§ Mr. Patrick Thompson (Norwich, North)The successful conclusion of the Edinburgh summit over the weekend provides the right background to the debate. After all, the completion of the Single European Act at the end of the British presidency of the European Council on 31 December will confirm Europe as the world's largest trading bloc—almost as large as the United States and Japan combined. I believe that progress with the Maastricht treaty is vital to future opportunities in trade and manufacturing, and I hope that the House will proceed with the Bill in the coming weeks and months.
To succeed in world markets, the country must perform well in engineering and manufacturing. I shall be able to refer only briefly to issues which have a bearing on that fundamental truth and will leave it to others to fill in the details.
Given the exchanges in the House over recent weeks and months, I think it right to strike a positive note and provide some good news. That is one of the reasons why I have chosen this subject for debate tonight.
I am grateful to those hon. Members who have seen fit to attend the debate. I welcome, in particular, my hon. Friends the Members for Castle Point (Dr. Spink), for Hertfordshire, South-West (Mr. Page) and for Bolton, North-East (Mr. Thurnham), whose speeches I look forward to hearing. I welcome, too, my hon. Friend the Under-Secretary of State for Corporate Affairs, who is to reply to the debate in due course, and my hon. Friend the Whip, who I know is listening carefully—
§ The Vice-Chamberlain of Her Majesty's Household (Mr. Sydney Chapman)The hon. Member for Chipping Barnet.
§ Mr. ThompsonI refer to my hon. Friend as the Whip because I regard that as his true role in the debate. I know that he will listen carefully to everything that is said during the next hour.
My hon. Friend the Under-Secretary of State may already be aware that at least six Departments of State are covered by the subject of the debate—the Department of Education, the Department of Trade and Industry, the Office of Public Service and Science, the Department of Transport and the Department of Employment. There may even be others. I am sure that my hon. Friend will have no difficulty in ranging outside his brief in his reply.
As my hon. Friend the Under-Secretary of State knows, his colleague the Minister for Trade made a significant but not widely reported speech on 25 November, speaking to the Institute of Export. In that speech, which I regard as a milestone in the Department's thinking, my hon. Friend referred to the economic challenge facing Britain and to our export performance which, thanks to the Government's policy and energy, is good in many respects. He also referred to the urgent need to increase our share of trade, not only with North America and Europe but against the competition of "the tigers", to use my hon. Friend's words—the economies of the southern and eastern Pacific. My hon. Friend spoke also of the need for a partnership between business and the Government.
I welcome such remarks because, in discussing the role of engineering in manufacturing industry, we must remember that there is a need for the Government to work 134 closely with industry and business. I hope that my hon. Friend the Under-Secretary of State will be able to confirm in his reply that that is the thinking of his Department.
In the speech to which I referred a moment ago, my hon. Friend the Minister for Trade spoke about the balance of payments deficit which has been caused by the narrowing of the manufacturing base and increasingly sharp competition from outside. He spoke in particular of the fact that our share of exports of capital goods to non-OECD countries had declined from 7 per cent. to 5 per cent. since 1985. I am sure that my hon. Friend the Under-Secretary of State shares the concern of the Minister for Trade about that decline, which represents a challenge both to the Government and to business and industry. After all, capital goods are the products that our engineers and industrialists are engaged in producing. We should be increasing our exports of such goods not only within the Community but to countries outside it. The figures that I have quoted are disturbing, and form part of a trend which should be reversed. To be blunt, we are not doing well enough in this area.
Britain has an excellent tradition, going back over many years, of education in science and engineering. I do not have time to refer to the great scientists and engineers of the industrial revolution and since. We also have great engineering achievements to our name. It follows, therefore, that we should be world leaders in the production and export of capital goods. Yet our share of such exports is declining.
I wish to refer to the early-day motion standing in the name of my hon. Friend the Member for Lewes (Mr. Rathbone) who, as my hon. Friends know, is chairman of the parliamentary group for engineering development. My hon. Friends the Members for Castle Point, for Hertfordshire, South-West and for Bolton, North-East are also members of that excellent all-party group, and I am sure that they will join me in paying tribute to its excellent work in raising the profile of engineering both in the outside world and here in Parliament. That early-day motion declares:
That this House, recognising the need to regenerate the United Kingdom manufacturing base and the importance of engineering to that process, notes the Engineering Employers' Federation proposals for a national industrial strategy; and calls for an early debate.Of course, this short debate very late at night might not answer that point totally, but at least we are having a debate on engineering and on manufacture.The Engineering Employers Federation, which is referred to in the early-day motion, has supplied me with details of the strategy that it recommends. Time does not permit me to describe it, but there are many excellent points and I recommend that hon. Members study that industrial strategy and take note and learn lessons where they apply. In particular, the federation is concerned that we should tackle the cultural bias against vocational education and industrial training.
In Norwich at the weekend I heard an address by Professor Paul Ormerod of the Henley centre for forecasting. He spoke about the prospects for growth in the 1990s. In fact, he was bullish—optimistic about the future, and rightly so. My hon. Friends on the Government Front Bench will agree that prospects for 1993 are certainly encouraging. He said that high-tech companies will lead us out of the present recession. Of course, the good news for hon. Members who represent 135 constituencies in East Anglia is the fact that that part of the country contains a high proportion of high-tech firms. That is good news for East Anglia, it is good news for the country, and it is good that high-tech firms will lead the way in a recovery.
Perhaps in my constituency of Norwich, North the news is not quite so good, because the proportion of high-tech firms in Norwich is not so high as I should like it to be. The chamber of commerce and other local organisations are aware of that and are doing all that they can to improve the situation. They are also rightly putting pressure on local Members of Parliament and on Ministers for improvements in the infrastructure in the Norwich and Norfolk area. I pay tribute to my right hon. Friend the Member for Norfolk, South (Mr. MacGregor), the Secretary of State for Transport, for the recent improvement in road construction in the Norfolk and Norwich area, but there is a long way to go. Infrastructure is important to the setting up of new industries, particularly high-tech industries in any area, and that is certainly true in Norwich. I should like there eventually to be a science park, perhaps creating a centre for high-tech industries in the Norwich area.
Success in high technology comes from the correct use of engineering and manufacturing skills. In May this year, the Institution of Electrical Engineers published a survey of surveys concerned with United Kingdom manufacturing. Its conclusions were important and interesting. First, it found that there have been improvements in management and that further gains are necessary. Secondly, it found that there is a need to reassess the balance between shareholders, managers and the work force. Thirdly, it found that the United Kingdom has a creditably large number of internationally competitive companies and that 12 of them account for the majority of our national spend on research and development. It follows from that—the institution certainly came to this conclusion—that research and development needs to penetrate a wider spread of companies in this country.
