Manufacturing and Competition

Prayers – in the House of Commons at 12:00 am on 10th July 1987.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Carlisle.]

Photo of Mr John Butcher Mr John Butcher , Coventry South West 9:35 am, 10th July 1987

In the summer of 1984, the Department of Trade and Industry sponsored a study mission to Hong Kong, Japan and the west coast of the United States. The members were a broadly based group representing management, banking, purchasing, trade unions, media and Government interests and their aim was to find out why companies in the countries that they were visiting were often out-performing British companies. All of them returned alarmed at the strength of the competition and challenged by what they had seen and heard.

Towards the end of the visit to Japan, they had an opportunity to talk informally to their hosts. They asked why Japanese companies had thrown open their factories, talked frankly to them about their techniques and shown them the secrets of their success. The answer was devastating. They were told by the Japanese, "Because it would take you 10 years to get where we are now and by that time we shall be even further ahead. And besides, we know you won't do it." I emphasise those last words. The Government have recognised that challenge. It is a challenge that many companies are responding to and it is a continuing challenge to us all in the future because, as those mission members were told, the competition is not standing still. However, that challenge also presents the way to tremendous opportunities and it can and is being met, as I will explain to the House in a moment.

Before outlining the ways in which we are rising to the challenges and opportunities, it is important to understand that the efforts of companies have been greatly assisted by the Government's achievements in improving the whole economic climate in which British business operates. While I would not wish to dwell unduly on the general issues that would normally come under the heading of "getting the climate right", I think that it would be appropriate to record here the progress of the British economy during a period in which we have been facing these major challenges from our overseas competitors.

The economy has just entered its seventh successive year of growth at an average annual growth rate so far of 2·5 to 3 per cent. Since 1980, our economy has grown faster than those of all the other major European Community countries. The outlook, which is good, is for continued growth. In recent years, productivity growth in the manufacturing sector has been the highest of the major industrialised countries. Reflecting that improvement, the rate of increase in unit wage and salary costs has eased. Our unit labour costs have, however, tended to rise more rapidly than those in the United States. Germany and Japan, but the gap has recently been narrowing and over most of last year may have risen as slowly as, or even more slowly than, in Japan and Germany. The United Kingdom's international cost competitiveness improved by 4 per cent. in 1986. Inflation has been brought under control and profitability has grown almost continuously from 1980 onwards. All these positive aspects clearly demonstrate how much has been achieved.

Compared with the first year or two of this decade, the problems facing industrialists have significantly reduced, providing a better climate in which they can meet the challenges and opportunities with growing confidence and renewed vigour. It is not an exaggeration to say that the opportunities for British industrialists, British industry and commerce have never been so good for a long time. If we can maintain the current trends well into the 1990s, talk of a British economic miracle during that period will not be an exaggeration.

All sectors are, of course, important to economic growth, but manufacturing in particular will need to play a dominant role over the coming years. Manufacturing is clearly more intensively traded than services—about four times more—and will continue so for the foreseeable future. Because of manufacturing's higher trade intensity, and because of the current dominance of manufacturers both in the United Kingdom's non-oil trade flows and in world trade, we shall need to look to manufacturing to contribute a major part to the United Kingdom's successful adjustment to the falling oil trade surplus. I am glad to say that it is doing so.

I am pleased to report that there is a good story to tell on the improving performance of our manufacturing sector. The figures on the improvement in performance of this sector show that output has grown by 16 per cent. from its trough in early 1981. It is forecast to grow by 4 per cent. this year, faster than the rest of the economy, and faster than in any year since 1973. Manufacturing productivity is 43 per cent. higher than in late 1980 and 34 per cent. higher than in 1979. Moreover, since 1979 our growth in manufacturing productivity has surpassed that of our major competitiors, including Japan. The trend of our falling share of world trade has stopped and the situation is now much more encouraging. For example, in the three months to April, our exports of manufactures, excluding erratic items, were up 10 per cent. in volume on the corresponding period of 1986, and imports were up 6·5 per cent. So we now have a major opportunity to reconquer domestic markets and increase our penetration of world markets.

I am aware that Her Majesty's Opposition like to make the comparison between 1979 levels of output and those of today, but it would be more helpful to establishing a constructive and analytical debate if they were to recognise occasionally the depth of the international recession, which was the worst in 50 years, and the reasons why our economy went into that recession with fundamental weaknesses compared wth some of our competitors.

Our improving performance has been helped too by the improvements in quality design and reliability that have restored the reputation of many famous British names, of which quality is the centre of our attention today.

Before I turn to today's topic in detail. I shall pause only to record that the performance measure which encompasses all these elements—manufacturing profitability—reached its highest level since 1973 in 1985, and when the figures are available should show a further gain for 1986.

The opportunities and challenges to which I referred earlier are regaining lost markets and obtaining a share of new markets. Those opportunities start with carefully identifying what the market has to offer, lead on to market research studies and then into project planning to meet the needs of potential customers.

No stone must be left unturned in those vital stages, and only when completely satisfied that the market and customer requirement has been identified is it sensible to move to the important design phase, then to production planning, purchasing, production and selling according to the requirements and expectations of likely customers. But the process does not end there—there is after-sales follow-up feedback of customer experience and amendments to the entire manufacturing cycle in relation to that feedback, and then the process starts again In short, these are all the non-price factors that are critical to companies if they are to succeed.

For example, a study in the early 1980s estimated that non-price factors accounted for about 45 per cent. of British export behaviour. They are the vital elements that will contribute to an industrial renaissance. The opportunities are there for all in their respective fields, but only by taking account of these vital non-price factors will companies be successful and be able to build on that success, maintaining existing and creating new jobs and reasserting our reputation, making sure that all those involved in the product or providing the service can genuinely be proud of the label "Made in Britain". The firms and countries that are doing best are those that are offering their customers the best value for money and competitive value for money, and competitive value for money comes from competitive quality at a competitive price.

By quality we are talking about satisfying customers and meeting their needs and expectations so that they come back to buy companies' products again and again. The issue can be encapsulated by describing it as being about selling products that do not come back to customers that do. Customers are becoming increasingly discerning, and as world competition increases the choice open to them is also increasing. They know the real costs of poor materials and unsatisfactory performance, and while increasingly price may be negotiable, quality is not. The leading companies worldwide have recognised this and have benefited accordingly from improved efficiency and reduced waste and not from increased sales.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

Does the Minister accept that in many sectors of manufacturing industry—I worked in manufacturing industry before being elected to this place in 1983—there was a period when management and supervision were more concerned about the number of products finding their way to the end of the production line than about the quality of the product? That attitude is changing in manufacturing industry, but if management and supervision are not concerned about quality, the work force will take the same view. I accept the Minister's argument that quality is important, but will he accept that improvements are being made and that it is important that attitudes change from the top of management through supervision to the work force?

Photo of Mr John Butcher Mr John Butcher , Coventry South West

I am delighted to welcome the hon. Gentleman's presence in the Chamber and his participation in the debate. I agree that in the 1960s and 1970s, an obsession with volume for volume's sake in many badly managed industries became extremely expensive. The rectification of faults halfway down, three quarters down and all the way down the production process cost companies a great deal of money. Post facto quality procedures are no longer the method by which we tackle the problem. I shall deal with the hon. Gentleman's question in greater detail later.

Towards the end of the 1970s, a number of studies highlighted the need for industry to take greater account of non-price factors if it was to succeed. These were factors such as good design, technological innovation, prompt delivery and reliability—in short, quality. An estimate at the time suggested—this goes some way to dealing with the intervention of the hon. Member for Burnley (Mr. Pike)—that mismanagement of quality was costing British companies about £10 billion per annum. These are the costs of failure—costs such as rejects, reworking, scrap, customer complaints and warranty costs leading to loss of customer confidence and orders.

More recent estimates suggest that the costs of quality mismanagement are frequently between 10 per cent. and 15 per cent. of turnover, and can be much higher. Too often these costs remain unidentified or accepted as inevitable, but this need not be so. The British companies that are paying attention to quality are showing by their example that there is a remedy, that something can be done about it, and that paying attention to quality does not cost money. Indeed, it is far more likely to release resources for use elsewhere in business, and increase profitability. Companies such as IBM, which chose to produce the personal computer at Greenock in Scotland because it could get the best job done there, and Philips UK, which won eight of the Philips 1986 quality awards, are but two examples of international companies whose United Kingdom subsidiaries were able to match and beat the performance of other subsidiaries in the same group.

But it is not only multinationals which are doing well from their bases in Britain. British companies such as Marks and Spencer and Rolls-Royce are well known for the quality of their products.

Photo of Bill Cash Bill Cash , Stafford

The announcement today about the sale of the RB211 engine to Qantas in Australia seems to prove the company's ability to repeat the fulfilment of customer requirements at quality level. That is why the company managed to get the repeat order.

Photo of Mr John Butcher Mr John Butcher , Coventry South West

My hon. Friend is absolutely right. I am sure that the whole House will wish to join him in his congratulation of the company on having built on a very successful product. While, as he rightly reminded us, that success is based on the reputation of Rolls-Royce for quality, the entire aerospace industry is now enjoying a rate of market penetration that is historically of the highest order, and I believe that the British aerospace industry in general has an excellent future.

J. C. Bamford has won a British quality award for outstanding achievements in the quality of product design and for the implementation of new and imaginative quality methods. Last, but certainly not least, Jaguar has made quality the prime selling point in its return to success.

It is not the size of the company that determines whether or not such an approach can succeed, because the same applies to smaller companies. It is a question of attitudes stemming from clear commitments from all employees, starting at the top, to meet customer needs. The Government's role, as with so many other policies in the Department of Trade and Industry, is to recognise best practice and to use, where necessary, third parties to try to disseminate that best practice—as recognised by our customers—across whole tranches of industry and commerce.

The 1982 White Paper "Standards, Quality and International Competitiveness" spelt out Government policy on the role of quality and standards in improving our international competitiveness. It laid the foundation for a range of developments designed to improve the quality of British goods and services, and to help Britain to retain a competitive position in domestic and world markets. A great deal has happened since then. In October last year my Department published "Quality Counts", which sets out what has been done so far to help and raise the quality and reputation of British goods. Copies are available in the Library. "Quality Counts" highlights the central role of quality in improving company competitiveness, and describes the steps the Government have taken to encourage the adoption of a total quality approach throughout industry and commerce. Those steps include the activities of the national quality campaign; to underpin and demonstrate quality achievement, the progress in encouraging the growth of a network of organisations that carry out assessment work, and the formation of the National Accreditation Council; the ways in which the Government have sought to improve their collaboration with industry and standards-making to improve the standards-making process; international developments; the role of Government as a purchaser and regulator of the market; and the contribution that standards and quality can make in promoting new technologies.

I would like now to highlight some of the activities of the quality campaign, in relation particularly to some of the more recent developments. In 1983, the campaign was launched to promote the importance of quality as a means of securing success in the market place, as well as making the running of a company more efficient, and improving profitability by eliminating waste of materials and effort. The campaign seeks to promote the "total" or "companywide" approach to quality management. This involves everyone in an organisation contributing to the improvement process, in ensuring the quality of whatever he or she does. In every job the need is to meet the customer's requirements by getting it "right first time every time".

Under the umbrella of the campaign, the Department of Trade and Industry has produced, often in conjunction with others, a wide range of audio-visual and written material reflecting as far as possible the experience of United Kingdom organisations and individuals, thereby letting others know that quality leads to success. The material is available free of charge to companies and organisations interested in adopting a quality approach.

The quality message has already been spread to a large number of British companies, and has been acted on by many. Following the initial advertising campaign and an extensive series of seminars and conferences throughout the country, the quality campaign is now concentrating on encouraging the quality approach by means of activity programmes with sectors of industry, on a regional basis and with individual companies taking the quality message to their suppliers and subcontractors. Eighteen of these activity programmes have been launched so far, and others are at the planning stage. In all, it is estimated that well over 50,000 companies have been contacted directly by the campaign through this and other work.

However, the significance of the campaign is not just the effort of the Department, but the work of all those organisations and companies that support the campaign's aims and objectives, and the work that it does—the institutes and societies, the CBI and TUC, the trade associations, companies and individuals, all working in the cause of quality.

As an important step towards the "total" approach, the campaign has also been promoting the benefits of effective management systems. The traditional way of manufacturing quality products has been to inspect goods after they are made, and to reject or rectify the defective ones. It is an expensive method, because faulty goods are not detected until time, effort and money have been invested in producing them. As I mentioned earlier, it can frequently cost 10 to 15 per cent. of turnover. A much more effective approach is to introduce a system that effectively plans, implements and monitors the process of manufacturing quality products or providing quality services throughout the product or service cycle, and encourages the entire work force to become totally committed to that process. Such a system must function logically and accurately, and must apply to every activity from marketing, design and the purchase of raw materials and components, through manufacture, to the delivery of the finished product or service.

Effective quality management generates procedures that can be used both to verify quality, and to provide information that will allow supervision, maintenance and improved management of the system. In the end, it reduces the need for inspection. It is essentially a system of prevention rather than cure. It is therefore also cost-effective, and not a financial burden.

The United Kingdom has a national standard for quality systems—BS5750. This standard has gained worldwide acceptance through the International Standards Organisation as the basis of the ISO 9000 series and, in its 1987 form, has identical wording.

As part of the campaign the Government provide assistance to small companies to help them to adopt more effective management systems. Since 1983, our business and technical advisory service on quality has committed over £12 million to enable independent companies, or groups with fewer than 500 employees, to employ consultants to give advice on how to introduce quality management systems. To date, over 3,400 companies have received assistance through the scheme.

As I said, encouraging the use of more effective management systems tuned to meet customer requirements helps companies to operate more efficiently. They can save money at the same time as raising the quality of their products or services.

To assist the marketing of products and services supplied by quality conscious organisations requires an objective means of clearly demonstrating their achievements. Independent impartial assessment can provide such a mechanism. It ensures that the quality management system of a company is in line with modern practice meeting the national quality standard and gives the customer greater confidence in the competence of the company. Assessment of products to a recognised standard in addition to assessment of management systems does, of course, give added assurance of conformity to the required standard. This involves independent testing in accredited laboratories and is frequently used when products have to conform to health and safety requirements.

Many sectors of United Kingdom industry are now developing schemes to enable them to demonstrate their commitment to quality and customer satisfaction. The Government have been helping by providing financial support—matching industries' contribution to the development of the schemes in their initial stages of development. So far we have helped to establish seven new organisations, and my Department is discussing similar initiatives with a number of other bodies intending to add to the network of independent assessment schemes gradually spreading to serve the entire spectrum of industrial activity.

However, the growing demand by industry for independent assessment and testing and the consequent growth in the number of organisations offering these services has required the development of a system to monitor the competence of those organisations so that purchasers can rely on test results and certificates and have confidence that the job has been done properly.

To build up this confidence, the Government launched in 1985 the National Accreditation Council for Certification Bodies, a representative group which advises my noble Friend the Secretary of State for Trade and Industry on the granting of accreditation for schemes assessed by the council. To date, five bodies have been accredited and applications from a number of other organisations are currently being processed. We have also established the national measurement accreditation service, which assesses and monitors the competence of test and calibration laboratories. NAMAS has been operating for rather longer than NACCB and to date has accredited over 500 laboratories.

I shall now briefly speak about the importance of good standards and the role of Government. The 1982 White Paper stressed the need for Government to be more closely involved in standards making and the booklet "Quality Counts" explains how this is being achieved. There has been a growing collaboration with the British Standards Institution in its work and in helping to set strategic aims. The key aim is to make British standards more relevant to the needs of industry and commerce, thereby helping to improve industrial competitiveness.

Particularly important is the use made by Government of such standards in regulatory and purchasing activities, and a priority has been identification of areas where strong standards are needed by key industries for their development. The Government also help standards experts to play a full part in international work so that British interests are fully represented.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

Is not one of the main problems about the BSI its snail-like pace? Those of us who have served on its sub-committees know only too well that years can go by before quality standards come out. Is my hon. Friend's Department trying to instil any sense of urgency into the BSI?

Photo of Mr John Butcher Mr John Butcher , Coventry South West

My hon. Friend will know that the standards-making process can be a particularly excruciating exercise. Of its nature, it requires consensus by quite a large number of participants. Over the years, I have wrestled with the problem that my hon. Friend has described vividly, and where possible we have, for example, recommended that these groups confine themselves purely to core standards. For example, looking outside the issue my hon. Friend raised, in telecommunications we feel that we should consolidate minimum standards to guarantee the integrity of the network rather than try to write in all sorts of individual features—gold-plated standards as they are called.

