Written evidence from CBI Wales
THE CBI WALES RESPONSE TO THE WELSH AFFAIRS
COMMITTEE INQUIRY INTO MANUFACTURING & TRADE IN WALES
INTRODUCTION
1. This paper is the response of the membership
of CBI Wales to the Welsh Affairs Committee Inquiry into Manufacturing
and Trade in Wales. CBI members employ around 40% of the private
sector workforce in Wales and members have been consulted widely
on the Inquiry. Members have been directly contacted for views,
individual interviews have been undertaken and the Inquiry has
been considered by the CBI Wales Economic Trends Panel, North
Wales Area Committee, and the response approved by the CBI Wales
Council, which is elected to represent the Wales membership. CBI
Wales represents businesses of all sizes across all sectors of
industry and commerce.
There can therefore be no doubt that the views
expressed here truly reflect the experiences of manufacturers
in Wales.
2. CBI Wales' mission for manufacturing
is to help create and sustain the conditions in which manufacturing
in Wales can develop, compete and prosper. CBI Wales believes
that manufacturing continues to play a fundamental role in the
Welsh economy. Through effective policy and lobbying work, CBI
Wales is committed to securing an economic environment in Wales
that is conducive to manufacturing, and to ensure that Welsh based
manufacturers are well placed to compete in the manufacturing
world of tomorrow. We therefore welcome the opportunity to contribute
to this Inquiry into Manufacturing and Trade in Wales.
3. The Inquiry also covers trade. CBI Wales
represents companies in this sector also, and they too generate
wealth which benefits the Welsh economy. However, this response
has been largely restricted to manufacturing as the sector most
under threat at this time, and of greatest current importance
to the country.
THE CURRENT
STATE OF
MANUFACTURING IN
WALES
4. Manufacturing in Wales directly accounts
for 24.6% of Welsh GDP (UK—18.8%, Scotland 18.8%) (Source:
National Assembly for Wales—Statistics Wales). The annual
value of Welsh manufactured goods exports in 2002 was £4.2
billion—72% of total exports (UK—60%) (Source: HM
Customs & Excise UK Regional Trade in Good Statistics: 17.07.2003).
5. Manufacturing is the highest value added
sector in the economy—some 33% higher than services, and
15% higher than the average of all sectors. It remains a significant
contributor to UK employment, generating direct employment of
around 3.8 million people. Manufacturing in Wales directly accounts
for 179,000 jobs—16.8% of total employment (March 2003 figures),
and almost as many again in dependent industries.
6. This is a significant contribution to
our national economy and to the creation of wealth needed to afford
us the quality of life we seek. There must be no doubt that a
successful manufacturing sector will be crucial to the economy
of the future.
High value-added manufacturing: a much-used phrase,
but what does it mean?
This is not simply the preserve of leading edge,
high-technology, knowledge-driven sectors, but encompasses adding
value across the manufacturing sector, in all parts of a business
and at all stages of the product cycle—from product concept,
R & D, design, production, marketing, branding, after sales
service through to end of life disposal. The scope for adding
value by integration across this product cycle is as great, if
not greater, than in any one part of it.
Downward trend in Welsh manufacturing continues
7. Manufacturing in Wales continues on a
downward trend, characterised by job losses, job relocations,
and full or partial closures. The last CBI Quarterly Welsh Industrial
Trends Survey in July 2003 showed a mixed picture in Wales, and
reported a further deterioration in confidence amongst Welsh manufacturers.
This is reflected in job shedding and a further weakening in investment
intentions. Continued sharp falls in domestic prices combined
with strong increases in costs implies that the pressure on profit
margins remains intense.
8. The rate of job losses in Welsh manufacturing
increased over the last three months, and the outlook for employment
remains bleak with a much steeper decline in employment levels
anticipated.
9. Other countries have experienced similar
trends over this extended period but with larger absolute increases
in output and smaller falls in employment than those in the UK.
In particular, comparing 1973 and today, UK manufacturing produces
about the same with half the workforce, whereas the US produces
almost double with the same workforce. Interestingly, these figures
indicate an identical increase in productivity.
Loss of critical mass threatens UK manufacturing
The pace of change in UK manufacturing poses
real threats to maintaining critical mass in the sector. We are
already seeing an accelerating trend of UK production migrating
to lower cost countries.
But it would be naïve to assume that as production
capability moves it will not also act as a magnet pulling innovation,
R & D, design and service capability with it. Maintaining
high value-added production in the UK has to be an integral part
of any strategy for manufacturing success.