Fourthly, the institution found that the United Kingdom is losing ground in patent applications. That is a worrying point for those of us who are worried about future innovation in industry. Fifthly, it found that the United Kingdom work force, except at the top, is still seriously under-qualified. Not surprisingly, of course, the same survey called for a change in national attitudes.
Therefore, I support calls from all quarters for the engineering profession to trumpet its successes and to capture the attention of the media. There is a need for new and positive themes after the doom and gloom that we have heard during 1992. There is good news on the engineering front. Ron Kirby, director of public affairs at the Engineering Council, spoke recently about surveys which had been conducted. In the past three years, pay and job satisfaction have increased in the engineering profession. Now young people are more likely to be recommended to go into engineering; apparently, young people's perception of the engineer has improved. Applications for university engineering courses have risen by 12 per cent. compared with two years ago. That is all good news on which it is worth focusing.
Similar trends were uncovered in recent answers on the subject from education Ministers to my hon. Friend the 136 Member for Rugby and Kenilworth (Mr. Pawsey). The initiative to encourage women into science and engineering has also succeeded and the number of women studying engineering has doubled since that campaign started in 1984. There is a lot of good news to relate at this time of night as we look forward to 1993 and the growth in engineering and manufacturing.
I hope that Ministers at the Department of Trade and Industry are forging closer links with those at the Department of Education and the Department of Employment to consider vocational and technical training. My right hon. Friends the Secretaries of State for Education and for Employment have widened access to further and higher education. They have reformed fundamentally vocational qualifications and removed the distinction between universities and polytechnics. They have also freed further education colleges from local education authorities. Those changes are all part of the revolution in further education, which I welcome. They represent a good start, but there is a long way to go.
Last week I had the opportunity to visit the Norwich ITEC—the information technology centre—which is funded by its own commercial efforts and the Norfolk and Waveney training and enterprise council. I saw excellent examples of training for young people leading to national vocational qualifications. In 1991–92, some 93 per cent. of those young trainees found jobs, despite the recession.
Even now, however, concern is being expressed in Norwich—and, I suspect, nationally—about a future skills shortage. Concern has also been expressed about future funding through the training and enterprise councils, but I do not have time to debate that in detail. Concern about skill shortages is important because if such concern is being expressed now, it will deepen as the economic recovery gathers pace in 1993 and beyond. We should address that concern now, press on with training and provide the resources to encourage that.
It is interesting to note that the Engineering Council, in its response to the consultation exercise launched in August by the Office of Science and Technology, called for
a larger number of sub-degree support personnel trained in NVQs levels 3 and 4.The need for a better supply of skilled people of that level cannot be overstated. My experience of industry dates back to the 1950s. Even then, people were drawing attention to the inadequate supply of technicians to provide back-up, compared with the adequate supply of graduate engineers. It is amazing that that is still true today. Our future competitiveness in world markets will depend as much on that supply of trained personnel as on anything else.We have a reputation for short-termism. As we emerge from the recession, it is vital that we plan ahead. We must have a partnership between business and Government. I hope that my hon. Friend the Minister agrees that there should be such a partnership before breakfast, lunch and dinner, and later if necessary. After all, if we are able to debate this issue at 11.30 pm, I see no reason why such co-operation should not continue through the night as well as before such meals.
Not everyone realises that 9,500 qualified engineers are chief executives, children or managing directors of firms. I do not believe that everyone realises that there are 200,000 chartered engineers—one must add to that all the other categories of engineers.
137 That figure compares with 134,000 chartered accountants and 55,000 solicitors. The number of engineers is significant. Engineers are important and there are a lot of them, so it is vital that we convey the message to them that there must be no more self-indulgent talk about the low status of engineers. Those days are gone.
I hope that the profession will discuss in public the challenges that we face not only in this country but in the world at large. I refer to the challenges of the environment: for example, in this time of famine in Somalia and elsewhere, the challenge of how we produce and transport food from one part of the world to another; the challenges of energy production and conservation; and, of course, the challenges of improving the infrastructure not only of this country but of the world.
I am sure that those following the debate will agree that engineering must be highly regarded in its own right. Engineering courses must not be subservient to the immediate needs of industry. There must be attractive and intellectually stimulating courses for our young people and they must attract a broader range of the population than just the future chartered engineer. Our future prosperity and self-respect as a nation depend on our attitude to creative and innovative work in industry.
I hope that my hon. Friend the Minister will respond in that spirit. I hope that he will confirm the pro-active role of Government, as described by the Minister for Trade in his speech last month, to which I referred earlier, so that Britain can again be the envy of the world in the quality and quantity of its trade in manufactured goods and in the number of well qualified and enthusiastic young engineers and technicians we have ready to solve the problems of the future.
§ Dr. Robert Spink (Castle Point)It is a difficult job for a new and innocent Member such as myself to follow my experienced and knowledgeable hon. Friend the Member for Norwich, North (Mr. Thompson), who eloquently and forcefully presented the debate and set out the terms for the next hour. I welcome his initiative in promoting the debate.
With your permission, Mr. Deputy Speaker, I should like to address the key issue of the research that is undertaken in educational establishments, and to focus in particular on engineering and technological research. I hope that in doing so I shall be able to signpost one simple way for the Government to intervene sensibly, and—if I may borrow a phrase from my hon. Friend—before breakfast, lunch and dinner, to help the manufacturing sector to help this nation back into growth.
Hon. Members will be aware that the manufacturing base of our economy relies for its innovation and competitiveness on technological research. They will also be aware that 63 per cent. of British exports—the figure is rising—derive from the manufacturing sector of our economy. I doubt that any hon. Member would seek to deny the strategic importance of the manufacturing sector to the British economy.
The position of industrial research and development in the United Kingdom is not as gloomy as one might think. Expenditure has shown a strong upward trend in recent years. That is not altogether unconnected with the 138 recognition and support of the Conservative Government in the past decade for research in this sector of the economy.
One of the questions that I shall pose tonight is whether we as a nation derive the maximum benefit from that research. Is that research truly helpful in the long term to our economy, or is it more helpful to economies of other nations that are somewhat quicker off the mark than we seem to be in Britain? I shall suggest that the Government could do certain things to redress that situation.
For example, clearly the Japanese have been successful in bringing products rapidly to the marketplace. They exploit technological innovation in a way that assists their economy positively, which we would do well to emulate. Japan and other industrial nations take technological developments rapidly through to products in the marketplace.
In this country we often have the feeling that other nations watch British universities carefully and painstakingly clearing a path through the jungle of fundamental research and then through the technological development, and that those other nations then seem somehow to time their product development runs cunningly down the research path that we British have so carefully cleared for them. They seem to start after us but to pass us just before we reach the warm sunlit clearing and the comfort of the marketplace. We do the basic research, but foreign economies too often benefit from it in the competitive marketplace.