My hon. Friend has made a serious point. I know that the BSI is aware that sometimes a delayed standard is one that may never fulfil its purpose. I hope to deal with this in my remarks towards the end of the debate. I shall deal with the domestic and international dimensions of the point that my hon. Friend has raised.

The comments made to our mission in Japan back in 1984 provided a further spur to the challenge facing British companies in world markets, as competition has intensified—a challenge to which industry is responding. Much progress has been made in many sectors and the quality of British goods has benefited accordingly. It is a challenge which will not go away and while much has been achieved more needs to be done. More companies need to take the quality approach to their operations to improve their efficiency and effectiveness in order to satisfy their customers. Whatever their improvements and achievements in quality, they cannot relax. Continuous quality improvement has to be their way of life. Help and advice are available from many sources but in the final analysis it is a matter which companies have to tackle themselves since it is all about the way they organise, operate, and manage their businesses and about the role of every employee.

The customer has to be satisfied. If companies consistently strive to improve their quality and take a "companywide" or "total" approach, they are far more likely to adopt the attitudes and reflexes necessary for customer satisfaction to make a real and sustained success of their operations.

I repeat the title of the brochure—quality does count, and it means the generation of British jobs.

Photo of Alan Williams Alan Williams , Swansea West 10:07 am, 10th July 1987

I came to this Bench 32 minutes ago intent on making an objective, non-controversial and, I hoped, constructive contribution to debate that I regard as of considerable importance to British industry. I even tried, with dedication, to listen to the last 30 minutes as the Minister droned on. However, the first two minutes cannot be allowed to pass without an answer. The Minister spoke of an economic miracle, a ministerial mirage that he has discovered to start this debate. I assume that he is talking about the current short-term trend, the mini pre-election boomlet that we have been through before and which is based on the abandonment of public expenditure controls in the two immediate pre-election Budgets—controls which will no doubt be rediscovered subsequently. The boomlet is based on the devaluation of sterling by 30 per cent. against the deutschmark, the very devaluation policy that the Government denounced as irresponsible in the 1983 election when the Opposition and the TUC pointed out that that was what was necessary to stimulate exports and domestic sales.

Most importantly, the pre-election boomlet is based on a quite cynical consumer boom, a debt-inspired boom from a Prime Minister who spent the previous eight years condemning anyone who ever talked about credit and borrowing as being irresponsible and not running their affairs as a proper housewife or shopkeeper would do. The Minister will not remember—I do not mean that in any disparaging sense, as it is a sign of my on-coming geriatric status—that we have been through it all before. He might be interested to see how well-founded his economic miracle is.

Photo of Alan Williams Alan Williams , Swansea West

No. The hon. Gentleman had 32 minutes to make his point, so he must let me make mine.

The Minister might at least bear in mind the fact that in October 1958 the Macmillan Government removed all controls on hire purchase and we then had the first credit boom of the post-war period. Coincidentally, that happened only 12 months before a general election. Of course, that was a coincidence and it was equally a coincidence that during those 12 months the sale of cars increased by 30 per cent. and the sale of domestic electrical appliances increased by 20 per cent. We went into the "Never had it so good" election of 1959 that resulted in a majority of 100 for Macmillan. All that was based on the credit boom that had been generated a year earlier by the removal of hire purchase controls.

The sad corollary of that is that by some other strange and, I am sure, utterly non-political coincidence, when the balance of payments crisis hit just after the election, six months later in March 1960, Lord Macmillan had to reinstitute all the credit controls. The boomlet and the economic miracle were over.

Photo of Alan Williams Alan Williams , Swansea West

Perhaps the hon. Gentlemen should form a queue if you, Mr. Deputy Speaker, think that that would be appropriate. I think that the Minister should be number one and the hon. Member for Bolton, West (Mr. Sackville) should be number two. Perhaps I should issue little pieces of paper.

Photo of Mr John Butcher Mr John Butcher , Coventry South West

I am grateful for the right hon. Gentleman's courtesy in giving way so early in his speech. I am sure that he will agree that we should get our database right before we proceed into the meat of the debate. Would he not agree that if he examined the record of an economist called Euchen in conjunction with that of a Chancellor called Erhardt, he might find that the preconditions that were set up by those two gentlemen for a German economic miracle in the period 1949–54 were similar to what happened in this country between 1982 and 1986? Unlike previous occasions in the British economy, that was not an unsoundly founded recovery; it was real growth. Provided that international conditions do not work against us and we can continue the current trend—I agree that I use the words "current trend"—into the 1990s, does the right hon. Gentleman agree that it would not be an exaggeration to say that that is an industrial renaissance?

Photo of Alan Williams Alan Williams , Swansea West

For the first time today, the Minister sounds as though he believes what he is saying, which is rather sad because it means the disillusionment will be greater when it comes. As for his point about a renaissance, I intend to comment on that as my next point arising out of his earlier comments. [Interruption.] I believe that the queue may be showing signs of temper and perhaps I should allow the hon. Member for Bolton, West to make his point.

Photo of Mr Tom Sackville Mr Tom Sackville , Bolton West

We have now spent another seven minutes on some sort of rhetoric about differing views on the economy. We shall be interested to hear the right hon. Gentleman's views on this debate, which is about quality in industry.

Photo of Alan Williams Alan Williams , Swansea West

I am sure the hon. Gentleman will be interested in my views because they will be well worth listening to and I intend to make them. However, I must advise the hon. Gentleman that it was his Minister who chose to open up side turnings that had nothing to do with this debate. Perhaps the Minister will confirm that earlier this week I advised him that I intended to come to this debate to make what I hope will be a constructive contribution on the main subject. It is not my fault if the Minister has forgotten that he still has his election notes in his pocket instead of his departmental brief. In fact, it was the Minister who challenged me.

You can see, Mr. Deputy Speaker, that it is hard for someone like me who likes to please people and to make them happy, because on the one hand the Minister says that he wants me to deal with the question of renaissance, but on the other hand his hon. Friend the Member for Bolton, West, says that he does not want me to deal with that and, even more, he wishes that I had not dealt with the points that I have already made. Is it not difficult, Sir, to please everyone in such circumstances? With respect to the hon. Member for Bolton, West, this is a circumstance in which seniority must be given its opportunity. I shall therefore pay some attention to the Minister's request.

In his intervention the Minister said that we must get our database correct. However, when one considers the beginning of the Minister's speech it is interesting to note that he chose his database carefully as 1980–81. In Stalin's era in the Soviet Union when someone was disgraced, say Beria, all traces of that person would be eliminated. He would be removed from all reference books. Obviously the visit to Mr. Gorbachev did the Prime Minister some good and she appears to have returned thinking "If the Russians do it, why can't we? However, instead of getting rid of people, we shall get rid of a year." The year 1979–80 does not exist in Conservative history because all Conservative history starts with 1981. Unfortunately—it is a sad fact for the country—the history of this Conservative Administration started in 1979. However, one would not think that when one hears the statistics that are quoted. Despite the Minister's talk about growth, it is a fact that manufacturing growth in this economic miracle is still below its level in 1979 and is still down on the level of the three-day week under the previous Conservative Administration in 1974.

The Minister said that the recession was the worst for 50 years. Indeed, it is, but it is a British recession that has been superimposed on the world recession because the recession was engendered by the opportunity Budget that the present Foreign Secretary announced immediately after the election. We do not need to go into details, because the facts are on record. It was the drive and the spiral down into high interest rates and high sterling generated by that irresponsible Budget that led to the 50 years of unprecedented recession to which the Minister referred.

On the balance of trade, the Minister continually forgets the fact that in his economic miracle we have not only gone into deficit in manufacturing trade for the first time ever but, his successful Government, in achieving that miracle, have turned a £5 billion surplus on manufactured trade into a £6 billion deficit. That does not look much like an economic miracle to me.

Manufacturing investment fell by 41 per cent. during the Conservatives' first year of Government. Therefore, when the Government talk about seven years of continuous growth in manufacturing investment—it is true that there have been seven years of continuous growth in investment—they are now only halfway back up the cliff over which they plunged in 1979. After seven years of Conservative growth, they are still 20 per cent. below the level of manufacturing investment that they inherited in 1979. Therefore, as I have said, the economic miracle is more a ministerial mirage than anything else.

What is surprising is that the Minister can see things that are not there, but apparently he and his Departmant have great difficulty in seeing the things that are there. After the Minister's marginally controversial opening statement that led to my corrective and calm response, he went on to describe a devastating discovery at the Department of Trade and Industry. The Department sent someone to Tokyo in 1984 and that person came back devastated, having found that the Japanese were so far ahead. Why was the Department devastated? The facts were all on record. I have an internal document from the Department of Trade and Industry which goes back to the late 1970s and early 1980s and contains a report that was delivered at an international seminar in Tokyo in 1978, which was sponsored by the Union of Japanese Scientists and Engineers. That report contains a paper that was presented by a Dr. Juran, which deals with the very points with which the Minister has been trying to deal today as if he has made a miraculous new discovery.

As far back as 1980, a Minister of Trade wrote to a Minister of Industry saying that the DTI had carried out a study of eight major companies in this country and had discovered that, although they all recognised that quality was extremely important, there was unanimity among the executives—the term used is "without exception"—that the responsibility lay with management. It stated that company boards were reported to be reluctant to accept the evidence of their large and influential customers about the importance of quality.

The Department was not unaware of that. The only thing that is astonishing is that the Minister was astonished. He was a little late in his astonishment. If only he had read the papers that were lying around gathering dust in his Department instead of being acted on, he would have known way before that wasted visit to Japan. As the Government are cost-conscious, the Minister can probably tell me how much it cost to find out what he already knew if only he had opened the right file in the Department. Reports based on the 1978 seminar in Tokyo were circulating and in 1980 the pressure in the Department was for a strategy for quality, so it is amazing that it took until 1982 to produce one White Paper and until 1986 to produce "Quality Counts". All that one can assume is that the officials have been diligently trying to explain all those things to Ministers, but it takes a little while for the Ministers to comprehend what they are being told.

I now come to the essence of the debate. If it had not been for the Minister's opening comments, there need have been no controversy. I should have thought that it was an area where there could be a consensus approach. It is not a matter of which party is in office—both parties favour higher quality. The Minister rightly quoted the figure of £10 billion. Obviously, he read the same article in Management Today that I read. The article said that, on the experience of companies that have tried it, £5 billion of that could be readily saved by industry. Industry should learn that lesson, but sadly, as internal letters between Ministers reveal, the management is not always responsive, even where there is a vague comprehension of the problem on the part of the Department and the Ministers.

Quality has two or three distinct elements. There is quality in terms of the avoidance of faults. Most of the £10 billion that the Minister and I are talking about arises from appraisal, inspection and the consequential cost of faults. In addition, there is a different aspect of quality, because it is not a static concept. It has to be a dynamic concept if industry is to remain competitive. It is no good making a snapshot attack on the problem of quality. It is no good getting up to date with one's competitors; one must stay up to date with them. Therefore, there is quality in the further sense of the upgrading of products, the continually increasing sophistication of products. One must ensure that one's products are more up-market.

There is a complication. The problem is not entirely within the control of management. By the nature of modern economic society, every manufacturer tends to be another manufacturer's supplier in one form or another. Therefore, the final product that is marketed can never be of a higher quality than its components and sub-assemblies allow it to be. The Japanese learnt that lesson and taught it to us.

We became slipshod in the quality that we demanded and expected. I remember when we talked to Hitachi about it coming into Britain, and with Matsushita and Panasonic about their use of British components. We also talked to the British component suppliers. I am sure that many of the Minister's officials will have taken part in similar discussions. British manufacturers said that the trouble with the Japanese was that they used unrealistic specifications. They set failure rates on components that were so low that they could not be achieved.

When the Department investigated, we found that, in fairness, the Japanese were imposing the same requirements in their own country on their own component suppliers. In some cases, the British moaners were meeting similar specifications in lucrative defence contracts while saying that they could not meet them in normal commercial contracts. Then we wonder why we lost the television market.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

l am sure that my right hon. Friend will recall that when Hitachi was talking of coming to Britain I was part of a delegation comprising union members, management, local council members, and my predecessor the then Member of Parliament for Burnley, Mr. Dan Jones, which met him in his office on Millbank. We said why Hitachi should not he allowed to come into the United Kingdom. Does my right hon. Friend accept that, whatever the problems were in the industry at the time, Mullard Colour Tubes has survived in this country and is now making a product that is as good as the Japanese product? It employs fewer people, hut it has survived and is doing extremely well in my constituency and in Durham.

Photo of Alan Williams Alan Williams , Swansea West

I well remember that occasion and the late Dan Jones making representations as the then Member of Parliament, with his colleagues from his constituency. I remember trying to assure the tube manufacturers that there was life for them after the Japanese.

There is a true story that at the same time as one multinational that produced tubes in this country was putting pressure via its constituents here to stop the Japanese coming in, it was doing a secret deal in a hotel in Tokyo, which it had not told its British trade union or management about. That was to ensure that it would supply the tubes when the Japanese came in. However, that is a diversion from the main issue.

It is important that we do not treat quality as a once-and-for-all operation. It is important that we recognise that it is a continual process of upgrading products and moving up market where one has the higher added value and higher productivity.

The Japanese have an objective of higher quality at lower cost. If one gets higher quality at constant cost, that gives one a marketing chance, but the Japanese have been far more ruthless in the targets that they set themselves. They have said that they want not only quality in product areas where they are attacking world markets, but cost reduction. It does not need a policy decision. It tends to happen. It is a natural consequence, and I am sure that the Minister will agree. He said virtually the same things in a different way in his speech.

A spiral develops once one accepts the need for quality. Once one accepts that quality matters and sells, because there is higher quality, one's productivity goes up because less of the product is being wasted and more gets out into the shops. One's costs are reduced because there is less scrap and so on—the £5 billion saving that has been pinpointed—so one has lower unit costs. Thus one becomes more competitive. That has been the lesson of audio and television market development of the past 10 or 15 years, and advanced products have become available at reducing prices. It is a lesson that British industry must learn, and unfortunately has been slow to learn.

Japan has no innate characteristic that led it to that policy decision. It was a decision of necessity, a conscious decision. As many of us will remember, in the post-war period the reputation of the Japanese was for the production of shoddy copy products—cheap versions of European goods. Japan has no raw materials. To sustain growth in the post-war period the Japanese had to be able to get raw materials, and to do so they had to get foreign currency. Therefore, the Japanese Government made a conscious decision, backed up by industry, that they had to move up market. To get the currency, they had to go where the price was, where the opportunities were, so they made a deliberate strategic decision. There was governmental and industrial consensus, which is typical of the Japanese. Quality is not a job for a quality department. It must be a corporate endeavour. Every individual in a firm must be quality-conscious, and the Japanese hammered that home, just as the Americans had done before them. The Americans, however, perhaps lost sight of that idea when the bottom line took precedence over everything else.

The Japanese had to accept the idea that, to achieve the quality needed to beat the Germans, the British and the Americans in the markets they dominated, they had to involve their work force. We talk of "quality circles" as though they are a great discovery. After the war, Britain sent productivity missions to the United States where the same ideas, although called something else, were being discussed and implemented in companies, but that information was never followed through. The Japanese discovered that, inevitably, as the work force was involved in the pursuit of quality and the elimination of inadequacy in products, it had to be drawn into wider discussions. Often policy matters were involved in eliminating faults. The Japanese developed that consensus approach. It has had industrial relations benefits. It has produced a greater sense of unity within Japanese industry.

It is important to get across to industry the fact that the pursuit of quality is not just a matter of trying to avoid that £10 billion of waste. But, for pity's sake, industry should be motivated enough, if only to get its act together, by the thought of an extra £10 billion profit. There are far more important gains to be made from the pursuit of quality in terms of industrial relations and attitudes if we recognise what follows from the decision to ensure that quality is part of the whole corporate philosophy instead of just the delegated responsibility of a quality control officer and a couple of inspectors.

Britain has fallen behind in quality competition, although some companies have not and have done well. I am sure that all hon. Members were delighted at the order announced today by Rolls-Royce. It is an example of a firm which, by excellence, has managed to break back into the market after going through a difficult phase. There is not just a philosophical problem in industry. For too long there has been too little investment. To achieve quality there must be not only policy decisions but investment to back them up. British industry has concentrated far too often on telling the customer, "You can have the best that we are able to produce with the machinery we have."

