Technik'." —[Official Report, 4 December 1980; Vol. 995, c. 461.] That quotation came from part of a speech made by my hon. Friend the Member for Eastleigh (Sir D. Price) during the 1980 debate. He was quoting from a well known report — it is still well known — put together by Sir Monty Finniston and his colleagues. It is true to say that we have made little progress on that front. I believe that the Finniston report failed to be implemented partly because it advocated over-bureaucratic solutions and there were far too many recommendations. I have read all those recommendations. I have forgotten the number because it is such a long list. Many of the recommendations were excellent but I think that my analysis of why we have not made much progress since then is fair. I hope that other hon. Members will take up that point later.

The Engineering Council, to which I am grateful for much of the information provided for this debate, owes its existence to the Finniston report and its follow-up.

The historical background to all this has been expressed very well by Correlli Barnett in the first of three lectures, initiated by the education for capability group, which was delivered in 1978. He compared the history of technical education in this country with that on the Continent and he described how the pattern of low productivity in the early years after the war together with an unskilled work force and poor technical education has been our legacy from the past. Although that analysis is correct—I think that Correlli Barnett was right to draw attention to it—we have made a great deal of progress since then. However, we have not gone far enough or moved fast enough for the good of the engineering industry and the country.

Dr. Michael Clark (Rochford)

Does my hon. Friend agree that within the education world and among academics, scientists and engineers are often scoffed at as being ignorant, whereas people who have a knowledge of medieval history or who know something of the pentameter of poetry about ancient Greek vases are considered to be educated?

Mr. Thompson

I am grateful to my hon. Friend. I would not go quite as far as that. I have found that quite often scientists and engineers are admired for their knowledge and expertise but perhaps do not always receive the support that they need to further their objectives. Otherwise, I agree with the sense of what my hon. Friend said.

This morning I have received, from the organisers of the Norfolk and Norwich Koblenz Friendship Association, newspaper clippings from West Germany describing its attitudes to technology and the skilled crafts. It would be impossible to find anything quite like that in this country, Therefore, we have a long way to go and we have to follow Correlli Barnett and say that our background and technical education is not as good as that on the Continent.

It is not surprising that the Engineering Council aims to increase public awareness, improve the supply of qualified engineers and technologists and maintain standards. Nor is it surprising that the Fellowship of Engineers adds to that list the need for investment in skilled training and the improvement of our design capability. I am pleased that my hon. Friend the Under-Secretary of State is listening to the debate because I am aware, as we all are, of his special interest in design in industry.

The Engineering Council, the Fellowship of Engineers and other bodies interested in engineering are coming up with a whole range of exciting and relevant initiatives and ideas which there will not be time to talk about. Research done by the Engineering Industry Training Board suggests that the number of professionally qualified engineers being recruited by industry exceeds the supply of graduates from British polytechnics and universities. Those extra engineers are being attracted from the public sector, higher education, other occupations and from overseas. However, that process cannot go on indefinitely. After all, employers already face problems arising from the contraction in the number of entrants to first degree engineering courses in the early 1980s. However, it is true that overall numbers have risen since then and that more of those graduates are entering permanent employment in the United Kingdom. Much of that growth has been in electrical or electronic engineering rather than mechanical engineering. Even so, the fact that more firms are competing for such a limited supply creates difficulties.

The fall in the birth rate and the consequent fall in the number of children reaching 16 are just beginning to affect the labour market and that will continue until the mid-1990s. It means that the problem of making engineering a more attractive career and increasing the number of engineering graduates will become much more acute over the next year or so. Therefore, the urgent need to attract more young people into engineering is clear. Although this is not the moment to debate education in detail, there is no doubt that radical reform is necessary and the Government are right to be tackling education in a radical way at present.

Mr. Dennis Skinner (Bolsover)

What would the hon. Gentleman say to my hon. Friend the Member for Hemsworth (Mr. Buckley) about the appalling announcement that we heard yesterday, that South Kirkby Riddings pit is to be closed? That means that upwards of 2,000 people will be losing their jobs, with all the after effects that that will have on the engineering industry in the area. What would be the chances for graduates and others who are anxious to take up an engineering occupation in that area or in the Mansfield area, where another pit closure has been announced? Does the hon. Gentleman take these matters into account when talking about glorious opportunities that obtain in the engineering industry? We know that the wreckage of the infrastructure of pits will have a massive effect on young men and women who want engineering jobs.

Mr. Thompson

The hon. Member for Hemsworth (Mr. Buckley) has an opportunity to address those points and raise his constituency interests during the debate. If the hon. Member for Bolsover (Mr. Skinner) takes the trouble to listen to my speech and those of my hon. Friends he will discover that the main theme that I shall raise at the conclusion of my speech is how relevant progress in engineering will lead to the creation of new jobs in this country. I am glad that the question of employment has been raised because the final paragraph of my speech will address how we can improve productivity and performance in engineering and thereby create many new jobs.

Mr. Roger King (Birmingham, Northfield)

In response to a question that I asked, my hon. Friend the Parliamentary Under-Secretary of State for Energy said that the Government are giving the coal industry £900 million for investment. That investment is being spent in the engineering industry to create jobs. There is no doubt that the Government are supporting the coal industry and, indirectly, the engineering industry.

Mr. Thompson

New jobs have been created faster in this country than in the whole of the European Economic Community. I resist the temptation to dwell on this matter because I shall refer to it later in my speech. I hope that the hon. Member for Bolsover will stay long enough to hear that part of my speech.

