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Lord Astor of Hever (Conservative)

rose to ask Her Majesty's Government what plans they have to ensure that the British motorsport industry remains a world leader.

My Lords, I declare an interest as president, unpaid, of the Motorsport Industry Association. For the past 25 years Britain has dominated the global motorsport industry with specialist teams, racing car manufacturers and parts suppliers forming a cluster of expertise. The industry has an annual turnover of £4.6 billion and employs 40,000 people in 4,000, mostly small businesses. Recently there have been signs that the industry is drifting into crisis.

Successful attacks on our position have been made from the USA, Germany and Italy. They recognise the huge knock-on effect in terms of the UK's wider reputation for technology, innovation and design brought by success in global motorsport. Motorsport is not only about developing vehicles and technology. One of the main reasons Honda, BMW, Mercedes and Fiat invest in motorsport is for the development and training of their people. They learn vital lessons in teamwork, timely delivery and competition. It is an environment that brings out the best in people.

Sadly, we appear to be witnessing the beginning of a brain drain of motorsport talent away from the UK. As overseas motorsport clusters begin to grow, such as in Germany, around Mercedes, BMW, Toyota and Porsche, we shall see those areas attracting growing numbers of UK motorsport personnel. People, and their innovative and competitive minds, are singularly the most valuable resource within the "community of knowledge" that is Motorsport Valley UK. The Government must ensure that the working environment not only retains these talented people but also attracts more of them to this cluster. The majority of motorsport-linked companies have freely chosen to opt out of the Working Time Directive. That option might be lost in 2003, and those companies forced to comply with a 40-hour week or less.

The essence of successful on-time delivery to the deadlines imposed by world motorsport customers is flexibility of working hours. No motorsport event has ever been delayed by the failure of delivery of a spare part! Once the flexibility of our workforce is lost, the UK loses yet another competitive advantage.

The Government need to consider their tax treatment of businesses in this valuable sector to find a better understanding of some of its unique aspects. Could an advice note be issued from Her Majesty's Treasury to the Board of the Inland Revenue covering clarification of motorsport engineering, R&D and circuit developments? An example would be that of development expenditure under SSAP13, where engineering products used in motorsport have a life of just a few months yet must be written off over two or three years. If such activities, which are more correctly described as applied research, could be 100 per cent expense in the year in which they occurred for tax purposes, that would encourage and benefit innovation in motorsport.

I understand that the aerospace industry receives favourable tax treatment on R&D expenditure. But motorsport companies spend a far higher level of R&D, as a percentage of their sales—often exceeding 25 per cent—than any other part of the engineering sector. Will the Government apply a similar helpful approach to motorsport?

The predominantly small businesses rely for their success on substantial interaction and collaboration with other advanced engineering companies—from precision to bio-medical micro-engineering; from aerospace and defence to automotive. It is important that world-class standards are maintained across all these sectors in the face of increasing competition.

Overseas governments appear more willing to find creative ways to subsidise or support businesses in motorsport and so gain the valuable international recognition for their own countries. I believe that the Italian Government, in support of the growing cluster around Ferrari, provide motorsport export rebate schemes and subsidise factory visits from overseas customers through their state tourist offices. It is vital that our Government move quickly, and with just as much creativity, to level this playing field. If they do not take urgent action, our industry will suffer the same fate as the once world beating British motorcycle industry—it will be destroyed by complacency.

All world-class sports events such as the World Cup or the Olympics receive state support. The televised audience for the Formula One series is of a similar size. The British Grand Prix is hugely important to this country. It is vital that this event is secured for the long term to add value and international recognition for our industry. I think that it is right to congratulate the Government on providing the extra cash to speed up the building of the Silverstone bypass. Substantial private funding has been secured for Silverstone, and yet further funding is needed. A bid has been delivered to the Prime Minister and government Ministers by Sir Jackie Stewart, and I hope that that will be seriously considered.

This November, Wales is again hosting a round of the World Rally Championship, the most prestigious event of its type, which attracts large tourism revenues into South Wales. What role are the Government playing to ensure that that event remains in the UK? UK motorsport, as a sport, and the many circuits and venues on which it depends, is starved of government support. A review of sports funding by the lottery, UK Sport or Sportsmatch shows motorsport to be virtually ignored—a few thousands of pounds compared to millions for other sports. Why is that so? Motorsport is the most capital intensive of all sports but it has no parent body from which it can derive funds. The sport relies on finance from individuals and the industry for its funding.