Industry cannot understand why it has lost markets to competitors which start, with market research, to find out what customers want and then set about ensuring that they have the equipment and system to supply it at competitive cost. Industry has been reluctant to accept that. That fact emerged from the study of eight companies undertaken by the Department of Trade and Industry in 1979–80 and was echoed by several of the National Economic Development Organisation sector working parties and reports such as Warner, Corfield, ACARD and Finniston in the previous decade or the early part of this decade. Those reports spelt out that message, but, sadly, we still have to talk about it as though we are missionaries, trying to take the message to an industry that should already know it.

Industry representatives said that they were astonished when they returned from Tokyo in 1984. GEC and Thorn Electrics were equally astonished in 1978–79 when they looked for possible joint ventures in Japan at the time Hitachi was setting up in this country. I said then to management and say now to the Minister that, in a way, it is an indictment of British industry that it is astonished to find out what its competitors are doing. If there is one thing about which we can be sure, it is that the Japanese know very well what their competitors are doing. It is astonishing that as long as six years after Thorn and GEC said, "Careful, there are dreadful things happening in Japanese industry with which we are not keeping pace", the Minister and the industries represented on the 1984 mission—I do not know what they were—were still astonished at what they found instead of having learnt the lesson of what happened.

We have lost out on the market because we have not learnt the lessons that have been there for anyone to see. In fairness, the British Institute of Management had been preaching the lessons long before the Minister did. At the end of the 1970s and in the early 1980s, the BIM said that, instead of British over-reliance on specialists inspecting bad quality out, industry needed to design and build good quality in. We are talking about getting the product right with pre-production investment and with correct process planning before it is put on the market.

I endorse what I regard as the serious part of the Minister's speech. I say to new Members, I am sorry but it is in the nature of the House that, if one flies one political kite, three political kites will probably be immediately flown by the other side. The Minister knows what I am like. We have often had exchanges. He should have resisted temptation today. We could have had an amicable discussion on a matter that the whole House thinks is important. There are lessons to be learnt. The tragedy is that one lesson is that no one has been willing to learn the lessons that have been there for a long time.

Photo of Mrs Elizabeth Peacock Mrs Elizabeth Peacock , Batley and Spen 10:36 am, 10th July 1987

I closely followed what the right hon. Member for Swansea, West (Mr. Williams) said. He talked about British moaners. Perhaps he ought to talk to some of his colleagues, especially the hon. Member for Kingston upon Hull, East (Mr. Prescott) who, before the general election, toured the north of England and later, in a debate in the House, refused to admit that he had seen new factories being built and massive investment in manufacturing, creating jobs. He pretended that they were not there and that they were a fairy tale. But they were there. The bricks and mortar are there and jobs are being created.

Today we are discussing the importance of quality in manufacturing for international competitiveness. Quite simply, quality is competitiveness. I speak as one who was born in and now represents an area renowned for its fine industrial history and the enthusiasm of its people for value for money as well as quality. I believe that the quality of goods that we produce can and will be the lifeline for British industry. The CBI has told us Quality means selling goods that don't come back, to customers who do. That is very important.

I should like briefly to consider some aspects of this matter. Why should we expect such quality from goods that we want people to purchase? I suggest that there are probably at least five reasons for that. The first is the rising expectation of consumers. Consumers now travel widely and experience new standards. They are better educated, they know exactly what they are looking for and they are not prepared to put up with anything less. They are better informed by the media. They see products and standards of living on television which perhaps they have not seen before. Even some soap operas, I am told, set standards. We may not always like those standards, but they are there for everyone to see.

Secondly, we hear quite a lot about circles of quality. The Japanese have practised this for many years. Those quality circles differ between companies and countries, but they provide one of the the major benchmarks of competition. In time, products of high quality become associated with particular firms and names. We have seen this over many years. To most people, Swiss chocolate means Nestlé, Mercedes Benz means West Germany, and vice versa. Over a longer period, brand names for high quality reliable products even become subsumed into the language as quasi-nouns. Food mixers are widely known as "kenwoods" and vacuum cleaners as "hoovers". They get those names because of the quality of the original article.

Thirdly, there is growing evidence that growth in the market share comes from sustained quality, and many of our companies have known that for some time now. In a price versus quality argument, quality wins in time. Over a long period, there is no conflict between price and quality, and quality is always the real winner because people buy goods only when they feel that they are getting quality and value for money. We must not try to achieve one without the other.

Fourthly, as the right hon. Member for Swansea, West said, initial quality can mean a saving of costs and of waste. Parts of United Kingdom industry are only now waking up to the fact that it can cost much more to destroy or repair shoddy goods than to make good ones.

My fifth point relates to the high cost of failure, to which the right hon. Gentleman also referred. Failure to produce good quality products or services can lead to financial disaster and, as the tragedy at Bhopal in India showed, lack of quality control can lead to real disaster.

Let us examine the "how" of quality control. How can we go about getting quality into every street? Not surprisingly, the answer is that the Government cannot bring that about. I congratulate my hon. Friend the Minister and his Department on the excellent literature about quality which has been available for some time. I know that many companies, especially in the north of England, have taken the advice to heart and those which have not used such practices before are doing so now.

Governments can legislate only in a negative fashion. Only firms and businesses can raise the positive standard. I know that this is a large and complex subject, but let me offer a few ideas. I am sure that they are not original, but they are worth a mention. Total quality throughout the manufacturing process, from the selection of raw materials to delivery at the point of sale, is essential. The companies and retail stores that have done extremely well have recognised that for many years and have become well known for their quality. Such a high standard can be achieved only by an attitude of self-inspection on the part of all those involved in manufacturing. Each employee should take an interest in the component that he produces and in the quality of the finished article. If employees do that, they are looking not only to their own futures but to the future of the company and our manufacturing base.

I refer to experiments in the vehicle industry, particularly in Japan. Having visited Japan with a Select Committee last year, I am not sure that everything in the Japanese garden is as rosy as it was. The Japanese face problems because they have put all their effort into their manufacturing base and very little in their infrastructure. Anyone who has tried to get out of Tokyo, at any time of day, knows that only too well. However, the Japanese have shown that an attitude of self-inspection is both cheaper and more reliable; it gives a responsibility to each employee for the finished article. Any Government initiative to raise quality consciousness must have international standards as its basis. It is no good making quality products that fall well below the standards of our industrial competitors. If we do not keep up with international standards, we shall not sell our goods on the market. We cannot look to the home market alone; we must export. We have always been a trading nation and that will be even more true in the future.

The national quality campaign launched by the Government in 1983 is to be welcomed. It has put the word "quality" back at the top of the agenda in large letters. It has now reached over 50,000 firms, many of which are proud of their quality record. Firms can take advantage of lower interest rates and inflation but only if that attitude pervades every corner of every workshop in every town and city of the United Kingdom.

We have many very small companies, particularly in the north of England, which export a variety of goods to all parts of the world. The articles that they export are not always small or easy to pack and send by freight or air freight. From my constituency we export fire engines, which are huge objects, to countries all over the world. They go to airports in Hong Kong and parts of Africa and to oil refineries in Saudi Arabia. They are not the easiest things to send, but the quality that the company has managed to achieve is second to none.

We have many other small companies. Some export nougat to France. We used to import it from the French and we are now sending it back to them. We even send spaghetti to Italy; that really is coals to Newcastle.

I have referred to some notable foreign successes and to some successes at home. We have many more, much too numerous to mention today. As reported in the newspapers today, the largest one-piece carpet ever made is to be despatched from west Yorkshire today. It measures 41 ft by 54 ft and has no seams, and it will cost the Saudi Arabian prince who ordered it £8,500.

Photo of Bill Cash Bill Cash , Stafford

Cheap at the price.

Photo of Mrs Elizabeth Peacock Mrs Elizabeth Peacock , Batley and Spen

It is cheap at the price, as my hon. Friend says. The very small company that made the carpet, which took five people three days to make, has 10 similar orders. The company has been operating for only five or six years. We should congratulate it on its success and hope that many more carpets will go to Saudi Arabia in the future.

We have massive increased investment in manufacturing in the north of England and it is there for everyone to see. Factories are being built and new jobs created and many millions of pounds are being invested. That money would not be invested without the prospect of a quality end product that companies know they will be able to sell not only in the home market but internationally. We must encourage more investment, particularly in the north of England.

A great British success is Jaguar Cars. In 1979, sales of Jaguar cars fell by 50 per cent. They had been falling in previous years and that result was almost the final nail in the company's coffin. In 1980 it took 10,500 people to make 14,105 cars. For every customer that Jaguar lost when its quality was not assured, 21 jobs were put at risk. Then there was a radical rethink of the company's attitudes under its present chairman, John Egan. All employees were told of the crisis of quality and competitiveness. Quality circles—which we have heard of somewhere before—were introduced, and all employees given responsibility for their own part of the process. The philosophy changed from one of inspecting out faults to one of building in quality—the right hon. Member for Swansea, West referred to that—and the results have been little short of fantastic. In 1982, 8,000 employees made 28,041 cars; what a change from 1979. Jaguar now has so many orders that it cannot make cars quickly enough and the prospects for increased employment are thus looking better than ever before.

We should not let such success stories hide the problems that we still face. We have much work still to do on quality and competitiveness. I return to my theme, that British industry can compete only when all our companies are based on quality street.

Photo of Mr Peter Pike Mr Peter Pike , Burnley 10:49 am, 10th July 1987

First, I apologise for the fact that I shall have to leave the Chamber at some stage for an outside commitment, but I shall return later. I had not intended to speak in the debate, as I expected that a large number of Members would wish to speak on the important subject of quality and competitiveness in British industry. Having worked in manufacturing industry for some 10 years before being elected to the House, I have always been concerned that there are not enough Members on either side of the House who have been involved in management or in the work force of manufacturing industry. Manufacturing industry is vital to the economy of the nation and it should be as well represented on both sides of the House as the legal profession, which internationally produces perhaps less benefit for the nation. That is a personal view. It does not mean that there should be no barristers in the House, which, in my view, should represent a wide cross-section of the nation as a whole.

My right hon. Friend the Member for Swansea. West (Mr. Williams), who was previously a Minister and ought to be a Minister now, referred to a meeting some years ago when Hitachi was talking of coming into the United Kingdom. I was present when the joint delegation of management and all the other people to whom I referred in my intervention came to my right hon. Friend's office. He began by asking whether they were aware of an agreement signed in a Tokyo hotel the previous day. The top management man from Mullard immediately left to telephone Philips in Eindhoven to find out what had been agreed. I actually found out what the agreement involved today because no more was said on that occasion and the meeting was adjourned.

Quality is of great importance and we must ensure that it is given great prominence in British industry. When I was involved in one industry and visited others in the 1960s and 1970s, people working on the production side were encouraged to believe that the most important factor was the number of articles coming off the production line and going out through the factory gates in lorries or containers. Quality was not the most important factor. That attitude was common to many industries, but it has changed and the change is an important one. Until the miners' strike in 1974 we were able to sell all the goods that our factories could produce, but the situation then began to change and we found ourselves competing in world markets where quality was important. Industry has become increasingly aware of the importance of quality, but the message must come down from top management through middle management and supervision to the work force itself if quality is to be given the attention that is required.

I have always believed that we must ensure that it is not a question of management versus workers but that all should work together, because if all those involved do not work together there will be no one left working in industry. In this context, communication, whether on quality or any other aspect, is of critical importance. We must ensure continued improvement in communications within manufacturing industry. Much criticism can be aimed at management in this regard, but having been a shop steward I know that there are also failures on the trade union side, whether between shop stewards and members or shop stewards and management. Management has an important role to play in ensuring that the work force knows exactly what quality requirements are essential and there must be constant encouragement to ensure that products meet that standard.

As the Minister has said, it is important not to have rejects which have to be repaired or scrapped, because the further along the production line that occurs, the greater the cost to manufacturing industry. The importance of that aspect must be made clear to the work force. In my industry, an added value bonus scheme was introduced whereby management and workers received a percentage of the value added, which could be affected if products had to go back a stage or be scrapped. I was on the supervision committee of that scheme and it proved a positive benefit to all concerned.

I am glad to see you in the Chair, Madam Deputy Speaker, if that is the correct way to address you.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

Thank you very much, Madam Deputy Speaker. It is the first time that I have seen you in the Chair and I am glad to welcome you.

Manufacturing industry is important to the economy of the whole nation. Yet the Government seem unconcerned at the fact that we import £8 billion-worth more manufactured goods than we export. Last Friday I took part in the debate on tourism. That is an area of great growth and I do not deride the benefit that it brings in terms of jobs and the economy. I appreciate the benefits to the nation from the service sector. Nevertheless, this nation was founded on manufacturing industry and our future prosperity must depend on that industry. We must therefore return to a position of trading surplus. In that regard, both quality and competitiveness are extremely important.

The rate of growth in manufacturing industry may be higher than it was, as the Minister has said, but, as my right hon. Friend the Member for Seansea, West has said, it depends on the starting point that one takes. I accept that productivity is greater, but output and investment are both lower than in 1979 and those adverse factors must be taken seriously into account.

I have never denied that new technology must be introduced, because if our industry is to compete on world markets, it must compete on equal terms and have the newest possible technologies so that our output can meet world competition. Many industries, however, are concerned about unfair competition. and I shall be writing to the Department about this. I shall not go into detail at this stage as I must respect the confidentiality of the companies concerned. One example, however, concerns a Hungarian competitor selling goods into the United Kingdom, and another concerns Japan. We have to accept competition, but it has to be fair competition. For reasons of confidentiality, I will write to the Minister and detail those two examples rather than discuss them in the House as that may cause embarrassment in that industry.

The Government also fail to take cognisance of energy costs. When I have met industry leaders, both as a Member of Parliament and before that, when I was leader of the borough council—the council always tried to maintain good relations with industry—those leaders always mentioned that energy costs were a problem. In theory, energy costs throughout the EEC are supposed to be above board and the tariffs published. However, that does not necessarily happen in all countries within the EEC. Some multinationals are very aware of the preferential rates that some competitors in Europe are able to get. One way around it is to give long contracts for the supply of energy, whether it be gas or electricity, at a rate well below the published tariff.

I do not want to get involved in the issue of rates because we will have many occasions in the months ahead to discuss that. However, whilst the Government continually mention rates as an area of concern, most industries in my constituency say that energy is of prime concern. The Government have to look at that. Whether it is the responsibility of the Minister's Department, or some other Department. I ask that he look at what is happening in other countries within the EEC. Are our competitors paying a fair energy price? The information that I have from some multinationals is that they are not.

Manufacturing industries have to grow. They have to have the right quality products. The Government, trade unions and management—supervisors and everybody involved in industry—have to be concerned about quality. We have to give every possible assurance and encouragement to ensure that our goods are of the right quality. As the hon. Member for Batley and Spen (Mrs. Peacock) said, consumers are concerned not only about the price of goods but about the quality of goods. The quality must match the price of the goods. If one pays for an expensive meal, one expects a good meal. It is the same when one buys a car, a refrigerator or a freezer. One expects value for money, and that is important.

We also have to encourage innovation in industry, and research and development. The Government should be taking far more positive steps to encourage research and development. We should also be encouraging suggestion schemes in those industries that do not have them already. The workers in some industries that I have visited have told me that they have put suggestions to management, but that no notice has been taken of those suggestions. The industry that I worked in was very good in that respect. We had a good suggestion scheme. One has to accept in industry that not all the good ideas come from management. Very often the worker on the production line can see what is being done wrong, what can save money, what can make a better product or what can avoid damage to a product. Suggestion schemes are extremely important and should be encouraged.

We also have to look at profit within industry. A manufacturer in my constituency—to avoid embarrassment I will not name it—last October put it to me that industry had to grow and make profits. I do not dispute that. That manufacturer also said that it was then for the Government to distribute that wealth, and I do not dispute that either.

We must accept that new technology will mean fewer jobs. That is inevitable. As new technology is introduced, that trend will continue. The Government must discourage employers from using permanent overtime. The unions also have a role to play. I am not referring to overtime to meet short-term sickness, holidays or where an order has to be delivered by a specific date. In many industries at present there is a pattern of regular overtime that is at an unacceptable level. If there are eight hours or more of regular overtime a week, those employers should be encouraged to employ extra workers rather than continue that level of overtime. Many industries consider it cheaper to use overtime than to take on new employees, and that is a very worrying aspect.

