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Motorsport

I must apologise that I cannot quite fill the shoes of my noble friend Lord Drayson in his first-hand knowledge of the sport, but I reassure noble Lords that I am very passionate about the UK industry's competitiveness and what it represents in modern manufacturing, advanced engineering and world-class skills. That is critical in a fiercely competitive global economy. This is about ensuring that we continue to hold pole position as a world leader in this field and seize the benefits that this can bring to manufacturing and the economy more widely. I acknowledge the enormous contribution of the noble Lord, Lord Astor, to the motorsport industry. However, I may not quite share the depth of pessimism that he expresses about the sector. Motorsport covers a wide range of events and activities; sometimes we focus only on the high profile world of Formula 1, which is at its pinnacle. The motorsport industry in the UK plays a crucial role in showcasing UK engineering excellence globally and in acting as a magnet for inward investment. Our leadership is recognised globally. As the noble Lord, Lord Clement-Jones, said, seven of the world’s 11 top Formula 1 teams are based here. The reasons for that are clear. We have a sector that specialises in the very best hi-tech manufacturing. UK companies conceive, design, develop and manufacture everything from hi-tech chassis, seats, cockpits, seatbelts and helmets to market-leading engines, transmissions brakes and suspension systems. They produce a seemingly endless range of precision components. Research data from the Motorsport Academy last year shows that the sector is supported by 2,500 engineering companies with more than 100,000 employees. Most of those are skilled engineers or technicians. Those companies are growing. There was discussion of the value that they contribute to the economy. That research shows that it is about £6 billion, of which 60 per cent is exported. Two-thirds of the companies have sales of more than £500,000; more than 80 per cent expected to grow by 50 per cent in the next two years; and almost half expect to recruit new people. The noble Lord, Lord Luke, refers to contracts being won by overseas companies. It would be fair to say that many UK companies have also been successful in winning contracts. For example, the majority of the A1 GP contract apparently lost to Italy has been subcontracted to UK companies. People are key not just to the success of our motorsport industry but to the transfer of technology to other sectors. Many motorsport companies operate in the mainstream automotive industry, with highly skilled engineers bringing expertise and know-how to innovate new products and processes. It is one reason why the UK is a global centre of excellence for automotive powertrain design and production and all aspects of performance engineering. There are many examples of technology transfer. Most recently, Cosworth engineering used its expertise in high quality, short production runs to supply engine parts for Rolls–Royce marine engines. For government, it is critical to sustain this success, which is why we established the Motorsport Competitiveness Panel in 2002. It identified market failures around the development of the industry at all levels from engineers to drivers. The panel of senior sport and industry experts, including the MIA, also recommended the need for an independent body to, "““fill a gap in the market, lead, coordinate and prioritise activities””." This resulted in 2003 with the creation of Motorsport Development UK, with a budget of £11.5 million. It undertakes five key programmes to tackle these market failures; that is, skills in the workforce, the motorsport academy, the motorsport learning grid—which is targeted at getting schoolchildren interested in engineering careers—energy efficient motorsport, business development and widening participation more generally by the public. Of course, I will facilitate a detailed financial breakdown to be made available of MDUK’s performance and expenditure costs. I recognise the noble Lord’s concerns regarding a shortfall from the originally foreseen £16 million of funding. As I understand was made clear in a Parliamentary Question in 2005, it is correct that DCMS has been unable to provide the £3.5 million funding that it envisaged due to limited resources and other priorities. However, I should like to clarify the noble Lord’s point on the remaining £1 million. This has been spent as part of SEEDA’s contribution and was expended directly on a knowledge exchange facility at Oxford Brookes University. If the noble Lord wishes, I would be happy to provide more information. Through the academy and the learning grid, 2,500 people have been helped to develop their engineering skills. Importantly for the future, more than 100,000 children have taken part in learning grid activities such as Formula Student, Formula 1 in schools and Greenpower, thus enthusing young people—boys and girls alike—to have an interest in engineering. Further support has gone into the volunteers; for example, more than 1,500 new marshals have been recruited and a further 800 have been trained. Without these volunteers many of today’s events could not take place. The noble Lord expressed surprise that statistical data have not been refreshed since the MIA survey in 2000. That does not, of course, take into account the work that MDUK has done in developing Motorsport 100, which I understand is proving to be a worthwhile barometer of business confidence in the sector, as well as the data that I quoted earlier that the Motorsport Academy research has made available. With my department’s funding devolved to the regional development agencies, I would nevertheless suggest that the MIA discusses the opportunities for making a proposal on this subject with the relevant RDAs. Additional data that are fit for purpose are always valuable. With environmental impact as one of the key issues facing this and other industries, the noble Lord rightly points out the important contribution that the industry makes to energy efficiency. The energy efficient motorsport programme—EEMS—has directly supported 15 projects to encourage energy efficiency, with some notable successes; for instance, the first biofuel success in a major championship—the car co- driven by my noble friend Lord Drayson—and the first class win for a hybrid vehicle, and, in Formula Woman, the first championship run entirely on biofuel. The UK industry is pioneering the use of alternative race fuels such as bioethanol, LPG and diesel. For instance, the A1GP series recently enrolled as an EEMS campaign partner. The series has switched to biofuel and has committed to cut waste, to offset unavoidable emissions and to promote environmental awareness at its meetings around the globe. My department will continue to fund MDUK until 2009, as committed. There is no budget for this activity beyond that date, but the Government’s involvement and interest in the industry, which is wider than any one organisation, will continue. I will be meeting MDUK in June to hear about the progress made and to discuss the future when it has its board meeting. I can respond to the noble Lord’s suggestion by saying that I would also be delighted to meet with the FIA, the MIA, and the UK Formula 1 teams. Looking ahead, we must ensure the long-term competitiveness of the industry. That means starting with young people, so that we sow the seeds of success in our classrooms. We are keen to ensure that programmes such as the academy and the learning grid can continue to develop an enthusiasm for engineering amongst younger students, and to develop skills once those young people are in the workforce. As noble Lords mentioned, my noble friend and ministerial colleague Lord Jones is no slouch when it comes to being a tireless champion all over the world. I am pleased to say that UKTI has recently agreed that advanced engineering, including this industry, will be one of its new strategic sectors and is planning support for four UK events. It is essential that we retain Silverstone Grand Prix as one of the showcase events for UK design engineering services. I assure the noble Lord that we will help in any way that we can if planning or any other issues arise. As the noble Lord, Lord Luke, said, I am aware of the exciting designs that have been developed for the pit and paddock area and my department will continue to be engaged in discussions on its progress. I am not sure that I would paint as bleak a picture as the noble Lord did about the state of the industry. As ever, we know that in a fiercely competitive global environment, there is absolutely no room for complacency. I welcome this debate and will ensure that we will continue to maintain our interest in this industry.