Healthy and active motorsport would benefit the industry and jobs, and secure our international competitiveness. Government funding should be made available more freely to develop the grass roots of the sport, to create a ladder of improvement for young drivers, and to assist in the updating and development of venues. The sport requires a national review to establish the most appropriate areas to which government support should be directed.

Professor Porter, of Harvard University, has indicated to the Government on several occasions that the Motorsport Valley performance engineering cluster is one of the rare global "jewels" in our industrial crown. The MIA put forward the industry's own cluster development strategy last year. The entire programme gained substantial financial and resource support, exceeding £10 million per year, from a wide range of advanced engineering companies from aerospace to automotive, defence to ceramics.

Such clear and substantial support, offered in March of this year, demonstrates just how keen and enthusiastic industry is to develop this valuable cluster. It is an asset which we cannot afford to lie fallow as we watch this sector slip away overseas and bureaucracy struggle along. Can the Government urgently find some way to match these commitments and make inroads into these cluster development plans?

Richard Burden, the Member for Birmingham Northfield, was recently appointed the parliamentary representative for motorsport. I very much welcome his appointment. In a debate in the other place in June, he called on the Government to do everything they can to nurture a sport and industry in which Britain excels. The Minister for Sport agreed and said that the strength of the sport and industry coming together bodes well for the future. He applauded the MIA and the MSA for playing an important role and working together. I am therefore mystified as to why neither the MIA nor the MSA has apparently been invited to join the DTI's competitiveness panel. They are, surely, the two key players. As the membership bodies, they represent the industry and the sport. The MIA has been the single source of cluster and industry knowledge for the past three years and represents nearly 300 members. On behalf of that business community, many members of which have contacted me before this debate, I believe that I am entitled to a full explanation from the Minister of that oversight.

This surely demonstrates the need for greater cross-Whitehall working. A number of officials in the DTI and DCMS have an interest in motorsport. The industry wants and deserves a clear leadership role and a strong voice in Whitehall. For, in the mean time, in a fast-moving international sector, overseas competitors are stealing this industry from under our noses.

May I urge the Government to change gear, up the pace and secure a victory for Britain in this vital economic race?

7:41 pm
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Lord Stewartby (Conservative)

My Lords, I congratulate my noble friend Lord Astor of Hever on initiating this debate, on his persistence and effectiveness in raising these issues—he ensures that they are periodically discussed in your Lordships' House—and on covering the ground so effectively, as he always does. I have some questions for the noble Lord, Lord Davies of Oldham, who will respond. I hope for satisfactory answers.

Before going further, I should declare an interest. I am the director of a public company, one of the smaller subsidiaries of which supplies wiring, connectors and other equipment to the motorsport industry. I say that because it is the custom of the House to declare an interest and also because that is one of the reasons why I have a particular interest in this subject. My interest in motor racing goes back quite a long way. I remember in the 1940s when I was in short trousers that one weekend at school I swapped my two prize conkers for some Dinky toys. Although my conkers had carried all before them, unfortunately the Dinky toys that I got in exchange did not. But the incident led to an interest that has continued to this day.

My first question for the Minister is: do the Government really appreciate the value of this industry? My noble friend mentioned some of the key facts. It has a turnover approaching £5 billion, more than 30 per cent, I believe, exports. It also has a wider value. The industry, although very specialist, is a leader in advanced engineering and has transferable capabilities into the automotive and aerospace sectors. The technology is of much wider potential application in precision engineering generally. The industry also involves the development of important skills, which can be transferred outside the specific area of the motorsport industry.

As my noble friend said, the sector is mostly the preserve of smaller companies which are not necessarily always heavily capitalised. It is a fiercely competitive sector. The enterprise that those companies bring to the motorsport industry and, through that, to the wider precision engineering industries of this country is invaluable. I hope that the Government understand the importance of nurturing such activity.

My second question is: how effective do the Government believe regional development agencies are in supporting this process? I know that they have made a number of statements of support. But is there really very much to show for that? To the extent that they have provided support, is it really targeted in a way best suited to sustain the activities in Motorsport Valley?

My noble friend referred to the brain drain. That can take place at any level, from the top—at the strategic level—down to the skilled mechanics. It is terribly important that, having attained an international reputation for this specialised industry, we do not let it slip away to Germany, Italy or elsewhere where there is growing competition and an aspiration to take over the position that our industry carved out for itself.

