Tyre Manufacturing Industry

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 18th January 2001.

Alert me about debates like this

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley 12:00 am, 18th January 2001

What recent discussions he has had with the UK tyre manufacturing industry regarding UK production. [144529]

Photo of Richard Caborn Richard Caborn Minister of State, Department of Trade and Industry

As the main tyre manufacturers are major inward investors into the UK, the Department keeps in close contact with them both at a regional and national level in the UK.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

My right hon. Friend will be aware that Michelin announced last year that the production of tyres at its Stoke factory would cease. He will also be aware that over the Christmas and new year period, cuts in production and output were announced by Goodyear at Wolverhampton. Does he recognise that in my constituency, where there is a Michelin factory, and in others there is considerable concern about the future of the tyre industry? Will he give an assurance that he believes it is essential that we continue to manufacture tyres in the United Kingdom?

Photo of Richard Caborn Richard Caborn Minister of State, Department of Trade and Industry

My hon. Friend is right. Global restructuring has obviously affected some British companies, and Michelin is but one of them. I remind the House that tyre production was worth in excess of £1 billion in 1999, and there were about £800 million worth of exports. There are still more than 8,000 people employed in the industry. I understand what my hon. Friend is saying, and the Department will be commissioning a competitive study to examine the entire rubber industry, and especially the tyre sector, where electronics are playing a greater part in production. With our research establishment, we want to ensure that we are at the leading edge of technology. Companies such as Pirelli are showing the way by introducing a robotics line in the UK. I think that we will be moving up the value-added chain in the tyre sector.

Photo of Sir Sydney Chapman Sir Sydney Chapman Conservative, Chipping Barnet

Given the importance of exports to the UK tyre manufacturing industry, and given that since its introduction two years ago the euro has declined sharply against the pound sterling, should not the policy of the Government, on reflection, have been to try to ease the burden of taxes and regulations on the industry, rather than bringing about the exact opposite?

Photo of Richard Caborn Richard Caborn Minister of State, Department of Trade and Industry

The way in which the Government have assisted industry, by creating a strong macro-economic framework and, at the micro level, introducing tax advantages for many parts of our manufacturing base, has been welcomed by manufacturing, including the tyre manufacturers. Three of the five major manufacturers of tyres are in the UK. They look to the Government to give the lead, as we shall do, on a foresight programme to develop new technology for those industries. The euro has not affected the global reorganisation that Michelin and others are undertaking. We want to help such industries to manage in the most effective way the changes involved in globalisation.

Photo of Barry Sheerman Barry Sheerman Chair, Education Sub-committee

But does not my right hon. Friend believe, as I do, that if a company such as Michelin closes down tyre production in the UK, or General Motors closes down car production, or Orange behaves badly as a telecoms operator, we should encourage the British consumer to be discriminatory, to buy products that are manufactured in our own country, to favour industries that stay and manufacture in the UK, and to penalise those that do not?

Photo of Richard Caborn Richard Caborn Minister of State, Department of Trade and Industry

I do not think that in this day and age that would be the right way forward. We look to the consumer to buy the best quality at the best price. The Government support the continued management of the globalisation of trade through organisations such as the World Trade Organisation. I remind my hon. Friend that in the past decade, that policy has enhanced world trade by 25 or 26 per cent. We believe that that is the way to go—to expand the global economy in a managed way that will produce a good result for the consumer. We are doing that through leading-edge technology in many industries.