The Automotive Innovation and Growth Team (DTI) established
that UK-based assemblers will very soon be sourcing well under
50% of their components in the UK. In the early 1990s, this percentage
was considerably higher. Where UK-based suppliers retain work,
it is often only by transferring their own purchases abroad.
Increase in supply of industrial property
10. A recent study on UK Industrial and
Distribution Floorspace by property consultants King Sturge,
found that the past five years have seen a significant increase
in industrial property supply in Wales, with large units over
10,000 square metres accounting for 37.5% of total available stock—an
increase of 3.4% in the short period between December 2002 and
April 2003. Wales has witnessed an increase of 21.8% in vacant
industrial floorspace over twelve months, and 50.5% over the five
years from August 1998.
11. This increase in industrial supply is
due to the increased availability of larger units arising from
corporate contraction or relocation. When larger units become
available, these are often sold quickly but the quality of the
employment offered by the ingoing occupier rarely matches the
departing firm. The increased obsolescence of the industrial stock
can in itself become a catalyst for closure.
Inward investment performance
12. One of the most telling indicators in
the decline of manufacturing in Wales, is the UK's recent performance
on manufacturing foreign direct investment (FDI). The UK has consistently
been one of the top destinations for FDI, but the number of manufacturing
projects have steadily fallen, and the UK can no longer guarantee
having pole position.
13. Inward investment figures for Wales
are down, though Wales is still performing well against the UK
average, in the face of stronger competition from other parts.
Of £932 million of private sector investment aided by the
WDA in 2002-03, £675 million was represented by inward investment.
Future is in R&D/high value-added manufacturing?
14. Low labour cost locations are increasingly
offering high quality as well. "Made in China" does
not mean an inferior product. Manufacturers are concerned at the
assumption in many quarters that high-value, knowledge-based production
is somehow the UK's by right. It is often easier to locate new
product production overseas rather than to uproot existing production
lines.
15. Production attracts development and
research activities. The model which describes the UK of tomorrow
as a knowledge-rich product development centre, which outsources
the manufacturing to cheap, remote locations, is not one which
is sustainable in the long-term. We need to keep our manufacturing
base to retain the knowledge activities.
Redefining manufacturing?
16. To focus on traditional definitions
of manufacturing is to overlook other areas of industry also involved
in production, which face similar issues to traditional manufacturers
and have similar alternative options.
17. Sectors such as financial services can
equally be regarded as manufacturers. For example, a bank may
have fifty people manufacturing mortgages, and fifty selling them
to customers. These manufacturing jobs are as vulnerable to relocation
to low cost labour locations as jobs in the electronics industry.
18. Looking specifically at manufacturing
by the traditional definition may mask a larger potential problem.
The issues affecting manufacturers in Wales, and the actions needed
to support them, affect many sectors of industry, and complacency
with regard to other sectors is equally dangerous.
But there are success stories . . .
19. Despite this rather gloomy background,
nonetheless there have been some notable successes in manufacturing
and trade in Wales in recent years. The defence sector in particular
has witnessed considerable expansion, as demonstrated by the burgeoning
successes of Cogent, General Dynamics and Oshkosh. Airbus, Ford
and Toyota are other Welsh success stories, as is Linde who are
illustrated in the following case study.
Linde Heavy Truck Division: Merthyr Tydfil
Linde are the world's largest manufacturer
of materials handling equipment, employing over 30,000 people
world-wide at manufacturing facilities in the UK, Germany, France,
Italy, the USA and China. Having operated in Blackwood since 1970,
Linde moved to a new factory in Merthyr in 1999 with the support
of the Welsh Development Agency and the National Assembly for
Wales.
The Heavy Truck Division at Merthyr specialises in
higher value-added product ranges, as the Group facility for all
forklifts from 5,000 kg to 46,000 kg, together with sideloaders
and the entire Linde Container Handler range. It currently employs
over three hundred people, exports over 96% of trucks produced,
and despite being the smallest of Linde's 10 manufacturing plants
world-wide, it has the highest return on capital employed within
the group and returns one of the highest profits per employee
within the materials handling division.
The Merthyr plant must compete with its sister plants
for funding and to do so has to continually invest in productivity,
research and development. Over 60% of exports are to mainland
Europe, often presenting logistics difficulties and additional
costs due to transport limitations via air, train and road from
Wales.