My third and final question is: can we please have an explanation—my noble friend also asked for this—of the composition of the competitiveness panel, which I believe is due to meet fully for the first time next week? If the Government really have overlooked the MIA, that would be a contradiction of all that the panel is supposed to correct. The MIA, one would have thought, is the one body absolutely core to deliberations of that kind. The fact that the governing body of the sport, the MSA, is also, I believe, not involved at this stage, is baffling. Why will the Society of Motor Manufacturers and Traders, which has a much broader remit because it covers the ordinary automotive industry, be involved when the specific representatives of the motorsport industry—the subject of the whole exercise—will be excluded?

I hope that the Minister will give reassuring answers to our questions. Noble Lords taking part in this debate want to draw attention to the fundamental importance of this industry, despite its small size. We want it to flourish.

7:47 pm
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Viscount Chandos (Labour)

My Lords, I, too, thank the noble Lord, Lord Astor of Hever, for introducing this Unstarred Question. I am delighted to be able to signal the interest in and support for the British motorsport industry that exists on these Benches. If I am not joined on this occasion by other speakers from the Back Benches on this side of the House, that is at least in part because my noble friend Lord Davies of Oldham, who made his maiden speech on this subject five years ago—almost to the day—will this time answer questions from the Front Bench. I wish him many happy returns, if that is the right expression, and look forward to his speech.

My noble friend Lord Davies said in his maiden speech that the motorsport industry was the nearest that the UK had to Silicon Valley; and, even if Silicon Valley has had, in the intervening five years, a ride—I was going to say "a roller-coaster ride", but perhaps it would be more appropriate to say a ride that was akin to spinning out from a two-lap lead back to the middle of the pack—it is still a compelling analogy. The British motorsport industry represents a competitive cluster, like Silicon Valley, of which Professor Michael Porter, as other noble Lords have said, can be proud. The position built up over the past 50 years through the extraordinary efforts and abilities of post-war pioneers, such as Charles and John Cooper and Colin Chapman, has bequeathed an industry whose direct impact on economic activity and employment is significant and whose indirect impact—through technology transfer and so on—is greater still.

It has not all been plain sailing—or racing uninterrupted by emergency pit stops. We should remember the original national champion, BRM, which in two decades went from being the Laurel and Hardy of Grand Prix racing to the world champions and back to being the Basil Fawlty of Formula 1 before expiring. Teams and companies have come and gone. As in all creative and entrepreneurial fields, to succeed you have to take risks, and if you take risks you may fail. I believe that, from the day they were first elected, this Government have understood that and have consistently taken steps to foster an environment in which dynamic, creative and high-tech industries have stood the best chance of succeeding from a base in this country. The motorsport industry has benefited, and will continue to benefit, from that.

In what specific ways, then, is the motorsport industry important and of benefit to the country as a whole? As a sport, it may not be everyone's cup of tea. But, for a large minority of the population, it is a sport for which, whether as participant or spectator, there is an enthusiasm as powerful as that for our other national games and sports. It produces tourist and other visitor revenues at events large and small. As with the new Rockingham circuit near Corby, it can be a powerful instrument for regional regeneration.

The design and manufacturing part of the industry is an important employer of highly skilled workers. That, in turn, nurtures the high value-added design and development specialists who serve the mainstream motor industry. Sir John Harvey-Jones used to argue that ownership of manufacturing industry was important because, wherever the head office was, there also would be the highest value research and development centres. The success of the British motorsport industry has contributed to the ability of the UK in this field if not to disprove that, at least to mitigate its effects, as the specialist design and R&D companies carry out increasing amounts of vital and lucrative work for the large motor manufacturers all around the world.

Finally, motorsport is a vigorous stimulus to the development of technology for the everyday driver. That makes him or her safer, more comfortable or more frugal with the world's resources. That is why the industry is important. What, then, should the Government do? I believe that, apart from setting the entrepreneurial environment that I mentioned earlier, they should concentrate on, to coin a phrase, education, education, education. That was a theme emphasised in his maiden speech five years ago by my noble friend Lord Davies.

I support the Government's contribution to infrastructure at the Silverstone bypass that was mentioned earlier. There are also specific initiatives in place; for example, the DTI has invited the industry, along with the regional development agencies, to pool their resources in training and education.

But I believe that we should be careful not to subsidise an industry which is quintessentially commercial and competitive. I suppose I was a little surprised by the vehement advocacy of the noble Lord, Lord Astor, for fighting subsidy with subsidy. There may be a proposal to handicap Ferrari in Formula 1 through weight penalties or whatever, but I was struck by the fact that the strongest competing teams do not consider that to be the right way to reinvigorate Formula 1. I believe that is an example that the Government would be well advised to follow. Our industry should not be disadvantaged, although small measures of support would be welcome; but nor should it be mollycoddled.