I am sure that the Minister is also aware that output in many industries could be increased by 50 per cent. or more if only 10 per cent. more employees were taken on. Many industries within my constituency, if they employed 10 per cent. more employees, could increase their output by as much as 50 per cent. if there were markets at home and abroad. We want to see people back at work.

The great difference between the Opposition and the Government is that we want to see the wealth shared. We want to see that people have an opportunity to work and that those out of work do not suffer a declining standard of living while those who are in work enjoy an improving standard of living. We want a fairer distribution of wealth.

Other countries will not buy our goods if they are not made at the right quality and at the right price. Our own consumers will not buy British goods unless they are at the right quality and the right price. There are occasions when one does try to buy British but it is extremely difficult to find British goods available. Therefore, industries must be asked why they have stopped making those items.

EEC requirements on labelling are of concern. The fact that the British Government cannot require labelling to say "Made in Britain" worries many industries, such as the textile industry in my constituency. Consumers have a right to know whether a product is made in Britain or not. We need to look more carefully at labelling that will show where the main labour was involved. Consumers do not have to buy British, but if consumers want to buy British, they should have the right to take that factor into account when making their purchase.

The Government should do everything possible to resist pressures from the EEC that will make it harder for consumers when they are making their purchases in any shop in this country to be absolutely certain of how much of the work has been done within the United Kingdom. That is a worrying aspect not only for Opposition Members but for Conservative Members. I am not asking for anything unreasonable. All I am saying is that the consumer should have the right to know and that they will be able to take that into account, along with all the other factors such as quality, price and design, when making their purchases.

This is an important debate. Whether we are involved in Government or Opposition, in the trade unions or management, we have to do everything possible to ensure that our industries are making goods of the right quality and at the right price and that we are able to achieve our fair share of the market in the United Kingdom and in the world in years to come. If we do that, this country will get over the problems we have been facing.

Photo of David Tredinnick David Tredinnick , Bosworth 11:11 am, 10th July 1987

I am grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye so soon after my arrival in the House. I am aware that not all previous hon. Members for Bosworth have been so fortunate. Sir William Edge, elected as Member of Parliament for Bosworth on 31 May 1927, was first successful in catching Mr. Speaker Fitzroy's eye on 12 July 1928, 14 months later.

I noted Mr. Speaker's remarks earlier in the week that hon. Members, for their good health, should wear jackets in the air-conditioned Chamber. I am sorry to hear that Mr. Speaker is not well. However, I must tell the House that, despite following his ruling to the button, not only have I caught his eye but I have caught his cold. I ask hon. Members to bear with me if I appear to be a little under the weather.

I have always considered it to be a great honour to be chosen to stand for Parliament. It is a much greater honour to be elected and it carries with it enormous responsibilities which I take very seriously. I first wish to thank the 34,000 electors in Bosworth who voted for me. I must make it clear to the House that my 17,000 majority, which made my vote almost double that of the party that came second, owed much to the respect, admiration and trust that my predecessor, Sir Adam Butler, generated during his 17 years as Member of Parliament for Bosworth. During my time in the constituency since my selection in December, I have heard not one word said against him. On the doorstep I have heard people say how he helped them, how he looked into their family problems and helped, for example, with war pensions. He has helped so many people in the constituency and he has always been approachable. He has certainly been kind to me.

I pay tribute, too, to his career in the House. He was the Parliamentary Private Secretary to my right hon. Friend the Prime Minister when she was Leader of the Opposition. He was a Minister of State at the Department of Trade and Industry, a Minister of State at the Northern Ireland Office and the Minister of State for Defence Procurement. Conservative Members will remember that he won the constituency in 1970 with an 8 per cent. swing, he held it in 1974 against the national swing and improved it in 1979 and in 1983. I hope that all hon. Members will join me in wishing Sir Adam a long and happy career outside the House.

I also pay tribute to my wife, who is sitting in the Gallery. She has already supported me through three campaigns, including two general elections, and I look forward to her support in many more.

One of the problems that newly elected Members on both sides of the House will have found in taking over from senior, well known and respected Members as they retire is how to get oneself known. Soon after I was selected as the candidate for Bosworth, I explained on the doorstep to a lady of advanced years and great seniority that I was taking over from Sir Adam, her respected Member of Parliament. She looked me straight in the eye and said, "Well lad, your problem is that nobody knows you from Adam." I would like to think that I have overcome that problem or I would not be speaking here today.

I am fortunate to represent one of the most historic constituencies in England. It was there, at the Battle of Bosworth in 1485, that the Wars of the Roses ended with Richard III being defeated by Henry Tudor, soon to be crowned Henry VII. I must say in passing that my heart goes out to hon. Members who represent constituencies with names that mean nothing to the local people and presumably mean something only to the mandarins of the Boundary Commission.

Apart from the famous battlefield, much favoured by tourists, my constituency covers 126 square miles or, if one prefers, 80,000 acres. It is situated at the very centre of England and has countryside as beautiful as one could wish to see. However, the commercial heart of the countryside is the town of Hinckley together with Earl Shilton, Barwell, Burbage and Anstey. A total of 46 per cent. of the residents employed in my constituency are employed in manufacturing, hence the reason for my great interest in wishing to catch your eye today, Mr. Deputy Speaker.

In the constituency approximately 16,000 are employed in the hosiery and knitwear industry. They are employed by one of the 90 hosiery and knitwear companies that we are fortunate to have. The motion refers to the importance of quality. I must tell the House that the quality of hosiery and knitwear made in my constituency is second to none. It is as good as that made anywhere in the world. We have a hard working, skilled labour force, forward-thinking managements and a record of good industrial relations. I suggest to hon. Members who live in the north and north-west that if they are driving up the M1 on a Friday they could do much worse than stop in Bosworth and buy some of the hosiery and knitwear available there. It will cost them much less than anything bought in Oxford street or Knightsbridge and they will get the same quality or better. I recommend that to hon. Members.

Quality is not the only virtue required for a manufacturing company to compete internationally. I propose to look at another factor and, I hope, demonstrate the profound impact that it has had on international competitiveness, at least for the hosiery and knitwear industries. That factor is the effect of the exchange rates and the value of sterling against European currencies.

I suggest that the easing of the value of sterling against major European currencies last year has been of great benefit to textile and clothing exporters. I do not want to send hon. Members to sleep by bombarding them with statistics but I must refer to figures for clothing exports to the EEC which have just been published by the British Textile Confederation. They show that in the first quarter of 1987, compared with the first quarter of 1986, those exports to West Germany were up by 43 per cent., to France by 45 per cent., to Belgium by 56 per cent. and to the Netherlands by almost 60 per cent. Those are significant figures.

As I said, those figures have been published, but what has not been published hitherto is the impact that the large increase in clothing exports to the EEC has had on our trading performance with the EEC in the first four months of this year.

I am delighted to be able to inform the House that the unpublished figures that I have received from the British Textile Confederation show a dramatic improvement. Compared with the first four months of 1986, in the first four months of 1987 our trade deficit with all European Community countries was reduced; for textiles by 10·3 per cent. and for clothing by 24·4 per cent. The combined textile and clothing deficit was reduced by nearly 15 per cent. That is good news for my constituents, the hosiery and knitwear industry and the country.

Unfortunately, there is bad news too. There is the general problem of low-cost imports from the far east. They threaten the viability of British companies. I refer to imports from countries in which labour is paid a pittance and the hours are long. In some cases, workers get only half a Sunday off each month.

I draw the attention of the House to a specific serious problem affecting my constituency; that is, the phenomenal increase in imports of cheap underwear from China. The matter is of great concern to me. In my constituency, 12 companies that make briefs and pants could be threatened. I ask hon. Members to bear with me as I give them a few figures that I think are important. Every year, approximately 136 million pairs are sold in the United Kingdom, of which, last year, 89 million were imported. In 1985, we imported from China about 2·5 million pairs. The figures that have now been compiled show that, in the first quarter of this year, we imported 8·5 million pairs from China. This year, we expect to import from China 34 million pairs in all. That is a staggering increase on a base figure of 89 million. Last year, the French and the Germans bore the brunt of imports from China. They pleaded with the EC for regional restrictions, and they were granted.

Were I not bound by the convention that my maiden speech should not be controversial, I would say that I wholeheartedly support the Knitting Industries Federation in its demand for urgent action for Britain.

I draw the attention of the House to another important influence on the ability to compete internationally. It goes hand in hand with quality. It is by no means restricted to the hosiery and knitwear industry. I refer to design. For six years, I worked in marketing in the computer industry and learnt to recognise the importance of design. Increasingly, in my constituency, companies are investing more in design and are reaping the benefits of that investment, particularly in computerised design in the hosiery and knitwear industry.

There is no better illustration of the force of good quality and design than another company in another industry in which many of my constituents work. I refer to Jaguar Cars at Coventry, which has already been mentioned by my hon. Friend the Member for Batley and Spen (Mrs. Peacock). Like many hosiery and knitwear manufacturers in my constituency, Jaguar has found the magic marketing mix that brings success in international markets.

Photo of Bill Cash Bill Cash , Stafford 11:23 am, 10th July 1987

It falls to me to follow my hon. Friend the Member for Bosworth (Mr. Tredinnick) and to congratulate him on an excellent maiden speech that he delivered with a lightness of touch and with an interest that we came to associate with his predecessor. I congratulate him not only on his excellent majority but on the quality of his first performance on the Government Back Bench. We look forward to many further opportunities of hearing from him in future.

At the heart of the debate is international competition. It has frequently been said that the quality of our goods lies at the heart of our industrial performance. Indeed, one of the curious characteristics of the current Japanese miracle is the fact that, for many decades, Japan was not regarded as a country that produced high-quality goods. It is fairly said that it was in the post-war period when it discovered the importance of a reduction in taxation—and it was the Economic Minister who introduced the notion of reduced taxation as a means of stimulating the economy—that it looked to America for its new industrial criteria. One of the other things that Japan discovered and developed was the need to improve the quality of its goods. Having been a country that traditionally produced goods of inferior quality, which was also a characteristic of other countries in south-east Asia and the Pacific basin, it learned its basic quality techniques from the United States and from men such as W. E. Deming and J. M. Duran.

The ability to be innovative and imitative ensured that Japan produced a combination of quality with volume and, at the same time, a reduced taxation policy, an innovation and an ability to produce an incentive-based economy. Much of its current success is due to a combination of such factors together with its ability to combine an exemplary relationship between management and work force that is being copied throughout the rest of the world.

The history of this country affords us a lesson. We must look back to the mid-19th century and consider how places such as Ironbridge, which is near my constituency, has become one of the leading places in Britain, indeed in the world, in power generation, the generation of turbines. We are aware of the quality of Evostick, Evode products and the world-famous Lotus shoe industry. They were all based upon quality. Back in the 18th century, when Richard Brinsley Sheridan was the hon. Member for Stafford, the quality of Stafford footwear led the world. Quality has always been at at the heart of industrial performance in my constituency. It has also been at the heart of industrial performance of Britain, and our ability to export during the 18th, 19th and 20th centuries depended upon the quality of goods that we produced.

In economic debates, it has been the characteristic of the Leader of the Opposition's speeches to stress the volume of production and the need to sustain it. The irrelevance of the theme that he developed has become increasingly apparent against the background of the need to produce goods and manufactures of the highest quality. In the modern world, there is absolutely no point in producing a system of manufacture that is geared exclusively to manufacture. From the only two speeches from the Opposition today, I noticed an insistence on the importance of output. Without quality, output is simply not good enough. For example, one must consider the number of people who have a Japanese watch, a Japanese car or a Japanese radio or an item from Korea or Taiwan.

People choose those goods because of a combination of factors including price, design, marketing and, above all, quality. We have sought to simulate that quality since the Conservative Government came to power. I pay tribute to the Under-Secretary of State for Trade and Industry for the way in which he has conducted that policy. It is essential to persuade people to go for quality if we are to compete in the modern world. Much of the credit for putting the emphasis on changing attitudes among management and work force should go to that Minister.

I referred earlier to the success of Rolls-Royce and the £150 million contract announced today. I understand that as much as £650 million might be involved. That contract is directly the result of high-quality production by a great British, privatised company. Through new contracts with Qantas it will be able to sustain jobs in Britain. It is not just a question of selling for the sake of selling because selling is vital to the economic performance of the country and to sustaining jobs.

We have heard much of Jaguar and Sir John Egan's efforts. That is another privatised company which imposes contractual requirements upon customers and subcontractors to ensure that the quality of goods is as high as the customer requires. There is no point in imagining that simply producing goods and, as we did in the car industry for decades, insisting on volume production is enough. It is not enough and might even be disastrous. We must sustain the quality of goods.

The Consumer Protection Act, which has just been passed, production liability and the harmonisation of European laws are of great importance as I know from serving on the Select Committee on European legislation. Working groups and Ministers discussing these matters in Europe have led to a proper emphasis on maintaining a free and fair market and that has much to do with the quality of legislation in the European Community and in this House. The combined effect will be to produce quality goods to enable us to compete effectively with the United States and south-east Asia.

Rejects and repairs have been mentioned. It is estimated that 10 per cent. of our gross domestic product can be put down to lack of quality and to the failure to produce goods of the type and quality that people want. If goods are constantly returned and industry has a repair and renewal problem, confidence will be lost and people will not buy the goods.

Accounting systems are also important. I understand that Ford and many other companies are ensuring quality not only by the quality of the product but by the quality of their accounting system. When such companies enter arrangements with subcontractors a condition of the contract concerns the quality of the accounting system to ensure proper cash flow. The quality of the goods is therefore matched only by the quality of the administration. We must dovetail all the ingredients to ensure that we produce quality goods.

Quality is essentially pro-competitive and anti-monopoly. One of the great problems in the past in terms of industrial performance and the development of monopolies—whether state or private—was that quality suffered. Thriving small enterprises which are highly energised and directed to the market produce the quality required. I think of places such as Covent Garden and of other small business enterprises being set up throughout the country. They prove that high performance, high quality products are what people want to buy in a thriving, prosperous and competitive world.

The Government are bent on the eradication of Socialism. They are a radical Government and they will achieve that objective. An intrinsic part of our policy is to get rid of the latter-day nationalisation which led to the lack of British quality in the 20 years after the second world war. I lived in Sheffield for nearly 20 years and witnessed the decline of the steel industry. Now that industry is in profit for the first time for over 10 years. One of the reasons is that it is now a highly competitive industry aiming at quality. That is how we shall be able to sell our products abroad as we did in the mid-nineteenth century.

The elimination of low-quality drab Socialism should be one of our aims over the next five to 10 years. One of the aspects of that, in terms of industrial performance, is to put emphasis on high quality manufacturing industry. High quality sells products, when products are sold a great economy is created, and a great economy leads to high employment.

Photo of Mr Tom Sackville Mr Tom Sackville , Bolton West 11:36 am, 10th July 1987

I should like to welcome you, Madam Deputy Speaker, to the Chair. I should also like to congratulate my hon. Friend the Member for Bosworth (Mr. Tredinnick) on an excellent maiden speech, in which he appealed eloquently for the interests of the industries in his constituency. I declare an interest in that he and I arrived on the same day, in the same house, at the same educational establishment near Slough 25 years ago. We sat next to each other then and it is good to be again sitting next to each other. My hon. Friend had many of the qualities of a successful politician at the age of 12. Today he sounded as if he had been here for years, and we expect great things from him.

Recently I was talking to a person who has worked for a long time in Japan for a British company. We discussed what should be done about the trade imbalance, the growing ability of the Japanese to sell goods to us and to other industrialised countries and our inability to sell to them. I suggested that we should allow the Japanese currency to appreciate yet further so that the competitiveness of Japanese exports would be further eroded. My companion said that the Japanese themselves expect to be able to weather that, to watch the yen appreciate further and to continue to sell to us because of the quality of their goods. The only way that we can combat that serious possibility is to produce similar or higher quality goods. We have not done enough to achieve that.

It is good that we should be debating today an important non-political subject. We spend most of our time in this House debating points that do not really contain great substance, as they are simply political issues. However, today's subject is absolutely vital to our economic future. It cuts across all political boundaries and it is excellent that it should do that. I am glad to be taking part in the debate.

