Specialist Manufacturing Sector: Regional Economies

Chris McDonald Excerpts

Wednesday 19th November 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

It is a pleasure to serve under your chairmanship, Dame Carolyn. I thank my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) for securing this debate, and for his opening remarks.

Hon. Members may have thought, when they heard that Stoke-on-Trent had been “moulded by ceramics”, that it was the worst joke they would hear in the Chamber today, but I will try my best. When I heard my hon. Friend refer to valve valley, I wondered, as a cornet player, whether it was a reference to the famous West Riding brass bands: the Brighouse and Rastrick brass band, the Elland Silver band and my personal favourite, the Friendly band of Sowerby Bridge. I am sure that they use their cornet valves to lower or raise the tone just as effectively as we did in this debate. Cornet valves, of course, respond well under pressure—I shall see how I do with that.

Maybe, after this debate, the particular expertise of the valve industry in Calder Valley will be better known to the country. It is not difficult to see the impact that manufacturing, and the valve industry in particular, has on Calder Valley. I have seen, as I am sure those watching will have, the pride and importance that hon. Members across this House recognise in the manufacturing industries in their particular areas. These companies are the heart of British manufacturing.

In the valve industry, we have companies such as Hopkinsons, established in Huddersfield in 1843, which continues, as part of Trillium Flow Technologies, to export valves globally. Its valves are used in applications ranging from boilers to power plants, in oil and gas, and in petrochemicals. In Fort Vale, founded in Calder Valley, we have a global manufacturing presence making valves for transportable tanks. Last year, Fort Vale received its fifth King’s award—formerly the Queen’s award—for international trade. Blackhall Engineering is another astonishing story of a link between our Victorian heritage and modern engineering. It supplies valves for the New York City water board, replacing originals installed by its predecessor company a century earlier.

We need to recognise the local pride in Calder Valley, and in all parts of the country with a strong manufacturing heritage, and recognise the economic opportunity of wages and real value that manufacturing brings to these communities. But there are, of course, significant challenges, including those that hon. Members raised in this debate. I wish to address the challenges in procurement, skills and energy costs, as well as the challenges that have been mentioned for small businesses.

The framework through which the Government are working with industry and manufacturing is, of course, our industrial strategy, which attempts to respond to those challenges and to deliver productivity and growth, and is unashamedly place-based in the regions that matter to manufacturing. Some 84% of manufacturing jobs are located outside London and the south-east. I want to mildly disagree here with my hon. Friend the Member for Stoke-on-Trent South (Dr Gardner), because she mentioned deindustrialisation—a word that I do not particularly like to use in this sense. The UK is very much an industrial country; we have just chosen to locate our industry elsewhere, and part of my mission is to ensure that we regrow and restore that manufacturing here in the UK. I know that she would agree with that.

The hon. Member for Taunton and Wellington (Gideon Amos) spoke of regional growth, which is also vital. Our industrial strategy is about securing competitiveness not only for sectors, but for regional prosperity, and we recognise that manufacturing is key to the resilience of our national economy.

[Gareth Snell]

A lot of Members have talked about the importance of defence manufacturing; the Minister has talked about our economic resilience, but a big part of this is our sovereign capability and our national security resilience. I know that he has done work on that, so can he say more about how his work aligns with the work of the Ministry of Defence team to ensure that the manufacturing capability in the UK is about not just economic growth, but our national security and safety?

[Chris McDonald]

That point is well made. Of course, alongside our industrial strategy, we have our defence industrial strategy. When I come to talk about procurement, I may say more about that, and many hon. Members have talked about defence.

When we talk about our manufacturing sector, it is important to highlight some of the headline statistics. Manufacturing pays higher wages and has generally higher productivity in the areas where it is located and, when it comes to the balance of trade, although around 10% of our employment is in manufacturing, it accounts for around 50% of our exports. Those outputs, jobs and exports consist of thousands of specialist manufacturers, large and small, up and down the whole United Kingdom. Those exports are global and, as we have heard, we also export into space.