20. As the success of Linde at Merthyr illustrates,
the so-called "death of manufacturing" is greatly exaggerated.
However, pressures on manufacturers have increased and the trend
in Wales, as elsewhere in the UK, is now one of steady decline.
The purpose of this paper is to show how Government—at all
levels—can help to stem this decline and even reverse the
trend, rather than exacerbate it as it is currently doing.
KEY ISSUES
FOR MANUFACTURERS
21. Manufacturers in Wales, and the wider
UK, are confronted with a range of issues that impact upon their
ability to operate and to do business. Manufacturers are broadly
agreed on these issues, though their level of significance to
individual companies varies.
Past successes now creating challenges
22. The success of inward investment into
Wales twenty to thirty years ago means that a number of manufacturing
operations are now requiring significant reinvestment, for example
in new factories and new systems of production. There is a definite
need for reinvestment in companies—though this factor can
often prove to be a catalyst for closure for some when such capital
is unavailable here, or more attractive help with capital investment
present themselves elsewhere. Government agencies need to ensure
that as much priority is given to the current stock of businesses
as to attracting new companies whether through FDI or start-up
programmes. Government in Wales at all levels should not take
existing companies for granted—if they are not supported
to reinvest, by the creation of a competitive manufacturing environment
and direct grant aid where appropriate, many will not be able
to maintain their presence in Wales.
23. Wales has a significant proportion of
globally owned plants, eg Hoover, Sony, and Ford. The great majority
of large employers in Wales are not headquartered here. Every
investment by such a company is subject to internal international
competition within the group. Hoover in Merthyr for example faces
competition from its counterparts in Italy, Portugal, China and
the Czech Republic. A threat to existing overseas owned manufacturers
is that it is often easier for them to locate new product production
overseas rather than to uproot existing production lines. Thus
future closures are quietly progressing at this time. Therefore
it is critical for the UK that we create an environment which
allows our manufacturers to be competitive, and this is even more
fundamental for Wales than for other UK regions which have a stronger
home-owned corporate base.
Macroeconomic stability
24. Macroeconomic stability provides the
platform for long-term planning, strategic investment and return
on those investments. It is critical for manufacturing success.
Since the early 1990s UK macroeconomic stability has been greatly
improved, through achievement of steady overall GDP growth, low
and stable inflation, and low and stable interest rates, resulting
in many of the key aspects of a macroeconomic environment conducive
to long-term strategic investment.
Currency
25. However, while the UK has more recently
achieved stronger overall growth than our major European competitors,
this improved performance has not been similarly reflected in
manufacturing growth. Serious concerns remain with regard to the
exchange rate. Historically, volatility has been a major concern.
More recently, the concern has been as much about the absolute
level of the pound, particularly against the euro, and while this
has eased back in recent months, the three to four years of a
considerably over-valued currency has taken its toll, not simply
on margins and profitability, but on actual manufacturing capacity
in the UK, and thus in Wales. There is a clear inverse correlation
between investment intentions and the value of sterling.
26. However, the recent easing of the high
sterling/euro rate has not proved the panacea that observers might
have expected. Many of our manufacturers have in recent years
adopted a strategy of sourcing overseas to create a natural currency
hedge. These imported components now cost more in sterling and
this has reduced the benefit of the easing in the exchange rate
against the euro.
27. For those manufacturers who have downsized
their business to serve only the UK market, the movement in sterling
has actually increased their production costs.
Communications
28. A reliable, efficient and well-maintained
transport infrastructure is essential to underpin a competitive
manufacturing base. The ability of industry in Wales to develop
and sustain a competitive manufacturing base depends heavily on
the quality of its infrastructure. Efficient transport links ensure
timely arrival of goods to market and staff at work.
29. Business satisfaction with the quality
of service provided by the transport network in general ranks
very low in the UK compared with other countries, as years of
under-investment in infrastructure, poor planning and the lack
of an integrated approach have taken their toll. In the case of
road transport—which serves a higher proportion of freight
movement in the UK than in France and Germany—the UK has
the most heavily used network compared with its main competitors.
The negative impact this has on journey reliability is a major
concern to manufacturing where just-in-time production and delivery
are key factors for success.
30. Wales is a long way from the main European
and global markets in which manufacturers operate. Welsh manufacturers
frequently have to travel out of Wales for meetings, as it is
difficult to persuade key contacts to come to Wales because of
its location. Air links from South Wales are particularly poor,
road networks are increasingly congested due to under investment
and a lack of integrated planning, and rail services remain expensive.