Clearly, quality is essential. Quality does not simply mean product quality. It involves quality in after-sales service, quality among the dealerships, quality in a relationship between the manufacturer and the distributors and quality of service. Of course, quality also involves the relationships between the customer and the manufacturer, especially in relation to what is often called "flexibility of response". When a customer asks a manufacturer to make some modification or come up with a new product, the speed and success of the manufacturer's response is how that manufacturer is judged in the market place. Only now, rather late in the day, are British manufacturers appreciating that.

Over 20 years, Madam Deputy Speaker, we have suffered an accelerated decline in world opinion. The world has believed that British goods are not of high quality. Whether they were or not, the world received the impression that British quality had suffered. That impression snowballed and peaked a very few years ago when all British companies were tarred by the same brush and compared with those companies which had failed in quality, had produced shoddy goods, failed to deliver or failed to service the customer properly.

I used to travel around Latin America selling British export finance services. The problem then was to find the British goods that people wanted to buy. The word had gone round that the goods were not delivered on time. It is all very well trying to sell export finance, but it was difficult to find manufacturers who had found markets in that area. We were often told then—this is another aspect of quality—that British companies did not even go to the area or attempt to sell there. The Japanese and the Koreans had picked up whole markets which we had 100 years ago when we had strong links with many Latin American countries, but which we have progressively lost. I hope that people will consider that aspect and review the whole question of marketing abroad and setting up decent representations in foreign countries to ensure that we get the goods to the markets.

There is good news now. I talk to industrialists in my constituency all the time and I have been told that they are now selling into markets in which they would not have had a chance a few years ago. I learned the other day of a company that was successfully selling into France. I was told that 10 years ago that company would not have approached French markets because the French would have said, "No, we do not buy British goods." That attitude has completely changed in a number of different industries, and that is excellent news.

We must examine briefly why that has happened. The shock of the recession from the late 1970s to the early 1980s made many companies look very carefully at why they were no longer competitive. People began to look at price—a very important factor—and at quality and quality of service. Another very important aspect is the total change in the industrial relations scene. If there are constant industrial relations problems in an industry, with strikes and rancour between management and the labour force, that firm will never get round to asking the unions to consider quality as a prerequisite, because other contentious matters will take precedence. The turnround in the industrial relations scene is a major reason why quality has been improved. To introduce a contentious note, it is sad to hear that the Labour party, if it was in government, would repeal the greater part of the industrial relations legislation. Many problems in industry would then return. We cannot begin to talk about quality if there is an ever-present chance of a strike.

Another very important factor in the improvement of quality is the privatisation of many vital industries and the future privatisation of others. It is common ground that many nationalised industries have had disappointing results in terms of competitiveness and quality over the years. Those companies which have been successful are, by and large, those which have tried to emulate the private sector and seek techniques by which it is possible to deliver.

We have already heard the example of British Steel, which has become a very high quality and competitive industry in the past few years. It has done that because it has taken on many of the features of private companies. I appeal to the Government to bring forward the privatisation of British Steel as soon as possible. Nothing but good for the work force, customers and this country can come from such privatisation. It would he very disappointing to see British Steel slip back into the demoralised and chaotic state it was in a few years ago.

I want to congratulate the Under-Secretary of State for Trade and Industry—I am sorry that he is not in the Chamber now—on what he has done on those points. He has taken a very intelligent and constructive attitude in his role in the Department over the years and he has started many initiatives on those vital subjects. Of course there is a limit to what Government can do in terms of convincing industry about quality, but the fact that the Government have provided the wherewithal in terms of ideas and training aids is encouraging.

I have seen an enormous change in the industries that I visit in my constituency. I hope that that change will continue. I see an atmosphere in which people are proud of what is being achieved in terms of quality and the new markets that result. I want to encourage the Government to carry on their campaigns and initiatives, and I am sure that we will reap the benefits of those in years to come.

Photo of Mr John Wheeler Mr John Wheeler , Westminster North 11:47 am, 10th July 1987

I welcome you, Madam Deputy Speaker, to your first Friday as occupant of the Chair. On behalf of myself and others in the House, I wish you long service in this House, with your customary charm, skill and wit. I had the pleasure of introducing my hon. Friend the Member for Bosworth (Mr. Tredinnick) into politics in 1979 in my constituency, if he remembers that. I was very glad to hear his robust and strong maiden speech to the House today and I wish him every success in his years in this House and his contributions to our debate and service of this House.

Today's debate is of particular relevance to the security industry. I am glad to advise the British Security Industry Association and serve it in the capacity as chairman of two of its inspectorates. Security is about protection and providing the customer with products or services in which he can place his complete trust. It is an international business continually having to reassess itself in the wake of highly sophisticated technological advances where product development is inextricably linked with quality standards.

I am well aware of the importance of quality, not only in manufacturing, but in company service and attitude. Since its formation in 1967, the British Security Industry Association has sought to provide leadership, guidance and quality standards through self-regulation. Its major objective is, and must remain, to create an environment which combines competitive and innovative flair with proven standards of reliability.

Since 1971, the association has worked in conjunction with the British Standards Institution, initially focusing on BS4737, which was designed to improve quality control within the alarm industry. Faced with today's increasingly complex market, the industry has realised that there is a need for a far more comprehensive standard by which to operate. Thus, attention has now turned to the recently revised BS5750.

Collectively, the security industry has seen the beneficial effects of such a standard upon those sectors that have already adopted it, such as white goods and machine tools. It is not often that a standard, and a British one at that, has been designed to have such a revolutionary effect upon an industry. What is more, it forms the basis of an international standard—ISO 9000—which is to be introduced later this year. There is no doubt that it will have a considerable effect on global trading in future.

With a turnover of about £630 million—by no means is all of that associated with exports—and with many companies selling equipment and services overseas, the security industry recognises that the achievement of such a standard is an inherent part of gaining an international reputation.

It should be recognised that BS5750 is a model for a quality assurance management system. It is more concerned with the establishment of a systematic way of working within a company than with the product or service end. In essence, it operates on the premise that to prevent is better than to cure. It is well known that first-class products and excellent service emanate from good, efficient management. The standard is divided into three parts according to individual company needs. First, there is specification for design, manufacture and installation. Secondly, there is specification for manufacture and installation. Thirdly, there is specification for final inspection and testing.

The standard has been created to be flexible in its operation and it is easily achievable by small companies as well as large. A company with fewer than 500 employees may be eligible for grants, consultancy advice in reviewing internal quality control and the production of the quality manual that is needed as the first stage in the institute's assessment procedure. The manual is fundamental to the institution's review of a business, for it forms the basis for the criteria on which a company's eligibility is judged.

Before registration, the institution's inspectors examine company practice to ensure that the business is being run in the way that is defined in the quality manual. Once certification has been granted, the institution will continue to visit the company several times a year to ensure that standards are maintained or even upgraded. Continuous assessment in confidence takes place for the customer and for the company. Over 4,000 United Kingdom industrial organisations are already registered by the institution, and the number continues to grow. Although any company may register individually for the standard, civil trade bodies have already recognised the competitive edge that BS5750 gives to their industry, both in the United Kingdom and, perhaps more importantly, in the international market place.

A sector scheme has been established to allow sufficient flexibility within the application of BS5750. The British Security Industry Association's sector scheme is currently being established, and in line with other schemes is targeted specifically at the particular requirements of the industry. A working party is currently producing a quality assessment schedule for the security systems industry—companies responsible for designing, installing and servicing intruder alarms, closed circuit television, access control and other electronic security installations. Members of the working party comprise the British Standards Institution, the British Security Industry Association, the police, crime prevention officers, banks, building societies and the insurance world—essentially, those directly concerned with quality standards in the security industry.

The recently launched security systems inspectorate, of which I am the honorary chairman, was devised by the industry as a means of maintaining quality control throughout the sector. The adoption of British standard 5750 as a criterion for joining the inspectorate was a natural development of the association's responsibility both to its own members and to the customer. By October, the schedule will have been set out, and security companies will be able to register under the sector scheme. I know of two firms that have already registered independently. Both Chubb Alarms and Shorrock Security Systems have found the benefits to be enormous.

British standard 5750 has resulted in a streamlined management approach, cutting out bureaucracy and ensuring that staff are properly trained and supervised. Overall, it results in a radical review and remodelling of management systems, which greatly improves any company's ability to respond to its market place. It improves service to customers, and—equally important—increases company profitability by raising levels of efficiency throughout, from administration, purchasing and production through to installation and after-sale service.

What British standard 5750 is really trying to achieve is total quality management, something that is efficiently practised throughout the Japanese industry, as some of my hon. Friends have said. If we are to maintain and increase our competitiveness in the face of such opposition, it is imperative that British industry adopts total quality management practices. That may require cultural change, and it certainly takes time to implement fully within an organisation.

Some of Britain's best-known companies—for example, British Telecom and Jaguar—have already claimed tremendous benefits from the introduction of the standard. Now, under the leadership of the British Security Industry Association, the security industry in this country is following suit. On a global basis, the standard is held in high regard, and it now forms part of ISO 9000. It will be a benchmark for international trading, and a fundamental part of a company's success. The Japanese, the Americans and many others across the continents have sought the help of the British Standards Institution in reassessing their own management control systems through the application of BS 5750.

This debate is about the relationship between quality in manufacturing and a product's ability to win in the market place. BS 5750 provides the United Kingdom industry with an opportunity to move forward to demonstrate the quality of British products, and to motivate employees, from the top downwards, to stand among the best in the world. I am glad to be associated with this progress, and particularly with the initiative through which one perhaps less well-known part of the industry, the British security industry, is working towards competitiveness across international sale market places.

Photo of Graham Allen Graham Allen , Nottingham North 11:59 am, 10th July 1987

Thank you, Madam Deputy Speaker, for calling me to speak. I welcome you to your new post. I am sure that your effort and service, about which I know from my experience on the national executive committee of the Labour party and within the trade union movement, will be amplified in your new position.

I welcome and commend the speech of the hon. Member for Bosworth (Mr. Tredinnick). Coming from a Member who has been here three weeks, I do not know whether that carries the weight of the congratulations of other colleagues, but I enjoyed his contribution.

I have been struck by the obvious political difference between the two sides of the House, which is reflected in the north-south divide. Everyone has his own experience of that divide and in the general election campaign Labour candidates made great play of it. The divide strikes Labour Members forcibly as they watch the performance of Conservative Members. They and their views are in a completely different world from that experienced by Labour Members. They are in the dreamland of Conservative policy since 1979, which has produced apparently untold benefits for them, their constituents and their constituencies.

I am sorry to say that the world in which we live in my constituency of Nottingham, North and other areas bears no relationship to that dreamland. I wish that it were not so. One of the great lessons that Conservative Members should learn, perhaps from the right hon. Member for Shropshire, North (Mr. Biffen), the former Leader of the House, is the humility to exercise their responsibility in Government on behalf of the whole nation rather than just those parts of the nation that they represent.

In my constituency 8,000 people are without work, and the vast majority of them have lost employment since 1979. Have they suddenly been afflicted with idleness? Have people on the unemployment register in Nottingham, North suddenly become idle scroungers, who do not care to work? The opposite is true. Many of these people are desperate for work. Many of them have been unemployed for a good number of years and are desperate for assistance from the Government so that they can find their way back to work and make a contribution not just for society but for themselves and their families.

Essentially, that assistance must come from the pump-priming efforts of Government, but the Government's efforts have been far from adequate. I am a trade union research officer in the General, Municipal, Boilermakers and Allied Trades Union, newly christened the GMB. I have had the dubious privilege of seeing cross my desk redundancy after redundancy, which has affected the members of one particular union only. There can be no question that this alleged revitalisation of manufacturing industry and improved competitiveness fails the real social test of people working and being productive, as they have been in my area, in ever larger numbers.

I have some statistics, which fortunately arrived this morning, which I shall quote briefly. They come from the Nottinghamshire county council and give a broad-brush approach to the position in Nottinghamshire.

On the latest available figures, manufacturing industry in Nottingham had a gross output of £4,083·8 million, which is just under 2 per cent. of the national output. The total of gross value added was £1,274·6 million. The total wages and salaries that were paid by manufacturing industry were £736·6 million. That is a substantial input into the local economy and, obviously, into the national economy. However, the key sectors in Nottingham for manufacturing have, without fail, been hit and, in my contention, have been hit by the Government's policies.

In the textile industry, Meridian, Courtaulds and Viyella are among the list of victims, which I could relate for as long as hon. Members have the time to listen. The textile industry in the east Midlands, and especially in Nottingham, has suffered greatly. The footwear and clothing industries have suffered badly also. However, higher in that league—I am again referring to statistics that have been produced by Nottinghamshire county council—the engineering sector has been hit especially badly. Hon. Members who know Nottingham will be aware of that city's proud history in engineering. In 1979, for example, Raleigh Cycles employed 8,000 people, but fewer than 1,800 are now employed in that great industry.

We also have a defence industry in Nottingham. The royal ordnance factory at Chilwell was once a great employer in Nottingham. Unfortunately, it has closed. The royal ordnance factory in Nottingham itself, which is in Queen's meadow, has now been privatised and the work force there is rightly worried about its future. In my constituency, Thorn EMI opened a plant four or five years ago to produce nerve-gas detectors for the Ministry of Defence, but that plant also is now closed.

Those jobs were not fly-by-night jobs or hamburger and candyfloss jobs. They were highly skilled and highly developed jobs that were performed by highly trained individuals who are now without work. Quite frankly, those people are also without very much hope of getting back into work. I suspect that talk of the competitive element or the vast boost that there has allegedly been to manufacturing industry would wear a little thin if the Minister were to put such a point of view to my constituents. I invite the Minister to come to my constituency and to make those points.

Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks

Does the hon. Gentleman not agree that one of the factors, and it is germane to this debate, involved in those redundancies and closures—I do not for a moment deny them or the social and personal problems that they produce—is that the quality of work coming out of some of those companies has not been good enough to compete in international markets?

Photo of Graham Allen Graham Allen , Nottingham North

I regard that as a great insult to the trained craftsmen and skilled workers who, for generations in Nottingham, have produced high-quality goods. I suspect that the answer lies more in the lap of the Government and with the fiscal and economic policies which they have produced and which have led to higher interest rates and to uncompetitive rates for the pound. Those people in Nottingham have worked all their lives and have not suddenly lost the skill in their hands and brains. They are perfectly capable of producing high-quality goods. There is nothing inherently or genetically wrong with the working people of Nottingham or elsewhere that means that they cannot produce high-quality goods whereas other countries can. The people in Nottingham can do so, given the right climate and the right support.

Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks

I referred to the right management and design and the hon. Gentleman immediately assumed that I was being critical of craftsmen. Perhaps I was being critical of other parts of a business.

Photo of Graham Allen Graham Allen , Nottingham North

That may be so. Perhaps the hon. Gentleman will elaborate on that later.

There are other examples in my constituency of highly skilled and competitive industries that have suffered in the recent past. The obvious one is the coal mining industry. We no longer have a pit. On the borders of my constituency, we have lost two collieries during the lifetime of the Government. Men who have worked all their lives, proud people who have given a lifetime of service to the coal mining industry, are thrown on to the market. Their prospects of further work are not increased greatly by the investment in the coal industry, much of which will not require skilled labour, but will go into high-tech coal-cutting and coal-processing machinery.

The other area on the frontiers of technology is the Plessey telecommmunications operation. There have been massive redundancies and cuts during the past few years.

A comment was made about the problems in industry that would be created by the repeal of legislation currently inhibiting the rights of working people to organise. The problems in industry have little relation to trade unions and, indeed, working people. Those problems are very much the product of under-investment and perhaps the poor management to which reference was made. Lack of investment, profit-taking and asset-stripping are afflicting my constituency in Nottingham. North. I am surprised that Conservative Members representing the southern half of the United Kingdom speak with such complacency——

Photo of Graham Allen Graham Allen , Nottingham North

I congratulate the few Conservative Members who represent constituencies other than those in the southern half of the north-south divide and I hope that they will represent the interests of a broader spectrum of people than those purely in their constituency. We need every voice to speak up against the Government about introducing a humane economic policy.

Let us never forget that economic policy is there to serve the people rather than to be their master, but within the southern part of our nation 1 million people are currently unemployed. In itself, that should be enough to make Conservative Members kick and scream against the Government's current economic policies, let alone the unemployment, which is way above that recorded in the 1930s.

It is a sobering fact that the image of mass unemployment in the 1930s that is seared into the brain of working people and the trade union movement fades into insignificance when we look at unemployment figures today. The complacency that we see among Conservative Members may exclude their consideration of that awesome image and statistic.

