We do not know how many people work in manufacturing. Why may I confidently make this statement? The answer is hidden in plain sight:
SIC 2007: The Standard Industrial Classification of Economic Activities is used to classify business establishments and other standard units by the type of economic activity in which they are engaged. The information in this dataset uses the 2007 revision (SIC 2007).
Let me unpack that for you, if my company manufactures plastic widgets and I have on site a canteen directly employing ten staff then those ten staff are counted as working in manufacturing, because my business establishment or other standard unit is a manufacturing company. Should I outsource my canteen then ten jobs in manufacturing will disappear and ten appear in the service sector, because the provider of the canteen is a catering company which is classified as being in the service sector.
You will not be surprised to learn that I gnash my teeth when yet another reporter or politician measures the strength of the UK manufacturing sector purely by the number of people directly employed by it. I gnash in sympathy with the likes of the Engineering Employers Federation. And, yes, I have done some work with them, too! The public sector used to contract with them to provide training for people looking for work, but not all were on Jobseeker’s Allowance and I had discussions with them about new premises to replace their old site in Tyseley. Unfortunately, those talks were overtaken by the events of 2008.
The EEF has an ongoing campaign to champion and celebrate UK manufacturing. Pity no one mentioned that to Farage before he made an ass of himself, early last year, about ukip’s plans to make our country a great trading nation again:
Manufacturing accounts for half of UK exports making the UK the 10th largest goods exporter in the world
Companies across the sector employ 2.6 million people and this figure has been on the rise for over a year
Industry accounts for the lion’s share of business R&D accounting for 72 % of R&D expenditure
Manufacturing output accounts for 11% of total UK GVA
Wages 13% higher than economy average and pay growth has been rising faster than in the rest of the economy for more than two years.
To be fair to Farage, he did, a month or so later, do something few in the media ever do and revised his view of UK manufacturing and its place in the world.
To return to the start of my piece, imagine a plastic widget manufacturing company in the 1950s that directly employed 400 staff and the same company today, but employing a lot fewer people. The obvious response is usually to put the decline in employment down to mostly external factors ranging from overseas competition to overly strong trades unions, from Thatcherite monetary policy to excessive EU regulations and goldplating, from poor management to lack of investment in capital and labour, from adverse currency market moves to lack of accessible capital, from deindustrialisation to globalisation, from not producing the goods and services that the world wants to buy to poorly educated school leavers, from excessive taxation disincentivising entrepreneurs to increases in the cost of energy; from offshoring to unofficial strikes, from profit taking rather than re-investing to the prevalence of too many third generation family owned and run businesses, from downsizing to rationalisation, from mergers and acquisitions to the deaths and retirements of employees and business owners and so on. The outsourcing of functions, previously delivered in house, rarely makes this list of causes, but it really should, because all the following may have been outsourced at our plastics factory over the last 60 years or so:
Security; receptionists; cleaning staff, both office and shop floor; catering staff, including the tea lady; office staff; design staff; delivery drivers; building maintenance; purchasing; marketing (and web design and management); factory medical staff; the odd job men; personnel staff; machine operators …
In fact, everyone may be outsourced either through contracts with companies to deliver services like logistics or catering or by employing staff through employment agencies. In fact, one might end up with only a few staff counted as working in manufacturing, the salaried middle and senior management. Incidentally, none of this is new. Twenty years ago, I met a Human Resources Manager working for GEC Alsthom at their Washwood Heath plant who was on an agency contract. One has to question the logic of such an approach, given his employer was costing Alsthom money through its approach to using taxpayer funded public services to fill jobs at the plant.
I met this HR Manager when I accompanied a colleague (and good friend of mine) to a meeting with him to discuss how we, the local Jobcentre, might help Alsthom recruit more people from the local area, one with high unemployment. We used to do things like that back then as a matter of routine. We had been assisting Alsthom in filling jobs on the company’s shop floor where those workers made, actually assembled, trains in what is known, rather dismissively, but accurately as a screwdriver operation.
Through a pre 1997 scam, the company had been eligible to receive about £600 per person if the person they took on met the conditions for entering Training For Work, a government funded scheme administered by Training and Enterprise Councils. These Job Entry Training payments, as they were known in Birmingham and Solihull, were administered by Training and Enterprise Councils and were paid ostensibly to cover the sort of induction programme that any self respecting business would not require a financial incentive to put its new recruits through.