Mr. Spencer Batiste (Elmet)

My hon. Friend has already said that attitudes are particularly important. Does my hon. Friend agree that it is the attitudes that the hon. Member for Bolsover enunciates so often in the House and outside that are at the root of the problems in the coal industry, and in others?

Mr. Thompson

It is good to see my hon. Friend taking a positive approach to this debate and I am delighted that so many of my hon. Friends are present to support this motion. Like my hon. Friend, I was surprised by the negative nature of the intervention of the hon. Member for Bolsover.

I should like to refer briefly to Government policy on education reform. The reforms that are being introduced by the core curriculum—testing at 7, 11, 14 and 16—are relevant to education for young people who wish to enter the engineering profession. The idea of the city technology colleges is also relevant. They will give a broadly based secondary education with a strong technological element, will provide a wider choice of secondary school and a sure preparation for adult and working life.

I recently met the project director for the new city technology college in Solihull. The excitement and enthusiasm that that new school has engendered in the area must be seen to be fully understood. During my holidays in Italy I visited a new technical school. The contrast between the Continental approach and ours is stark.

As someone who has worked in education, I am as conscious as anyone of the need for a broad education that is more than just training for a job. When one sees the enthusiasm of well-motivated children who feel that studies are relevant, up to date and exciting, and if one contrasts that with some of the half-baked trendy rubbish that passes for education in some of our schools—which is often intellectually undemanding and of little practical value — one sees why it is a good idea that the Government are promoting other types of schools to introduce more variety and to improve standards.

In that connection, some industralists have told me that they are not sure about city technology colleges. I have heard the phrase "The jury is still out on this subject". With respect to those industrial leaders, who are thinking long and hard about this matter, it is about time that the jury returned its verdict. We should have more open support for the concept of city technology colleges because at the very least they shall achieve more variety in our education system, and that must be right.

I should like to refer briefly to skill shortages, particularly among craftsmen and technicians. The decline in the number of craftsmen and technicians undergoing training in the engineering industry must be of concern. In 1977–78, almost 13 per cent. of technicians and just under 14 per cent. of craftsmen in the industry were receiving training. Seven years later, the percentage had fallen to only 8 per cent. for technicians and under 7 per cent. for craftsmen. Although recent evidence shows that it is the shortage of new and experienced graduates in electronic engineering and computer science that is affecting employers, in certain parts of the country — that is certainly true in my constituency — there is no doubt that the shortage of craft and technical skills is very serious indeed.

The University of East Anglia Townroe report states that local firms are experiencing difficulty in recruiting manual, mechanical and engineering skills, especially toolmakers and technicians with knowledge of engineering and electronics.

My constituency is fortunate to have many good firms with engineering bases. United Closures and Plastics has a long tradition of skills, particularly toolmaking skills, and it has now been taken over by Metal Box. Defence Equipment and Systems manufactures guns for the Royal Navy. Other examples are Heatrae Sadia, Datron, Diamond H Controls and Beaver Machine Tools, which is a go-ahead firm about which my hon. Friend the Minister and I have spoken before. That firm has resisted the downward slide in the machine tool industry and has developed computer-controlled machining centres very successfully.

In discussion with those firms and the Machine Tool Trades Association, many of the points that I have already made in my speech have arisen. There is no doubt that the shortage of skilled personnel has caused wide concern. At the suggestion of the chairman of Beaver Machine Tools, Mr. Victor Balding, I attended a meeting with representatives of the Department of enterprise, the Manpower Services Commission, local employers and educationists. It was a good opportunity to describe the many initiatives that exist to help employers to face up to skill shortages. It was a little discouraging to discover that such meetings are very rare and that all too many employers are attempting to deal with the problems in isolation. Matters discussed at the meeting included ways of encouraging schoolchildren into engineering and links between schools and industry. According to Sir Geoffrey Chandler, since Industry Year, 1986, there has been a dramatic increase of 90 per cent. in the links between schools and industry, and that must be a step in the right direction.

At the meeting we referred to the work of the East Anglian group industrial training centre at the Norwich airport industrial estate, where much has been done to meet the development of training needs of all manpower categories. The centre is approved annually by the Engineering Industry Training Board and runs standards-based courses in all engineering disciplines required by local industry. Recently, the acquisition of new hi-tech equipment has enabled courses to be updated.

There has been much good news on the local front in Norwich, but there is still a long way to go if we are to get to grips with the problem of skill shortages. Local employers must take as many initiatives and advice as possible and get together to tackle those problems. If I were to describe all the concerns of local manufacturers, obviously my speech would go on for much longer than I intend.

There is concern in the machine tool industry about cheap imports from Taiwan and South Korea—I hope that my hon. Friend the Under-Secretary of State for Trade and Industry may be able to address that point in his speech — and about the unavailability of suitable statistics describing such imports. With such statistics our market could better identify the way in which it could best meet that competitive challenge. Indeed, as someone said to me recently, "If the Italians can do that, why can't we?" I hope that my hon. Friend will address that point as it is of particular concern and local interest in Norwich.

It has also been put to me locally that the training of foremen and chargehands is just as important as the training of more senior managers. Although I do not have the time to amplify that point, I fully support it and hope that consideration will be given to it in future debates or discussions.