There has to be more to improving our manufacturing base than the current economic policies pursued by the Government, added to the fiddling of the unemployment figures over the past few years. The only way forward and out of the crisis is to invest in resources and training.

Photo of Graham Allen Graham Allen , Nottingham North

Let local government spend its own money. Let it spend its capital receipts as it sees fit——

Photo of Mr John Taylor Mr John Taylor , Solihull

It is not local government's money.

Photo of Graham Allen Graham Allen , Nottingham North

Would the hon. Gentleman like to intervene? Otherwise, perhaps he will keep quiet while I am trying to speak.

Photo of Mr John Taylor Mr John Taylor , Solihull

By convention, I am not meant to intervene.

Photo of Graham Allen Graham Allen , Nottingham North

Local government capital receipts are in the trust of local government. It should be allowed to spend that money in the best interests of local people. It knows best how to assist the local population. If local government were allowed to do that, it would be one major contribution to restoring manufacturing industry and the competitiveness of our working people.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East 12:14 pm, 10th July 1987

I, too, add my voice in welcoming you, Madam Deputy Speaker, to your new position. I congratulate you and feel sure that we will be in good hands under your control.

I was impressed by the style and delivery of the speech of the hon. Member for Nottingham, North (Mr. Allen) who made his maiden speech only a short time ago. I was glad to see him make this speech more or less without notes because there is a disturbing tendency for hon. Members to read their speeches word for word from typescript. I am sorry that I gained the impression that my hon. Friend the Member for Westminster, North (Mr. Wheeler) was doing just that, reading from what appeared to be a brochure from a trade association. Fascinating and enticing though it was, reading from a trade association brochure is not what this place is all about. I am sure that my hon. Friend will not do that on other occasions, because normally his speeches are of extremely high quality.

I pay tribute to my hon. Friend the Minister for his relentless hard work in recent years on this subject. At the risk of annoying his colleagues, I can think of no one in the Department of Trade and Industry who has worked harder than him. It is a grinding task.

This leads me to the attractive conclusion, which I hope is not complacent, that the Department of Trade and Industry is now much better organised to help industry in a host of ways which are uncharacteristic of the actions of civil servants only a few years ago. I pay tribute to the civil servants and officials in the Department of Trade and Industry for their entrepreneurial approach, which has caused different management attitudes. Management has realised that civil servants are not backward in considering important notions of business development but often know much more about the subjects than they do.

I pay tribute to the maiden speech of my hon. Friend the Member for Bosworth (Mr. Tredinnick), which was disturbingly superb. His delivery gave the impression that he had been here for many years. I am sure that we shall enjoy hearing many other speeches from him on these and other important themes.

The hon. Member for Nottingham, North paid tribute to my hon. Friend the Member for Bosworth and referred to unemployment. He revealed in an interesting way how the Labour party cannot get out of the difficulty in which it found itself during the last election campaign of harking back to the old ideas of the past. I share the hon. Gentleman's acute anxiety about high unemployment and what we should do about it. I have been well known in previous Parliaments for discussing those matters and objecting to Government policies which appeared to lead to high unemployment.

The hon. Member for Nottingham, North will concede, I think, that Socialist-run Spain has one of the worst unemployment levels in Europe. Spanish Ministers are going around at ministerial meetings tearing their hair out worrying about unemployment and what to do about it. It is absurd to say, as the hon. Gentleman did with great complacency, that it is not the fault of the trade unions or trade unionists but that it all depends on the Government and management. We all know that we have let the country down in the past couple of decades. We have produced a complacent country and assumed that the world owed us a living, that it was not our job to learn the languages of potential clients, but that they would learn English and we would shout loudly to get our orders, and that everyone else was producing suspect goods whereas Britain was the only country producing quality goods.

There have been several decades of complacency in Government, trade unions and management. Enormous mistakes have been made by management with terrible old-fashioned attitudes—for example, arriving later than the workers at the factories. We are used to the whole syndrome. To say that only two or three sectors are at fault and that one is pristine and perfect is as crazy as my saying that everything was wrong in the trade unions and that management was wonderful. That is not the case. This country has embarked, for good or ill, on what I hope will be a great national co-operative effort to overcome this disease of the past. I am afraid that means that some of my colleagues will have to accept the fact that we need less class conflict in politics and more co-operation.

The reappearance of my hon. Friend the Member for Stafford (Mr. Cash) is beautifully timed. He said that the Government and the Conservative party were committed to the elimination of Socialism. It is not our job to say that, although I am as enthusiastic about the concept as my hon. Friend. It is for the nation and the electorate to decide. We cannot say that our mission in history is to eliminate Socialism; that is a function of the will of the people. We hope that they will reach the same conclusion as us. They will do that only if we produce attractive

Our national share of the vote did not increase last time; it fell slightly. The workings of the electoral system gave us another big majority in the House, but we know that many people do not agree with our policies. We must persuade them. We cannot simply bash them on the head and insist that they accept our policies, telling them that the Labour party is in a mess and that the alliance is wholly split so there is no other choice. We must persuade people of the merits of our policies.

Photo of Graham Allen Graham Allen , Nottingham North

I agree that persuasion is all-important. I do not know whether I am due for abolition in the near or the distant future. However, the question depends on our definition of Socialism. I suspect that the definition currently used by the Prime Minister and the Conservative party includes state education and the National Health Service. If that is so, there is great cause for concern.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I hope that the hon. Gentleman will forgive me if I do not explore those themes. All I would say is that I am committed to the development and to the flourishing of our state education. Indeed, in my constituency the state schools are so good that they are better than most private schools that I know; long may that continue.

We need a different approach—an approach that is reflected not only in the attitudes of other European countries but in those of the far east. For this to be possible, we must surrender something which we regard as a precious gift and which the media love—although, of course its representatives are not here today because it is a Friday—and that is ferocious and savage conflict in politics. It has become heretical to agree with the Opposition, just as they must not dare to say that Conservative Members have made a good suggestion.

On my first visit to Japan two years ago to discuss quality control and so on, I naively asked a Government spokesman, "How many times have you changed this policy since 1947?" He said, "Why bother to change it? It is a perfectly good policy." If we had more compromise in our approach to complex problems in which there is no easy black and white, red and blue and yellow solution, we would begin to make progress. We cannot achieve industrial regeneration and revival with prejudices and false nostrums. We have to get at the truth, and if we are to do that we must surrender some of our time-honoured political prejudices at the margin for the sake of a better result for the whole population. We need more investment in new assets—mainly in the private sector, which has much larger investment potential, but also in the public sector.

My hon. Friend the Minister justifiably painted a rosy picture of our recovery since 1981. However, we all know the uses to which statistics can be put, and I smiled at the Minister's timing. It is true that things are much better, but the Government are inclined always to stay with percentage improvement figures. They say that our output as a percentage of our gross national product has increased faster than that of any other European country since the base date of 1981. It is nevertheless a sobering fact that in absolute and therefore in relative terms the production of our key sectors is still well behind that of equivalent economies in the OECD. That is a matter for serious concern. The Italians, applying the it sorpasso doctrine in certain key sectors, are now producing twice as much steel as Britain. These facts are ignored in the British press, particularly in papers such as the Daily Express and The Sun. We have to bear in mind the immediate small sector considerations as well.

I well remember a meeting with Jaguar recently. Tribute has been paid to that company in the debate in terms of its recovery, quality control, and so on. There has been a great transformation, but it was sad to hear the managing director's answer when asked how many vehicles were actually being produced. It is a tiny proportion of the German output of luxury cars. Again, why cannot a small Rolls-Royce be produced? The demand would doubtless be great, but management is very complacent. I do not mean that as an unfair attack. I am describing a state of circumstances rather than an example of sinful behaviour. Companies in this country perhaps do not consider such possibilities as much as their overseas competitors. There are myriad examples.

I am concerned, too, about certain areas of the retailing industry, particularly in electronics. Here I declare an interest as a director of a large retail group. For some reason, in contrast with manufacturing industry, some areas of retailing in this country are very successful. In many ways they are more successful than the United States, which has a considerable reputation. One thinks of the great efforts and achievements of the food retailing sector and the famous names there. One thinks, too, of the prowess, tradition and power of the John Lewis group arid the achievements of Marks and Spencer and groups such as my own dealing in electronic consumer durables. In recent years, for the first time, retail groups have become heavy investors in new equipment and assets. In some areas they have overtaken manufacturing industry in this respect.

My hon. Friend the Minister referred to the revival in production and output since 1981, but there are still nauseating problems arising from what I would describe as the doctrine of the reluctant supplier. Retailers are on their knees begging suppliers of important goods and services, but mainly manufactured goods, to deliver the required quantities. My group recently gave a British company what must be the largest single order for television sets. I shall not go into the details now, but all this is on public record. The British company supplied large sets almost as good—in my view, just as good—as Japanese or Korean sets. That was a good example, but on other occasions the number of sets that can be supplied is woefully inadequate and the waiting times much longer than for Japanese sets. That is why the Japanese and Koreans are coming in to supply electronic consumer durables in this country.

The Government's policy of welcoming import substitution is an important factor in the aggregate industrial regeneration of this country, but why is management still so complacent? I sympathise with the problems faced by an impatient work force wanting to get on with things but often prevented from doing so. Those attitudes are changing, but the problems will be resolved only with full co-operation and mutual respect, with the Government acting as a catalyst, rather than by the corrosive injection of conflict still evident in our political and socio-political system. If we can overcome that problem and emulate the compromise approach of other countries, we shall get much further.

Photo of Graham Allen Graham Allen , Nottingham North

I am curious to know what part in the new consensus the hon. Gentleman envisages for the young unemployed on youth training schemes, some of whom are now to be conscripted to schemes on pain of losing their unemployment benefit, the 8,000 unemployed in my constituency of Nottingham. North and the 4 million unemployed in the rest of the country.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I do not say that we should slavishly copy other countries or that the solution is always over the horizon, but presumably we must search for the successful solution that the Japanese have found to that grievous problem. They have built up their economy, becoming heavy investors in new assets and high technology, with low unemployment and some temporary protectiveness towards industries at the germination stage. That is the basic answer, but the question more logically should be directed to my hon. Friend the Minister. I am sure that in due course he will reply on that.

While the reluctant supplier disease is still with us, opportunities now are much more attractive and greater because the far eastern producers are beginning to have their own problems of rising labour costs, adverse currency movements and perhaps even greater social pressures than they had in the past. We all talk about the wages in certain far eastern countries being lower than those in Japan, but that will not be for very long. The opportunity in this country is even greater for us to do tremendous things if we do not ignore volume and just go for quality, as one or two of my hon. Friends suggested. We should combine both quality and volume. The quality enhancement produces the volume increase potential.

The hon. Member for Burnley (Mr. Pike) has left the Chamber. He said that he had to depart, so we understand that. In his concluding remarks, with which I do not agree, he referred to the need for trade marks and brand names. While I would agree with him that the "Made in Britain" designation is important and that many consumers both here and elsewhere may want to have that on their goods, I do not think it should be compulsory.

I agree with the various judgments of the European Court and other EEC agencies that the danger of that kind of compulsion is that it is a restraint on trade within the Community. France did have a compulsory trade mark system, but I am not sure of the latest state of play in other EEC countries. The European Court is right to pronounce against that and to encourage merely the voluntary registration and usage on equipment of national trade marks or brand names, if people desire—I am thinking mainly of trade marks. If people want to put trade marks on their equipment, that is fair enough, but national compulsion is quite wrong.

With my antecedents and interest, I am naturally attracted to the idea of a European Economic Community trademark, but again I am not sure that even that should be compulsory. We live in an increasingly independent world, where consumers increasingly know that various products are put together in different countries under one label and that labels are less meaningful now. My hon. Friend the Member for Stafford referred to consumer protection legislation. Labels are not necessary, provided that consumers have the right in a shop or store to ask where a product is made, or is mainly made, because international assembly and delivery means that products are often not made in just one country. I hope that there will be increasing Europe-wide agreement on that and in due course world agreement, but that will take much longer.

Consumers must be presented with the highest quality. That is now improving, partly thanks to Government policy, but not wholly so. Managements now have less complacent attitudes, and I hope those attitudes are also fixed on quality control. The situation will improve provided that we get the aggregate management of the economy right and provided that this ceases to be an under-investing country. Although the figures have improved slightly in recent years, they are still woefully inadequate—I am thinking mainly of the private sector, but also the public sector, which is also a very important investor in new assets. If we solve those problems over the next few years, we will not need to talk in superficial political terms but begin genuinely to represent the interests of our nation.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate 12:33 pm, 10th July 1987

It was rather sad to listen to the opening speech of the right hon. Member for Swansea, West (Mr. Williams). He really was making bricks without straw. He was fighting the last election—a lost election—again. Do I perhaps do him an injustice? Was the Front Bench spokesman of a party that claims to be the party that represents manufacturing industry creating a facade to conceal the fact that throughout his speech there were only two of his colleagues listening to him? That shows the genuine interest of the Labour party on the subject. If I may say so, my old friend can make better speeches than that. He was unfairly critical of my hon. Friend the Minister. I suggest that, when he reads Hansard, he might feel that he could have made a speech much more in line with his normal excellent speeches.

The right hon. Member for Swansea, West talked about Japan. He said that Japan had succeeded in going up market with better quality and lower prices. However, he omitted the vital fact that there were no Luddite trade unions in Japan. That was our great handicap for more than three decades after the war. Fortunately, that handicap has now been reduced.

I am sorry that I had to miss about 40 minutes of the debate to deal with a constituency matter, but I came back to listen to the hon. Member for Nottingham, North (Mr. Allen) saying that Conservative Members know nothing of the real facts of the north-south divide and that we are mainly for the south. He was not in the Chamber to listen to my hon. Friend the Member for Batley and Spen (Mrs. Peacock) who comes from further north than Nottingham. She made a speech extolling what is happening in her constituency instead of whining about everything being wrong. The voice of the hon. Member for Nottingham, North was that of authentic, unreconstructed trade unionism and the public showed what it thought about that.

My hon. Friend the Member for Westminster, North (Mr. Wheeler) made a clear and good speech. I am sad that my hon. Friend the Member for Harrow, East (Mr. Dykes) found it necessary to criticise him in his absence. It is not the sort of thing that one does. He had an opportunity to criticise while the speech was being made if it was necessary to do so.

I believe that the time for compromise policies and politics is long past. We suffered that for 30 years and look at the mess we had. Firm policies have got us out of that mess and, clearly, the majority of people accept that we need strong sensible policies.

During the speech of my hon. Friend the Minister I intervened to speak about standards. The British Standards Institution has a good reputation. I had to deal with it as a manufacturer and, subsequently, as a Minister. I served on a couple of its sub-committees on one occasion. I asked my hon. Friend the Minister whether there was anything that could be done to speed up the process of decision-making. He said, fairly, that much of the work of the BSI depends upon consensus. I suggest that consensus reached in six months is probably just as good as consensus reached in two years. The trouble with many people who man BSI committees is that they are professional committee sitters and they have no real sense of urgency. I should like to make a concrete suggestion to my hon. Friend the Minister that he call in the leadership of BSI and ask it to set a time at which a new or revised standard should energe from the machine. That would concentrate the minds of those who are sitting on the committees. A target date is extremely important because that is another angle on quality. We need quality of decision and quality of effectiveness and we are not getting that from the BSI.

I spent some 20 years in manufacturing industry, based mainly in the north and Scotland, and I know the real problems. I watched the installation of new machinery. It was rubbish of the hon. Member for Nottingham, North to talk about under-investment, because hundreds of millions of pounds have been spent on new investment and, in many cases, the attitude of the unions has negated much of the potential benefit of the new equipment, machinery and so on.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

I will give way shortly.

One of the other problems involved in the installation of new equipment is that in so many cases it produces a reduction in the labour force. I remember going to the Austin Rover factory and seeing a man in a room sitting pressing a button every 20 seconds. I said, "That is a marvellous new machine." They said, "Yes, the job that one man is doing was done by 18 people before that machine was put in." We must recognise that, of necessity, the installation of new equipment will remove people's jobs. They need retraining or new jobs.

I do not accept the other point made by the hon. Member for Nottingham, North about hamburger jobs. A lot of good work is available in service industries, so it should not be despised in such a way.

