Manufacturing Industry

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 25th March 1999.

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Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham 12:00 am, 25th March 1999

What action he is taking to remove (a) financial and (b) regulatory burdens on the manufacturing industry. [77035]

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The manufacturing sector, along with all business, will benefit from the framework for economic and financial stability put in place by this Government. I am currently reviewing all regulations that have an impact on business.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

Why, then, has the president of the Confederation of British Industry—along with the CBI itself—calculated that, over the lifetime of this Parliament so far, Labour has imposed more than £39 billion of excess charges on industry by introducing the national minimum wage, the working time directive and European works councils? Why has the president of the CBI said that the business horizon has darkened since Labour took office, and that unless the creeping paralysis of red tape stops, the only growth markets in 1999 will be in regulation?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I am disappointed to hear that rather selective quotation from what was said by the president of the CBI. I shall have a word with Sir Clive, and put him right. It is a shame that he was not the CBI representative at a meeting that I convened last Thursday, involving the CBI, the Institute of Directors, the British chambers of commerce and representatives of small business, to discuss constructively how we can lift the burden of regulation from business. That is a serious agenda, and one that I intend to pursue with vigour.

Photo of Chris Leslie Chris Leslie Labour, Shipley

Will not manufacturing industry be helped considerably by the new small business service that the Government are setting up? Will it not help to cut through the thicket of bureaucracy and red tape that the Conservative Government put in place, and also help small firms with such matters as payroll administration?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I am sure that the Small Business Service will play an important role in helping what is clearly a vital part of the economy. We need a small business sector that is vigorous and prosperous, and we are introducing measures to ensure precisely that.

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

The way in which to sort out the president of the CBI is to do what he asked, and abolish the stealth taxes and extra regulatory costs that have been heaped on industry by this dreadful Government.

Does the Secretary of State realise that the pound has risen by 7 per cent. against the euro so far this year? Does he accept that means that British goods are now 7 per cent. dearer in relation to the French, German, Spanish and Italian goods produced by our main competitors, with which we ourselves are trying to compete? Will the right hon. Gentleman and the Chancellor of the Exchequer stop ducking the question of how many jobs will be lost as a result of their policies? They have made it too dear to make things in Britain, and as a result we have a balance of payments crisis and an industrial meltdown. Will the right hon. Gentleman tell us how many jobs will be lost, and will he tell the 474 people in his constituency who have lost jobs in the past six months what message of hope he has for them?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I can tell the right hon. Gentleman that we will not lose 1 million manufacturing jobs, as happened under his party's Government in the early 1990s.

If the right hon. Gentleman wants to talk about the value of sterling, he should reflect on the fact that, in the last 12 months of the Conservative Government—between May 1996 and May 1997—the value of sterling rose by nearly 20 per cent. That is the difficulty that the present Government face.

The right hon. Gentleman has form, of course: he was a Minister in the Department of Trade and Industry with responsibility for companies. In 1989, when he took office, there were 21,000 insolvencies; but then the Redwood magic began to work. In the following year, there were 33,000 insolvencies. In 1991 there were 55,000, and in 1992, when the right hon. Gentleman departed from the DTI—thankfully—there were 69,000. That is the right hon. Gentleman's record, and it is one that we do not intend to repeat.

Photo of Denis MacShane Denis MacShane Labour, Rotherham

Does the Secretary of State agree that stability must be the key? It is not just the rise in sterling, but the fact that, between May 1990 and May 1997, sterling changed value 87 times against the deutschmark. It is Tory instability that we have to put right.

We also acknowledge that, in helping business, the most charmless words in the British vocabulary are, "Good morning. I am from the Ministry in Whitehall and I am here to help you." What business wants is just the ability to get on with its success. In Rotherham, the chamber of commerce has merged with the training and enterprise council and incorporated the business link. Now there is a real partnership feel in the town. We are worried about whether there are any proposals emanating from Whitehall to pull all that up by the roots and replant them. Where it is working, let it get on with working.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I agree that, where things are working, they should be allowed to proceed accordingly, but the success that Rotherham United might be achieving is not reflected throughout the country. We have not only to build on best practice, but to recognise that, in certain parts of the country, we are not providing the service that small businesses need. We intend to do that.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

In view of the great concern about the burden of regulation on small business in particular, will the Secretary of State consider lowering that administrative burden by raising the threshold above which firms pay value added tax?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

As I have said, there are a number of issues that we will discuss with the business sector to find out how we can lift the burden of regulation from business. We have started that process. It would be premature to identify today one particular proposal that may or may not be supported, but we intend to take a radical approach to the issue. I take it seriously. I intend to take action quickly to ensure that that burden can be lifted.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

My right hon. Friend may be interested to know that this morning I visited Landis and Gyr Communications Ltd.—I do not know whether Opposition Members ever go to factories—which produces high-tech telephone systems. I was giving out Kaizen awards, which Opposition Members may not know are for converting innovative ideas into action and viable products.

Does my right hon. Friend agree that the role of Government is not just about finance and tax, but about creating an entrepreneurial atmosphere within the broader economy through the education and trade and industry systems, so that we can convert good ideas into saleable products in the global marketplace? May I bring the good wishes of Landis and Gyr to the House for the creation of a much stronger dialogue with the business community, something that I have personally been encouraging in south London?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend is a great advocate in south London for the initiatives that he has outlined. I assure him that the Government are committed to the knowledge-driven economy. The initiatives to which he has referred will play a key part in ensuring that we have world-class companies that are able to prosper in the environment of stability that the Government have been able to establish.