Manufacturing Industry

Opposition Day – in the House of Commons at 3:31 pm on 24th January 2001.

Alert me about debates like this

Photo of Michael Martin Michael Martin Speaker of the House of Commons 3:31 pm, 24th January 2001

Before I call the right hon. Member for Wells (Mr. Heathcoat-Amory), I announce that there is a 15-minute limit on speeches from Back Benchers, and that I have selected the amendment in the name of the Prime Minister.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 3:36 pm, 24th January 2001

I beg to move, That this House is alarmed at the continuing job losses in manufacturing industry, which now total over 300,000 since the 1997 election; condemns the Government for having abandoned this sector of the economy while burdening it with additional taxes and regulations; and demands that the Secretary of State for Trade and Industry brings forward a strategy for restoring the competitiveness of British manufacturing industry in world markets. I declare the interests recorded in the Register of Members' Interests that are relevant to the debate.

We have called the debate to galvanise the Department of Trade and Industry and the Government generally into doing something about the plight of manufacturing industry. We want to shake them out of their inertia into dealing with the crisis in large sectors of manufacturing.

Since the general election in 1997, approximately 350,000 jobs have been lost in manufacturing. The cause is a fatal combination of complacency and failed policies. The Government are complacent because they inherited from us a golden economic legacy, which they have failed to maintain. Indeed, they have eroded the competitiveness that we achieved. Their policies have failed because they have not understood the challenges that manufacturing faces in the modem world. They have imposed layer upon layer of extra regulations and business taxes, which have attacked our competitiveness.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Will the right hon. Gentleman give way?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I will give way later.

The CBI has estimated that the total burden of taxes and regulations during this Parliament amounts to £32 billion. That is a ball and chain around the ankle of British manufacturing industry. There is a time lag in the effects of that burden, but they are now apparent in a clear loss of competitiveness.

The World Economic Forum reports that the United Kingdom has slipped down the competitiveness league from fourth place under the Conservative Government to ninth place now. That affects manufacturing jobs. Last year, more than 100,000 net jobs were lost in that sector. I contrast that with the figures for the last Parliament. From 1992–97, the number of manufacturing jobs increased by 69,000.

Today, firms and industries are threatened throughout the country. Ford and Vauxhall have announced the end of car making at several of their plants. We desperately hope that Nissan will retain its capacity to make the next Micra in Sunderland. However, that is in the balance. Last year, Corus, our largest steel manufacturer, shed 4,500 jobs. This year, another 6,000 jobs are threatened, especially in important plants in Redcar and Llanwern. If Llanwern shuts, it will be a body blow to the entire south Wales economy, and the ripple effect will be felt much more widely. My constituency, which supplies limestone to Llanwern, will be affected. I therefore appreciate the seriousness of the matter.

Amid all that, the Department of Trade and Industry has become a mere spectator, although it has got bigger: the Secretary of State presides over a Department that has gained 1,000 more civil servants since the general election—but what are they all doing? The Department cannot even pay its own bills on time.

In a previous incarnation, the Secretary of State negotiated a public service agreement with the DTI. It states unambiguously that the DTI is committed to paying all correctly presented bills within 30 days of receipt. Shortly after the agreement, the right hon. Gentleman was in a position to deliver on it. He became Secretary of State for Trade and Industry—and what has happened? The performance has worsened: the DTI has broken its agreement.

Under the last Government, the Department was paying all its own bills 98 per cent. of the time. The percentage has now slipped to 93. The Department is very near the bottom of the Whitehall league table: it is 51st worst of a total of 57. It cannot even pay the money that it owes companies for goods supplied. So much for helping British industry.

Even more striking is the saga of the disappearing ministerial group on manufacturing job losses. The House will recall that at the end of last year there was a lot of adverse comment about manufacturing job losses. The Government announced to the press—not, of course, to the House—that a ministerial group would be set up. On 21 December last year, the Leader of the House confirmed the existence of the group, saying: The group will consider a range of manufacturing issues.— [Official Report, 21 December 2000; Vol. 360, c. 574.] The Christmas and new year holiday went by, and the job losses were temporarily out of the news. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), however, tabled a parliamentary question to the Department asking what had happened to the ministerial group. He received the reply: There is no such group.—[Official Report, 8 January 2001: Vol. 360, c.356W.] That is the story of the incredible shrinking ministerial group. It simply vanished into thin air.