Photo of Graham Allen Graham Allen , Nottingham North

Is it not a fact that, in many cases, the failure of private industry to invest properly over a long period led to the state—the hon. Gentleman, me and the taxpayer—having to bail out such companies, certainly in the immediate post-war period, so that they could be revitalised? Is it not also the case that such industries, many of which are being sold off by the Government, are now handing back to individuals the investment that the taxpayer put into them'? I do not know whether such individuals are of a different generation from those who got us into the mess in the first place. Perhaps private investment is not the be-all and end-all, as the hon. Gentleman said.

Very often, hamburger jobs are low-paid and involve long hours. They are jobs from which the Government have removed the protection of wages councils. Does the hon. Gentleman say that that is the way forward for the 4 million unemployed?

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

The hon. Gentleman will find that most unemployed people would rather have that sort of job than stay on the dole. The attitude of the unions that he represents is keeping far too many people on the dole by preventing them from taking useful jobs. I do not propose to change my mind on the matter.

I do not accept the hon. Gentleman's earlier point. He spoke of the post-war years. He may have forgotten that in the post-war years there was no investment. Of course, many industries had run down. The real trouble is that the Labour Governments, excluding the Attlee Government, were incapable of taking decisions. They allowed more and more overmanning and messing-up of our industries. We had to examine the problems in the coal, iron and steel industries and in the railways until a firm grip was taken on them. The steel industry is now virtually in profit.

Photo of Alan Williams Alan Williams , Swansea West

I do not know why the hon. Gentleman is going down that path. Does he understand that there have been only two peaks of manufacturing investment in the post-war period? The first was in 1970, at the end of the Wilson Labour Administration, and again in 1979, at the end of a period of Labour Administration. Far from having a period of underachievement in investment in such industries, if only the hon. Gentleman's Government had sustained the level of investment that they inherited in 1979, we would now have an industry that invested £10,000 million more than it has. The best year of investment still only equals the level of 1961, a quarter of a century ago. The hon. Gentleman should not lecture hon. Members on investment.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

I had not used the word "underachievement". My abiding memory of the last Labour Government was 20 per cent. inflation, which the right hon. Gentleman will know meant an average of over 12 per cent. throughout the entire life of the Government of which he was a member.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

If the right hon. Gentleman will forgive me, I shall not give way again. I am sure that other hon. Members wish to speak.

Photo of Alan Williams Alan Williams , Swansea West

Is it not the normal practice of the House, Mr. Deputy Speaker, if an hon. Member goes out of his way to attack an hon. Member, to give way again if the hon. Member wishes to answer?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

It is a convention of the House.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

I gave way when I attacked the right hon. Gentleman. When l give a statistic, I am not attacking him. The right hon. Gentleman is getting a hit touchy, which is out of keeping with his normal equable self.

I have watched the installation of new machinery. In many cases, it leads to a reduction in the work force. I have listened to people denigrate the need to keep to delivery dates. I have heard people say, "We'll deliver the merchandise when we are ready." They totally forget that it might be required by a set date and that by the time they deliver the ship will have left the docks. The merchandise will be useless and the repeat order will never come because overseas customers have been let down. The quality of service is as important as any other quality.

We must remember that the customer is king. If we do not produce merchandise of a quality and at a price which is acceptable to the customer it will pile up and remain on the shelves. That in itself will produce unemployment.

We are fortunate in that many of our great companies will not accept merchandise of a quality below that which their customers will accept. The customer decides what is needed.

I remember talking about quality, or lack of it, almost a decade ago, when many people asked, "What is the point of working overtime because so much money is taken away in taxation?" It was difficult to refute that argument. One of the causes was the change from wage freeze to wage inflation and perhaps the feeling that production might be more important than quality. Some companies recognised that the cost of putting in the quality control would add considerably to the cost of the merchandise and they were not certain whether the market would bear that.

My hon. Friend the Member for Batley and Spen spoke about Jaguar. That is a fine example of a company which has been almost completely transformed. Once it produced an unreliable vehicle with an appalling after-sales service, but now it produces an excellent product with a very good after-sales service. As my hon. Friend said, people are queueing up everywhere to purchase that car.

We can see in the progress of production and quality the outward beneficial effects of Government financial policy on the industries which have been taken out of the bureaucratic public sector and put into genuine public ownership. Employees have shares of their own company and receive dividends. They respond that much better to the need for greater and better production—greater in volume, better in quality.

Lower direct taxation is a definite encouragement to people to work harder. They receive more money and can keep more of it in their pockets because the standard rate of tax has come down. Those who say that they do not want tax reductions but more public expenditure are arrogant. Their view is certainly not shared by those who work hard to earn their money.

Photo of Mr Geoffrey Finsberg Mr Geoffrey Finsberg , Hampstead and Highgate

I have already been very generous to the hon. Gentleman. He will perhaps forgive me. I have already given way to him four times and he has interrupted every speaker from the Conservative Benches. I hope that he will forgive me. I am not being discourteous. I want to finish my speech as I do not like making long speeches.

Those people who accept that point of view ought to realise that they have no right to speak for others. If they do not want to take that extra money, they can give it to charity. However, they have no right to deprive others of the benefits that the Government's financial policy are producing.

The quality of the civil servants in the Department of Trade and Industry is extremely high. They have done a very good job in producing basic background material for those in industry who want to improve the quality of their merchandise and cater for the wishes of an increasingly sophisticated consuming public. I pay tribute to the Minister's staff in the Department of Trade and Industry and to the staff of other Government Departments who co-operate in trying to take us forward in that way. That is the correct way forward and for that reason the debate has been very useful.

Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks 12:51 pm, 10th July 1987

I welcome the opportunity to take part in this debate on the importance of quality in manufacturing and international competitiveness.

This debate has clearly ranged widely over that subject and other factors affecting the economy. This is an area in which the Department of Trade and Industry, as my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) has just said, has played a very full and effective role as a stimulator for good practice and a clearing house for information about that good practice.

I also want to pay tribute to the Minister's specific contribution in giving leadership to that activity which shows the role that the Government can and should play in supporting initiatives that industry must take, but where Government support is needed to make progress. I also welcome the fact that, despite the thinnest of thin Houses on Labour Benches, this has been a debate in which, as well as controversy, there has been a considerable measure of agreement on some of the fundamentals involved in achieving higher quality.

It has been clear from this morning's debate that by quality we mean a whole range of non-price factors including good design, technological innovation, reliability, delivery on time and the quality of after-sales service.

If British industry is to continue increasing its competitive position, as it has been doing with signal success over the past four years, the need continually to improve quality is clear. If any business wants its customers to return, it must ensure that its products and services are not criticised. In so many instances in the past it has been the quality of imported goods, not price, that has attracted British buyers. There is the example of motor cars from Germany, Japan, France and Italy, but especially from Germany and Japan. The quality and reliability of the product put British manufacturers at a disadvantage until they started to put matters right.

With audio-visual equipment, for example, the important factors are reliability of quality and the ability to deliver both in quantity and quality. The reliability of products, especially those manufactured in Japan, has had a devastating effect on our industry. That could have been avoided, and steps are being taken that demonstrate real improvement.

Another example is to be found in household white goods such as washing machines and smaller items such as irons, toasters and other kitchen equipment. In the past, German and Italian products have made heavy inroads into the British market. So often the quality of British goods was lacking, while the quality of German and Italian products was higher. The producers of furniture for kitchens and bathrooms from Scandinavia, Germany and Italy made large inroads into markets supplied by British goods, and there was no good reason why British manufacturers should not have been competitive in quality. As so many have said today, quality requires an input from management, designers and the work force. It is a job for all three within an economic environment that effectively the Government have set over the past eight years. We are seeing the pay-off in the way in which British industry is now working so much more effectively. I do not dismiss, however, many of the problems that have been raised by Opposition Members. On the other hand, I cannot accept the doom-and-gloom view that suggests that British manufacturing industry is not in many instances making supremely effective strides towards occupying a far more effective position.

If the number of faulty products gets out of balance, jobs are exported. There lies a key factor in the overcoming of unemployment and the maintenance of a strong balance of payments.

The quest for quality binds together a number of priority tasks for British business and the Government over the next four years, and specifically in the immediate future. I shall list some of the priority tasks. First, secondary education must be reformed so that schools turn out youngsters who are better equipped than in the past, with basic capabilities for the world at work. So important are the attitudes that are instilled in school towards quality of work. The satisfaction of a job well done, the experience of successful activity, the feeling that a game has been well played and the achievement of a good report all help a young person to fit into the world at work and contribute, when his time comes, to ensuring that the quality of the product in which he is involved is high and that it is saleable both at home and abroad.

The second priority is the establishing of closer links between higher education and business. We must ensure that universities and polytechnics produce more science and engineering graduates. More people must be encouraged to take jobs in the wealth-creating sector, especially in manufacturing.

A reputation for quality, which industry can often demonstrate, has a real attraction for graduates. Some of the most able have been discouraged from entering industry on graduation—this is one of their views, and one of many—because of "bushfire" problems. In the days when management was dealing almost continuously with industrial relations problems, many able graduates did not want to be involved. They wanted more readily to get into an industry in which they could concentrate on improving productivity, design and marketing, making the industry more effective as a world beater and not always having to deal with industrial relations problems. I recognise that such problems were the result of faults on both sides, but they were also partly due to the lack of the legislative framework which the Government have now put into place, and which I believe now contributes to a calmer atmosphere.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

I do not wish to pursue the industrial relations aspect, but I think that the hon. Gentleman has hit on an important point—the reluctance of people with ability to be attracted into management in industry. People should be considering jobs in industry as well as jobs in the City, because industry is vitally important to the country's future. People have been particularly reluctant to go into industry recently, and I hope that the trend improves.

Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks

I am delighted to have the hon. Gentleman's support for my remarks. I agree entirely about the necessity for more people to take jobs in industry. The calmer atmosphere in industry may encourage more people to become involved in an industrial career, rather than choosing the City or the professions.

The third priority for Government and business to work on together is the improvement of skill training so that the present shortages and rising costs can be overcome. It must be accepted that training is vital throughout the working life of people operating on the shop floor, in supervision and among management. No one can accept that the good practice that they learn at one stage in their career will necessarily be suitable later.

The fourth priority is to encourage more investment in research and development, and the increased application of advanced manufacturing technology. I hope that the Minister will have something to say on that vital issue. I know that the Government are actively dealing with it, but there is some disquiet as to whether enough push and support is being given.

The final priority is to persuade Whitehall and the town halls, the Health Service and others in the public sector to think British and to cut down on unnecessary imports,while promoting the competitiveness of British industry.

Those priorities are bound together under the flag of improving quality. The need to drive incessantly for quality improvement involves the whole work force in arty company. Every member of that work force has a deeply rooted interest in the objective of quality, and—as we have seen in the House—it is not a matter for political argument or special interest debate. Shareholders, managers, supervisors, work force and customers—all of them involved with the prosperity of a company—have a deep involvement and interest in ensuring that the quality of that company's product is improved. Individuals working in the company have a major interest, for their own security and job satisfaction.

Other hon. Members have mentioned the importance of quality circles and suggestion schemes which involve the work force in giving advice and taking decisions about the way in which the job is run. Job satisfaction and commitment to quality are increased when members of the work force feel that they have a stake in the company's achievement, and that their views are properly listened to by management. It also gives them an opportunity for further personal development and increases their scope for fulfilment in the work that they are doing.

I shall mention here an example of one company, which I chose because it highlights some of the points that I have made again and again. It is one of the case studies in the Department of Trade and Industry booklet "The Case for Quality", which disseminates good practice among many companies. I refer to Greendale Electronics. Dr. Roy Followell, one of the team at Bradford university carrying out Government research into quality control methods in industry, has said: Greendale Electronics has achieved a great deal in a short time by the successful application of statistical methods of quality control. What were some of the main factors involved in this company? First, the managing director had a clear objective, based on his experience in international and British business, to drive for high quality. That main drive was towards educating and motivating the work force. It has not been easy, but, after two years, his view is that he has infused a highly satisfactory relationship throughout the work force, because he was used to an egalitarian, collaborative relationship from shop floor to the hoard room. That is crucial for the effective development of high qualty standards in industry.

Better run meetings at which successes and failures were properly discussed is another example of that, as it produces a constant flow of information which is then linked by the company to bonus and productivity schemes and share options. Self-discipline is encouraged. For example, a scheme of self-certification for illness was introduced and immediately brought a marked reduction in absenteeism.

Being able to trace performance back to individuals as well as to materials and machines has proved to be an essential part of quality assurance. Originally, it encountered resistance, but ultimately those involved in that activity came to understand its importance to the company as a whole and therefore to their future prosperity and benefit. I hope that the House feels that it is not unreasonable to utilise such an example, as it demonstrates how fundamental those points are to achieving high quality in British industry.

My final priority, that of getting Whitehall, the Health Service, local government arid everyone in the public sector to think British, leads me to what I want to say about partnership sourcing—and I am not referring to dating agencies. Partnership sourcing means the involvement of the user with the supplier to raise standards. Examples of this have been given by other hon. Members. United Kingdom sourcing can be of benefit to everyone. It makes Britain more competitive in overseas markets. It ensures a more competitive and effective position for British companies serving the British market.

Government, the CBI and the National Economic Development Office all recognise the vital importance of improving business performance in terms of obtaining a larger share of the home market, and increased British sourcing helps to bring this about. It means adopting constructive purchasing policies and cultivating good, two-way relations with suppliers and potential suppliers of the products of services and other business needs. Of course, that increases the availability of alternative suppliers to British business.

Finally, I should like to talk about two aspects of partnership sourcing. I have already referred to the first, which is thinking British. That means being prepared to look among other products for one that is made in the United Kingdom and to buy it if it equals or beats those other products on price and non-price factors. That is a better approach than any "buy British regardless" philosophy and is accepted as correct by the Government and the CBI.

The second point about partnership sourcing is positive purchasing, which takes the philosophy a stage further. It means conducting purchasing procedures within a company to increase the abilities of that company's suppliers. That can be done by encouraging them to participate in regular dialogue about longer-term needs and future likely orders, involving them in setting the specifications and the use of approved standards, which have been mentioned by many other speakers. Far from giving special preference to those companies, positive purchasing seeks to make businesses genuinely more competitive. As we know, most examples of it so far are from the large companies. Marks and Spencer plc was the market leader in that area but other companies are increasingly doing the same. It is important to encourage medium-sized companies to do the same thing and to take a leaf out of larger companies' books.

Public purchasing policy is crucial. I hope that the Minister will confirm the Government's continuing commitment to use British sources when the Government are involved in public purchasing, provided that those British sources are competitive on quality and price with overseas sources.

I value the opportunity to take part in the debate and am grateful for the indulgence of the House in doing so.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton 1:12 pm, 10th July 1987

I want to apologise first to the Minister for not hearing all of his opening remarks. I apologise also to many of the hon. Members who have spoken because I have been dashing in and out doing various business.

I am absolutely delighted that we are having such a debate today because it gets to the heart of our future as a manufacturing country, to our industrial relations and to the type of society in which we live.

If I may digress for a few moments before addressing the issue of quality and competitiveness, if we are to put this discussion into its proper context, we must understand the decline that has taken place in our manufacturing industries over many years. The trouble in this country is that we all became extremely complacent because at one time we were the workshop of the world. We led the way and were the first great capitalist manufacturing country. Our competitors had to catch up with us. We had always done things in a certain way. Those running and owning industry, as well as those engaged in it, felt that we had found the best methods and that little change was needed.

I regret, for example the passing of our great motor cycle industry. We have only the dregs left and that is an absolute scandal. Our motor cycles were the best in the world. If we are discussing quality, I must point out that our workers produced the best manufactured goods in the world. There is no question about that and I hope that I can say so without any contradiction.

Last night some hon. Members may have seen an extremely interesting programme about the P and O line. For much of my life I worked on the shop floor in the shipbuilding industry. The old ships have all gone. Modern ships, despite their quality, are not in the same class. They are not ships, as we understand it. The old ships had real quality. The beautiful first-class lounges, the first-class accommodation, the restaurants and all the other things on those ships had real quality. I was one of those carrying out such work in my early days.

The Chamber has high quality woodwork. Would such a Chamber be built today? No, because it would be argued that it would not be competitive and that one could not build such things because nobody wants them any more. The job might be done under certain circumstances if people decided that it did not matter how much it cost because they wanted real quality.

Does not quality sometimes come up against the nature of the competitiveness of our society? Can one have the real quality goods, and at the same time the present competitive society? Do not profit and competitiveness stand in the way of real quality at different times? I am not suggesting that we should not have the best quality in our present competitive society, but there will be a problem in future.

