 Mae gweithio, mae hi'n fawr am y Llaidwyr CBI i chi'n gwneud am gweithio, a'r fawr i chi'n gweithio i chi'n gweithio. Mae'r gweithio eich cyfnodau gyda'r Llyfrgell, ac mae'n debyg oedd yn cael ei gweithio i chi. Mae'n ei chweithio o'n cael ei fod yn cymrydau yn gwaith. Ac mae'n gallu bod yn cael ei gweithio o'r hollu cerdd. Mae'n cael ei gweithio i chi'n gweithio i chi'n gweithio i chi'n gweithio, mae'n cael eu bod yn cael eu gweithio. ac mae'n ddweud bod bod ni'n wedi cael ei ddweud... .. ac mae'n ddweud o'r ddiogel, oherwydd mae'n ddweud o'r CBI. A'n mynd fawr, mae'n ddweud yn gweithio'r ddweud. Rhaid i'n ddweud i'n ddod i'r Tata i'n gweithio'r ddweud o'r ffordd. Mae'r ddweud o'r cyffredig a'r mynd i'r rhai dda yn ymdau'u... ..eg i'ch ddweud i'n ddweud y ddweud o'r Tata'r grwp... llawer o'r cyfrifodau yn fawr ym Mhwylwyr, mae'r fawr hyn yn fawr yn ymdegolol, mae'r cyfrifodau fawr yn ymdegol, yn ddwylo'r lleol, ac yn ymdegol. A wneud i'w ddwylliant ac yn gwneud i'r cyfrifodau ac yn ymdegol fawr yn ymdegol. Let me turn to the subject matter. Last week I set out in Parliament then in a speech what I mean what my colleagues in government mean by industrial strategy, I want to add a little bit of flesh to the bones. I want to give my own language and put the arguments in my own way. The way I would start is by saying that when we talk about business we're actually talking about very large numbers of very different kinds of companies. And there's no one size fits all. That's my starting point. We've got about four million plus companies. There was many of them as sole traders, many of them extremely small. Their attitude to a phrase like industrial strategy would probably be what the hell has this got to do with me. I just want to get on, run my business, government please keep out of the way as little as tax as possible, a little regulation as possible, banks please be reasonable. Otherwise we're not terribly interested. And that's fine. I mean that's for most of British business that is a perfectly sensible and reasonable agenda. But there are other kinds of companies at the other end of the spectrum who are quite different in character. You know who as John explained it in his speech who have a long term perspective. I came out of an industry where I mean I think John cited 20 years as long term. Actually they've regarded 20 as reasonably short term. Developing a big new gas field as my company were. You know you're thinking 30, 40, half a century. That's the kind of time span of planning and of amortising your assets. Politicians when we think we're great you know when we think five years. I mean this is you know we've got this five year government. It's an innovation, but actually compared with many companies this is ridiculously short term. And so we have a lot of companies, many of them here, who need some clarity, some certainty, some consistency. And a large part of what I think industrial strategy is about is creating a framework within which that can happen. And who also look to government as potential partners who you know their business, their commercial, they want to get on and do their thing, but they recognise that government does important things affecting their business. It sets the regulation, does training and education and does procurement, all kind of things which affect the business and they'd rather have this in partnership rather than in conflict or random. So industrial strategy comes from an understanding that there are many companies of that kind, I say many of them in this hall, who want that kind of relationship. And I don't see these two different approaches as being in any way in contradiction. You know there are people in the media, I'd say this isn't a whinge about journalists, but you know who have been portraying this as some kind of great ideological conflict within the coalition or even within my own ministers, absolute nonsense. We fully understand that business is varied, they've got different needs and the concept of industrial strategy fits within that breadth of industry experience. And I thought I would sort of tackle head on some of the criticisms that are already being lobbed in our direction. You know a lot of people react in a kind of visceral way when they hear phrases like industrial strategy. And the first one I think both Ruff and John have partly addressed already is this idea, well you know why don't you just leave all this alone, leave it to competitive markets, it will all get sorted out. Why do we need this thing, an industrial strategy from governments, unnecessary? I think there are two answers to that. First of all we just look at what our competitors are doing and examples have been given. Most of the successful countries in the world, the Asian countries like Korea or countries like Germany, even the United States which ostensibly has a kind of free for all but actually in many areas extremely well organized and focused and has a very close relationship between federal government and business. They have industrial strategies, they may use different language but they have it and we frankly I think in the past have been a bit naive in Britain in assuming that this somehow doesn't apply for us and we can be completely purist and ignore what's going on in the rest of the world, we can't. The second reason is one that John used a phrase which was I think very helpful, you can either have an industrial strategy by design or by default because the government is doing lots of stuff anyway which affects you, like procurement, it can be done completely randomly, do nothing whatever to have any underlying purpose or support or it can be done in a more systematic way and that's what we're talking about. So that's why I don't accept the laissez faire approach. The second criticism related to that are people who say well didn't we have all this nonsense in the 1970s? All this stuff, a government putting money into business, supporting losers, I feel good to say we don't want to go back there again, you've read a lot of that over the last week. Well of course it's true that we've had bad experiences with industry strategy. I was there, I saw it, I was actually in my present department briefly at the end of the 1970s and I saw some of the bad experiences of government throwing money at losers and then throwing even more in order to try and stop them losing and it just gave industrial intervention of all kinds a bad name and then the pendulum swung to the other extreme and it's been pretty much stuck there ever since. Now what is the assurance that people have that we're not going to rediscover the bad habits of the 1970s? I think it's, you know, we do understand that a lot of the technologies of the future