I turn now to a comment made to me by the Engineering Council. When I was travelling to Norwich on the train last Wednesday, I picked up a copy of the magazine "InterCity" and was amazed to see a letter in it on this very point. It is all too rare to find engineers or technologists at senior management level or on the boards of directors of large companies although there are plenty of graduates from other disciplines in such positions. That presents a strong contrast to the practice of our international competitors. It is essential that we move in that direction and try to persuade British companies to recognise that their engineers and scientists form an under-utilised source of potential managers. Their professional training gives them a good insight into the demands of modern technology, the skills required to organise physical resources and to produce to a deadline. They understand the basic requirements of production, but what they often lack and, indeed, are not offered, is practical training for management.

The Engineering Council has put forward constructive proposals for incorporating business training into the normal career structures of engineers. The proposals involve, in the early years of employment, the development of good communication skills and liaison with other departments. At slightly higher level, in supervision and junior management, there are opportunities to motivate other people, to assess their success in meeting targets and to co-ordinate action with other groups within the firm.

Many companies do not have the career planning or in-house training to enable engineers to move from their specialisms into management. There is no smooth progression from one to the other. Trained engineers tend to stay within their own expertise. Business education is seen by them as an unnecessary or expensive frill, and that must change. If there is one message that the engineering industry should take from this debate, it is that our competitors already have those bridges between professional specialists and management, whereas a sizeable proportion of our industry does not. Such links must be built internally. I do not believe that the Government can do that. I hope that people listening to the debate or reading the report of it in Hansard will recognise that the time to start is now.

There are other ways in which Government could persuade and encourage the engineering industry to do more to meet the challenges that I have described in my speech. However, now, just a few days before the Budget, is not the right time to talk about fiscal matters, so I shall resist the temptation.

What about the idea that has been put forward ever since the Finniston report, that a company should be required by law to state in its annual report the amount that it spends on training? What about the "enterprise bond" scheme, advocated by my hon. Friend the Member for Luton, South (Mr. Bright) and other hon. Members who are interested in smaller businesses, whereby a firm could purchase an enterprise bond from the Treasury out of profits in one tax year and, upon incurring expenditure on research and development or training, be able to reclaim that amount? It is the smallest companies that have the greatest difficulty in training, research and development. I hope that the Government will pick up the many other good ideas that are floating about.

Let us consider a young person in school, possibly in a sixth form, who is considering his career and talking to his friends, who may be going into the City, accountancy or law. From my time in the sixth form, and from being a school teacher, I can remember how much discussion there is among young people about their future careers. As a result of this debate we want much more consideration to be given to the exciting opportunities in engineering. However, there must be good pay. After all, accountants and solicitors are well paid, so qualified and skilled engineers should be well paid, too. I make no apology for raising that point as strongly as I do. Engineering must be accorded the status that it has in other countries. I have no idea who determines that—it may well he up to the engineering profession itself, but that point needs to be considered.

There must be media recognition. With the greatest respect to the media, all to often its emphasis is on the trivial and sensational—concepts which go right against the scientific and creative engineering tradition in this country. As time does not permit me to expand greatly, I shall give just one example which, although not relating to engineering, will make the point. Astrology is given far more attention in the media than astronomy — we all enjoy reading our star charts and there is nothing wrong with that, although it causes great excitement among our young people.

There are many exciting opportunities for the media in promoting creative activity in engineering, which are not being taken up.

Let us consider, for example, the MacRobert award — Britain's premier engineering prize. When it was awarded recently there was virtually no publicity, apart from a tiny report, a few centimetres square, in The Times and, apparently, that occurred only because of a personal appeal to the vice-chairman of Times Newspapers Ltd.

We need a renaissance in this country in our attitudes to engineering and science. The media has a large responsibility and could do a lot more good than all the initiatives, the sets of initials and the speeches that we make in this House. I hope that that point will be taken up following the debate.

In conclusion, engineering is crucial for economic and social progress. However, the real nature and importance of engineering is not widely recognised by the British public. Engineering firms design, make and support a diverse range of electronic, electrical, optical and mechanical equipment, systems and services. New and improved engineering products and services are the main source — [Interruption.] — I hope that Opposition Members are listening — of job creation in industries that use those products. Consequently, the importance of engineering to the economy far exceeds its direct employment or its direct contribution to the gross domestic product.

Today's employment in transport, the hotel industry, broadcasting, the entertainment industry and in financial and information services originates from yesterday's engineering innovations. Therefore, tomorrow's jobs in the service industries will depend crucially on new hardware and tools being developed today by engineering. That is why today's debate is so important and that is why I look forward to other contributions in the debate and to the reply of my hon. Friend the Under-Secretary of State for Trade and Industry.

The Department of Trade and Industry has a new name — the Department for Enterprise — and a new logo. Perhaps that signals a new era for engineering enterprise in this country so that we can compete and succeed to the benefit of all, especially our young people who need the challenge that engineering and creativity can offer. That is why it gives me great pleasure to move the motion on the Order Paper.

10.7 am

Sir Barney Hayhoe (Brentford and Isleworth)

I begin by congratulating my hon. Friend the Member for Norwich, North (Mr. Thompson) on his good fortune in coming top in the ballot for private Members motions today, and on his good sense in choosing engineering as the subject for debate. As he referred to the parliamentary group for engineering development, I pay tribute to his work as treasurer of that group during its early days and to his continuing contributions to it. I also join him in paying tribute to my hon. Friend the Member for Harwich (Sir J. Ridsdale) who has chaired the group with distinction. I hope that the group will play an increasing part in bringing together people in the House, in another place and in the industry generally, to the mutual advantage of the engineering profession and the country.