Jobcentre staff had to sign off on each payment before they were released and by doing so we got to count each person attracting a payment as a job entry (and we had indicative targets to try to meet). My apologies for the preamble, but in undertaking this work we built up a relationship with the HR staff and, by checking the details of each new recruit to determine whether or not they attracted a payment, we found out from where they were recruiting staff which was revealing in itself.
Having developed a rapport, we were able to persuade our new friend in HR to discuss with us about doing more than just checking the NI records of people and signing off on their eligibility for TFW. A few years before, in 1992, LDV next door to Alsthom had made over 1,000 workers redundant and many of them were still unemployed and lived locally. We hoped to persuade Alsthom to allow people to undertake Work Trials to show they met Alsthom’s requirements. Alsthom were asking that applicants had an NVQ Level 2 in Manufacturing which no one locally had. The Work Trial option would have levelled the playing field for local job applicants.
The HR Manager told us that Work Trials sounded useful, but that they were a no go with the trades unions. Ok, we said, we will happily meet with them to explain how they help unemployed people to show an employer what they can do with no risk of losing benefit, even if they are offered a job. For whatever reason, that meeting never took place. I had looked forward to brandishing my trades union membership card and referring to Branch 5/709 as I gave the secret …
On the way out of our ultimately fruitless meeting, my friend was hailed by an office worker who thanked her profusely for helping her into a job with the company. What did you have to do with it, said the manager. Us? My friend said we could tell him because he had asked us directly, but in normal circumstances we were not allowed to approach an employer as to what had occurred. An agency had placed the vacancy with us, we had advertised it, submitted a list of suitable people for interview and one of them, the grateful woman, had got it. My friend exploited the opening to ask how much the agency had charged for putting Alsthom in touch with our service that was within walking distance of where we were standing. Somewhere in the region of £400 to £600 back in the mid 1990s. Incidentally, back then, the Tories would not allow us to point out that our service was free. When that despicable New Labour crowd got in., Mr Blunkett let us promote our service to employers as being free at the point of delivery … Had a nice ring to it and still does, does it not?
It was during this discussion about how an agency had charged Alsthom for filling an office job, using a service for which their client had already paid, that we learnt that he too was employed by the agency! An agency, moreover, that had no qualms about pointing Alsthom in our direction for factory shop floor staff, because you find them, unlike good clerical staff, down at the Jobcentre. However, by requiring applicants to have an NVQ Level 2 in Manufacturing they had restricted the pool of applicants to white men, mostly with a background in automotive manufacturing. Farage and company would have loved the plant back then with its all white male manual workforce, its offices full of female juniors and male managers … Do not get me wrong, there were brown faces on the shop floor (as a result of a fortnight in the sun) and women too (taking messages from the offices to the shop floor). No People With Disabilities though need apply.
I had been angling for another trip back to Alsthom after my friend and her fellow employer marketing officer got taken on a grand tour of the plant. I only wanted to sit in the cab of a Eurostar train set which was surely not much to ask? Us chaps can be very childish at times so having been firmly put in my place my my two female colleagues I needed another legitimate way into the plant. Fortunately for me, the company was not enthusiastic about taking PWDs on, but had agreed to another colleague and friend of mine, the Disability Employment Adviser, accompanying a hearing impaired jobseeker, supported by an interpreter, to a recruitment test organised by Alsthom’s HR people. The DEA allowed me to shadow him and cock a snook at the better half of our External Relations Team. Yes, we were in ERT! Sorry, old, poor joke.
Any way, we met the HR Manager on site and he took us through the plant hence our subsequent joint observations about the visual demographic make up of the workforce. A very informative visit. The plant was amazingly clean and not at all what we expected, but then it was not a manufacturing plant. They were assembling trains for London Underground not fabricating the parts for them. The basic carriages were made elsewhere, delivered to the site and then seating, wiring and so on were installed. Companies like Alsthom in days gone by would have employed electricians, carpenters, upholsterers, glaziers and the like, but not now, despite them asking for an NVQ Level 2 and poaching recruits at a premium from car companies with household names. I asked the HR chap about whether they had someone on site to repair torn seat cushions and the like. No, he said, we just send them back to where they come from for a replacement. So much then for what Blue Labour these days likes to romantically call the joy of meaningful manual labour. A joy that seemingly increases with distance, class and income, and the option not to have to do it. As Alan Johnson remarked recently, most people wanted their kids to get jobs that involved them not having to follow their forebears down the pit or into the factory.
