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Invest in research to succeed, says minister

PLANT - Manufacturers told to invest in new technology or face losing business to foreign competition

BRITISH plant manufacturers have to move away from traditional metal-bashing and low-skill processes and embrace high-tech, research-driven methods, according to the competition minister.

Barry Gardiner MP, speaking at the Construction Equipment Association's annual general meeting, told the sector 'not to romanticise the past, but to look outwards to new opportunities'.

Mr Gardiner delivered a bleak message to those in manufacturing sectors that rely on low-skill labour, warning of the threat of intense competition from both developing and developed nations.

He said: 'There is no way at a certain level of manufacturing that you can compete. Our production must be at the higher research and development level, as we can not compete on labour on low-skilled manufacture. We are not going to get that back.' He said: 'Both the USA and Germany have higher proportions of their GDP invested in R&D. The manufacturing industry must commit to skills development and investment to make more of higher value-added processes.

'There is growing competition for raw materials, energy and water and pressure on resources will be severe.

To succeed we have to embrace highertechnology R&D.' He added that the Government had set up an advisory service and offered tax credits for research.

He said: 'In the UK, just two companies represent 40 per cent of all the R&D in the private sector and 10 companies represent 85 per cent. That is unacceptable.

'The UK has 1 per cent of the population and undertakes 6 per cent of the world's academic research but we fall down on putting cutting edge research into products the world wants.' Mr Gardiner said that this had an impact on the take-up of skills within the sector.

He said: 'There is a skills shortage.

Unless we upskill, we are not going to be able to compete globally.' Plant manufacturers are campaigning for more Government support for the sector, particularly for smaller companies, but Mr Gardiner said: 'We are not going to be able to protect low-skills manufacturers.' He dismissed questions over the failure to renew funding for the CEA's Manufacturing Excellence business improvement programme, despite it making £20.6 million in identified savings.

He also rejected comparisons between funding for the construction sector and the £6.5 m illion loan to MG Rover.

He said: 'Manufacturing Excellence was a pilot programme and its three years of funding came to an end. It is a low blow to try and compare it to MG Rover.' Mr Gardiner added that, while the British Government had the EU presidency, it had persuaded the EU commissioner to strike out 68 proposals for legislation.

He said: 'That is like taking the Queen's Speech and ripping up a third of the legislation.' n See World Plant, page 34