Manufacturing

Part of Backbench Business — [Un-allotted Day] – in the House of Commons at 4:30 pm on 24 November 2011.

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Photo of David Willetts David Willetts Minister of State (Universities and Science) 4:30, 24 November 2011

It gives me great pleasure to respond to the debate. I congratulate the hon. Members who tabled and secured the debate: my hon. Friend Guy Opperman who began with an excellent speech, my hon. Friend Chris White and the hon. Members for Huddersfield (Mr Sheerman) and for Burnley (Gordon Birtwistle).

This is a very important debate, and I welcome the fact there has been very little partisanship. There have been a lot of shared themes, which I hope to touch on in my remarks. Perhaps the main difference is almost a temperamental one, between the people who take a more optimistic view and those who take a more pessimistic view. I am certainly with the optimists. We can be proud of the revival in our manufacturing sector that is already under way.

Instead of drawing attention to the overall statistics, perhaps I can reflect on the announcements that we have had this week, which tell us what is going on. Today, the Prime Minister has been able to welcome Toyota’s plans to build its new generation family-sized hatchback at its UK factory in Burnaston near Derby during his visit there. That investment of £100 million will secure many jobs. In addition, Airbus has today announced 200 extra engineering jobs at Feltham, and Nestlé has announced a £110 million investment at its Tutbury plant, which will involve 300 extra jobs. Those are today’s announcements. Yesterday, Coca-Cola announced a £50 million investment in a new bottling facility at Wakefield and other investments as well.

If one considers the build-up of announcements, there is clearly the sense that a revival is under way in our manufacturing industry. It has been very encouraging to hear from hon. Members on both sides of the House about the strong support that there is for manufacturing. There is a recognition that the future of our economy must include manufacturing, just as our proud history has manufacturing at its heart.

My hon. Friend the Member for Hexham made an excellent opening speech, and I shall briefly respond to two themes that he touched on, particularly as they were picked up by other hon. Members. He called for there to be a Minister for manufacturing. Let me make the role of the Minister of State, Department for Business, Innovation and Skills, my hon. Friend Mr Prisk, clear. Incidentally, he is not here to respond to the debate because Ministers are fanning out across the country today as a result of all the excellent news on manufacturing. The Prime Minister is in one part of the country, my hon. Friend the Member for Hertford and Stortford is elsewhere and, of course, the Secretary of State is somewhere else.

My hon. Friend the Member for Hertford and Stortford, who deals with business and enterprise, has the following responsibilities: aerospace, the defence sectors, the automotive sector, professional and business services and the delivery of the advanced manufacturing growth review. In addition, he is the architect of our next manufacturing summit in Bristol, and he has overall responsibility for manufacturing and materials. Although he does not have the word “manufacturing” in his ministerial title, he is for all practical purposes our Minister for manufacturing. Several Members have asked: who is the go-to Minister? He is the go-to Minister for manufacturing and he does an excellent job. Of course, the Secretary of State also has a clear personal commitment to manufacturing. My view, therefore, is that there is a key Minister in the Government with that responsibility and a Secretary of State with very strong personal commitment to the subject. We are all, as Ministers in BIS, working on this and trying to contribute in our different ways and with our different responsibilities, whether they be for universities, research, science, high tech, skills or apprenticeships.

A second question put by my hon. Friend the Member for Hexham concerned access to bank finance. That subject is raised regularly in the House, as I often notice in BIS questions. His particular point, which has been pursued by several Members on both sides of the House, is about whether we can do more to enable new banks, especially new small banks, to set up. One of the key recommendations in the report by the Independent Commission on Banking was that we should look at barriers to entry, which are too high. It should be easier for new entrants to come in and set up banks, and we are now pursuing that recommendation. There has already been a round table meeting with challenger banks—the banks that want to come in and do more. The Chancellor himself touched on the subject in a major speech on the subject on 3 October.

Given my responsibilities for research, high tech and science, I have been frustrated by the time it has taken to establish Silicon Valley bank, which originates, as its name implies, in silicon valley and is a specialist in venture debt that lends to start-up businesses at early stages. I was told that it took it a year just to assemble the paperwork that was necessary for the Financial Services Authority approvals process, and another year for the FSA to consider that paperwork. We in BIS, and the Government as a whole, with the Treasury in the lead, are absolutely persuaded by the argument that we need to think about whether we have ended up with a system that has barriers to entry that are too high. That is why we are looking to see how we can pursue the recommendations of the Independent Commission on Banking.