On procurement—I know that this area has been a major concern for many hon. Members, and particularly Government procurement—I have great sympathy for the comments of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), and I am happy to pursue the specific issues that he raised. I see it as vital to our manufacturing and industrial sectors that we ensure that the money that we as a Government, or our regulated sectors, spend is significant and is concentrated as effectively as possible in the UK, for both its economic and its social value. We need to raise awareness of the opportunities. We must ensure that those opportunities are open to UK manufacturers and that our UK companies are competitive enough to win those contracts. The industrial strategy plays a part in ensuring that those companies can do that.

To increase business investment, we must also ensure that we have a real market opportunity, both at home and overseas. Our clean energy strategy is introducing measures aimed at directly increasing UK beneficiaries in Government procurement. The clean industry bonus for offshore wind, for instance, is designed to encourage investment in Britain’s coastal industrial areas and supply chains. We also want to see robust local content targets. We are examining market demand guarantees to encourage UK scale-ups and introducing a clean energy supply chain fund to support UK-based clean energy manufacturing.

The defence industrial strategy, which I mentioned earlier—the defence industry is, of course, another user of valves—sets out a major reform agenda for procurement to grow our UK industrial base. We will be speeding up procurement processes and reducing bureaucracy, while ensuring greater visibility of defence procurement and taking steps to ensure that small and medium-sized enterprises will have greater access to our supply chains. Our procurement and capital programmes are key to anchoring manufacturing here in the UK and then encouraging businesses to secure investment and export overseas.

UK manufacturing, however, ranks just 24th globally for robotics and automation. Here I move to the topic of productivity, which is of course a key element in profitability and competitiveness. That is an area where, as a nation, we need to work more. If we are not working digitally, we cannot adopt automation and move as fast as our competitors. Our Made Smarter adoption programme, with up to £99 million of additional funding, will help with this. It will support more manufacturing SMEs to take up new technologies and improve their digital capabilities. We have had reference today to the High Value Manufacturing Catapult, which I know from personal experience is a great supporter of improving competitiveness, robotics, automation and productivity in our supply chains.

Skills was also an important feature of today’s debate. They were raised by my hon. Friend the Member for Calder Valley, with his inspiring story of Stuart Billingham —maybe we all need to see more Stuart Billinghams in our lives. The hon. Member for East Londonderry (Mr Campbell) also mentioned regional skills development. I know that persistent skills shortages and the availability of good applicants are a concern felt across our manufacturing sectors. That is certainly an area for Government and industry to work closely together on, to encourage talented people from across the UK to seek jobs in our manufacturing sector. Fort Vale in Calderdale has a strong tradition in apprenticeships, and I understand that it receives over 140 applications each year for the opportunities it provides. That experience of high numbers of applications for apprenticeships is something I see across the country. I applaud the work of the West Yorkshire Manufacturing Services charity and its partnership with Calderdale college on the Industry 4.0 hub, which addresses exactly those digital issues.

[Rebecca Smith]

I mentioned skills as a significant challenge in the defence sector and the additional manufacturing. We have five defence technical excellence colleges opening by the end of next year. How well connected is the Minister’s Department with the Department for Education? Does he have any knowledge of when those colleges will be announced? They are surely a key part of what the Government hope to achieve with defence skills, but they will also be important for regions such as the south-west.

[Chris McDonald]

I welcome those comments. The hon. Member is right to point out that skills is a cross-Government exercise, and that applies not only to defence skills colleges. Work is done across the two Departments I work in—the Department for Business and Trade and the Department for Energy Security and Net Zero—and skills itself resides in the Department for Work and Pensions, which is where it is co-ordinated. Moving skills into that area and having the co-ordination there is exactly right. I also meet Defence Ministers to discuss this issue; many of these skills are transferable across industries, and we want to ensure that people can transfer across from different industries. A couple of weeks ago I launched the clean energy jobs plan, which provides support for people to move out of the oil and gas sector, for instance, and into clean energy industries. I thank the hon. Member for raising that issue.