7:53 pm
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Lord Monro of Langholm (Conservative)

My Lords, it is a privilege to join in this debate, initiated by my noble friend Lord Astor, because I believe that speakers on all sides of the House are expressing concern about the current standing of motorsport in this country. That is not to say that we are being particularly critical of the Government, but we are worried that motorsport itself is not justifying its past successes.

I declare an interest as a member of a number of motorsport clubs, as a past competition licence-holder and as past president of the Auto-Cycle Union—a position held now by my noble friend Lord Jopling. We must not forget that motorcycle racing is equally as prestigious as motorcar racing in this country and around the world, and it, too, should be given consideration in tonight's debate.

We are very worried about losing our national prestige as the leading constructors of chassis and engines. We are also losing employment. We are concerned, too, about losing spectators at major events such as the British Grand Prix. I know that there were special circumstances this year, when the tickets were cut in half because of the problems and the threat that the Grand Prix might be lost if the road improvements were not completed. I congratulate the Government on what they achieved very rapidly at Silverstone.

The noble Lord, Lord Davies, should bear in mind that we appear to be awfully bad at managing traffic at our major sports events, whether they are held at Twickenham, Murrayfield or, in the old days, at Wembley. I also include many horse-racing events, and so on. We simply do not seem able to manage traffic flows as they do in other countries.

I often go in Baltimore to the baseball park, which holds 50,000 people with perhaps two or three matches a week. One can drive to the ground 10 minutes before the start of the game and leave at any time, and there is no traffic congestion. If other countries can achieve that type of traffic management, we should be capable of doing far better than we do at present. I know that the problem is partially down to the police and partially down to local authorities, but it is an issue which we should consider seriously if we are to maintain the number of spectators at sports events in this country. I believe that the average driver is becoming rather fed up with the traffic jams at so many events.

We should give praise to Sir Jackie Stewart at the British Racing Drivers Club. He set a fine example in trying to encourage the nation to develop our past achievements in relation to motor racing. He has also encouraged some entrepreneurs, such as Lord March, who has achieved splendid things at Goodwood. He has attracted all manner of praise from many parts of the world for the way that he has presented motor racing at the Goodwood track and at the hill climb on his own estate. Men such as Lord March, Tom Wheatcroft at Donington and others can show the way if they are given the opportunity and are not frustrated by the complicated planning problems that so often arise in almost every development in this country today.

I am concerned that we are being slowly removed from centre stage. BMW, Mercedes and Ferrari are taking over what used to be our home ground. We do not seem to be able to rise to the challenge, and we should help our industry in any way that we can. I am particularly concerned at American racing, which, with its IRL system, is very different from our form of racing. Enormous TV coverage is given to the sport in that country. It seems to me that motor racing takes place almost every day somewhere in the United States, and it receives a great deal of coverage with huge spectator gatherings. I feel that we are losing out in that respect, too, and that we are also losing out with regard to the cars that we used to build and export to the United States.

Indeed, I should like to see a change of fortune for those who drive for this country. I know that David Coulthard is doing well and is among the top two or three drivers in the world. But where are the rest? They are slowly slipping out of the frame and are not developing as quickly as one would like. In a strange way, the people in this country seem to support the drivers more than they do the cars. That is also what the press are interested in. We should see what we can do to improve the situation.

I hope that the Minister will say a word about Sport England, which has become a major issue in relation to the lottery. At present, the organisation does not have a chairman or a chief executive. That does not bode well for sport in this country because Sport England has overall responsibility for so many things, but not of course for the detailed work of motor racing. However, it is there to present the case for Britain. I hope that the Minister will explain what has gone wrong with Sport England and with the distribution of lottery money.

The whole issue is now one of leadership. I am not asking the Government to throw money at the sport because, in many ways, money is not the problem; it is the technology, the salesmanship and the presentation that have gone wrong. It is desperately important that the Government recognise that we are on a downward road and it is up to them to try to help us to regain the position of world leader in motorsports, in engines, in chassis development, and in racing technique.

8:00 pm
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Lord Jopling (Conservative)

My Lords, we are extremely grateful to my noble friend Lord Astor of Hever for introducing this debate. I must begin by declaring an interest as one who, years ago, used to race cars as an amateur, and who is currently president of the Auto-Cycle Union, the governing body of motorcycle sport, to which my noble friend has just referred.

