60. We were struck by the similarity of the
evidence given by all our witnesses Government,
management and unions about the causes of the
comparatively poor productivity gains of UK manufacturing.
This consensus is a good basis for tackling the problems.
61. The immediate
background to our inquiry was the terrible events of 11 September
2001. We welcome the signs that, contrary to the views of many
commentators at the time, the economic consequences of those events
have, for most of the manufacturing sector, proved only temporary,
although we recognise the continuing difficulties faced by those
sectors most affected by the downturn in the American economy
and in travel.
62. Overall, however,
the problems of UK manufacturing are both longer term and more
intractable. Manufacturing has suffered from decades of under-investment
in plant, labour force skills and R&D. UK management has been
slow to adopt good practices from abroad. Government can have
only a limited role in solving these problems: managers, the workforce,
capital markets, trade bodies and educational organisations all
have at least as significant a role. But Government can show the
importance it accords to manufacturing by giving a vigorous lead.
Because of the nature of the problems faced by industry, the DTI
must have the close co-operation of other Departments such as
the DfES on training, the DTLR on planning and, not least, HM
Treasury on incentives to promote investment in plant and R&D,
if the UK is really to become a world leader in this sector. Recent
initiatives by Government are a start. It is essential that the
impetus be maintained; we will continue to monitor this area to
assess whether it is.