Manufacturing Competitiveness

Oral Answers to Questions — Duchy of Lancaster – in the House of Commons at 12:00 am on 24th February 1997.

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Photo of Austin Mitchell Austin Mitchell , Great Grimsby 12:00 am, 24th February 1997

To ask the Deputy Prime Minister what measures he proposes to increase the international competitiveness of British manufacturing. [15530]

Photo of Mr Michael Heseltine Mr Michael Heseltine First Secretary of State and Deputy Prime Minister

The Government have created the enterprise culture, which allows manufacturing firms to prosper. The three White Papers on competitiveness contain nearly 500 new initiatives, many of which are directed at manufacturing.

Photo of Austin Mitchell Austin Mitchell , Great Grimsby

Does the Minister accept that all the cheapjack measures that he advocates, such as cutting costs, firing workers and cutting the social costs of protection, avail nothing against the rise in the pound that is now occurring? Price is critical for manufacturing and if the pound goes up, that subsidises imports and penalises exports. Should not the Government be doing something about that, or are they just sitting back and hoping to get the counter-inflationary benefits, while leaving Labour to inherit the disastrous whirlwind that will ensue for manufacturing?

Photo of Mr Michael Heseltine Mr Michael Heseltine First Secretary of State and Deputy Prime Minister

The hon. Gentleman will realise that the reason why such a high proportion of all inward investment in Europe comes to this country is that men and women across the world who must make judgments about such matters know our economy to be the most attractive place in which to invest. If I had to back their judgment against that of the hon. Gentleman, I would have not the slightest difficulty in making the choice.

Photo of Peter Viggers Peter Viggers , Gosport

Will my right hon. Friend join me in thanking the hon. Member for Great Grimsby (Mr. Mitchell) for drawing attention to the highly competitive nature of British industry? Does my right hon. Friend agree that that situation will continue, unless it is spoilt by a Labour Government, because Labour Governments have shown that, as night follows day, they bring higher taxation, more controls and more union influence?

Photo of Mr Michael Heseltine Mr Michael Heseltine First Secretary of State and Deputy Prime Minister

My hon. Friend is right. There is no secret about Labour's intention to increase taxes and introduce new taxes. There is to be a windfall tax, which is a direct tax on the pensioners of Britain and all those who pay their bills for utilities. There is to be a special penal tax in Scotland to punish the Scots for returning Labour Members of Parliament year in, year out. A range of social costs is to be imposed on British industry. All those are clearly highlighted as the direct threats of a Labour Government. One of the reasons why there will not be such a Government is that people realise that such threats exist.

Photo of Richard Caborn Richard Caborn , Sheffield Central

Let me remind the Deputy Prime Minister that the minimum wage is not part of the social chapter, as he said in response to my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott).

In the light of today's announcement that yet another regional electricity company, Yorkshire Electric, has been taken over by the Americans, I am sure that the right hon. Gentleman is aware that well over 50 per cent. of the RECs in the United Kingdom are in American ownership. Only one out of the 12 RECs is in UK ownership. That is in stark contrast to the position in the United States, where it is impossible for a British company to have a majority ownership of a US electricity supply company. That creates a great deal of concern, as was evident from the series that was run in the Daily Mirror this week about who owns British industry and reciprocity with other countries. Will the right hon. Gentleman make strong representations to the Americans to open up their market, if they are to have such a strategic position in the UK market?

Photo of Mr Michael Heseltine Mr Michael Heseltine First Secretary of State and Deputy Prime Minister

We constantly urge upon Americans and the rest of the world that they should open their economies as widely as we have done. We can see the benefits of having done so in the UK and we wish to spread best practice.

To return to the hon. Gentleman's initial point, the minimum wage is part of the social model of Europe. That is not a concept for which I am responsible; the shadow Foreign Secretary told the nation that Labour was comfortable with the European social model. That has led to rising levels of unemployment across the continent which we have avoided in the UK by avoiding the social model.