The reason is that the DTI is driven entirely by media considerations. If something is in the news, it does something about it—or it says that it will do something about it. When the issue is no longer in the news, it gets forgotten.

We also remember the famous saga of rip-off Britain. At the 1997 Labour party conference, the Secretary of State intoned solemnly: rip-off Britain must come to an end … We've already started. Investigations have begun into the cost of … prices at supermarkets. It is simply unacceptable to have hard-earned wages pickpocketed at the cash register. A year later, after the industry had had to spend £20 million explaining its case to the Competition Commission—which itself spent nearly £4 million of public money on one of its biggest inquiries ever—the result was the following statement: we are satisfied that the industry is currently broadly competitive and that, overall, excessive prices are not being charged, nor excessive profits earned. That was the end of "rip-off Britain"—a soundbite at the time, huge public and private expense, and nothing at the end of it.

This is a Government, this is a Department, this is a Secretary of State obsessed with packaging and appearance rather than with substance and delivery. A worse charge, however, is that the Government and the DTI are weak in regard to industrial issues.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

My right hon. Friend talks of the weakness of the DTI. A few moments ago, he talked of the weakness of the car industry. Does he agree with the Society of Motor Manufacturers and Traders, which says that the Climate Change Levy will result in substantial increases in production costs for the UK motor industry and adds: In a globally competitive market it is not possible to pass on these cost increases, and there are fears that UK based businesses— including the car industry— will lose out as a consequence. Is my hon. Friend therefore surprised by the closure of Vauxhall and other plants?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

My hon. Friend is absolutely right, and I shall say more on that point in a moment.

It is typical that, at Prime Minister's Question Time today, the right hon. Gentleman said that he would do everything possible to save such companies, yet he will not abolish or withdraw the damaging tax that will come into effect in April.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I promised that I would give way to the hon. Member for Burnley (Mr. Pike).

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

I represent a constituency that is heavily dependent on manufacturing jobs. Was the right hon. Gentleman not being somewhat selective when he referred to the previous Government's record from 1992 onwards? What about the period of Thatcherism, during which the importance of manufacturing industry was totally dismissed? The Thatcher Government were in office for many years, and witnessed the loss of many hundreds of thousands of jobs, and the complete deletion of many manufacturing centres from this country.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I know how strongly the hon. Gentleman feels about that, because he is affected by some of the job losses about which I am speaking.

Yes, the restructuring in the 1980s caused job losses, but those policies of industrial and trade union reform are now accepted by the Government as an essential precondition to the industrial recovery that followed. I repeat that, after we had achieved the restructuring, jobs in manufacturing industry rose under the Conservative Government. Then, in came the new Labour Government, who abandoned manufacturing industry and ignored its problems, resulting in 350,000 job losses over the past four years. I ask hon. Members to consider the truth of those statistics and what lies behind them.

Several hon. Members:

rose

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

If hon. Members will forgive me, I want to make a little more progress, because this is a short debate.

My essential charge is that the Department of Trade and Industry does not stand up for manufacturing industry. There are many examples of that, including energy prices. Industrial gas prices have doubled over the past year. Indeed, that is the subject of an early-day motion tabled by Labour Members. However, when challenged about this problem—which affects all manufacturing industry—the DTI simply said that it continued to monitor the gas market. That is a wholly inadequate response to a very real problem.

There is much worse to come. I come to the point raised by my hon. Friend the Member for Lichfield (Mr. Fabricant) in his intervention. From April this year, all firms will be paying a new energy tax—the so-called climate change levy—on all their energy bills, including those reflecting the higher gas prices that are now feeding through. The Engineering Employers Federation has shown in a recent survey that 2,300 of its member firms, employing nearly 1.5 million people, will have to pay nearly £100 million extra in taxation. That money could have gone into investment, but the costs will now have to be fed into higher prices, which will make the firms less competitive in the international markets.

Photo of Mr Tom King Mr Tom King Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament

I am bound to agree with my right hon. Friend's assessment about the prospects for manufacturing industry, which are serious.

I know of a number of companies that have managed to compete, despite the strong pound, and that have been hanging on, albeit at a reduced level of performance. Unfortunately, however, the new energy prices are likely to be the final straw that will break their backs.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

My right hon. Friend speaks from great experience, and also from regional experience: his constituency is next to mine, and we share a number of firms that will have direct experience of the high energy prices. What baffles those firms—and annoys them—is the supine indifference of the Department to this escalating problem, and the fact that it is bringing into effect a tax in a few months' time that will make a bad situation worse.

