For any child it would be a dream job. Michael Dee owns the sweet factory that makes traditional favourites such as Love Hearts, Drumstick lollies and Parma Violets.
Swizzels Matlow in New Mills, Derbyshire, employs more than 550 people and turns over more than £30m, exporting its goodies all over the world.
Dee, 70, the joint managing director, has chosen to keep production at the Peak District plant set up by his father in 1933 rather than moving overseas. “Making the sweets in Britain enables us to retain full quality control,” he said.
“We have a considerable skills base with quite a few people who have been with us for more than 30 years. We just would not have the same degree of control if we were importing the sweets from elsewhere.”
The other advantage is being close to the big supermarkets. “They may want us to supply something in special packaging within a month. There is no way we could do that from China.”
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Swizzels Matlow is an increasing rarity. More and more manufacturers have found it impossible to resist the arguments for moving production abroad.
The owner of Bendicks is considering closing its factory in Winchester, with the loss of 140 jobs, and moving production of its chocolate mints to east Germany.
And the trend is making an impact right across the manufacturing sector, which now accounts for only 11% of gross domestic product in Britain compared with 22% 20 years ago. There are fewer than 2,000 factories left that employ more than 200 people.
George Osborne wants a manufacturing revival. “However important financial services may be, we cannot place all our bets on the City of London,” the chancellor said this month. “We need other parts of Britain, and other sectors of our economy, to grow and succeed. Wouldn’t it be good if Britain made things again?”
His rallying cry, made only hours after the Bendicks announcement, has sparked a heated debate among entrepreneurs and academics. While few disagree a new manufacturing boom would be desirable because it would deliver the double benefit of jobs and exports, they argue about how, and indeed whether, it can be achieved.
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ManMohan Sodhi, professor of operations and supply chain management at Cass Business School, London, said Osborne should focus on supporting small specialist manufacturers. “The clock cannot be rewound and we cannot replicate China,” he said.
“We need to support the very small manufacturers who are punching above their weight as far as their economic value is concerned. They may not be making much money but they help other larger companies further down the supply chain make money. They are the ones that need the Government’s attention.”
Karel Williams, professor of accounting and political economy at Manchester Business School, disagrees with targeting specific areas of manufacturing. “It is not a question of trying to judge what people should be making. We should leave the manufacturing sector to make its own decisions,” he said. “We need to provide incentives to companies so if they increase output, they will be rewarded.”
At the top of the chancellor’s priorities, Williams said, should be the tapering of corporation tax — currently 21% for small companies — and the introduction of generous allowances on capital investment. British manufacturing investment is at a low of 9%, he said. There should also be incentives for workforce training.
“If you do not incentivise people then all the skills we now have in the middle-aged and the elderly will be lost in the next generation,” Williams said.
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After 27 years in business, Kingkraft still proudly makes bathing equipment for disabled and elderly people at a 10,000 sqft factory in Sheffield. It turns over £2.5m a year and has more than 30 employees. It supplies councils and also exports its products to seven countries.
Nigel Harrison, Kingkraft’s owner, says that manufacturing gives him real long-term benefits. “You often think, gosh, it would be so much easier to be just a reseller,” he said. “But for me there is one overarching advantage of manufacturing the products ourselves: it gives us the security of knowing we have one foot in the future and we are in control of our destiny.”
It also helps with product development. “Knowing how to manufacture things makes it a lot easier to innovate. We have the skills that allow us to develop new products and we are not dependent on knowledge that could drift out of our hands.”
It is solely because Kingkraft has its own manufacturing base, he said, that the company was able to work with Sheffield University and a big industrial partner on new products for up to three years before they reach the market.
Harrison, 56, said if the Government wanted to support manufacturing it should make it easier for companies to invest in developing products.
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“The only way to secure the long-term future for manufacturing is by innovating continually, raising the skills of your workforce and the utility of your product,” he said. “But to innovate takes time and the investment decisions can be huge, particularly for a small company.”
Lord Bhattacharyya is director of WMG (formerly Warwick Manufacturing Group) at Warwick University, which he established in 1980 to help revive the sector. “Britain has enormous ability to succeed in manufacturing and now, when the financial sector is in trouble, is the time to do it,” he said.
“The problem with Government is they talk a lot but they do nothing. For the past 30 years we have talked about sunset industries, then knowledge-based economies, now it is high-value-added manufacturing.
“It is wonderful the previous Government and the current one are talking a lot about manufacturing, but talking about this type of sector or that type of sector does not get you anywhere. There is something fundamentally wrong in that approach.”