Hewitt launches productivity drive

Low productivity hinders UK manufacturers

Trade & Industry Secretary Patricia Hewitt has unveiled a strategy document aimed at boosting productivity in the manufacturing sector.

The document claims that the sector would be worth an extra £70bn if it raised its productivity to US, French or German levels.

In a show of support for beleaguered manufacturers, Ms Hewitt emphasised the role the sector plays in the economy.

"Manufacturing success is critical to the prosperity of Britain, both now and in the future," she said in a statement.

"If we can drive UK manufacturing productivity up to the average level in the US, France and Germany, we could add billions to the value of our manufacturers, creating better jobs and higher returns for investors."

Benchmark

She said more British businesses should emulate companies such as oil giant Shell, pharmaceutical firm GlaxoSmithKline, and the bank HSBC - three of five British firms ranked among the top 15 value creators in Europe on a new government league table.

The league table ranks companies according to their ability to add value, defined as the difference between sales revenue and the cost of raw materials.

The UK manufacturing sector, heavily exposed to the global economic downturn, is only just starting to emerge from a year-long recession.

A productivity deficit with most other industrialised nations has added to British manufacturers' problems.

Car design boost

Employers' association the British Chambers of Commerce welcomed the new strategy, but urged the government to do more to reverse "decades of under investment" in the manufacturing sector.

It also called on the government to help businesses by upgrading the UK's transport infrastructure.

The new strategy document came as the DTI announced a £45m programme aimed at improving the British car industry's access to cutting-edge design and production technologies.

The five-year scheme involves setting up an academy to improve performance, injecting funding into supply chain groups, establishing centres of excellence and funding a pilot project to speed up adoption of low-pollution vehicles.