The transport infrastructure of England is as important as that
of Wales, as it is the main market or route to market for Welsh
industry. These all impact upon the customer-supplier interaction,
and on the general ability of manufacturers to do business from
Wales.
Level playing field with Europe
31. UK plants of global companies confirm
that they operate against a much more detailed enforcement regime
than their sister plants elsewhere in Europe. There is no light
touch to legislation in the UK that is seen elsewhere in Europe
or overseas, with the effect that the UK's competitive advantage
is being eroded. This affects all UK business, and has a disproportionate
effect on smaller businesses, which do not have the management
resource to handle the bureaucracy.
32. This is evident in the area of environmental
legislation, where measures such as the Climate Change Levy and
numerous EU Waste Directives place additional burdens on British
business. Industry recognises the importance of effective environmental
legislation, but we are in danger of suffering from over-zealous
implementation which adds no benefit, without due recognition
of the consequences for wealth creation—in the manufacturing
sector in particular.
33. Government needs to balance its interpretation
of EU regulations with the impact on business and, in particular,
with reference to UK competitiveness. For example, all manufacturers
in Germany are eligible to claim a rebate from their carbon tax
by improving energy efficiency. In the UK, only selected sectors
can claim a rebate from the Climate Change Levy.
Amcor PET Packaging
Amcor PET Packaging employs around 400 people
in Gresford, Wrexham, producing plastic beverage bottles. Unlike
competitors producing glass, metal or cardboard packaging, the
company does not qualify for Climate Change Levy rebates. It is
now facing loss of business to competitors in France who are able
to serve its main customer in Kent quite easily, and from its
drinks customers taking bottle production in-house, where they
are able to claim CCL rebates against the integrated operation.
The company has shed jobs as a direct result of the CCL.
34. Business is rarely convinced that the
benefits from a more detailed legislative regime deliver commensurate
improvements in outcomes. Health and safety legislation for example
places far greater administrative overheads on companies in Wales
than it does overseas, due to the volume and interpretation afforded
it by the UK authorities. This extra burden is equally placed
upon companies already showing outstanding safety records, whilst
those companies ignoring earlier legislation are likely to do
the same with the new requirements.
Labour market: flexibility
35. The UK has the greatest labour market
flexibility within the EU, but this position is under threat.
At a time when other key competitors—France and Germany
in particular—are removing layers of regulation to free
up labour markets to boost their economies, the UK is moving in
the opposite direction, thus jeopardising one of its key success
factors.
36. Since 1997 there have been fourteen
major new employment regulations affecting UK and Welsh businesses.
These regulations have stemmed from both UK Government (such as
the national minimum wage and mandatory trade union recognition)
and the EU (working time regulations, regulations on part-time
and fixed-term workers and European Works Councils). Government
has also added to the cost of employment through the administration
of welfare payments or debt collection through the company payroll.
The cumulative impact of these extra burdens has been an additional
recurring cost of employment of over £4.5 billion per year.
The increasing cost burden of employing people in the UK is hitting
competitiveness. The UK labour market is still lightly regulated
compared to EU levels—but while other countries are recognising
the benefits to job preservation and creation of less stringent
employment legislation, UK legislation is becoming more restrictive.
Capacity building in Welsh business
37. Business sees little benefit from being
located in Wales when seeking to do business with the public sector
in Wales, unlike the experience of some members in Scotland for
example, and the situation that commonly exists elsewhere in Europe.
The question of public sector procurement favouring local businesses
is one which raises very proper questions of best value, as well
as legal issues. Nevertheless we believe there are opportunities
for the public sector to use its economic muscle to build capacity
in Welsh industry, which it currently does not exploit.
38. Government and its agencies in Wales
should work to grow the ability of businesses in Wales to compete
for public sector contracts. It should put in place procedures
to notify companies of forthcoming opportunities, and examine
legal means consistent with obtaining value for money to use public
spending to build the Welsh business base.
39. The National Assembly invests in Welsh
industry and infrastructure, and is the major consumer of services
in Wales. A procurement policy which recognised the economic multiplier
benefits of sourcing within Wales, alongside value for money and
quality standards would enable the Assembly to maximise its investment
and further deliver its social policy aspirations.
Labour market: skills
40. Manufacturers in Wales stress that there
are some cost advantages to being in Wales compared to other UK
locations. The cost of living in Wales leads to competitive wage
rates, with some firms recruiting high quality engineers at 65%
of the cost of those in the south of England. Labour supply in
Wales is better than previously—at low to medium skill levels.
