AT LONG last the government is taking manufacturing seriously. That was the headline news from Nick Brayshaw, a former automotive engineer who is now chairing the CBI's manufacturing council.

Mr Brayshaw was speaking at Celtic Manor at a Barclay's seminar for its manufacturing clients.

With tremendous clarity and common sense Mr Bray-shaw described exactly why the government has woken up and smelt the coffee.

"There are four million people directly employed in manufacturing in the UK, and another two or three million indirectly. The sector contributes £150 billion towards our gross domestic product, and accounts for a massive 60 per cent of all UK exports."

Contrary to most people's perceptions, far from contracting, the UK manufacturing base has been expanding by an average one per cent per year since 1980, and is now 22 per cent bigger than it was in that recession-blighted year.

But because the UK economy has been growing by an average two per cent per annum, manufacturing now accounts for a smaller part of it. "It is this fact which leads people to mistakenly believe the sector is contracting."

Mr Brayshaw confirmed that UK manufacturing had twice the productivity of the rest of the economy - an important factor to remember given that we now have almost full employment and any future growth will depend on immigration or further productivity gains.

So far, so good, but the worrying note is that British investment in plant, research and development, and skills training is way behind our European and US counterparts.

Consequently, over the last 40 years, where British output rose 50 per cent, US output rose 100 per cent, West Germany's rose 140 per cent and France, believe it or not, rose a mind-boggling 300 per cent

As Mr Brayshaw put it: "The UK has been consistently inferior in terms of investment and skills development. All it has had in its favour is more flexible work practices, and this is how UK manufacturing has improved its productivity."

Nevertheless, the UK is still 20 per cent behind France and Germany, and 40 per cent behind the USA.

And the situation can only get worse because our competitors - in both public and private sectors - are continuing to invest more than the UK.

On the skills front, the UK can compete in terms of the numbers of graduates it turns out, but falls hopelessly behind when it comes to intermediate skills, such as those gained from apprenticeships.

"This is partly because of the continuing promotion of apprenticeships in Europe, and partly because of the UK government's wish to see 50 per cent of school-leavers become graduates.

"Our government is now shouting about the expansion of its modern apprenticeship scheme."In the West Midlands, 65 per cent of skilled people are over 45 years old, and we're facing a huge skills gap when those people retire."

Fifty per cent of Britain's four million manufacturing workers are unskilled.

But according to Mr Brayshaw the sector won't need them in the future.

"In modern manufacturing, machines do the making, the workers maintain the machines, and this is usually highly skilled work."

Mr Brayshaw concluded that there was no reason why manufacturing should not flourish in the UK. "It's much more expensive to manufacture in Japan, but look at the cars and motorcycles they produce."

This country has more motor manufacturers represented than any other country in the world - but the point is that none of them apart from Rover are UK-owned.

"The government used to think that ownership wasn't important, but as we're now seeing, it's very important when it comes to investment and disinvestment."

Mr Brayshaw called for more capital investment, more skill training and more research and development. "Britain has traditionally been strong in research but what we need is more spending on development, which actually brings products into the market place."