I declare an interest at the outset because I am a chartered engineer and a Fellow of the Institution of Mechanical Engineers. After the sad death of David Penhaligon I believe that only myself and my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) share the distinction of membership of the institution. There are far too few engineers in the House. There are 68 barristers, 30 solicitors, 20 accountants, six doctors and only two mechanical engineers.

Mr. Thurnham

Perhaps it would be appropriate again to mention the great loss that we suffered with the death in a car crash of David Penhaligon, the former hon. Member for Truro, who had an interest in engineering.

Moreover, perhaps this is also an appropriate moment to congratulate the hon. Member for Great Grimsby (Mr. Mitchell) on being here and on being the sole Opposition representative in this important debate on an industry which contributes 10 per cent. of the country's gross national product.

Sir Barney Hayhoe

I am glad that I gave way to my hon. Friend. He is right in what he said about David Penhaligon.

The hon. Member for Great Grimsby (Mr. Mitchell) is now in splendid isolation. It is remarkable that, in a debate on engineering, the importance of which cannot be in doubt, not one Member of any Opposition party is here. We have the statutory presence of the hon. Member for Great Grimsby on the Front Bench, who I suppose is doubling up as the Opposition Whip. He is a jack of many trades. Perhaps he can act as the representative of the Liberal party, the social democrats, the Ulster Unionists and uncle Tom Cobbleigh and all.

Mr. Batiste

Would my right hon. Friend care to contemplate the fact that, as Opposition Members have in the past said so little that is of use to engineering, their absence today is a step in the right direction?

Mr. Deputy Speaker (Sir Paul Dean)

Order. I hope that we shall now get back to the motion.

Sir Barney Hayhoe

As I was saying, there are too few engineers in the House.

Mr. Austin Mitchell (Great Grimsby)

I would not want the right hon. Gentleman to do my reputation in the Labour party any good by suggesting that I am the spokesman for the Liberal party today. Opposition Members have better things to do on a Friday than come here to sing panegyrics to the Government's performance in respect of engineering. I shall be here to put the critique. Others are in their constituencies battling with the problems caused by the decline in engineering that has occurred under this Government.

Sir Barney Hayhoe

The hon. Gentleman may be doing his best, but that is a pretty poor excuse for the absence of his right hon. and hon. Friends.

Engineering is crucial to economic progress and national prosperity. I hope that this debate will encourage more engineers to seek election to the House. Manufacturing industry in general, and engineering in particular, took an awful beating in the early part of this decade. The slow recovery which has followed, leading at last to our regaining the 1979 level of output in manufacturing, has been accompanied by great and welcome improvements in productivity and profitability. Nevertheless, much was destroyed during the months of recession and it has not yet been replaced during the years of recovery.

I shall concentrate more on the engineering profession than on the industry. We need more and better trained engineers. I welcome what my hon. Friend the Member for Norwich, North said about training. We need people to design the products, organise their manufacture and control and ensure their quality to help stem the deeply alarming and increasingly adverse balance of trade in manufactures. One statistic will illustrate the problem. A £5.5 billion surplus in manufactures in 1980 became a £6.5 billion deficit in 1987.

The growth in services and invisibles is to be welcomed and encouraged, but no conceivable growth in services could replace the wealth creation which must come from manufacturing, and engineering is a crucial part of manufacturing. I exclude my hon. Friend the Minister, but the Government sometimes seem more concerned with City and financial interests than with industry and engineering. Public opinion is much more favourably disposed towards the land and farming than to factories and production, but it is out of factories and production that much of the life blood of our nation comes.

Attitudes are changing, and I pay tribute to Kenneth Adams, Sir Geoffrey Chandler and the many others who were involved in Industry Year for their constructive contribution, but much more must be done. I am not in any way criticising my hon. Friend the Minister when I say that it is unfortunate that we do not have a Cabinet Minister present. We should have a Cabinet Minister here to take part in such an important debate.

Engineers are not regarded as professionals. Recent surveys have shown that the public perception of an engineer is of a manual workers or a blue collar operative who works with machines. There is never any confusion between doctors, consultants and surgeons and hospital porters, but there is great confusion between highly qualified and highly skilled professional engineers and skilled or semi-skilled people who work in the industry.

The public are not to blame. It would be absurd for engineers to blame the public for a fault which lies with them. I accept my share of the responsibility for that. The engineering profession is its own worst enemy. It is hopelessly disunited. The Engineering Council is doing its best, although I do not think that it is living up to the promise that many of us thought possible following the report by Monty Finniston. The chartered bodies and the principal institutions could do more.

I was very sorry when the Institution of Mechanical Engineers did not merge with the Institution of Production Engineers. Merger would have been in the best interests of members of both institutions. Fresh attempts to achieve greater unity are now required. Unity will bring strength and influence.

I should like to mention what is happening on the European scene. My hon. Friend the Minister will know that there is a proposed European Council directive on rights of establishment, which is Eurospeak for the right of qualified professionals to practise in other member states. It involves the mutual recognition of professional qualifications. The thrust of the proposal is that there should be a general directive which covers all or most professions.

There is a subsidiary question, which has not yet been determined, about whether it would be wise and sensible to have a separate directive for engineers. It seems reasonably clear from what one knows of the discussions that have been going on that if the first choice is made of a general directive, it will probably rely upon educational qualifications — upon the higher education of the individuals concerned. That will be the entry key. The second possibility of having a separate directive for engineers would allow for proper account to be taken not only of the educational record but of the training, experience, competence and responsibility in engineering of the person. That has been the tradition of the engineering profession in the United Kingdom. It has not relied upon purely academic qualifications, and it has been absolutely right not to do so, but it has been concerned with wider aspects of training and experience and with people having the competence and responsibility to take charge of elements of the practice of engineering and engineering performance.