Hon. Members will be aware that there are three generic phases of research—strategic, applied and near-market research. Strategic research is concerned with the longer term; applied research takes a medium-term view; near-market research is just what the name implies—it focuses on a one-year or two-year time scale. It is that near-market research which we neglect at our peril, and I wish to promote it tonight.
In recent years, industry has recognised and begun to apply compressed time concepts and philosophies in order to bring products more rapidly to the marketplace and secure a competitive advantage. It is time that the Government gave more recognition to the enormous value of near-market research, and they could do so by switching research funding away from the more fundamental PhD type of research towards more practical near-market research. Provided that that took place within a balanced strategy, it would be more immediately valuable to our economy.
I welcome the White Paper on the subject, and the reply of the Parliamentary Secretary, Office of Public Service and Science to my question on the issue earlier today. But the Government can play a yet greater part in the shift of emphasis towards applied research. To do so, the Office of Science and Technology and the separate Department of Trade and Industry must create better bridges, so that the flow of research enterprise, from basic research through strategic and applied research to near-market research will bring competitive and innovative products to the marketplace for the benefit of our economy rather than of someone else's.
If the price that we had to pay for that was that we had fewer Nobel prize winners, but we had a more enterprising, successful and vibrant economy, with more jobs, that would be a price well worth paying. That is not to say that all big science projects should be disbanded in favour of 139 short-term projects. For instance, I believe passionately that the joint European torus project should continue to receive our full support.
The public are now a little confused about where the responsibility for research and research funding lies. My constituents are not certain how the Government provide funds to promote the development of marketable products—but they are under no illusions about the fact that we must bring such products to the marketplace if we as a nation are not to fall behind in the competitive race from which there is no opt-out for Great Britain.
Of course, I accept the prime need to ensure that public funds directed to all research, and especially to near-market research, go to the right potential product areas, and therefore to the correct educational and other institutions that can most effectively deliver products and technologies to the marketplace. That will require that the marketplace is properly researched—but that is another question.
The whole concept raises the issue of what are the right institutions to conduct near-market research. The links between industry and academia need to be encouraged and improved to maximise the development of new products and technologies. There are good examples of successful interaction between industry and academia enabling us to exploit the science and technological base of our universities. They include the teaching company scheme, the support by ACME of near-market research and the willingness of the Department of Trade and Industry and some of the funding councils to support centres of excellence in near-market research in our universities. The Cimtex centre at De Montfort university is an excellent example of such support and of such a centre of excellence.
Such examples are still too few. There is a strong resistance to near-market research and a presumption in favour of the PhD-based, more traditional research in our educational establishments. That is entirely understandable given the traditional basis of many of our academic institutions compared with the more pragmatic educational and research establishments that have grown up in modern, less traditionally based economies.
I urge the Government to look for ways in which to redress the unhelpful bias against applied research and to give near-market research the credibility, status and value given to fundamental research. They should give applied research a more rational and therefore a more equal level of funding compared with the funding that traditional research currently enjoys.
Clearly, the former polytechnics, which have done so remarkably well academically, can be beacons of light for some of our ancient educational institutions in terms of technological, near-market research. We need as a nation to look again at the funding methodologies for research in our educational establishments. The Higher Education Funding Council for England gives a weighting for funding applied research of excellence of only one third of that given for basic research of excellence. I do not know how that can possibly be justified and the people of Essex expect me to fight in the House for a more rational balance in the funding of the different phases of research.
Indeed, the HEFCE has even suggested, albeit tentatively, that applied research may not be recognised at all for funding. That would militate against the former 140 polytechnics which Are now forming a new platform of university excellence. Sadly, they can currently expect to receive little recognition of their research from the HEFCE, as much of it is applied. Such a policy is part of the British disease. I am delighted that so many of my hon. Friends agree with me on the matter.
Our research students are often encouraged to believe that a theoretical paper published in a good academic journal is of more value than a product brought to the marketplace. I would agree with that if I were a Japanese industrialist feeding off the papers and taking other people's efforts to the marketplace for my own Japanese benefit, but I cannot agree with that as someone who has responsibility for finding ways in which to fund a better health service, better and more education, and improved pensions, which could be done by developing a competitive economy. That means a dynamic manufacturing sector and more effective near-market research—as they say, "QED".
The Higher Education Funding Council for England should fund strategic and applied research that is linked to a national framework of economic objectives within a visionary strategy for growth and employment for industry and the economy. Industry should be encouraged to collaborate with academia in near-market research using industrial and commercial specifications for that research.
Such a process would very quickly become self-sustaining as industry gained confidence in the service that it received. That should lead to the new universities benefiting from much greater dual funding than they currently enjoy in comparison with the ancient universities. The new universities should develop close and sensible partnerships and relationships with industry.
As time is short, I will refer to my next two points briefly and raise them as issues to which we should return as part of the general debate. The first of those issues is a national framework for research funding that recognises areas for applied and near-market research that are likely to have the most desirable and internationally marketable outcomes.
The second issue is the scope for improved education and training opportunities in science and technology and the need for a national framework and objectives that will promote engineering and technology as more desirable options. My hon. Friend the Member for Norwich, North called for options for students from A-level through to higher research.
We must strive to increase the status of engineers and I recommend a review and study of the German model whereby engineers are educated in an integrated way with industry. Hon. Members may be aware that I have been promoting differential student grants and the emergence of statutory registration for engineers and technologies as part of the move to improve the status of engineers and engineering in our society.
I am not surprised that hon. Members say that I would say that anyway. I acknowledge that I have a vested interest in the matter as I am a simple engineer. I should be pleased if my hon. Friend the Minister could comment on the Government's view of statutory registration of engineers.
The aims of the Finniston report were excellent, but sadly it failed in its delivery. The report failed to deliver 141 primarily due to a lack of ownership and commitment by industry and, I am sad to say, a distinct lack of enthusiasm and promotion in the House.
I am aware that the Engineering Council is addressing that question from the industrial viewpoint, and I welcome that. I am sure that hon. Members will join me in encouraging the council in that endeavour. I trust also that the boards of all research funding agencies and councils are exercised by the arguments in favour of near-market research that have been set out in this debate.
§ Mr. Richard Page (Hertfordshire, South-West)I congratulate my hon. Friend the Member for Norwich, North (Mr. Thompson) on having the wit and wisdom to choose this topic and, even more so, on having it at a reasonable time rather than at 2 or 3 am. I notice that my hon. Friend the Under-Secretary of State for Corporate Affairs is to reply to the debate. I understand that, when he replies, he will be halfway through his triple. No doubt my right hon. Friend the Minister for Industry will owe my hon. Friend the Under-Secretary of State something for his presence for this triple-decker.