In that capacity I want to talk about the position of motorcycle sport with all its different disciplines: road racing, grass track trials, moto-cross and enduro events. First, I must say how impressed I have been by the support for motorsport from Coventry University, where my noble friend Lord Plumb is chancellor. The university fully recognises the importance of the British motorsport industry to the United Kingdom economy, particularly to the West Midlands. Building on its world-class work and reputation in automotive engineering and in transport design and the potential for motorcycle design and development, it has now, I am glad to say, established a centre for motorsport engineering and a new degree course in motorsport engineering in partnership with the industry. In that way it is playing its full part in providing the future intellectual capital and research to maintain the United Kingdom's world leadership and position. I warmly commend it.

The motorcycle industry is worth £3 billion a year to our economy. It employs 15,000 and there are 1.5 million active riders who have a close connection with the motorcycle sport. Enthusiasm for riding on the roads and the sport itself feed off each other. The number of competitive licence holders in the UK has been growing steadily and currently is no fewer than 22,000. However, it is important that we start investing in the future of the sport so that we can produce more world-class athletes. I say "athletes" because the young people who compete in motorcycle sports are stupendous athletes. Anyone who has seen moto-cross events will understand that, like the legendary man on the flying trapeze who flew through the air with the greatest of ease, these young men are extraordinary. At the other, perhaps less spectacular, end, in trials the judgment and the balance of the competitors is quite astonishing.

I am irritated that archery currently also has about 21,000 members and has been granted funding of nearly £90,000 over the past seven years. In 2002 the Government have provided no funding whatever to the ACU. In the past 10 years funding has been poor, with an average of only just over £8,500 a year, making a decade total of around £86,000. Other sports such as skiing have been award £671,000 in the seven years up to January 2002, yet motorcycle sport which has seen over 30 world championship titles in the past 10 years taken by British riders, has barely seen 10 per cent of the figure given to skiing.

Funding is needed to encourage youngsters to get involved in the sport. There is a steady decline in the number of competitors under 18 years-old with less than 17 per cent of the competitive licence holders this year belonging to that age category. Valentino Rossi, the current Italian World Moto Grand Prix champion, has been drawing attention to the few young people coming for training in this country compared with Italy, Spain and Germany.

To enable us to continue to compete at world level and to discover new talent, we need to put more money into all motorcycle disciplines, from club racing to the national and international arenas. Ice skating has produced no major world stars since Torvill and Dean, yet in the past eight years that sport has received nearly £35 million. That is just not fair. Motorcycle sport has produced champions in road racing, such as four-times World Superbike Champion Carl Fogarty and in off-road racing, the 11-times indoor and outdoor trial champion, Dougie Lampkin. But the sport has not received anywhere near enough support or recognition.

Funding is required to support not only the riders, but also the volunteers and marshals who are the backbone of the sport. It is important that safety regulations are properly looked after in this potentially dangerous sport and there has to be training.

This year the World Superbike round at Brands Hatch had a crowd of over 120,000 people, the largest sporting crowd in Britain, for yet another consecutive year. But the crowds want to watch home talent and this Government are not fulfilling their part in assisting the development of such riders. Most events are much more modest club events without the spectators and the cash generation that we saw at Brands Hatch.

The treatment of motorcycle sport is not fair. I challenge the Minister to make a case that it is and if he cannot do so, I ask whether he will meet a delegation from the Auto-Cycle Union, which represents the sport, so that we can hear a more considered reply than he is able to give us tonight.

8:06 pm
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Viscount Falkland (Liberal Democrat)

My Lords, as is often the case in your Lordships' House a short debate can be a riveting one. We have to thank the noble Lord, Lord Astor of Hever, for introducing this one.

Is it not a curious cultural anomaly of this country that we have the well documented self-destruction of the motorcycle industry followed by the more gradual self-destruction of the mass motor industry and yet in motorsport, particularly in Formula 1, we have a situation where most of the innovation and development has been carried out in this country, and within a 20-mile radius of Banbury? Small companies are working within their particular expertise, innovation and design of engines, chassis and so on.

It does not stop there, but continues into other areas of motorsport which are less publicised but which nevertheless involve a great number of people, whether on track or off-road. The noble Lord is right to talk about the brain drain of expertise to other countries. I am reminded of what happened in the film industry in the world of special effects. Special effects for cinema, which form a great part of what Hollywood does in blockbusters, were developed in this country by small companies that had the same kind of expertise. However, the brain drain has caused that expertise to go to the United States. We have not been able to gain the added value from that expertise, probably for the same reasons that the noble Lord, Lord Monro, mentioned. I believe that he spoke of our failure in salesmanship and presentation.