we've never heard of, we don't know what they are. We have to approach this with a certain humility. There will be change, there will be markets, we can't predict and we've got to learn that lesson from the past and let me just give a few concrete examples which I think will show the way we have to proceed. One of the sectors that we talk about in industrial strategy is having a competitive advantage is life sciences, British biological sciences, brilliant companies doing lots of things. But one of the first dirty jobs that I had to do with David Willits, the university's and science minister in the department was dealing with the closure of Pfizer in sandwich. We didn't stop it, we didn't rush in and say sorry this mustn't be allowed to happen and we're going to give you lots of money to stop closing. We accepted that that was the logic of the market and we had to help them to adjust. And similarly we've set out a sectoral approach but we do accept that in future people may be looking at the world in a very different way. I attended a meeting a couple of weeks ago, I think Neil Bentley from the CBI was there, we were looking at a long term view, a brainstorming about what industry would be looked like in 10, 20, 30 years time. And somebody made the point that one of the areas, sectors if you like, where Britain is brilliantly successful, probably a world beating country, is algorithms. Well there's no algorithm industry, doesn't exist. There's no algorithm association anywhere, I don't think you have a bit in the CBI for that. But you have these brilliant cryptographers in GCHQ. You have lots of people now in the most sophisticated forms of R&D in many of our IT companies, many of them foreign companies but based here. We've got those very clever people, some of whom did quite a bit of damage but none of us very clever people in investment banks in the city, they're quants. Very clever, mastered this particularly sophisticated form of mathematics. This is something we do very well, it's an asset and we're going to turn it to a dungeon. And let me just give a final example of how we've got to think flexibly and openly, not in sort of narrow prescribed ways. I attended a business dinner last week, a group of people who had some kind of background in the textile and garment industries and retailers who bought from overseas and what to my mind was a rather shocking proposition. They said, look, the British textile and clothing industry virtually disappeared. These days only 5% of all garments in British shops are made in Britain. But we think, business people, we can reinvent this industry. As business people, we're not asking you government to come in and subsidise it or protect it. We think there is a business proposition, logic in business has changed, proximity is now much more important, speed of delivery is much more important. We think we can set up not just garment making factories, but going back to spinning and weaving and dying and all those things that we used to have. And we'll do this as a business proposition, but we want you government to be involved. Not to give subsidies, but there are things which government can do to help because a lot of the skills in this old industry disappeared. Somebody's going to have to help us retrain them. So there is a role, it may be actually one of these sectors, it isn't listed here in five years time, will turn out to be textile and garments back to the 70s, but in a different way, not driven by government. So that's my answer to the second complaint, 1970s revisited. The third complaint is well, isn't this all about industry and manufacturing and the modern British economy is about lots of other things. Well actually I don't make any apology about the fact that one of the things we're doing now is emphasising how manufacturing is very important to this country. It's only 10% of GDP, but that's pretty meaningless now because of the overlap between manufacturing services. It's terribly important actually, far more important than that 10% because that's where we get half of our exports, so we get most of our productivity, it's where we get most of our R&D. But nonetheless, it is still a minority of our economy and services, and these traded services, knowledge-based services, are important too, cities important. And our industrial strategy has got to be broad enough and flexible enough to accommodate that new mix. Industry is important in the traditional sense manufacturing, it isn't just about manufacturing. So some of the criticisms, and I'm sure they will continue to roll in, but I think we've got good answers and I think we have thought this through and I know the CBI has thought this through because they will be hit from their critics in exactly the same way. So let me just say a little bit more about how we're going to take this on, and I think quite a lot's been said so I don't need to repeat it all. We do see the value of a sexual approach of saying there are certain things in this country that we do well, we call it comparative advantage or whatever, we do these things well and we want to reinforce them and we want to support them because they're internationally competitive activities and they merit a backing, not subsidane or protection in the old sense, but a partnership arrangement with the government. And what are these? Well, last Tuesday we set out in the department a framework, I'll put it more precisely than that, of some of the groups of activities that we ought to be looking at seriously if we're going to have a coherent industrial strategy. One was in the area of advanced manufacturing and there are some obvious candidates like aerospace and life sciences in the automotive sector, but I'm sure if there are any food and drink manufacturers here they will tell me that their process engineering is at least as advanced as in any other sector of the economy, so I don't want to use these words rigidly, so advanced manufacturing. And then we've got our traded services, which are based on knowledge, I quoted our algorithms a few minutes ago, but creative industries, something we do brilliantly well in this country, music, digital-based industries of various kind. And, you know, it isn't one of the items we've listed, but somebody came to me with this monitor, why isn't tourism there actually, it's one of our biggest exports, but certainly higher education, higher education is a massively important export industry, not just overseas students but campuses, the business relationships that are now developing between academics and people in the big emerging markets, an enormous source of growth and strength of the UK, particularly given the high class of our universities. And then thirdly, a