However, manufacturers find it harder to recruit at the higher
end of the market, frequently having to recruit from the rest
of the UK or overseas where specific skills are needed. A common
theme is that of highly skilled workers returning to Wales during
a slowdown in the economy, and being taken east along the M4 when
it becomes buoyant once more.
41. Concerns are often expressed at the
ability to recruit management skills. Clearly there is a large
responsibility on companies to develop their junior talent, but
this would be assisted by a better infrastructure for management
training in Wales.
42. By far the most common concern expressed
by business is the lack of employability of a significant proportion
of school leavers. As well as the group which have literacy and
numeracy problems, there is a larger group who have wider communication
and attitude problems, a lack of confidence and understanding
of team working, problem solving and a basic economic literacy.
Of the craft and engineering apprentices taken on by a large engineering
business in Wales, 80% failed the company's internal assessment
on literacy and numeracy.
43. We do not suggest that this situation
is significantly worse in Wales than the rest of the UK, but the
education system must start to place as much emphasis on the employability
of young people as on pure academic attainment.
Grant support
44. Manufacturers in Wales are widely agreed
that this is a significant factor in the presence of multinationals
within the country, and remains a significant factor in reinvestment
decisions. Companies such as Linde and Hoover in Merthyr readily
admit that were it not for RSA and similar grant incentives offered
by Government and its agencies, they would not have located and
retained their operations in Wales.
45. However it is widely felt that there
needs to be greater flexibility in the support offered to existing
businesses. Business is dynamic but the grant regimes currently
in place in Wales are not. Business needs to restructure, outsource
and adapt to compete in an ever-changing global market—and
this is no more evident than in manufacturing in Wales. Grant
regimes rarely recognise this, being focused on capital investment
and direct employment. The Government, and the Assembly in Wales,
should be more creative in its thinking, and be willing to explore
other legitimate routes for public assistance to industry, in
ways already followed by other countries under the same EU rules.
46. We welcome the recent development of
the National Assembly's Wales for Innovation programme as a necessary
step in this area. Its attempts to move the emphasis on grant
assistance from purely capital investment to job targets is welcomed,
however we await the direct impact it will have upon businesses,
and how it actually operates in practice, before deciding on its
effectiveness.
Amersham PLC
The biosciences group Amersham receives no Objective
1 funding support because of its location on the outskirts of
Cardiff. However 40% of its employees and 50% of its contractors
live in an Objective 1 area in the nearby Valleys. The company
faces internal competition overseas, and could usefully utilise
such assistance were there more flexibility in the implementation
of government support mechanisms.
Supply chain
47. Many manufacturers have local supply
chains so a contraction of the manufacturing base in Wales will
have a knock-on impact on the supply chain. If a manufacturer
is forced to withdraw it will impact not just directly on the
workforce, but indirectly on its suppliers. Support for manufacturing
and trade in Wales means support for the supply chain and smaller
local businesses as well.
48. The contraction of local supply chains
itself detracts from the quality of the environment for manufacturers.
This is an issue that has particularly hit the electronics industry
in South Wales. Once the supply chain has gone, as is now happening,
it will no longer be possible to bring in large FDI.
R & D/University links
49. Industry in Wales, as in the UK as a
whole, welcomes the introduction of R&D tax credits, and now
looks to Government to see extensions in both scope and scale.
However, they do not help companies making losses and therefore
paying no tax.
50. Links between business and universities
are increasing, particularly in Wales where there are many positive
examples of partnerships between companies and universities. Universities
are more willing to collaborate with business than previously,
but there is still a long way to go. Too many courses lack the
intellectual rigour to prepare students for the needs of industry.
The time scale on activities/initiatives is frustratingly slow
for business.
51. Funding remains an issue as ever. The
quality of science at Cardiff University has improved as they
have brought in top quality academics from other universities.
But universities are concerned they will not be able to finance
world-class aspirations if divergent funding mechanisms between
English and Welsh universities disadvantage them, and this threatens
to undermine the collaborations and partnerships such as that
outlined in the following case study.
Cardiff University Communications Lab: Collaboration
with business
Cardiff University is currently in the process
of developing a new Communications Laboratory that will sit halfway
between University and business. The University is investing some
£1 million in this, along with 50 members of university personnel,
on both a full and part time basis. There will be no direct financial
requirement on business, other than a nominal subscription and
the direct costs associated with sponsored work.