The motorsport world is a rough one, as I am sure the noble Lord, Lord Davies, recognises. There are always those who envy what we do and hope to do it better. Even in the world of tuning and customising of cars, over the years we have seen the European Commission trying to introduce legislation that limits what can be done with a manufactured piece of road-going machinery in terms of altering its performance and so on. We have resisted that because it is what we do well. There are hundreds of small operators in this country—small businesses, often consisting of no more than six or seven people—who do this kind of work brilliantly. It is what other countries wish they could do. The Italians used to do it in the motor industry, but we took over. It would be a great pity, as the noble Lord said, if we lost that expertise. I am sure that the noble Lord, Lord Davies, has taken that on board.

I have a particular interest in motorcycles. I paid great attention, as always, to what the noble Lord, Lord Jopling, said. The image of motorcyling has improved because of what has happened in motorcycle sport. It has put a rather heavy emphasis on the production for the domestic market of race replica machines, but, on the other hand, motorcycle racing is now producing national figures who are the match of those who drive motor cars.

These people are very necessary. What they say is followed closely by the young. Most of them are keen on road safety. We need to bear that in mind. One year, at the lunch for the Birmingham motorcycle show, I sat next to Steve Webster, the champion at that time of sidecar racing—a discipline I do not think was mentioned by the noble Lord, Lord Jopling. That year he was the only automotive British world champion. Rather naively I asked him, "What kind of motorcycle do you ride at home?" He looked at me with absolute horror. He said: "I haven't got a licence. My wife would be horrified if she thought I was going out on the roads in this dangerous activity". So, it is a curious business. These great stars of the track are often great models to the young and to others.

Motorcycling is becoming an extremely popular business. It will be helped shortly by the Mayor of London, Mr Livingstone, forcing people on to scooters. They will not be able to park them anywhere, but they will be there. Often inexperienced people will be driving them and they need these kind of heroes.

I have nothing further to say. It has all been made clear by excellent speeches. The noble Lord, Lord Davies of Oldham, will fully understand. I wonder whether his understanding—which I know he has—can be translated into government action and support along the lines suggested in your Lordships' House today.

8:12 pm
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Baroness Buscombe (Conservative)

My Lords, I begin by thanking my noble friend Lord Astor of Hever for asking the Government what plans they have to ensure that the British motorsport industry remains a world leader.

I have a particular personal interest in motorsport. As a small child I remember feeling very privileged to be able to spend hours at what we in my family called "The Works" at Thames Ditton, Surrey, where my grandfather, together with his dedicated team, custom-built AC Cars, latterly with the input of Carol Shelby and the Ford engine. There I learnt the true meaning of the word "precision", as my cousins and I watched the engineers in brown coats pouring over plans and overseeing the making of simply beautiful machines.

Motorsport has endured as one of Britain's most popular and successful sports. Almost 800 motor clubs are registered with the motor sport association, which oversees about 5,000 events annually in 22 different disciplines. Some 30,000 individuals hold competition licences and at least 100,000 people compete in total. This massive home market, worth some £400 million alone, helps to make Britain the world's leading motorsport nation. Britain has at least 60 permanent motorsport venues, more than any other country in Europe. Events take place in England, Scotland, Wales and Northern Ireland, the Isle of Man and the Channel Islands. British marshals are the best in the world. Many foreign events import them to raise local safety standards.

UK motorsport, which includes most of the Formula 1 and world rally teams, plus several thousand "behind the scenes" companies, provides full-time employment for nearly 40,000 people, together with another 100,000 employed in part-time positions. They include truck drivers, mechanics, engineers, tyre fitters, electricians, computer programmers, salesmen, secretaries and people in public relations, administration and planning.

The Royal Academy of Engineering points out that all motorsport events revolve around what is essentially an engineering competition. Their lifeblood is the brainpower and inventiveness of designers and engineers, and, as such, the calibre and standard of their education are of paramount importance. The demand is for all levels of engineers, not simply at graduate level, where competition is at its height. The sector needs "hands on" technicians with practical and academic skills in modern technologies. A recent MORI poll for EMTA (the Engineering and Marine Training Authority) showed that over 50 per cent of young people associate engineering with a dirty working environment and that they relied mostly on family members and school careers teachers for their information on engineering. Motorsport, properly used, can attract young people into "clean" types of engineering.

Motorsport is highly popular with young people, especially through computer-based video games and television. The Government, working with the industry, should use the clean engineering environment of motorsport to dispel these myths among teachers and school children. This will increase interest in engineering, just as the glamour of NASA has done in the USA, and so benefit the UK generally.