Our focus on skills includes a new engineering skills package, worth over £182 million, to fund technical excellence colleges in advanced manufacturing. More widely, through the post-16 education and skills strategy, we are introducing wider reforms, including new foundation apprenticeships for young people in target sectors. Our new V-levels will encourage young learners into vocational pathways, and I am sure that hon. Members will have heard the personal priority the Prime Minister placed on this during his speech at the Labour party conference.

Attracting young people into manufacturing is clearly a priority for the sector, and our advanced manufacturing sector plan sets out ways in which we can do that. Wages in the sector are 8% higher than the UK average, which can provide great opportunities for young people. We heard earlier that welders earn even more than that—something that my nephew, who is a welder, also tells me. My welding is terrible, so I was absolutely unable to pursue that as a career. We are also concerned about equalities, and we have a target of 35% representation of women in the sector by 2035.

Young people also value their employment rights, and I should say to the hon. Member for South West Devon (Rebecca Smith) that before I came to this place I ran a small business that had almost all of those employment rights. I understand that small business owners might be concerned, but I can assure them that it is perfectly—[Interruption.]

[Carolyn Harris (in the Chair)]

Order. If the hon. Member for Bognor Regis and Littlehampton (Alison Griffiths) wishes to speak, I suggest that she ask for an intervention.

[Chris McDonald]

Small business owners might be concerned, but I know from personal experience that with the right level of support, it is perfectly possible to manage a business with these employment rights. I suggest support, rather than scaremongering, is the way to go. We heard from the hon. Member for Tiverton and Minehead (Rachel Gilmour) about the support a previous local industrialist gave to their community. Although I commend that, Labour Members think that good pay and conditions are a right rather than a gift.

Energy costs are clearly the major competitiveness issue for industry. I agree with the shadow spokesperson, the hon. Member for Reigate (Rebecca Paul), about the lack of competitiveness of UK energy costs—she cited a figure from the International Energy Agency showing they were 46% above European averages, and that is a figure I recognise. However, our clean power mission will ensure that we are weaned off the international gas markets, to which we were enslaved by the previous Government for such a long time. The shadow Minister mentioned Mossmorran, which is a good example of a business that sustained losses for years and was unable to justify investment as a result of the previous Government’s neglect of manufacturing and industry.

We recognise that, beyond our clean power mission, we must do more and act quickly to support sectors with high growth potential and significant exposure to high electricity costs. We are increasing the support available for energy-intensive companies through the British industry supercharger, and from 2027 we will introduce the new British industrial competitiveness scheme, which will reduce electricity costs.

[Gareth Snell]

I make my regular plea to the Minister to consider extending the supercharger scheme to energy-intensive industries that are not currently covered, ahead of the introduction of the British industrial competitiveness scheme.

--- Later in debate ---

[Chris McDonald]

I would have been disappointed had I mentioned the supercharger from the Dispatch Box and my hon. Friend did not intervene—I shall write that into my speeches from now on. His point is well made and is heard by me. A consultation on the British industrial competitiveness scheme will open shortly. I encourage the valve manufacturing industry of Calder Valley to participate in the scheme, and all Members to publicise the scheme to small businesses in their areas.

Hon. Members did not particularly mention regulation, but I want to raise it. Of course, £1 off the costs of regulation is worth £1 off any other business cost. A lack of new funding or of access to finance or working capital can be a reason that businesses fail to grow. Small companies tell me that financial institutions often do not understand their businesses or the need for more patient returns. We are undertaking a programme with the British Business Bank to make available £4 billion for our industrial strategy growth capital in industrial strategy sectors, and the Office for Investment will focus on high-value investments, leveraging the National Wealth Fund’s £27.8 billion for industrial strategy sectors.