Staff in the lab will work on research projects identified
by and along with staff of their business partners, which include
major international firms located in South Wales, operating in
a fairly fluid team. Intellectual property will emerge from the
Lab which will in turn be exploited by industry. This will be
very much a multi-disciplinary approach involving the sharing
of information which does not currently exist. Cardiff University
has provided the impetus for this model which is unique in Wales,
and will provide the blueprint for similar partnerships elsewhere.
ACTION BY
GOVERNMENT—UK AND
NATIONAL ASSEMBLY
52. Manufacturing and trade globally are
in a state of transition. Competition is increasingly intense,
with businesses continually having to assess where they locate
operations internationally to maintain and secure competitive
advantage. Along with their UK counterparts, many Welsh manufacturers
are rising to this challenge—ultimately the responsibility
for enhancing competitiveness rests with business. However government
plays a key role in influencing the environment within which business
is able to operate, and must therefore take action at all levels
to support manufacturing and trade in Wales and ensure that it
is not burdened by requirements not placed upon their international
(not just European) competitors.
53. The Department of Trade and Industry
must follow through on its Manufacturing Strategy, (see Annex)
with a clear, high level and co-ordinated set of action plans.
Government, including the National Assembly, must ensure that
the competitiveness of the Welsh/UK manufacturing industry becomes
a central priority, and avoid policies which place additional
costs on this sector. They must also bear in mind that UK business
faces global competition, not just competition within Western
Europe
54. Transport: Labour mobility and market
accessibility are vital to business in Wales, and we need to have
the transport infrastructure in place to ensure this. High travel
costs and poor public transport impact on the low wage economy
here in Wales and deter people from taking work away from their
immediate locality, and hinder businesses' ability to recruit
staff. Overall existing transport infrastructure within and to
Wales is poor and unless significant improvements are made this
will deter the growth of business and investment in all parts
of Wales.
55. "Gold plating" of EU directives
must stop: The UK Government, and the Welsh Assembly Government
where relevant, should implement EU policies with due consideration
for the impact on manufacturing and UK competitiveness.
56. Government must retain the flexibility
of the UK's labour markets—a key source of competitive advantage
for manufacturing and business in Wales, but one that is being
rapidly lost.
57. Government and its agencies in Wales
should support capacity development in Welsh business by using
the economic purchasing power of the public sector in Wales.
58. Government must ensure that the education
and training system delivers the skilled and adaptable workforce
required by industry in Wales. Manufacturing needs a workforce
that can adapt to new technologies, new concepts and new market
opportunities. Schools and colleges have a role to play in ensuring
children are adequately prepared for the world of work in the
broadest sense. In particular, the National Assembly must work
to ensure that the poor basic literacy and numeracy skills amongst
our school leavers and adult workforce are greatly improved.
59. Government must improve the planning
system to enable businesses to develop, adapt and operate successfully,
and to work towards tackling the issue of obsolescence in industrial
property in Wales. In a competitive world, investing in Wales
needs to be easier than investing elsewhere.
60. Grant support must be used more flexibly
with creative thinking from government, so as to maximise the
benefits to industry/Wales.
CONCLUSION
61. The existing stock of manufacturers
and exporters in Wales need continued support. As well as their
obvious contribution to the country's economy through wealth and
job creation, they also underpin and provide opportunities to
many indigenous SMEs in Wales. Despite this, Welsh manufacturers
feel taken for granted and believe that Government—at all
levels—does not understand or believe the competitive pressures
and the very real threat of relocation they face.
62. Government policy (UK and Wales) has
become very focused on indigenous SMEs and business birth rate
strategy. If we ignore or take for granted our larger companies,
a large part of the SME sector will disappear with them, as part
of the supply chain.
63. The widespread feeling of resignation
amongst politicians at all levels within Wales that manufacturing
will soon leave the UK is flawed. This is not inevitable—if
manufacturers are provided with favourable conditions within which
to operate, and they receive support from Government and its agencies,
they can prosper here.
64. There is still, just, a critical mass
of manufacturing in Wales, and CBI Wales believes it can enjoy
a good future, but this will require government to put manufacturing
and the productive economy at the heart of its policy-making across
all portfolios. The Government and the Assembly should assess
each new policy proposal for its effect on our manufacturing base.
This is as much about not doing things as it is about affirmative
action.
David Rosser
Director, Wales
16 October 2003
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