In each of the past three or four years, I have delivered what I would call my annual manufacturing speech—and, until the last autumn statement, more in hope than in expectation. As the years rolled by, my speech developed a stereotype nature. It had one major advantage—I did not have to update it much, except the figures. The message of my speech was the importance of manufacturing as the basis of our major economic activity and the need for targeted support if we were to match foreign competition. I advanced the same case until the autumn statement.
I sincerely hope that the autumn statement has signalled a shift in policy towards manufacturing and industry in the Treasury's long-term thinking. I use the word "hope", because I want to believe that the targeting of various levels of support schemes within the time limits set out in the autumn statement is the start of a long-term policy. I hope that the targeting of such schemes is not simply a short-term measure to alleviate the recession, after which we will return to the previous policy of creating a uniform regime which covers every manufacturing and commercial sector in the United Kingdom—the proverbial level playing field, with no distortions, no anomalies, no recognition of overseas competition, and theory which is untroubled and untrammelled by practice.
In 1979, I welcomed as enthusiastically as anybody else the moves to shake up our rather sluggish and inefficient industrial base. Over the next eight to nine years, I welcomed, as did everybody else, the fact that management was released to manage, restructure and defeat restricted practices. In that time, quality and productivity rose and efficiency improved. The state-owned industrial bastions of inefficiency, ruled by the political lunchtime directive, moved into the private sector. In a short period, the United Kingdom stopped being the sick man of Europe: it showed a distinct improvement in economic health.
The time then came to move to the next stage. A gulf of understanding had to be bridged between those who lived in the theoretical world of economic models and forecasts—in the worlds of Samuel Johnson and those whose knowledge of the world is strained through books—and 142 those who lived in the real world of industry and commerce. The real world which I am talking about is the one in which people have to find the wages on Friday night; in which one is out of a job and could lose one's house if one fails. I am talking about the world that provides the basis on which the theoretical world rests and draws the revenue.
I said earlier that I hoped that the autumn statement has signalled a change in policy which will give the various industrial sectors matching and targeted support to compete in the export and import substitution markets equally. That is absolute common sense to the business manager, because he or she uses a whole range of incentives and selective treatments to cure problems and make his or her business grow. There are few cases in which a blanket solution solves all problems. More often, problems are like a cake: one divides it into slices and deals with each slice individually. In that way, one solves the overall problem.
I am aware of the time contraints this evening, so I will not embark on my next point in any depth whatever, except to say that, with the single market coming and the transfer of taxpayers' goods throughout the European Community, the Government will have to examine two matters: first, extending the VAT tax base and, secondly, examining differential VAT rates. I quote as an example what is happening to our horse racing at present.
It would be nice to think that we could have a simple, overall, blanket solution of one VAT rate at the top end and then the zero exempt rate. However, I do not believe that we can live in such a world. If we are in the European Community, either the other member states must change or we must change. We simply cannot survive by hitting certain people with 17.5 per cent. while somebody else pays the penalty of only 5 per cent.
The transferability of goods means that we must examine that change. I do not like it; I do not want it; but I move away from the theory into the real and practical world. It will mean that every sector of industry has its own market problems which must be tackled individually. That is why I congratulate my right hon. Friend the President of the Board of Trade, and I am delighted that he has reconstituted the 15 industrial sectors which will look at each of those areas of industry in detail.
Overall, there will also be a division to study world best manufacturing practice and how that information can be best distributed and implemented within the United Kingdom. I am not sure whether it is above or intermingled with the 15 industrial sectors, but it will be called the industrial competitive division. It is under the control of Professor Dobbe—that is spelt D-o-b-b-e, for the sake of the people up in Hansard, so that they do not have to send me a little note. I am sorry, Mr. Deputy Speaker—you can reprimand me if you wish. You will be absolutely right. We are not under too much pressure here this evening.
From the work of the industrial competitive division will come a much more detailed knowledge of how our competitors operate and how we can provide our industry with that equalising factor. That does not mean politicians picking winners. They could not pick a winner in a one horse race. It means the abandonment of our previous policy of unilateral industrial disarmament. It did not work for defence, and I see absolutely no reason why it should work for manufacturing.
143 More information will emerge from that division. It will examine world best practices and target our resources. That will give us a greater chance of success. I take one example from our industrial competitors abroad—the machine tool sector in Japan. Every two years, a sector is targeted for support. The Government choose specific objectives which thay want that sector to achieve.
In 1980–82, energy efficiency in manufacturing machine tools and companies employing fewer than 1,000 people were targeted. In 1985–89, the Government targeted investment in new technologies using CNC machines and gave support to it. The Government targeted support to specific areas in a series of years. Everyone knows that increases in quality and productivity and success in the marketplace flow from the advances being made in machine production techniques. So the emphasis on machine tools is not entirely surprising.
The Japanese are not alone in giving support to specific areas of industry. I understand that the Italians have a £0.75 billion programme of support for small and medium companies. Some 25 per cent. grant is given towards purchase, and low rates of interest are made available. In Portugal, the Government give money towards certain forms of moulding machines. One could go on and on producing examples in the machine world.
I hesitate to produce other examples to the House, but one need only consider shipping. Help for shipping is even more widespread. Certain Governments have introduced measures to compensate for the widening of the cost gap between European and third world crews. For example, some Governments have reduced social security payments for employers of national seafarers. I have here a list of comparisons with other countries. Exemptions from seafarers' income tax in full or in part, with varying conditions, are available in Belgium, Denmark, Greece, the Netherlands and Sweden—and the list goes on.
We must begin to consider varying our terms and conditions if we want to compete. Lacking such support, what have we seen? Barely 1 per cent. of the world's shipping now sails under the British flag. We are down to 27th place. In a parallel fashion, there is concern about the age of our fleet. Questions must be asked, such as whether roll-over relief should be considered if we are to stay in the same game.
If anyone thinks that I am dealing only with Europe or the east, I also have details of American subsidies. According to the Financial Times on 12 November, the
US faces the prospect of being taken to task by Gatt, after an extraordinary formal admission of the considerable export credit insurance subsidies it provides to exporters.The article gives four or five examples of other countries where support has been given. The actions of our foreign competitors in the world market bring my remarks full circle, as I hope that the autumn statement has introduced an on-going policy of time-limited, targeted support for industry.My hon. Friend the Member for Norwich, North has already mentioned the most excellent speech by my hon. Friend the Member for Wiltshire, North (Mr. Needham), to the Institute of Export on 25 November, and that gave the framework. I hope that the industrial competitiveness division, which has 15 sectors under observation, will start to colour in the squares.
144 In some quarters of the House, hon. Members believe that, if we can get the macro-economic formula right, all benefits will flow. I have to disillusion them fully. Life is not like that—it is the nitty-gritty, piece-by-piece attention to detail which will bring things right and win.