The challenge and glamour of motorsport are motivational and should be used to their utmost to encourage children to study engineering. The MIA and its industry members have actively supported the initiatives Formula Student, Formula Schools and F1 in Schools, which are all design and engineering competitions for students. These excellent initiatives rely primarily on the funding and good will of industry and individuals, with virtually no government funding involved—just £500 from the DTI in the case of Formula Student, which attracts entries from over 35 universities. The DTI and the Department for Education and Skills should be more generous and active in their support for these educational initiatives and work alongside the MIA to maximise their success.

Graduate level courses were first pioneered by Oxford Brookes University and the Swansea Institute, the latter offering the very first degree in motorsport engineering in 1998. Since then, the MIA education council has encouraged many colleges and universities to develop courses which use motorsport at their heart. I join my noble friend Lord Jopling in congratulating Coventry University on its support of the industry. These provide NVQ, HND, BSc and MSc level qualifications in various branches of motorsport and at technician to Masters level.

These courses have proved outstandingly popular, with applications far outstripping supply—a unique experience for engineering courses. This allows educators to ensure that the very best applicants join the courses, and, more importantly, to invest in improving their engineering facilities. However, now that a successful formula has been found to encourage engineering studies, it is proving difficult for the establishments to find adequate resources to equip themselves satisfactorily to teach these subjects or to recruit and retain the staff required. Government support is needed to ensure that these popular, fast-growing engineering initiatives deliver the required results to satisfy the demands of British industry at large.

Tourism is a major economic generator for the UK, and recently the Government have focused on heritage and sports tourism initiatives. Motorsport is the largest income generator within UK sports tourism, not only through the major international events of world superbikes, world rally, Formula 1 and the CART race at Rockingham, but in the many other events which take place each year, many in rural locations. Added to these are the many motorsport museums and corporate events that are open for tourist business every day of the week. We know that motorsport creates substantial rural income, whether from Forestry Commission roads or local farmhouse bed and breakfasts.

This debate is extremely timely, given the Secretary of State's announcement in July of a programme involving an independent study to look at the key issues facing motorsport, a Motorsport Roundtable and the development of a long-term partnership programme between the industry, sport and government at national and regional levels.

What that all adds up to, time will tell. We understand that the Roundtable has proposed the formation of a motorsport competitiveness panel, which will include industrialists and relevant industry and sport bodies, with representatives from relevant government departments and agencies. Will the noble Lord, Lord Davies of Oldham, confirm that the Motorsport Industry Association will be invited to join this panel?

We have already heard today from my noble friend Lord Astor of Hever that the MIA has been the single source of cluster and industry knowledge for the past three years. This is something which is currently being overlooked.

In addition, while this proposed panel meets and extra industry research is carried out by the DTI (a process that could take up to 12 months) we fear that the industry is slipping away before our eyes—a classic case of fiddling while Rome burns. Could the Government not release substantial funding in the interim to support the cluster development work that has already gained support from within the industry? Furthermore, could not the DTI increase support for the Motorsport Valley RDA programme and encourage it to make resources available with more urgency than has been shown?

In conclusion, those cars that I saw being built years ago represented the basis of what we had then and what has endured: a world class industry which deserves our whole-hearted support. I therefore urge the noble Lord, Lord Davies of Oldham, and his colleagues in the Department of Trade and Industry to listen to what has been expressed with conviction and to respond positively to the real concerns shared by noble Lords today.

8:20 pm
Photo of Lord Davies of Oldham

Lord Davies of Oldham (Government Whip (technically a Lord in Waiting, HM Household); Labour)

My Lords, I, too, am grateful to the noble Viscount, Lord Astor, for introducing the debate. As president of the Motorsport Industry Association, he is well placed to comment on the issue in the House. His speech raised many of the important issues that we must address.

I shall spend the bulk of my speech responding to the issues relating to motor car racing, because it has been the subject of most of the debate, but I would be remiss not to respond to the interest expressed by both the noble Lord, Lord Jopling, and the noble Viscount, Lord Falkland, in motorcycling. We all recognise that one of the great advantages of motorcycling is that the skill level—which is not greater but certainly no less than that involved with motor cars—is considerably more visible because the riders can be seen so well during the execution of those skills. I therefore agree with the noble Lord that it has much to offer our young people—not least, I always think, because of the old adage that people who have learnt to drive on two wheels subsequently make rather better drivers on four wheels when they get the chance.

