Barry Sheerman: University cash cuts will kill the goose that lays the golden egg

How do I justify such a viewpoint? Firstly, while we all recognise that our economy was shaken to its foundations by the global financial crisis, short- sighted cuts in public investment before private investment has recovered is a reckless gamble indeed and puts us at risk of plunging back into recession.

On Tuesday, I took part in a Westminster Hall debate on funding for Yorkshire universities. There I argued that Yorkshire's universities boost the economy by making a 3.68bn contribution to the region and play a critical role in generating jobs, creating innovation and driving enterprise.

The UK economy is not a "basket case" nor is it in a significantly worse situation than many of the other leading world economies. Don't just take my word for it but rather that of Samuel Brittan, the respected Conservative economist, commentator and supporter of the coalition Government, when he warns against exaggerating the problems of the UK economy, points out that we are in many ways stronger in our fundamental position than Germany, the US and France, let alone countries such as Spain, Portugal and Italy.

However, few would deny that our economy needs rebalancing. Recently, two insightful pieces of research give us some indication as to how we could develop rigorous policies that might have positive outcomes for our overall productive capacity.

The National Endowment for Science, Technology and the Arts (Nesta) tells us: "The concept of a rebalanced economy has become central to the debate on how the UK can emerge from recession and generate sustainable growth."

The authors believe that a vital debate must be pursued between those who believe that the UK needs a new balance between its different sectors, with a smaller role for financial services and a greater one for manufacturing and technology and those who still believe that financial and business services will continue to provide the country's bread and butter.

This thoughtful report evaluates four scenarios for future growth including a "business as usual" case, a "broad-based manufacturing renaissance", a "hi-tech growth" scenario, and a case in which businesses invest heavily in innovation across the country.

An equally useful report from the highly regarded ERA group points to the fact that the UK has slipped from fourth to seventh in the leading exporting nations and will continue to decline if it does not address its capacity to nurture its core productive capacity. It sets a clear target for maximising manufacturing and other productive enterprise exports by at least 10 per cent.

Matched by a reduction in our reliance on imports, it also helpfully points out our propensity to travel overseas on holiday incurs an expenditure that more or less wipes out our manufacturing export earnings.

We in Yorkshire are well aware of the massive shift in employment patterns from manufacturing towards the service sector. But this has gone too far. For me, I am persuaded that the hi-tech innovation linked to manufacturing renaissance is vital for Yorkshire, as well as for the rest of the UK, but it is in regions like ours where a manufacturing growth strategy would flourish, more so than in London and the South-East. We also have the capacity and potential to deliver.

Manufacturing is highly advanced, innovative, creative, dynamic, and diverse. It is crucial that public perception is positive, even inspirational, so the industry attracts the brightest and best. Mindful of this, I believe it to be imperative that greater prominence is given to universities in developing the science and technology base from which innovation and enterprise is born.

Our universities are well aware of the critical part that they can and must play in equipping the manufacturing sector for success. They should be at the forefront of our productive renaissance and levels of investment in them should reflect this. In a world that is dependent on a knowledge economy, our higher education establishments are world

leaders; so why are we killing our golden goose?

Implementing 25-30 per cent cuts in university funding would be catastrophic; not only for students and staff, indeed, one vice-chancellor tells me that even half the predicted cuts would mean the loss of over 1,000 jobs in his institution, but also on our international competitiveness and our national and local economies.

The abolition of Yorkshire Forward means that we will struggle to maintain an overall strategic vision regionally and are certainly at risk of causing irreparable damage to our local economy as a

consequence.

By impoverishing our universities as well, we undermine our strategic capacity and seriously weaken our ability to respond to the exciting potential of rebalancing and re-invigorating our economy. Coalition cuts are gambling with Yorkshire's future prosperity.

Barry Sheerman is the Labour MP for Huddersfield and a former chairman of Parliament's Education Select Committee.