I understand that a decision by the European Economic Community is expected soon. There is pressure during this six months of the German presidency for real progress to be made in that area. The position is complicated by the parallel development involving FEANI, the European Association of National Engineering Associations. That body has suggested that there should be a "European Engineer" qualification. I understand that in this country the representation of FEANI is little more than one man and a boy. It does not seem to provide the right basis for establishing the appropriate qualification for engineers at a European level.

If there were to be a general directive, almost certainly a four-year full-time degree course would be the basis for the professional qualification. I am not sure that all those involved in the discussions realise and appreciate that such an educational requirement involving a full-time four-year degree would virtually exclude the vast majority of chartered engineers in the United Kingdom. That would be very worrying for their future and the future of our engineering profession.

Therefore, there is a complicated and worrying state of affairs at the moment for professional engineers in this country. If the wrong decisions are made now at a European level, United Kingdom engineers will be put at a continuing disadvantage. The Department of Trade and Industry is the lead Department in the negotiations. I hope that the officials conducting the preliminary negotiations before the matter reaches ministerial level will be in close touch with the engineering profession — not just the Engineering Council — but the major engineering institutions, the chartered bodies as well. If we can avoid the pitfalls of the general directive for professionals and obtain agreement for a separate engineering directive, that will serve the engineering profession well for the future. I believe that, with enhanced status, the engineering profession must advance along the lines suggested by my hon. Friend the Member for Norwich, North to provide a continuing and important service in this country.

I hope that the high professionalism of engineering will be more widely recognised in future and that it will be seen as a distinction if people leaving school and going to university look upon engineering as the profession that they want to enter rather than, as happens so often now, as a second choice, to other professions that make less important contributions to the welfare and prosperity of our land.

10.25 am

Sir Julian Ridsdale (Harwich)

I thank my right hon. Friend the Member for Brentford and Isleworth (Sir B. Hayhoe) for the contribution that he has made to this first debate initiated by the engineering development group in the House, and particularly for what he said about the importance of manufacturing industry to our balance of payments, with the challenge focused on 1992, when there will be a consumer market of 320 million people in Europe.

I congratulate my hon. Friend the Member for Norwich, North (Mr. Thompson) on the excellent way in which he introduced the debate. He was right to talk about the supply and training of engineers. One expected him to underline that, because of the contribution that he makes to the House on education, with all his experience in that sphere. Those of us who have a close contact with the engineering industry know how important not only the supply but the shortage of engineers is. The shortage of skill in engineering is holding back the contribution that we should make to our manufacturing industry at present. My hon. Friend was right to underline the profitability and productivity of the engineering industry compared with some time ago, but he was also right to underline the challenge to our engineering industry now.

I also thank my hon. Friend for helping to get the all-party group of engineering development off the ground and for his initiative in introducing this first debate. My vice-chairman of the all-party group is the hon. Member for Motherwell, South (Dr. Bray), who has made a great contribution. He has apologised for not being here today, but I should like to thank my hon. Friends who are here for supporting the all-party group by attending the debate.

The membership of the group to date is 54 Members of Parliament, including 15 new Members, 39 Peers, 17 non-parliamentary individuals, and 97 companies, trade unions and other organisations. I am glad to say that our subscription income, with no money from the Government, was enough to cover the running of the group in the past year. We owe a great deal to the Fellowship of Engineering, which acts as the secretariat of the group, and to the Engineering Employers Federation, which has also contributed to the group's activities.

I have already paid several visits to industry, and so has the group. I am glad to say that the group's visits have been well attended. We went to the Rolls-Royce factory at Derby to see the RB 211 being made. When one visits such a factory, it is encouraging to see the robotics being used. I have seen Fujitsu-Fanuc factories in Japan and what robotics can do there. It is good to see that our facilities in certain industries are as up to date as in Japan. Then we visited Oxford Instruments Group plc, which deals with brain scanning and has experts working on magnetic matters. Some of the research and development done by that company is so interesting that it does not surprise me to find that it is exporting so many of its products worldwide.

Then we visited Kearny and Trecker Marwin, a subsidiary of Vickers, in the automation equipment industry, and Ricardo Consulting Engineers plc, which has 200 consulting engineers specialising entirely in the internal combustion engine and exporting almost 80 per cent. of its know-how. This is exciting, because it shows the path along which our engineering industry is developing and the way in which it is facing up, as we all have to, to world competition. We can no longer look on our island as the only place to sell our goods. We have to sell them in the world as a whole, and we have to think in world terms, not narrow terms.

We also visited Scicon Ltd, a leading company in computer services, and the Design Centre. I mention these companies to show what is happening in the engineering industry today. It is advancing, but there are challenges. My connections with Japan, and the frequent visits that I have made to industry there, have made my visits to our engineering industries exciting. I find us making much more use of modern technology than we were a few years ago, especially in computer-aided manufacture and computer-aided design. This applies particularly to small industries. I know this from my visits to small industries in East Anglia, particularly in my constituency, where there are several small but important engineering companies exporting to Japan.