group of activities that we call enabling industries, things which we may not be exporting directly, but which underpin the others. You know, you need to have, as John said, you need to have basic energy infrastructure, absolutely fundamental, basic digital technologies, construction products, they lie behind the other things. Now, how do we want to progress this? What I think we would find useful is to build on some of the rather good structures that we've already gotten, have come up from the bottom, that have come from you. The Aerospace Leadership Council is a good prototype, a good model. The Automobile Council is another one, and I spend a lot of time with them, and it's really a real success story, thinking about supply chains and how we develop the next high tech bits of the automotive sector that the commercial decisions will not produce themselves, like electric cars, for example. Or something I set up with Jeremy Hunt, which was a Creative Industries Council, getting those rather scattered industries around the table. Initially we weren't sure what we would talk about, but then it became clear. They have massive problems with skills and massive problems with bank credit, because of course they don't have any tangible assets to offer. So it turned out that this was actually a very productive area of conversation. So we want to make it very clear that as these groups are established or operate, they've got to be business led, absolutely fundamental. Business has to want them, otherwise we won't go there. Business has to lead them, and business has to develop them. It's got to be a business led process. But out of it, we would hope to see a whole series of strategy documents, if you like, not in a stylised way, but in a way that hopefully is helpful to you, and I think the aerospace strategy that we were discussing at Farnborough was a very good model of the kind of thing we'd like to see moving out from the other sectors. But again, I stress, I'm sorry to be boring and repetitive, but it's got to be led by you, it's not going to be led by us. Let me just say, finally, that the way I see this industrial strategy developing is doing a whole lot of things we already do better and more coherently. And I think John's been over this agenda, but let me just repeat it. First of all, in terms of technology, we have good institutions, the Technology Strategy Board, and he's an excellent example. But we want to try to pursue it in a more systematic way. One of the things we've done since we came in just over two years ago is set up this chain of catapults or innovation centres, and it is shamelessly based on learning from other countries. We've seen the way the Germans operate their Franhofer centres, and we want the British version of that, and we want a copy that learning from their experience and those centres are now being rolled out across the country, but they've got to be done in a sensible, coordinated way that makes sense in relation to our industrial strategy. We have now, based on the analysis of the foresight group, now that's putting a lot of money into synthetic biology and sophisticated computing, for example. But there is a strategy now behind it. There's a sense of priorities and a limited amount of money can be sensibly allocated. The second area where we have to pursue things in a more systematic way is in relation to skills. I hear what you say about the shortage of engineers. It is absolutely dire. It is a major disadvantage that we suffer from. But we can't turn this round overnight. As you know, you can't train an engineer in a year or two years, that's absurd. It's working amongst other things with the next generation. One of the real bits of encouragement that I've derived from the last few months is to see the impact of our higher education financing changes, which have been very painful, very traumatic politically, on the next intake for the next academic year. The subject area that has held up better than any other is engineering. Teenagers have got it. They do understand that there is an enormous future in engineering. They are applying now. The mentality is changing in a positive way. We will try to get behind that. That's why we funded 500 masters in aeronautic engineering, for example. We will try to do more of that kind of thing. One of the things again that I'm proud of having done since I came into this job of having injected real energy into apprenticeships. We've massively increased quantity, but, of course, you will say it's also about quality and business access. All those things are true. What we are doing, and I would keep a careful eye on it, is introducing pilots, pilot scheme for business-led apprenticeships. In other words, the money will not be given to the trainers and the colleges to produce what they want to produce. You take it or leave it. The money has not been directly from the channel to business to purchase the skills you want to need through the apprenticeship programme. The emphasis is being shifted completely, and I think you'll find once this pilot is built on a much, much more business-friendly and targeted approach to apprenticeship training, much more appropriate. Then procurement. We put our hands up in government. It's been horribly unstrategic in the past. That's partly for good reason. Government's trying to get value for money. We have all these European rules we have to follow. It hasn't been very helpful to the British industry very often. Purchasing has gone off into the wrong place for the wrong reasons. We need to be more long-term. We need to be more strategic. I know, because I work with my colleagues on this, that gradually the culture in Whitehall is changing. There are areas now where some really interesting developments are taking place. Just take one example, tunneling as a consequence of all the big new investment that's going into railways. The biggest railway revolution for decades is taking place right now. There will be a big demand for people who understand tunneling technology and all the skills around it. We've now developed a pipeline working with the industry to help them ensure that there isn't a bottleneck when these tunnels are actually drilled. We're trying to do similar things with all the big infrastructure projects that are now, albeit slowly, grinding through the system. I hope that's given you a flavour of how I see industrial strategy and also for my passion for it. I really believe in this stuff. It isn't just trotting out the cliches. I really believe that this is something that's been missing and I think where we can make a really big difference. Thank you for your attention and I look forward to working further with the CBI on all this. Thank you.