Will competition, profit-making and cutting corners to make more profit be the future of our society, or will we create genuine quality of life? Is not that important? William Morris had the dream of a society with quality of life, where the building worker went home at night feeling that what he had produced was a great work of art. Do building workers go home now feeling that they have created a work of art?

In my constituency, I was a joiner at the Royal Oak pub and I put up all the oak panelling in the pub. Then the modernists came along. They did not like the oak panelling, so they tore it out and put in plastic. With it, to make more money, came the machines to produce the music, so that no longer can people have a nice quiet drink in a nice pub. Their ears are blasted off. They cannot talk to each other. It is an atmosphere of modernisation. Is that quality of life?

We are destroying the quality of life because of the nature of the society in which we live and because profit and competition, the capitalist mode of society, are destroying everything that is decent and right. That is what I am concerned about. When we talk about quality, let us talk not only about the quality of the product but about the quality of life that we produce for our people.

The hon. Member for Sevenoaks, (Mr. Wolfson) talked about the need for skill training. I know about that. I spent five years as an apprentice. It would have been seven, but the war came along and my apprenticeship ended. I found myself in the Royal Air Force, in which I spent four years. I want skill training, but it is interesting that some of the big companies with their own training schools got rid of them because they were not profitable enough. We are sometimes diverted from the realities of society when we talk about quality and international competitiveness.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

If the hon. Gentleman does not mind, I shall not give way. Perhaps he would like to answer my points in his speech.

As for international competitiveness, we were complacent because we had been the workshop of the world. It was obvious that the Germans, the Japanese, the Americans and everyone else would not only catch up with us but pass us. They did so, but we continued in the old way.

We often hear people attack workers, saying that if only the workers had not gone on strike and if only the industrial relations system was such that workers were tied up—just as they are with the present industrial relations machinery—all would be well. But much of management did not change when it ought to have changed. Management let time pass and said, "It has always been done like that, the money has always come in like that, so do not do anything about it." I challenge Conservative Members who put that argument. When real changes in industrial techniques were put to the trade unions after serious discussion, so long as they were not imposed on them, nine times out of 10 agreement was reached, changes were made and there was little industrial disruption. Industrial disruption occurred when working people had conditions imposed on them without proper debate and discussion. Let us return to talking about real equality.

I believe in good design, but what is it? I have explained what I think about the design of modern pubs. It is unbearable, yet I am sure the people say that it is good design, that it is profitable, so we should have it. As for good design in cars, our cars were not accepted abroad, not because the quality was bad but because of press reports about them. I am sorry if hon. Members think that the quality was bad. If they think that, they have fallen for what the press said, not that there are many members of the press in the Strangers' Gallery at the moment. Those who wrote for the motor car columns were responsible. Every time a new product was produced, it was knocked. That point was picked up by our competitors who said that British cars were not worth a light.

British motor cars, especially Rovers, were some of the greatest cars ever produced. They are still among the best cars. It is a scandal that our cars were knocked by a press that was and is irresponsible towards the industry. Workers are knocked all the time as though they are responsible for every dispute and as though every dispute is unjustified. People have not understood that workers in other countries are told by their employers that they must not take industrial action because, if they do, they will be uncompetitive with workers in other countries. That happens in the United States where people want to put up barriers between themselves and the rest of society. The unions and others say, rightly, "We cannot have competition on the basis of others coming in and taking our jobs."

I believe that the matter goes to the very heart of our society. I do not believe all the nonsense that is talked about British Telecom doing so much better now that it has stopped being a publicly owned company and has been sold off to all sorts of shareholders. If people are so pleased with BT, why did I read in this morning's press that there are more complaints about BT's services and prices than ever before? I am sure that we shall find that that happens with gas and all the other industries that are to be sold off, too.

Sooner or later, we have to choose. We have to decide what sort of society we intend to build and live in. Are we going to have a society with genuine equality of life in which people have the chance to better their quality of life collectively or a society in which people do that individually at the expense of everybody else? Is that what we want?

I want a society in which we all gain. I judge a society according to the rung of the ladder which those at the bottom have reached, their quality of life, their security, their future and their hopes. If we are to build a society of genuine equality which is not obsessed with the concept of internal and international competition, we must change our basic philosophy. We must get rid of the philosophy of this Government. We must use public money in the interests of the public and recreate publicly owned industries—this time on the basis not of bureaucratic structures but of the democratic involvement of the work force and democratic management.

That is what I believe and that is all that I have to say. I may not have been dealing with every aspect of quality control in the factory. However, while some of the Conservative Members who have taken part in the debate have been bankers or directors, working at levels which I shall never know, I came to this place from the shop floor. Apart from my years in the Royal Air Force, I spent my time working on the shop floor, in the ship repair yards and on the big construction sites. The great argument throughout was real quality versus profit. How did the time and motion study people help quality in industry? They did not. They undermined quality but helped to create competitiveness and profitability. If we are serious about building a new society and a new world, it is high time that we got rid of the profit-making system and built one worthy of us all.

Photo of Mr James Spicer Mr James Spicer , West Dorset 1:28 pm, 10th July 1987

It is a privilege to follow the hon. Member for Liverpool, Walton (Mr. Heffer), to whom we always listen attentively. What worries me is the way in which he muddled slightly the quality of life with the lack of competitiveness. We cannot improve the quality of life for the people of this country if we do not compete in the world, at least on level terms.

The hon. Gentleman talked about his role in industry. Let us compare the state of British Steel today with what was happening 10 years ago. Today we have quality. British steel is in worldwide demand and we must try to increase our quota from the European Community. That was not so 10 years ago and it was not so with Jaguar seven or eight years ago. Eight years ago I was a member of the European Parliament, and I tried to persuade that institution that it would be right and proper to have a quality British car in the car pool. Six months later, Jaguar was out because it did not compete with the quality of German and other cars in the car pool. Those who deserted British motor cars in the 1960s and 1970s in favour of overseas products did so not because they were traitors or had been misled by the media but because we had a reputation for failing to produce quality vehicles.

Where does that situation stem from? Looking back to the 1940s, there was a natural attitude at the end of a war when we were exhausted. The hon. Member for Walton spent five years in the Royal Air Force. I spent my time in the Army, and I remember coming home in 1945 almost feeling that the world owed us a living. Throughout the 1940s and 1950s, due to the pent-up demand created by the war, it was possible to coast along producing goods which would sell whether they were any good or not.

In 1946, I bought the first civilian model Volkswagen. I paid £160 for it and drove it back to this country. People in this country had never seen anything like it, but when management had the opportunity to produce those cars in this country they turned their backs on the idea. There have been faults on both sides, but that was entirely the fault of management.

In the 1950s and 1960s, there was a combination of bad management and disruption in industry, leading to the appalling situation in the early 1970s. We all have memories of the "One out, all out" attitude, the cries of "Are you with us, comrades?" and mass meetings in the fields. Any attempt to impose proper quality control in the motor industry and to bring people to book if they did not observe it provoked that reaction. Shamefully. up to last year 56 per cent. of cars bought in this country were from overseas.

Reference has been made today to the old slogan, "Better buy British", but we must be clear where the emphasis lies. It must be a better buy because it is British rather than suggesting that one had better buy the product just because it is British. That must be emphasised not only in this debate but throughout industry. We cannot stand aside from the theme of competitiveness. In the 1960s and 1970s, wherever we looked in the world—not just Japan, Germany and France, but Taiwan and Korea which were already coming up—we saw our manufacturing base being eroded because those countries were producing goods not just at the right price but of the right quality.

What fascinates me and gives me great hope for the future is that in the 1980s a new attitude is emerging in our industry. I am glad to see that my hon. Friend the Minister responsible for sport has joined us at this point as yesterday I chanced to have lunch with the director of Dunlop—one of our major companies. He told me that for the first time in years Dunlop goods were increasingly being produced in this country because we are competing in both quality and price with Taiwan, Singapore, Japan and Germany. That is the message that we must take on board. If we continue on that path, we shall indeed achieve a better quality of life. Why has the quality of life in Germany improved so dramatically in the past 30 years? It is not that they have forgotten how to produce quality goods—they have done that increasingly; they have always produced quality goods—but that they produce competitive goods. The more the value of the deutschmark goes up, the more competitive they have become.

For the first time in 50 years we are seeing that slogan of "Better buy British" coming through strongly. We should all be proud of that because it indicates, for the first time since the last war, a genuine partnership between management and labour, working to produce goods for the benefit of their own families, their own companies and the country as a whole.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Does the Minister have the leave of the House to speak again?

Photo of Mr John Butcher Mr John Butcher , Coventry South West 1:35 pm, 10th July 1987

I am grateful for an opportunity to make a few further comments on a number of the important issues that have been raised in what has been an informative and searching debate. I listened carefully to some formidable contributions, including a maiden speech about which I will speak in a moment.

When the right hon. Member for Swansea, West (Mr. Williams) examines the record in Hansard I hope he will agree that in my opening remarks I made it very clear that the devastating comment made to our delegation that went to Japan—devastating because of its candour—implied that the British were not capable of doing the business and not capable of catching up with their obsession with quality. When he examines the record I hope he will find that we are not in disagreement, that we have the same objectives, and that the quality message is not an ephemeral or recent obsession of the Government or the previous Administration. It is something that we are reaffirming, enhancing and expanding, and it has been based on the knowledge of a few central truths about quality that have been with us for quite a while.

It is for that reason—building on that information—that the Government have targeted an objective of getting the quality message across to 100,000 companies. We are about halfway there now. If we reach that target, we should have an example of quality management present in virtually every sector—in large or small companies—in most towns and cities. We hope that that will have a multiplier effect in changing the culture on the shop floor.

My hon. Friend the Member for Batley and Spen (Mrs. Peacock) summarised the debate skilfully. She concluded that an obsession with quality means an improvement in the job situation—it safeguards existing jobs and reimports jobs back into the United Kingdom that we may have exported in the past through a lack of concern about quality.

The hon. Member for Burnley (Mr. Pike) made a fine speech. If he does not mind my saying so, it was a speech of the old-fashioned Labour party—a speech made by someone who had great experience on the shop floor. I suspect that he will talk to the hon. Member for Bassetlaw (Mr. Ashton) about his new club, which is apparently dedicated to solidarity to the origins of the Labour party. I agree with him and with the hon. Member for Liverpool, Walton (Mr. Heffer) that quality is not something that can he imposed by management. It is something that happens in partnership with participants from all sections of the work force. By its very nature, it can work only if participation is full-blown and committed.

I am pleased to report that prominent trade unionists are involved in our national campaign. In companies around the country true partnerships are being set up, across what used to be the great divide, to get the quality message over.

My hon. Friend the Member for Bosworth (Mr. Tredinnick) made an excellent maiden speech. He vigorously defended the interests of the hosiery and knitwear industry and he illustrated the point I made in my opening remarks that—and I choose my words cautiously—if we can keep the current trend going into the 1990s we will be able to describe what happened as a British industrial renaissance.

My caution extends to recalling that there are international factors that a domestic Government can often do very little about. However, on the premise that the current trends continue, we have a real and major opportunity for a fight back in the international markets and the reconquering of certain sectors of our domestic market. I suspect that my hon. Friend the Member for Bosworth will be a vigorous defender of his constituents' interests, particularly those who work in the hosiery and knitwear industry.

A similar point was made by my hon. Friend the Member for Stafford (Mr. Cash) who used this opportunity to praise, rightly, the efforts of Rolls-Royce, which has confirmed yet again through the massive export order that it has announced in the past 24 hours that quality means jobs.

My hon. Friend the hon. Member for Bolton, West (Mr. Sackville) asked us to bring forward the privatisation of British Steel and made a number of other points. I would like to thank him for the kind remarks he made before he had to leave to look after the interests of his constituents. My hon. Friend the Member for Westminster, North (Mr. Wheeler) made a number of pertinent comments about the British security industry whose performance on quality objectives has improved.

The hon. Member for Nottingham, North (Mr. Allen) made an interesting speech. I should say immediately, in response to his request, that I have visited Nottingham a number of times. One of the visits incorporated the opening of an excellent exhibition in the Nottingham chamber of commerce, which vividly showed me that there is much dynamism in the local economy, that Nottingham business men are forward-thinking and that they are building new industries and using new technologies to preserve the prospects of their existing industries. I share with the hon. Gentleman what I presume is an objective of all hon. Members, which is to see that the prosperity that is now starting to accelerate in our country is shared in all parts of our country. I believe that we have a real prospect of that happening.

My hon. Friend the Member for Harrow, East (Mr. Dykes) pointed out that quality is about team work. He identified some of the trends that could lead us to be optimistic about the future.

My hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) hit on a sore point. There have been times in the past when I have asked why we cannot guillotine the standards-making process in order to clear a few minds and introduce a greater sense of urgency into the excruciating process. The BSI committees are setting strategies for their sectors of interest and that includes targets. The use of standards is voluntary and it is important that consensus is maintained, so that the standards that emerge are recognised and used by industry. I listened carefully to my hon. Friend's comments and I will examine them in greater detail when I return to the Department on Monday. It may be that one or two of the items he raised can be considered on future agendas with our partners at the BSI.

I can tell my hon. Friend the Member for Sevenoaks (Mr. Wolfson) that the automated manufacturing techniques programmes are successful. There is a supplier industry emerging in the delivery of AMT technology to the shop floor. It is a new industry and one in which we can take our existing skills forward to build a brand-new industry. My hon. Friend will know of the large amount of work we have done on skills shortages and I know that in the past he has welcomed 'the development of the new partnership between the higher education sector and the private sector. I am sure, having read my skills shortage report, that he will agree that it is starting to lever a significant spend from the private sector. A total of £43 million-worth of public money went into engineering and technology, levering £24 million of additional spending from the private demanders of the skills for the higher education sector.

The hon. Member for Walton made a vintage speech. We enjoyed listening to his reasons. They come from his convictions and his roots, and we respect them. But I ask him to consider the fact we are talking about the integration of the concepts of quality and competitiveness. One comes from the other, one depends on the other, and one leads to another. In this part of the 1980s, one must compete to sustain the quality of life that he would ask us to achieve.

My hon. Friend the Member for Dorset, West (Mr. Spicer) reasserted our national objective of improving the quality of British goods and services.

Before I conclude my remarks—hon. Members wish to return to their constituencies or launch into the next debate—I shall make a major point on the matter that was raised by my hon. Friend about the entrepreneurial approach of DTI and its officers. As I said earlier, the quality message can apply to all types of companies and organisations; for example, those engaged in manufacturing and services, and even public administration. There is no reason why the lessons learnt and the experiences gained in one part of the economy cannot be used in another. The principles are the same, although the methods of implementation can and often do vary.

I take this opportunity to highlight some of the quality activities within my Department, as evidence of our commitment to the quality drive. One of my Departments divisions, quality design and education, which is responsible for the campaign, has been exploring ways in which it can apply the principles of more effective quality management to its work. It is the first time that such principles, which in the past tended to be focused on manufacturing, have been applied to a central policy division of the Department. As part of its programme of improving the efficiency and effectiveness of its response to its customers—for example, industry and commerce-, the general public and other Government Departments—and improving its internal operational performance, it has been reviewing management procedures and communications, looking at ways of reducing the quantity of paperwork, providing better training, and reviewing ways of improving support services such as typing. In addition, two quality circles have been set up. Although it is only a short time since the approach was introduced, operational benefits are coming through.

Referring briefly to other parts of the Department and examples of quality activities, all the Department's research establishments have now been accredited by the national measurement accreditation service which, as I mentioned earlier, assesses and monitors the competence of test calibration laboratories. NAMAS, in turn, has adopted quality procedures and, as a method of involving employees, has also set up quality circles. The National Physical Laboratory is in the process of adopting standardised management systems. Most recently, the companies registration officers have adopted the principles of quality management. In addition, my Department has provided the necessary funding for a two-year consultancy to help ourselves and other Government Departments to examine in detail what more can and should be done. As Minister responsible for management resources in the DTI, I support that work.

My Department will now identify further areas for the introduction of such procedures within the administrative work in the Department, with the aim of improving the efficiency and effectiveness of sections that have regular contact with members of the public and users of DTI services. I think you will agree, Mr. Deputy Speaker, that it is right that my officials and the DTI should be involved in such procedures and that we should do as we say others should do. I am delighted to have had this opportunity to announce that that is precisely what will happen.

Photo of Mr Alan Howarth Mr Alan Howarth Assistant Whip (HM Treasury)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.