For example, machine tools in carbon fibre manufacturing are going to Japan from my constituency. It is encouraging to see another small firm breaking into the photographic equipment sphere. This shows what can and must be done. Small industry is a pathfinder. It is not generally realised that over 50 per cent. of Japanese engineering production comes from small firms and industries. The production system in these small industries is more advanced in the division of labour and more rationalised than ours.

I am encouraged now when I go round our industries to find the progress that we are making in computer-aided manufacture, computer-aided design and other systems. I was most impressed to see the work being done by the Cranfield Institute on research and development for small industries in the United Kingdom. I was disturbed to find that the take-up in research and development by the small industries is not as large as it should be. Perhaps my hon. Friend the Minister will refer to this.

I welcome the visit of my noble Friend the Secretary of State for Trade and Industry and representatives from British Aerospace and Rover to Japan this week. I hope that the tie-up with Honda succeeds. All the time that I have been a Member of Parliament I have had a British car, and 18 months ago my Metro went to Instanbul in three days and came back in four without any trouble. With the prospect of a European market of 320 million consumers from 1992, it is vital that we do everything possible to improve our technology, quality and reliability even more. I am certain that such tie-ups will improve our quality and competitiveness.

One of my incentives in starting the engineering group was my knowledge of what was happening in Japanese and American industry. I knew how vital it was for us to meet the challenge and to be aware of the efficiency of our competitors. The best way to deal with the huge and successful Japanese economy is by co-operation and not confrontation, although one has to have one's eyes open for certain practices which may prevent the necessary co-operation. Nevertheless, it would be idle if we did not help firms such as KTM to fight for its share in the fiercely competitive automation equipment industry. We must face the reality that the United Kingdom's position in the equipment supply industry for automated electronics is weak and getting weaker. This industry is vital in meeting the world challenge.

In most types of hardware, from machine tools to computers, British supply companies have only a tenuous hold in this growing industry, which is dominated in particular by the American and West German manufacturers. On our visit to KTM we saw that its policy was to strengthen partnerships with other companies. It had a co-operation agreement for the use of software with Hoskyns, a computer and systems house, and with Mitsubishi heavy industries to produce the Japanese company's medical machine centre under licence. It wisely realises that no company in this country can afford to be isolated. Nor can we afford to hold the narrow view that we can protect ourselves from the blast of competition. It is vital for us to realise this if we are to be competitive in the huge European market that will come about after 1992. Our engineering industry is divesting only too well. The companies realise that we must take an offensive rather than a defensive approach.

Mr. Thurnham

Will my hon. Friend refer to the attitude of trade unions? It is a welcome fact that the electronics union — the Electrical, Electronic, Plumbing and Telecommunications Union and now the Amalgamated Engineering Union — are much more enlightened in their attitude towards comparisons between this country and its competitors. Would my hon. Friend welcome a similar attitude among other trade unions?

Sir Julian Ridsdale

I certainly would. I was glad to take to Japan with me in early January the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) who is a trade union leader. I find that today's attitude is different from the narrow-minded approach of five or 10 years ago. Now, I am glad to say, trade union leaders are becoming much more aware of the competition that we face and the trade union practices that must operate in this new world. It is important to realise that the company union in Japan is one of the cornerstones of Japanese success. This is another matter, but I thank my hon. Friend for drawing it to my attention.

It is encouraging to see our companies selling to Japan. Those that succeed know that they must be commercially competitive but, in addition, must ship 100 per cent. defect-free products on time every time. This is as important as anything else in the engineering industry. They must have not only high technicality but practicality, to make, for example, the lock on a British suitcase work. It is no good having lovely material in one's suitcase if there is a defect in the simple engineering of the lock. We used to have a pride that British was best. I am certain that we can have that pride again, but we must realise that there are some defects. We must listen to what some of our competitors say about some of our products.

Mr. Robert B. Jones (Hertfordshire, West)

Is not one of the reasons for our success, when we have it—and we have it, for example, with Crosfield Electronics in my constituency, which has 25 per cent. of the Japanese market — not only innovation and, as my hon. Friend says, quality, but the provision of good after-sales service, which is often deficient with British companies?

Sir Julian Ridsdale

I entirely agree with my hon. Friend and I have seen that in the follow-up abroad. Our technical support must always be of top quality. The views that I have been expressing come from British Timken, a company exporting ball bearings to Japan very successfully. Those ball bearings go to Nissan, and the company knows that it is no good trying to export to Nissan and similar companies unless the product is defect-free. We need a unified attitude to the challenges that we face. That is why I am glad of the existence of my all-party engineering group. We are not talking about party politics; the very existence of our country is at stake, and unless we meet the challenge together we shall not compete in the world as we should.

I was glad that my hon. Friend the Member for Norwich, North referred to skill shortages, which are a challenge to our engineering industry. In engineering development a vital role is played by research and development activities. In Japan, 98 per cent. of industrial research and development is funded by private industry and only a small percentage by the Government. I should be interested to hear the Minister's comments on Government funding for research and development in this country. According to my figures, 63 per cent. of research and development in the United Kingdom is funded by industry and 30 per cent. by the Government. That is a high ratio of Government support even if we recognise that the Government own certain of the industries. Have we really taken into account the huge amount of R and D investment that Japan is making? The growth rate is among the highest of those for free world nations. In the 1985 fiscal year Japan spent 3.5 per cent. of its gross national income on R and D, of which three quarters came from private industry. That was possible because of the great profitability of Japanese industry. I know that percentages of themselves do not necessarily mean much, but 3.5 per cent. of the income of Japan, which is approaching the largest income of any country, is substantial. That makes one realise the amount that the Japanese are putting into research and development and the challenge that we face.