The President of the Board of Trade has told the story of the Japanese company going round a British steel-making company. The Japanese company carried out the same process but was more profitable. On leaving, the Japanese asked, "Would you mind if we made a few suggestions?" The company director said, "I would be delighted." The Japanese firm produced 50 items. For example, it said, "You take too much steel for testing—you do not need to take a foot of steel, as three inches will do and you open the furnace door wide open, when you only need to open it a few inches, as that saves heat." Those examples show the nitty-gritty and attention to detail that give companies efficiency and an edge.
I have abandoned my previous speech. The autumn statement has moved the game on, and this will be my standard speech until those sectors are coloured in and efficiencies are obtained. I am grateful to my hon. Friend the Member for Norwich, North for bringing the subject to the attention of the House.
§ 12.2 am
§ Mr. Peter Thurnham (Bolton, North-East)I wish to intervene in the debate briefly, in view of the hour and the limited time. I congratulate my hon. Friend the Member for Norwich, North (Mr. Thompson) on his luck in the ballot. I have put in for a debate on a number of occasions, but have not been able to get anywhere near the luxurious position of being able to talk not long after midnight, if not before it. I congratulate him on choosing such an excellent subject. We cannot spend too much time in the House debating engineering.
I declare an interest, as before coming to the House my career was entirely in the engineering industry. There used to be two other members of the Institution of Mechanical Engineers in the House, but I regret that that is no longer the case. We lost the late David Penhaligon, the former Member for Truro, which was a great sadness to us all. I enjoyed debating with him when he was here. The loss of my noble Friend Lord Hayhoe, the former right hon. Member for Isleworth and Brentford, is a gain for the other House.
My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) said that one has to remember what it is like at the sharp end, when one has to pay the wages every week. That is the position which I faced when I started my own business, and I still face it, although I am glad that my wife is principally concerned with the business on a day-to-day basis.
The debate is timely in view of the fact that the Institution of Mechanical Engineers is judging the finals of the manufacturing effectiveness awards tomorrow, and I am delighted that my right hon. Friend the Chancellor of the Duchy of Lancaster will be there to present the prizes, which have a total value of £20,000. There is a £10,000 prize for the outright winner and a £5,000 prize for the winner of the small firms category—firms with up to 200 employees. Eight firms have reached the semi-final stage and I was delighted to see that two of them are north-west companies: British Aerospace, and Thorn Fire Protection in Oldham.
145 The other firms include Footprints Tools of Sheffield; GEC Alsthom of Rugby; which is through to the final four; Hayward Tyler Sumo of Kilbride; Johnston Engineering of Dorking, which is also through to the final four; Nautech Ltd of Portsmouth; Rexel Business Machines Ltd of Droitwich, which is through to the final four and is the outright small firms winner, as it is the only small firm to have reached the final four. Thorn Fire Protection is the fourth firm to have reached the finals.
I have the good fortune to be on the judging panel to select the winner from those four finalists. I have been delighted to read the contributions made by those four companies and I recommend that all hon. Members who have participated in this debate read those stimulating entries, which show exactly what can be done in this country and the excellence that can be achieved by our firms. They all talk of substantial increases in their share of world markets and give evidence of how this country has increased its share of the world markets in recent years. After decades of decline through the 1960s and 1970s, we are at last seeing an overall increase in our share of trade.
My right hon. Friend the Secretary of State is not here, but I recently showed him some figures giving this country's total share of both visible and invisible trade. I recommend that hon. Members look at those figures, which are available from the Library. The lastest figures that I have show that in 1990 this country's share of total visible and invisible trade amounted to 13.2 per cent., an increase from 12.1 per cent. the year before and 11.5 per cent. the year before that. It is made up of visible trade of 8.6 per cent. and invisible trade of 16.9 per cent. We should not worry whether we earn our wealth through visible or invisible trade, because it all contributes to our standard of living. As we have a higher share of invisible trade, which is the fastest growing sector of world trade, it gives us a better basis for increasing our share in future.
May I quote some of the points made by Thorn Fire Protection as an example of a north-west firm. I am delighted that the north west is so well represented this evening. The hon. Member for Stretford (Mr. Lloyd) and the Under-Secretary of State for Corporate Affairs, my hon. Friend the Member for Tatton (Mr. Hamilton) are both present and may like to hear of some of the points that Thorn Fire Protection made in its excellent submission. We do not know who will win tomorrow, but I am sure that Thorn will be given strong consideration on the basis of its excellent written submission in advance of its full presentation tomorrow.
The submission says that the company
has a turnover of over £30 million and employs 1,000 people in the UKand thatThe significant improvement in the business over the 6 year period is the result of visionary thinking started in 1985 with the aim of becoming the 'Best in the Business'.It says that thechanges since 1985 have enabled the company to grow in turnover at a compound rate of around 15 per cent. per yeargiving a return on net assets of 30 per cent. and profit-to-sales ratio of more than 10 per cent. The submission goes on:In terms of market share, the company currently holds No. 1 position for manufacturing output and No. 2 in fire extinguisher servicing within Europe.146 There has been a total transformation in the company's Oldham factory from its traditional "fire-fighting" mode to "excellence in extinguisher manufacturing". The submission says:
The Oldham manufacturing operation has moved up in its ranking from 6th to No. 1 position for output volumes, productivity and stock turns compared to its counterparts within Europe … The original concept for change required a great deal of creative thinking and a visionary approach. Right at the outset, the change programme was seen as a long haul, with no short cut route to success and requiring sustained commitment and support from the top.The report shows how its service branch network has improved its stock turns from about six times a year to in excess of 20. On quality and the way in which it has motivated its staff, it shows that it has involved the shopfloor employees through "Kaizen"—a Japanese word meaning continuous improvement. In that way it has motivated its staff through involvement and created team spirit—a key success factor.The report uses a memorable phrase on quality. It states that the management team's belief is that
Quality is a journey and not a destination".That should be borne in mind by everyone who is involved in manufacturing industry.I thought that I would use that example to show how firms in the United Kingdom, particularly the north-west, have been able to improve their positions substantially in recent years, due to the success of Government policies, which have enabled management to focus on the job of managing. That company has brought itself up from number six in Europe to number one in a climate where the number of days lost through strikes has dropped from the high figures experienced under the last Labour Government to the lowest figure since records began 100 years ago.
I am confident that the engineering industry will be able to go from strength to strength and management will be able to demonstrate that it can make companies in this country the best in the world. I thank you, Mr. Deputy Speaker, for the opportunity to participate in the debate, and I hope that my hon. Friend the Member for Norwich, North, who has done so much to bring engineering to the attention of the House, will continue to be successful in the ballots.
