John has made a very robust defence of intervention by the state to secure growth.

I believe the nature of that intervention is all-important.

The economy will not be rebalanced by supply-side tinkering, rolling back the state or making it easier to sack people.

What is needed is investment in skills, infrastructure and industry – and that needs government to play its part.

One of the arguments from the coalition is that labour market flexibility is essential to attract the kind of inward investment that will rebalance the economy.

However, flexibility can all too often lead to fly-by-night investment because it’s easier to get out of a country with weakened labour rights.

The paradox of this is that, to prosper and grow, the manufacturing sector needs stability more than flexibility.

Stability in terms of the capital that it can access to invest; certainty that there will be a pool of talent that can be recruited and developed; and predictability in terms of the policy and legislative framework in which manufacturers must operate.

Labour was getting it right and there is no justification for abandoning the industrial activism that our government belatedly discovered.

Labour should make the case to open up investment opportunities, and also develop strategies to secure new markets for UK products overseas, particularly within the emerging BRIC economies.

And government is fundamental to delivering a skills agenda that supports the development of industry that provides more secure jobs.

Wherever necessary we should incentivise employers to invest in the skills of their workforce.
After all, skills development is a far better route to flexibility than reducing people’s employment rights.

But it is also vitally important that we recognise and promote the significant advantages we already have in UK manufacturing.

Foremost among these is the fact that we already have as highly skilled and efficient a workforce as there is anywhere in the world.

Unfortunately, in recent years there has been a tendency amongst British companies to undervalue and even scapegoat the British worker, as British industry has gone through some challenging times and suffered through a lack of investment.

But my union’s experience, particularly in the steel industry, is that outside of the UK our workforce is recognised by foreign multinationals as the best in the world, and is a major incentive to investing here.

Companies like Tata, who bought Corus back in 2007, and SSI who bought Teesside Cast Products earlier this year.

These companies are in it for the long haul, and they recognise that, while the UK steel industry is currently not as competitive as it should be, this is down to a lack of capital expenditure not a lack of capacity in the workforce.

For each of the last 20 years in the steel industry the workforce has delivered no less than ten per cent year-on-year productivity in spite of the lack of investment. The message is clear – invest and you shall reap the rewards.

This brings to mind the example of the Toyota factory in Derby – which has actually started to export Toyota cars to Japan as they’re better made than those produced by Japanese workers. You could not pay a bigger tribute to the workforce in Derby.

Furthermore, we need to fundamentally change the way that we think about manufacturing in this country.

As I mentioned previously, the last Labour government belatedly came round to the cause of industrial activism.

But for the majority of Labour’s 13 years of power the government’s approach to our manufacturing industries was one of sunset not sunrise.

Investment and talented young people were channelled towards the service sector – which was to be the source of the next ‘industrial revolution’ – and look where we are now.

For too long the manufacturing sector has not been portrayed as a viable long-term career choice for the brightest and best and consequently the quality of the management is not what it should be.

And as you may have picked up in the news recently, Ratan Tata also thinks that British managers are all lazy – but that’s another matter.

The point is that this wouldn’t happen in Germany. The Germans understand the importance of having a properly mixed economy, with proper investment, led by the right people, and that is why Germany is racing out of recession whilst the UK is limping out of the starting blocks.

Finally, we need to champion our industries in the ever-evolving policy and legislative framework.

Labour should make common cause with our industry giants such as Tata Steel, by making the case to both the Westminster government and in Europe that action is needed to prevent ‘carbon leakage’ and in recognition that the steel industry can be part of the solution to climate change.

UK manufacturing is already struggling to compete in the global economy, and the Labour party should strongly oppose any unilateral increases to emission reduction targets that further harm our competitiveness.

It would be the worst kind of industrial vandalism to sacrifice our manufacturing industries on the altar of climate change.

But climate change is only one area where we can be on the side of industry – we’ve heard of the great potential for the growth of SMEs. I am sure people here can think of many more areas.

Through increasing investment, securing stability and speaking up for our industry, Labour can make the case for the vital rebalancing that our economy and our communities so desperately need.

Photo: freefotouk