I welcome the fact that our manufacturing industry is becoming much more profitable so that we can expect our R and D activities to increase, but the financial conditions in which engineering operates have a crucial bearing on its development. Of course, engineering will be helped by the huge market of 320 million consumers, but stability of interest rates, and lower interest rates to encourage long-term development, as well as stability in exchange rates, are vital. If we are in for another period of high interest rates and exchange rates, I hope that my right hon. Friend the Chancellor realises that he must do something—I would say something as radical as abolishing corporation tax—if industry is to progress as it has in the past few years. Industry is making profits but the burdens on it, including rates, are heavy. I hope that the Chancellor will realise that in the coming Budget because if he does not, his hon. Friends will be pressing him very hard.

Finally, I underline the engineering theme taken up by Sir Francis Tombs, the chairman of the Engineering Council, who has been a great help in getting the engineering group set up. He emphasised that engineers have a key role to play not only in the nation's enterprise but in its management and business skills. A Japanese friend of mine, who is a director of ICI, drew attention to the fact that in Japanese large-scale manufacturing enterprises, 55 per cent. of board members have science and engineering degrees, compared to 34 per cent. in the United Kingdom. The status of engineers is considerably higher in Japan, Germany and the United States than in our country.

My right hon. Friend the Member for Brentford and Isleworth was right to underline the fact that we must do something to raise standards and to ensure that we have people with engineering degrees. Even in the Civil Service we should have permanent secretaries with engineering degrees rather than just general degrees. Some years ago, a Nobel prize winner said: The most formidable threat to research and innovation is the growing number of executives and politicians who are making decisions affecting research policy and expenditure, whose training and experience does not permit them to understand what it is all about. Fortunately, our Prime Minister has a science degree and one member of her Cabinet has an engineering degree.

Mr. Thurnham

I remind my hon. Friend that our right hon. Friend the Secretary of State for the Environment is a former distinguished member of the Institution of Civil Engineers.

Sir Julian Ridsdale

That is why I said that there was one member of the Cabinet with an engineering degree. I am only too well aware of my right hon. Friend's qualifications. I hope that I shall leave time for my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) to speak because I recognise his qualifications, too.

We must adopt a policy of continuous improvement. I hesitate to say this, but it must be more revolutionary than evolutionary because we need to mobilise all our industrial strength to face the challenge. If we do not, we shall find ourselves in an extremely difficult position. Time is not on our side. We have much catching up to do. However, I am sure that we are moving in the right direction and I commend my right hon. Friend's motion to the House.

10.46 am

Mr. Peter Thurnham (Bolton, North-East)

I add to the congratulations extended to my hon. Friend the Member for Norwich, North (Mr. Thompson) on his motion and on all the good work that he does for the engineering industry, and also for education, on which he expresses sound views. As treasurer of the all-party group on engineering development, he has helped to establish that body. I commend my hon. Friend the Member for Harwich (Sir J. Ridsdale) on the excellent contribution that he has made to the work of engineers throughout the country in founding the all-party group. It provides an excellent vehicle to enable us to express our views and to invite speeches from people outside on these important matters. I hope that our membership will continue to expand, both in the House and elsewhere. I endorse the points made by my right hon. Friend the Member for Brentford and Isleworth (Sir B. Hayhoe) in his excellent and wide-ranging speech, in which he drew attention to some of the problems that the industry faces.

I should like to comment briefly on those problems and then go on to discuss the excellence of engineering as a career option for children at school. One of the points mentioned has been professional liability, which is of great importance to the members of the Institution of Civil Engineers and of the Association of Consulting Engineers. We have talked about the question of qualifications and entry into Europe and the role of the National Council for Vocational Qualifications. The role of the engineer is of concern to the Institution of Civil Engineers and I know that my right hon. Friend the Secretary of State for the Environment is considering the matter at the moment. It is sometimes a mixed blessing to feel that as one has been on both sides of the fence one can consider the matter with a little knowledge from a previous career. I hope that my right hon. Friend will pay due regard to the interests of the institution when he considers that problem.

I am proud to be an engineer. It was my ambition when I was at school. My right hon. Friend the Member for Brentford and Isleworth stressed the need to enhance the status of engineers. When I signed the register at my wedding, the vicar said, "Don't put 'Engineer'; it looks as if you are a locomotive driver." I said that I was very proud to enter the word "engineer", and I have always been proud. I declare an interest as a practising engineer. I founded my own engineering business in 1972 and employ more than 400 people in electricial and mechanical engineering. I am a fellow of the Institution of Mechanical Engineers. I also represent the Institution of Civil Engineers and the Electrical Contractors Association in matters relating to Parliament.

We had a debate on engineering training about a year ago, but I had not realised that there had been no full debate on engineering since 1980. That emphasises the importance of today's debate. In the debate on 12 March 1987, I stressed the need for more professional engineers in the country as a whole and in the north-west in particular. Although the industry has declined, there has been a strong growth in the number of professional engineers, which is approaching 90,000—a 60 per cent. increase in the past 10 years. We still need many thousands more, especially in the north-west.

I emphasise that engineering is not just a career for boys. It is also an excellent career for girls, and there has been a strong increase in the number of girls entering the profession. The latest figures show that girls form 10 per cent. of the entry to university and college engineering courses, but the figure needs to be much higher to reflect the full proportion of the population. There are certainly very good prospects for girls entering the industry and seeking professional qualifications in the country as a whole as well as in the north-west. I appeal strongly to school pupils, both boys and girls, to consider a career in engineering.