§ Mr. Tony Lloyd (Stretford)I congratulate the hon. Member for Norwich, North (Mr. Thompson)—with whom I have been spending rather a lot of time recently—on choosing the subject for debate. At a constituency level I have great interest in the topic as my constituency houses Trafford park, which is still one of the leading centres of engineering industry in this country. Its traditions are desperately important—it is a source of both employment and economic success, for the city and the country.
The engineering industry is fundamental to this country's future. We have heard four interesting speeches. We always say that debates in the House are interesting—some are more interesting than others—but tonight's has been. All four speeches have been slightly different in structure and have mentioned different aspects.
I was intrigued by the speech of the hon. Member for Castle Point (Dr. Spink) and the gentle, mocking irony with which he spoke of the Government. He rightly said that nobody would seek to deny the strategic importance 147 of the manufacturing sector. He also said that it had been supported by 10 years of Conservative government. As an oblique attack on the Ministers, his must be one of the more subtle ways of sticking the knife into Ministers' backs.
§ Dr. SpinkWill the hon. Gentleman acknowledge that he welcomes the increase in unit productivity that we have achieved in the manufacturing sector over the past decade?
§ Mr. LloydWhen the hon. Gentleman says "we have achieved", I trust that he includes both sides of industry. Some of the credit should go to those who are still in employment and who have made considerable sacrifices.
I should place on record a less rose-coloured view of Britain's manufacturing sector, particularly the engineering sector. The facts—borne out by many of the professional and employer-led organisations in engineering, not just employees—show that engineering in particular and manufacturing in general have been in decline for the past 20 years. The present recession has badly hurt British industry. I hope that the Minister will pay attention to that.
While engineering represented 11.8 per cent. of gross domestic product in 1979, when the present Government came to power, by the middle of 1990, the level had dropped to 9.4 per cent.—a significant decline. Since the recession began in 1989, there has been a 13 per cent. fall in engineering output. That is tragic for the nation and for the individuals involved. Those people have seen their employment base in engineering shrink from 3.3 million to about 2 million. These are highly skilled people, with skills that should have been updated. Even the employers reckon that about 55,000 more jobs will go in the next year.
The hon. Member for Norwich, North said that people were bullish about the future of the industry. I have with me numerous press cuttings in which people roundly condemn the Government's role in the industry and express their concerns for the future. One states that engineering confidence has been "shot to pieces". Suppliers to collieries, especially the Association of British Mining Equipment Companies, talk of the loss of 120,000 jobs in their industry as a result of the destruction of the mining industry by the so-called interventionist President of the Board of Trade. That industry alone has a turnover of £900 million a year.
The director-general of the Engineering Employers Federation has said that engineering skills are going to waste in this recession, threatening Britain's longer-term ability to compete. He added that a Government policy
of waiting for something to turn up is demonstrably not going to provide the sort of positive results industry has the right to expect.So engineering is hardly a success story at the moment. It is rather a story of Government incompetence and failure to act in partnership with the industry. That failure has cost the nation and those employed in the industry dear.Ironically, because of the nation's and the industry's failure to train, we face the almost unique calamity of an erosion of skills at the same time as a significant skills shortage. An article in today's Birmingham Evening Mail carries an interview with the managing director of a bolt-making firm, Bauer and Schauerte Kaucher, who has 148 been trying for six months to recruit four skilled setters to work some new high-technology forging machines. Mr. Gevals Hammond said that he had thought that
soaring unemployment would make it easy to fill the jobs.'We know we are paying a very competitive rate and a generous bonus scheme, but in the current climate experienced workers with the skills we are looking for are reluctant to risk losing possible redundancy pay off by leaving existing jobs.'". So people are afraid for their futures, and the mobility that the industry needs is being ripped away because of these uncertainties.
There are severe skills shortages in the electrical engineering and capital goods sectors alongside high levels of unemployment. Those shortages spell future capacity and output downturns which will threaten the competitiveness of the industry. The uncertainties lead in turn to a reluctance by the industry to train people and to invest—and that feeds back into the skills shortages that created the problem in the first place. So we are trapped, not in the bullish market described by Conservative Members, but in a vicious circle that will cost the nation dear.
The hon. Member for Norwich, North was right about the need to train engineers. If we are to increase the amount of research and development in the productive end of the industry, we need highly trained engineers and technicians. We need them to perform a new role; to sustain and increase our R and D in areas such as product and process development. Only that will bring about the long-term competitive edge that the hon. Gentleman mentioned. That is not even beginning to happen at the moment. The statistics describing the state of the British industry make for a sad comparison with those of our competitors. We know that the United Kingdom's capital stock is much older than that of competitor nations. In Japan, the average fixed asset life is six years, compared with decades-old machinery that still exists in British engineering and elsewhere.
Japanese investment is led very much by a confidence in the future that British industry does not have. That confidence is also absent in the training of our young people. That begins at school. There is an acute shortage of teachers for science and technical subjects that are so important as the fundamental base of the engineering industry.
A very low number of young people in the post-16 group stay on at school. We fall far behind Germany and Japan in that respect. The Japanese and French train three times as many craftsmen and women in mechanical and electrical engineering and in construction. Britain would have to train an extra 50,000 young people a year to catch up with the Japanese and the French, and an extra 80,000 a year to catch up with the Germans. That is the kind of task that our nation must set itself and achieve.
Conservative Members should not be deceived by their own propaganda, because the situation is much more worrying than they suggest. Under the German dual system, to which the hon. Member for Castle Point drew attention, 600,000 people are trained every year, and it strips away the artificial divide between academia and vocational training. Germans view with amazement the kind of educational system that we have. We have a lot to learn, and we should not be blind to the achievements of the German system.
Seventy per cent. of those who pass through the dual system gain a qualification, and 30 per cent. of those who 149 start dual training already have qualifications higher than our present A-levels. It is therefore ridiculous to suggest that the German qualification is downgraded. It is a high-status qualification and one which we should seek to emulate.
§ Mr. ThurnhamThe hon. Gentleman's whole diatribe is centred on how much better other countries are than our own. I do not believe that it is all a one-way business. Obviously we can learn from others in the world, but the Engineering Employers Federation states that engineer training in this country is better than in Germany.
§ Mr. LloydThe hon. Gentleman refers to my diatribe, but it is a diatribe of fact. If he will say which of the facts that I stated he considers inaccurate, I shall be happy to debate the matter with him. The hon. Gentleman says that the Engineering Employers Federation states that the training given in Britain is better than that in Germany. I will not enter into an argument about whether British training is better, although I will return to that theme later.
It is certain, however, that the Germans are training many more—that a much larger number of young people in Germany are studying for a higher qualification. Even if the hon. Gentleman is right to say British training is better, such small numbers are involved, at such a specialised level, that it is a little dangerous and self-deluding to have the idea that we are competing with the Germans. The hon. Gentleman should view with concern the figures that I gave.
