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James Caan: “The UK can kiss manufacturing goodbye”

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“In our lifetime, I don’t think we will compete with India and China,” he told the audience of 250 entrepreneurs.

“We don’t have manufacturing anymore. If somebody approached me tomorrow to invest in a business where they were going to manufacture something in the UK, I probably wouldn’t invest. Within six months, that same product in India or China would be a third of the price.

“We have to recognise what we’re good at,” he continued. “I think our current cost base means that we can kiss manufacturing goodbye. In Britain, we are – and we will continue to be – a service culture country. I think that is where our income’s going to come from."

Well, that certainly caused a few raised eyebrows.

“James Caan must win the prize for daft comment of the day,” said Gary Dutton, the entrepreneur behind windows and conservatories firm Synseal. “Well, I’ve got news for you, James. Good old Gary is in manufacturing and could likely buy you and Peter Jones out.”

"James should listen to someone who knows about the British manufacturing industry properly.

"The fact is that the unions and then the Far East have, in turn, decimated the UK manufacturing sector. But some industries such as mine are not labour intensive. In fact, 80 per cent of our cost is made up of raw materials. These are commodities that we and the Chinese buy on the markets. Therefore, what advantage they have by way of notional labour cost reductions are balanced out with getting the finished product from the other side of the world."

Sir Robin Saxby, the founding CEO and chairman of ARM Holdings, threw more fat into the fire.

"With increased pressure on our planet’s scarce resources, final assembly of finished goods close to the end customer will become a new trend, especially where products require a high degree of customisation.

"It would be foolish to consider that a modern thriving economy could survive with a service only culture.”

Harry Rawlinson, chief executive of upmarket shower-maker Aqualisa, also joined the fray, pointing out that, with labour comprising less than five per cent of his manufacturing costs, he would continue being a proud UK manufacturer. He was joined by at least two other high-end manufacturers who took umbrage at Caan’s comments.Should we kiss manufacturing goodbye? Let’s hear your views.

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