The Engineering Council has produced an excellent document for this debate which describes careers in engineering as exciting, satisfying, socially useful, fun and well rewarded. I remind my constituents, and indeed, the whole country, that earlier this week my right hon. Friend the Secretary of State for Employment declared that he would be offering 12 possible pilot areas throughout the country for which sums of up to £100,000 per year would be available. The aim is for schools and local employers to get together to establish compacts — a concept first developed in Boston and introduced into this country by the London enterprise agency. We should like to see such developments elsewhere in this country. My right hon. Friend has stated: We now want to hear from any group of local employers and schools who wish to develop Compacts. We stand ready to help potential Compact partners in the target areas who need assistance to put together a full Compact proposal. I hope that employers in my constituency will pick this up. Bolton is especially well placed. The Engineering Employers Federation has listed Bolton as well as Leicester, where I have started my own business, as the two areas of the country where the association is the base of the new local employer networks, so in my constituency a compact could well be started between the schools and the employers.

We need to widen the criteria for people entering engineering. The Institution of Civil Engineers has drawn attention to the need to establish criteria which recognise engineering not just as a highly satisfying career in itself but as a base for engineers to go on to become managers and entrepreneurs and to play a full role in today's enterprise culture. The Engineering Council has pointed out that the profession has many suitable characteristics. It states: Engineers are excellent raw material for management. They have to use common sense, they have to be practical, they have to be able to quantify and to measure as well as to make judgments on inadequate information. The latter is perhaps an endorsement of the ability of engineers to go on into Parliament and Government.

Many criteria make engineering both a good career option in itself and a base from which to develop into management, and we must encourage engineers to do that. The recent report by Professor Charles Handy, "The Making of Managers", points out that there are more than 120,000 qualified accountants in this country, but only 4,000 in West Germany and 6,000 in Japan. It also states that in this country only 24 per cent. of top managers are qualified, compared with 85 per cent. in Japan. The writing is on the wall — we need far more qualified engineers to go into management and on to company boards, and less emphasis on accountants. If my right hon. Friend the Chancellor adopts the suggestion of my hon. Friend the Member for Harwich and abolishes corporation tax, we might be able to spend less time consulting our accountants and more time consulting engineers on what needs to be done for the success of the business. I have no doubt that the extraordinary number of accountants in Britain reflects the enormous rates of tax—up to 98 per cent.—imposed by the Labour Government for so many years.

There is no better career than engineering for school pupils to consider from an early age and to follow through college and university.

Dr. Michael Clark

I have been following with great interest my hon. Friend's comments about engineering being a good qualification for senior management. Does he agree that many engineers make themselves so invaluable in middle positions in companies that they are not promoted to the top, while those without engineering qualifications, such as accountants, lawyers and arts graduates, obtain the top positions because they are not so useful lower down?

Mr. Thurnham

The trend is well established in the United States, and it has been pointed out that in Japan people can leave the large corporations to start their own businesses. Many Japanese firms are quite small and in the United States there is an established pattern of people joining large corporations and then leaving to start their own businesses. The more indispensable people are, the greater the potential scope for starting their own businesses and cashing in on their abilities in that way.

Engineers must consider the broad spectrum of their role. In December 1979, in the 66th Thomas Hawksley lecture, entitled "UK Industry in the 1980s", Sir Peter Carey, permanent secretary at the Department of Industry, emphasised that the engineer must assert himself as … an entrepreneur, 'a man who shows enterprise' … The ball is going to be very much in your field. May I express the hope that you will run with it? I believe that engineers are indeed picking up the ball and running with it. I have mentioned the presence of engineers in the league table of Britain's richest 200. The number who have been able to gain such wealth through the engineering industry is encouraging. If one excludes all the land owners, engineers make up quite a substantial proportion of those who have achieved wealth through their own industry. There are at least 12 names, to which one must add those in major building and construction companies which are also acting in civil engineering. The Bamford engineering family figures in the top 16, so the industry is not just attractive as a career in itself but provides an ideal platform from which to go on into management and the running of enterprises on which the wealth of this country must depend in the future.

In conclusion, the Engineering Council, so ably led by Sir William Barlow, believes that Britain needs more engineers, better qualified and continually updated … not only … in engineering but also in industrial and business management at all levels, Government, Parliament and the civil service, schools and higher education if it is to be competitive … Our future success in Europe and the world will depend on sufficient numbers of both boys and girls coming forward from British schools willing and eager to follow an engineering career and suitably equipped with the requisite school leaving subjects. I support the motion.

10.58 am

Mr. Robert B. Jones (Hertfordshire, West)

I join my hon. Friends in congratulating my hon. Friend the Member for Norwich, North (Mr. Thompson) on his choice of subject and his good fortune in being able to bring it before the House today. The debate has covered many areas of the engineering profession and has shown the breadth of the concept of engineering. That gives rise to certain problems because the term is used so loosely in this country, describing just about everyone from locomotive engineers to highly skilled professionals who have spent many years learning their profession. There is much to commend the position in many of our competitor countries where the term "engineering" is protected and denotes a very high status. That, in turn has ramifications for the use of engineers in industry and their involvement in general management.

The sector to which I wish to devote my remarks is civil engineering, with which I have been closely associated for many years. My father is a civil engineer and my sister—

It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).