There is much that we ought to applaud in the development of motorsport. On the question of subsidy and support, the noble Lord, Lord Jopling, will recognise that the sports councils make their allocations to sports according to transparent and public criteria, which include need, public interest in the sport, the contribution that they make to increasing participation and international success. The noble Lord, supported by the noble Viscount, Lord Falkland, said that he thought that the case could be made more effectively directly to Ministers. I shall certainly convey that request to my colleagues to see whether a meeting with the interests of motorcycling at heart can be arranged.

Turning to the more general issues raised in the debate, we should recognise that the Government fully understand the significance of the sport of motor racing and the fact that we are the world leader. Seven of the 11 major companies that race are based in that wonderful area that some people have described to me as the South Midlands, but which—as my noble friend Lord Chandos reminds me—I referred to in a debate five long years ago as Silicon Valley. We all know that those talents are concentrated in a limited part of our country, but they are most important, because they raise the level of engineering skills in this country. They set a bench-mark that we ought all to applaud.

I bow to no one in the advocacy ably advanced by the noble Baroness, Lady Buscombe, in support of other noble Lords, of the importance of engineering and engineering skills. I happen to be the father of two sons who are both engineers—neither of them having inherited their skills from me, I hasten to add. One of them works in the motor industry although, regrettably, he has taken his talents from the United Kingdom to Detroit. But I am well aware of the fact that we have much to do to develop engineering skills. Motorsport can attach significant glamour to engineering—a point made by the noble Baroness.

Let me emphasise that the Government are most concerned about vocational education and to ensure that people pursue educational courses from age 16 to 18 to help to establish their subsequent interest in engineering and technical skills—which are part and parcel of the more rarefied forms of engineering performed at graduate and post-graduate level. Such vocational courses reflect the fact that the Government recognise that we need to pay due regard to skill level at every level. We do not produce sufficient high quality engineers and we must attend to that problem. That is an important part of the general sustaining of skills necessary for the industry in which we are taking pride in this debate for its role as a world leader.

We all recognise that motorsport has an enormously passionate and devoted following—sufficient for the Government to recognise the point made forcefully by the several noble Lords that access to Silverstone has been scarcely adequate in recent years to meet the needs of those who want to attend. The noble Lord, Lord Monro, broadened that point to cover other sporting events. I sympathise with him; we all know the enormous frustration—not to mention the deterrent effect on attendance—caused at major sports occasions when it is so difficult to obtain access.

The Government take pride in and accept the generous comments made by the noble Lords, Lord Stewartby and Lord Astor, about the improvements to the approach road to Silverstone, which have ensured that people had a better journey both to and from the track this year than in previous years. That is an earnest of the Government's recognition that the sport is of course important for those who participate in it and watch it, but it is also important for the engineering skills that it engenders and the industrial and technical support that is employed to sustain it.

I also mention that, although we have overwhelmingly discussed Formula 1, there are other encouraging developments. The noble Lord, Lord Stewartby, asked me about regional development agencies. My noble friend Lord Chandos referred to the fact that support from the regional agency has helped to develop the Rockingham circuit, which is an important development for a different kind of motor racing from Formula 1, but one that produces its own thrills and interests. I am grateful to my noble friend for reminding us of that.

I also pay tribute, as have others, to the 18 institutions—of which Coventry is a significant one—that play their part in ensuring that we have the skill levels to help us to ensure that our present lead is sustained. Of course, there was comment on the dangers presented by the Italian challenge. There is not much that the Government can do in the short term about the excellence of Ferrari and the problems that others have had in competing with it during the past two or three years. But it is only four or five short years ago since British firms were to the fore.

Excellence and leadership in the sport tends to run in cycles over a fairly limited period and I am sure that the whole House is united in the hope that we shall wrest that leadership from Ferrari in the near future. It is inevitable that Ferrari has a beneficial spill-over effect in Italian interest in the sport—not that Italian interest in the sport was ever at a low level; it has always been an important part of Italian culture. However, we must emphasise our contribution.

Tax concessions are on the agenda of the committee set up to consider such issues. There have been complaints that the motorsport industry is not directly represented on the main body, but I assure the House that the competitive working group will consider such issues. It has, of course, the capacity to set up sub-committees in which motorsport will have the chance to make its case fully and present its position.

I reassure the House that the Government take seriously both aspects of motorsport—the enormous enjoyment that it brings to our fellow citizens and the unique dimension of the sport in engendering technical and engineering competence. It places demands upon skill levels that we ought to value and enhance. I assure the House that the Government have that at the forefront of their mind.