Our hearing impaired jobseeker was asked to undertake a test to see if he was able to undertake the work that would be asked of him if he were taken on. We would have preferred a trial of a few days, but the test was the best we were able to wangle. What they were testing was his ability to staple wires to the underside of a tube train carriage. The carriage chassis were on their backs with what resembled paper dress patterns spread over them. The patterns on the sheets were coloured lines on to which the various wires had to be ‘stapled’. Our chap did not need, as it turned out, his local authority supplied interpreter. He was more than able to follow what he was being asked to do and he did so well, but not quite quickly enough, allegedly. Either way, he did not get the job, but not before the HR Manager had started talking about audible, but not also visual fire alarms; stepping back into the path of silent forklift trucks, driven by people not looking where they were going and so on. Employers seeking to justify discrimination back then often had very vivid imaginations and work places that were veritable death traps to all, but those whom they sought to employ.
I and the DEA, both white collar workers, and the interpreter, a female white collar worker, would have been able to do the job for which our client was applying so it was certainly not difficult and well within his abilities. Alas, this ‘test’ took place before the passing of the Disability Discrimination Act 1995. One was always (and remains) wary of building a case on partial observations, but a few years later I visited my old office and had a chat with the new Jobcentre Manager, another friend and colleague. We got around to exchanging notes about the company and agreed that we shared the same view about its recruitment practices, but without a complaint from a third party no action might be taken to investigate them.
Some of the current discussions around manufacturing seem overly nostalgic for my taste and ignore the reality of what working on the shop floor was really like for those who had no choice, but to work there. Moreover, what many ignore, along with the impact of outsourcing, is that much of manufacturing is now focused on high value added production. Production requiring highly qualified workers capable of using quality data, CAD, CAM and other complex machinery, some of which augments their physical strength many times over for a specific purpose, for example moving a car body on an assembly line. I have seen one of these Cyberman devices (and masses of TQM data) on the Jaguar production line at Castle Bromwich. Someone stepping into the device has their strength increased by ten so one skilled man may do what ten unskilled or semi skilled men had done in years gone by. Moreover, none of them would have been expected to have interpreted statistical data or would have been given the power to stop the production line without reference to line management. I have seen a button that allows the Cybermen of JLR to do just that. Manufacturing has moved way beyond the ken of Red Tory, Blue Labour and ukip, all of whom wish to reconnect with a manufacturing working class that mostly no longer exists and these days, when it does it rarely looks like an unskilled or semi-skilled white male.
Of course, the fishing industry is not what it once was either. I remember so well a question on it in my Geography O Level examination paper in 1983. The question was partly based on data that showed that between 1945 and 1975 the size of the UK fishing industry workforce had halved whilst at the same time the size of the annual catch had remained the same. The things one’s mind palace or, old style, lumber room files away for future reference, eh?
Incidentally, JLR employs 100s of people through agency contracts and when the NHS does the same, its agency workers are counted as being in the private sector and not the public, despite being paid for out of the public purse. Mrs Thatcher knew how to play this game when she ‘reduced’ the size of the Civil Service by changing the employment status of staff at places like the British Museum. On the Friday they were in the Civil Service, but the following Monday they had left it to become other public sector workers. The head count within the Civil Service had fallen at a stroke, but the total number of people employed by central government had remained the same. Mrs Thatcher could honestly say she had reduced the size of the Civil Service, if asked by a reporter about her pledge to do so.
And any way, what do we mean by manufacturing? When someone talks about it, do you think about chocolates or buildings? What is Cadbury of Bournville, if not a mass manufacturer of confectionery? And what of another manufacturing plant in Castle Bromwich, not far from JLR and which recruited redundant track workers from Rover in the south of Birmingham? What do they produce? Well, they produce modular units in which people may live, that are manufactured on a production line and whose use may reduce build times by as much as two thirds. Perhaps Natalie Bennett should have a Party Political Broadcast filmed there?