Britain is found lacking in the whole area of industrial training. There has been a large cut, of about 45 per cent., in the money provided by training and enterprise councils since 1988. On previous occasions, I have expressed severe doubts about the quality of training provided by the TEC system. I believe that Conservative Members at least share my view that those who pass through our academic and vocational systems must be of the highest quality.
I share the view of the hon. Member for Bolton, North-East (Mr. Thurnham) that Britain should produce the best engineers and technicians in the world. If we are to do that, however, we must begin to establish some basic facts.
One of those facts is that this country does not invest enough in training and education for our young people—both generally, and in manufacturing and engineering specifically. An anti-manufacturing culture has existed here for some years, and the position was not helped by Lord Lawson when he was Chancellor of the Exchequer. As Conservative Members will recall, for many years he told the House that manufacturing was concerned with the smokestack industries; the future, he said, was in services.
The future can never be in services in that glib sense. Services have an important role, and no one wishes to knock that role; but it is a matter of statistical fact that, for every 1 per cent. of manufacturing exports that we lose, we would have to increase exports of services by 3 per cent. We still depend very much on manufacturing, but there is real doubt about whether our manufacturing base is large enough to sustain the size of our economy. We must rectify that: we must begin to train, and we must give a commitment that the funds will be there to make the training available. Those funds must come both from central Government and from the private sector.
It is instructive to note that when Labour spoke a t the last general election of the need for a training levy, it was 150 in touch not only with the views of Jacques Delors—who introduced a similar system in France some 20 years ago: that system works, albeit at a much higher level than we propose—but with those of Sir Brian Wolfson, chairman of the national training task force. He recently called on the Cabinet to abandon its philosophy of "voluntarism", and to introduce a compulsory levy on company payrolls to ensure that money was spent on training. Sir Brian's comments echoed some recent remarks by Sir Richard Layard at the Economic and Social Research Council: Sir Richard said that Britain would continue to provide a vast army of "lumpenproletarians" unless the state invested more in training.
We need a commitment that the Government have not been prepared to give in the past. Time after time, without that driving force and without a levy, the private sector will regard investment in training as a negotiable cost which can be cut in a period of recession. Earlier this year, the Department of Employment's own survey of training made it clear that the private sector had cut its investment for that reason.
We need to overhaul our attitude to manufacturing and, in particular, to engineering. We need to develop a culture that views manufacturing and engineering as a strong and significant element, and which appreciates that people with an engineering background, such as the hon. Member for Castle Point, have something real to say to the House and the country. We must turn away from the outdated view that accountants and lawyers should run our industry; we must develop the manufacturing culture, and invest in it. Sadly, however, there are no signs as yet that the Government intend to do that.
§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton)With the leave of the House, Mr. Deputy Speaker.
I congratulate my hon. Friend the Member for Norwich, North (Mr. Thompson) on his initiative in giving us the opportunity to debate this important subject. I regret that I cannot claim to be an engineer myself, although my father was one; I am a humble lawyer, and my only connection with the world of nuts and bolts has been the occasional throwing of a spanner into the works over the years.
The importance of engineers and engineering in industry is, however, undoubted: many hon. Members have made plain their support for that proposition tonight. Engineers, of course, have a profound effect on the economy, wealth creation and everyday life. Although we are most conscious of their contribution to the engineering industry, they also make a major contribution to all aspects of business life. Their skills and training are necessary ingredients in management and the successful operation of modern companies, stretching well beyond what we recognise as the engineering sector.
The engineering sector is of major importance to the United Kingdom, and the annual sales of the United Kingdom engineering industry are estimated at more than £100 billion, with more than £50 billion-worth of exports in 1991. The engineering industry's output accounts for 42 per cent. of our manufacturers' gross domestic product. The sector employs some 2 million people, and we depend 151 on the skills and ingenuity of our engineers, often without even realising it. It is too easy to undervalue their important contribution to almost every walk of life.
People with the right blend of skills are vital to our industry, and if our industry is to benefit most from recovery, we must fully develop and train our engineers and technologists. Our engineers need to be of the highest quality. They must be innovative and highly motivated. Our industry must have access to the latest engineering technology and must make the best possible use of it.
The message must go wider than our engineering industry, however. If our engineers are to play their full part in underpinning long-term growth, our financial institutions need to understand engineering and make good use of their talents. We must examine and learn from the best engineering practice around the world. Unless all sectors of industry and commerce use engineering skills to the full, our potential for wealth creation will suffer and our bright ideas will be left on the shelf or, worse still, will be exploited by others.
If we are to strengthen our productive performance, we need to break out of the damaging and outdated thinking about practical work. For too long, our culture has undermined practical work—even in the case of a discipline as vital and intellectually demanding as engineering. The solution to that problem lies in a partnership between education, the engineering professional institutions, employers and Government.
Stepping outside my departmental responsibilities to an area which is immensely important to trade and wealth creation, the training of our engineers must start as early as possible and it must continue, through full-time education and training, in a lifetime's process of learning. I mention first the initiatives that the Government have taken in schools, where the development begins. By 1995, all pupils aged 16—girls as well as boys—will have followed the national curriculum throughout their secondary education. They will thus all have studied technology. Similarly, all those who reach 16 in 1994 will have studied science. Gone are the bad old days when pupils could drop such subjects by their own choice or perhaps at parental whim. That remarkable change should boost the long-term take-up of engineering as a subject and a career.
We are always seeking ways to improve, however. The Department of Education is currently undertaking a review of technology, and that should improve further the preparation for continuing studies in engineering and other disciplines. In addition, the technology schools initiative encourages schools to provide specialised supplementary courses with vocational relevance. Such courses are designed to allow pupils with particular aptitude for technology to build on the subjects covered in the national curriculum.
The role of vocational qualifications has not been neglected. In the past, there has been great confusion about the types and levels of vocational qualifications. It has been a veritable jungle. We are cutting through that jungle with a new system of national vocational qualifications. The NVQs fit into a comprehensive framework. They are based on national standards, which define the skills, knowledge and understanding that employers need, and the employers are closely involved in 152 their development. The options for gaining NVQs are varied: they can be obtained at school, in sixth form and further education colleges and by study at work. NVQs are made up of units which can be added together and which allow individuals to become qualified at their own pace.
Many NVQs are already available in science and technology subjects—for example, power station operation, pharmaceutical processing and aircraft maintenance. The Government strongly support the national education and training targets, which include critical goals for NVQs both for those in education and for those in work. For example, one aim is that 50 per cent. of young people should reach NVQ level 3 by the year 2000. That work is crucial to the United Kingdom's ability to compete with the best in the world.