Although we hear very strong voices regarding international alignment on products and standards, we also hear about the complexity of business regulation and its impact on smaller businesses. We have set out an ambition to cut the administrative costs of regulation for business by 25%. I am pleased to say that we have released a business questionnaire seeking views on the impact of regulation on businesses. Again, I ask for help from hon. Members in encouraging all manufacturers in their areas to consider closely which regulations are enabling or hindering growth, and where compliance is creating an undue burden.

[Jim Shannon]

I hope the Minister will forgive me if he is going to address my earlier request, which related to the Northern Ireland Assembly Minister back home. I know that he travels to Northern Ireland and has an interest in Northern Ireland, and it is important that we work together. Will he give the commitment I mentioned?

[Chris McDonald]

I did hear the hon. Gentleman say that earlier, and he is right that I have a strong interest in Northern Ireland and a great deal of respect for our advanced manufacturing there. I look forward to visiting the aerospace and shipbuilding industry there soon—I think it will be early in the new year—and I am absolutely committed to working with Northern Irish MPs and the local authorities to ensure that the manufacturing industry in Northern Ireland thrives.

Our plan for small and medium-sized businesses, published this year, includes a number of additional measures aimed at assisting those businesses, including ending late payments, modernising the tax system, establishing the new business growth service, and considering how we can best support exporting businesses to increase their exporting activity.

[Mr Joshua Reynolds]

The Minister talks about SME exporting. Is he aware that, although UK Export Finance has unveiled what it believes is a fantastic and ambitious plan to support 1,000 SME exporters a year by 2029, there are 314,000 SME exporters in the UK at the moment? I would not have thought that 1,000 a year out of 314,000 is very ambitious.

[Chris McDonald]

The hon. Gentleman is right that UK Export Finance’s plan is to encourage an additional 1,000 businesses, but that is not the limit of our ambition with regard to SME exporting. It is important that we increase not only the number of SMEs that are exporting but, as I said earlier, the competitiveness of SMEs, so that they can increase the percentage of their exports. The work we are doing on UK procurement will also help with that by giving a baseload of orders to UK businesses that will then increase their competitiveness and enable them to win more export orders.

[Dr Gardner]

In 1882, a ceramics company in my constituency exported 50% of its products to Europe and globally. Since Brexit its ability to export to Europe has dramatically reduced. It can export to the US in two days, but it can take months to get its exports to Italy. What can the Minister do to help us improve our trade to Europe?

[Chris McDonald]

This comes back exactly to my point about regulation. Through our work with the EU, we are endeavouring to ensure that we have maximum access to the market. Where regulatory burdens are restricting export activity, I am keen to hear about them. I encourage businesses to come forward and support the questionnaire we have released on business regulation.

The industrial strategy places an emphasis on growth and frontier industries, but it also gives a clear focus to city regions and clusters with the highest potential to support our growth sectors. It is important to us that we grow the manufacturing sector across the country and also businesses, small and large, in supply chains, as well as well-known household names. I reaffirm that the Government have an ongoing commitment to UK manufacturing. We can too easily think about manufacturing as being about household names and consumer products, but we have heard a lot today about manufacturing businesses in the supply chain that employ many more people and make a significant economic contribution, over and above the consumer products we can buy.

As I know myself, manufacturing is about local businesses that have an impact locally on communities and prosperity, as well as on the growth of the country. The Government have a high ambition for our manufacturing industry. By 2035, we want to be the best place in the world to start, grow and invest in advanced manufacturing. We want to double the annual business investment entering the UK manufacturing sector from £21 billion a year to nearly £40 billion a year. That requires bold action, and in many of the measures I have set out we are looking to do more. The steps we have taken in setting out the industrial strategy and various sector plans this year, and the reforms we are making to skills, finance, innovation and regulation, will have a positive and lasting impact, not only for valve manufacturers in Calder Valley but for other specialist manufacturers around the UK.

[Carolyn Harris (in the Chair)]

I thank the Minister for my elevation to Dame—it has a certain ring to it. I call Josh Fenton-Glynn to wind up the debate briefly.