Competitiveness

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 5 February 1998.

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Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South 12:00, 5 February 1998

What steps she is taking to assist British companies to improve their competitiveness. [25685]

Photo of Ruth Kelly Ruth Kelly Labour, Bolton West

What steps she is taking to improve the competitiveness of British companies. [25698]

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I launched my competitiveness UK initiative last summer, and it is at the heart of my drive to build a partnership with business to identify practical policies that address business needs and help companies improve their competitiveness.

Since I launched that initiative, I have held a major business summit to establish the areas to be tackled, and have published a benchmark for business to compare the United Kingdom's performance with that of our main competitor countries, and to meet business peoples' request for sectoral analysis; I have set up my competitiveness advisory group of prominent business people to ensure that the initiative retains a business focus; and I have established six working parties of business people to identify practical ideas for the White Paper later this year.

In addition, I am pushing forward the competitiveness agenda in Europe through the UK's presidency of the European Union. The Industry Council, under our presidency, will hold its first ever competitiveness debate.

That radical approach will lead to policies for sustainable wealth creation, based on a high-skill, high-investment, innovative, modern economy.

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

I thank my right hon. Friend for that comprehensive answer. Does it not show the stark contrast between the approach of this Government, who are prepared to support business in a practical and positive way, and that of the previous Government in the past 18 years? In 1979, manufacturing industry represented 30 per cent. of gross domestic product. That figure is now down to below 20 per cent. We have the lowest growth in manufacturing of any of our European competitors. Will the Government support manufacturing to ensure sustainable growth, because that affects employment? Our constituents vitally need the jobs that manufacturing can create.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I share my hon. Friend's view of the importance of manufacturing, and have always, both in opposition and in government, stressed how mistaken it was of the Conservative party to neglect that vital sector of the economy in the mid-1980s. My hon. Friend will be aware of the steps that the Government have taken recently, in partnership with companies such as Rolls-Royce, British Aerospace and Jaguar, to secure the high-quality employment that manufacturing can still offer this country.

Photo of Ruth Kelly Ruth Kelly Labour, Bolton West

Will my right hon. Friend confirm that after 18 years of Conservative government, our average company performance remains below that of our main competitors? I re-emphasise the point made by my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) about manufacturing industry. Our manufacturing productivity is 25 to 30 per cent. lower than that in France, Germany and the United States. Do not those facts fully justify the Government's determination to involve industry in a new partnership with Government to improve economic performance?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

My hon. Friend is entirely right. Part of the unfortunate legacy left to us by the Conservatives was that they told at best half or partial truths about the state of the economy. There have been improvements in productivity in recent years, but my hon. Friend is right that there is still a great deal of work to be done. That work can be done effectively only in partnership with the business community, and we are engaged in that process.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I was with a large group of business people last night, and the main complaint on which they lobbied me was the uniform business rate. Is the right hon. Lady aware of the Conservative party's proposal at the last election to make a £1,000 deduction from the uniform business rateable value? That was extremely popular with small business men. Would she consider such proposals in the review that she is about to undertake? Would she consider particularly the unfair impact that the uniform business rate has on small businesses as compared with large businesses?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

I am well aware of the profound unpopularity of the uniform business rate with small businesses, and the hon. Gentleman is right to draw attention to it. It was, of course, introduced by the Conservative Government, and small business made repeated representations to them over the years asking them to do something about it. I accept that the Conservatives underwent a belated, deathbed conversion and tried to do something about it. Proposals as to how the matter should be handled are a matter for the Department of the Environment, Transport and the Regions, and I know that it is actively considering those proposals.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I congratulate the right hon. Lady on her choice of a very old Labour outfit to show some solidarity with the principles that she is ditching.

Does the right hon. Lady plan to make any more exemptions to the national minimum wage in the interests of British competitiveness? Why did she tell the House that there would be no sectoral exemptions, and then exempt the armed forces? She must have known that such exemptions were being planned. I certainly did, and I told her that they were being planned. Will she now apologise for misleading the House in such a blatant way?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

The right hon. Gentleman was mistaken in everything that he said. I picked out this outfit to match the departmental folder.

Let me turn to the serious point made by the right hon. Gentleman. I do not consider the armed forces to be a sector, and I do not think that the armed forces do either. As I believe everyone recognises, they are in a unique position.

In the National Minimum Wage Bill, we have sought to provide coverage that is as broad as is practically possible, and we have made every effort to accommodate the specific and important operational requirements of the armed forces. The decision that we made, which my hon. Friend the Minister of State announced in Committee on Tuesday, recognised not only their unique position but the unique machinery that exists for them through the armed services pay review body.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Why did the right hon. Lady not warn us at the time of the debate on the issue that the Government were considering exempting the armed forces? I told her that they were considering other exemptions, and she made no mention of it. Will she now tell the House categorically whether any other exemptions will be made under the Bill, or whether that is the last exemption that will be pulled out of her by the Chancellor and other Ministers?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Business, Innovation and Skills

What I actually told the House was that these were matters of considerable importance and complexity, which would be debated in full in Committee and through the legislative process of the House. That is precisely what I said, and that is precisely what has happened.