For 16 to 19-year-olds, there remains the traditional route into university by means of A-levels. We have also introduced the general national vocational qualification, which should provide a further route into universities, whether of the old or of the new variety. We want universities to encourage the use of GNVQs as an entry method. That will provide greater opportunities for students to obtain a broader, vocationally relevant qualification. GNVQs will provide some general direction to students' career paths, which may well be in technology, but will not close off paths prematurely.
The further education sector also received a boost in the half billion pound increase in education funding announced in the autumn statement. That extra support will increase dramatically—by about 250,000—the number of students in further education. We expect within two years to have more than 1 million people studying in further education. That will provide many more young people with the technical skills that industry needs. It will also help to lift us to the top of the international league table for 16 to 19-year-olds staying on in education over the next three years.
In higher education we have already acted to ensure that there is no shortage of engineering places. There have been two specific initiatives—the engineering technology programme and the manufacturing systems engineering initiative. The latter initiative, for example, has brought together traditional engineering knowledge and skills with the use of management systems. It has been a success, and courses have been enrolled above their targets. That initiative has been carefully evaluated and a report will be available shortly.
Industry and commerce need senior people who have engineering knowledge and experience—people who look wider than the figures on the balance sheet, people who will look beyond the short term, and people who understand the processes of product design and manufacture. Engineers have the potential to climb the ladder to the top of companies. They understand the technology and its capabilities, but engineers need to be able to participate in all business activities, including management, and our university degree courses must offer that integrated style of education. Some universities already do so; others must follow.
Although the number of student places has been increased, the demand has not been so high as we would have liked. However, it is pleasing to note that applications to 1992 engineering and technology degree courses were up on those for 1991. We must all work to ensure that that demand continues to grow.
153 Universities must play a part in attracting and retaining young people. Science and technology education must be made an attractive option. We already have some of the most outstanding science and engineering courses in the world, but all our universities must seek to attain that same high standard if they are to attract the best students in the numbers that industry needs. It is not for the Government, of course, to tell young people which courses to take. The Government have a role, but schools, teachers, career advisers, parents and society generally all have their parts to play. Engineering must be seen as a worthwhile career option which leads to stimulating and rewarding job opportunities. In the United Kingdom, that requires a culture change. In Germany and Japan, the engineer is highly valued, and we must do the same if the United Kingdom is to prosper.
There is, of course, a key role for employers to show that engineering and technology skills lead to rewarding and satisfying careers for young men and women. They must transmit the right signals about engineers to the whole of society. Unfortunately, recent evidence suggests that the manufacturing sector still has a poor image among final year undergraduate engineers, and the most commercially minded of them intend to leave engineering. That clearly brings into question that sector's ability to recruit the high-calibre engineers whom it needs.
Most of all, we need a commitment from companies to increase job quality for young engineers and provide early opportunities for them to take responsibility. I understand the constraints, particularly in a recession, but there is also the need for employers to provide and maintain competitive pay and to give it full publicity as a factor in image building. There is evidence that more employers are recognising that. The pay of new graduate engineers has risen over the past few years, but that remains an important element in increasing the professional status and the social standing of engineers.
Knowledge and skills are at a premium in today's economies. In the United Kingdom, we have made large investments in the scientific and technological research and skills in our universities. The research and skills are first rate and acknowledged as such by the world's science and engineering communities. They are a national asset which should be developed and used. There is a clear need for a constructive partnership between our educational institutions and industry and commerce. That partnership should be a two-way street. Industry can make enormous gains by exploiting the technology and expertise that our research has produced. At the same time, British industry and commerce must play their part in assisting our higher education institutions to become as industry-oriented as possible.
The Department of Trade and Industry supports a number of schemes which serve to foster links between the academic world and industry at different levels. Those schemes include Link, which encourages collaborative research, equipment schemes which help colleges to re-equip their laboratories with up-to-date technology, and expansion of the Shell technology enterprise programme which places second-year undergraduates in companies for eight weeks. A number of our schemes encourage the exchange of people—they are the best vehicles for transferring technology—so that companies can exploit the wealth of knowledge and technology in our science and engineering base.
154 I will give one example to demonstrate that point. The highly successful teaching company scheme is widely recognised as an effective vehicle for providing bright young graduates with practical industry-oriented training. It does that by placing them in companies, of which more than 60 per cent. are small and medium-sized enterprises, to perform strategic technology projects. They work under the supervision of industrialists and academics. The teaching company scheme also serves to transfer technology from our universities into industry and begins the process of establishing long-lasting links between companies and higher education institutions. The teaching companies scheme is sponsored jointly by the DTI and the Science and Engineering Research Council, along with a number of other participants. It has a budget of about £14 million this year with more than 450 live programmes.
We should note the important contribution of the engineering profession. More than 40 professional institutions represent professional engineers of different disciplines. I am delighted to say that my right hon. Friends the President of the Board of Trade and the Minister for Industry will meet the presidents of four of those institutions in January. My right hon. Friends are looking forward to hearing, at first hand, their views on some of the central issues for engineering. I also know that the Royal Academy of Engineering works hard to promote engineering and to raise its status. It was highly appropriate that the President of the Board of Trade spoke at the recent dinner celebrating the academy's change of name. He warmly congratulated it on being granted permission to show its royal patronage in its title. That is surely a sign that our culture is beginning to value its engineers.
It has long been recognised that fragmentation does not serve the profession well. The barriers between the engineering disciplines, as practised in industry, are beginning to break down. A more unified approach to the engineering profession would therefore seem sensible. It is for that reason that I warmly welcome the recent initiative by Sir John Fairclough in conjunction with the Council of Presidents. They are considering how the profession could be organised so as to focus more sharply on the big issues that it faces. The DTI is providing half the cost of a secondee to assist in the work and I look forward eagerly to the results of their consultations and discussions when they appear next year.
In that context, we should not forget the work of the Engineering Council. One of its objectives is
to promote the status and practice of engineering with a view to improving competitiveness.The Government supported its establishment with initial pump priming of almost £3 million in three years as grant in aid. The council has a range of continuing activities. It maintains and develops the register of 290,000 chartered engineers, incorporated engineers and engineering technicians. It operates through education and training initiatives to ensure that industry's needs are met. It also runs schemes, seminars and conferences to promote the career image of the profession.The DTI has provided specific financial assistance for some of that important work—for example, the neighbourhood engineers scheme. That scheme aims to secure closer links between practising engineers and secondary schools, to assist with project work in the curriculum and to foster the understanding of the role of 155 engineers by schoolchildren, their parents and teachers. It currently involves more than 7,500 engineers in nearly 2,000 schools.
It is also important to note one other initiative that the Engineering Council runs—Women Into Science and Engineering, which was launched in 1984. The intention is to help—
§ In accordance with Mr. Speaker's ruling—[Official Report, 31 January 1983; Vol. 36, c. 19]—the debate was concluded.