The Engineering Employers Federation is particularly annoyed that the companies that they surveyed do not even qualify for the limited rebates available under the new tax. Those firms are in textiles, rubber, plastics, motor vehicles and aircraft manufacturing—they go right across the manufacturing spectrum—and they cannot understand why they will not he eligible for the rebates available.

To be eligible, firms must be polluting companies and must be regulated under anti-pollution regulations. I promise the House that what I say is true: there are firms that have switched to cleaner industrial processes, thereby making themselves ineligible for the rebates. In other words, they are doing the right thing for the environment—trying to clean up their plants and stopping the pollution—but, by doing that, they are rendering themselves ineligible for the rebates under the new energy tax. That is the politics of a madhouse.

Everything has been explained to the Government. Firms in my constituency, firms in London and firms up north and in the midlands, which I visit, have patiently told DTI officials and Ministers exactly what the problem is, but they get no response whatever.

Photo of Claire Curtis-Thomas Claire Curtis-Thomas Labour, Crosby

Does the right hon. Gentleman agree that the Environmental Protection Act 1990 had a significant impact on British manufacturing industry inasmuch as many major chemical, gas and plastics sectors were forced to suspend their processes altogether because the cost of implementing the legislation was so great? If he had the opportunity, would he repeal the Act, knowing what he now knows about the impact of the cost of implementing it?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

No, I would not. We took great care to minimise the impact on our manufacturing industry and to ensure its competitiveness in world markets. That is completely different from what is happening now, whereby the Government are deliberately introducing a new tax when energy prices are already rising. The tax does not need to be introduced. The Finance Act 2000 only allows the Government to introduce the measure; it could be withdrawn today. The Secretary of State could get to his feet, say that he has listened and learned and tell the House that he will not bring the tax into effect. That would provide immense relief right across manufacturing industry, and I challenge him to do so in the debate.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

I visited a factory in my constituency a few weeks ago and was told that gas supply cost the company £300,000 last year. Next year, the bill will be £600,000. Gas is the company's third largest cost so it does not need the Government to tell it to try to reduce energy costs.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

Exactly. That experience and that information is available to the Government; it has been explained to them. I entirely agree with my hon. Friend. There is real anger and frustration that the Government appear to listen, but fail to act.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I shall give way once more, to my right hon. Friend the Member for Fylde (Mr. Jack).

Photo of Michael Jack Michael Jack Conservative, Fylde

Is my right hon. Friend aware that certain industries—chemicals and sugar, for example—made efforts to introduce combined heat and power schemes to improve energy efficiency? Some of those investments have had to be cancelled because of the barmy nature of the climate change levy.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

My right hon. Friend is entirely right. Those are other industries that have been let down. They were promised that all combined heat and power plants would be exempt from the levy, but that turned out to be completely untrue. The larger plants used by the sugar industry and others will pay the levy, at least in part. Industry is trying to do what is right for the environment and trying to save energy, but it will be clobbered by a new and unnecessary tax.

We heard about Corus at Prime Minister's questions and I have already referred to it. The company will pay some £8 million a year under the tax. That will completely undermine any rescue package that it is trying to put together. The tax will also be bad for the environment. If steel making is exported to countries with lower environmental standards, the global environment will suffer, so the tax does not even make sense from an environmental perspective.

Corus is not the only company affected. Sony, which also has a plant in south Wales, announced 400 job losses at the end of last year and said: It is not just the euro; it is the fact that all these things are coming together … Transport costs are very high in the United Kingdom and the climate change levy alone will add £500,000 to the cost of our … tube-making business. There is therefore a direct link between a new tax and 400 job losses in south Wales.

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

Will the right hon. Gentleman give way?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

Will the hon. Lady forgive me? This is a short debate and I still have two points that I wish to make. I hope that the hon. Lady will have an opportunity to speak later; hon. Members on both sides of the House wish to do something for manufacturing and want clear answers from those on the Government Front Bench on the subject.

The climate change levy is bad, damaging and environmentally unnecessary. We will abolish it: that is a clear pledge. However that is not enough. We require from the Government a package of measures to help manufacturing industry. There is the issue of the pound-euro exchange rate, which the House should not ignore. Exporters to Europe have real problems, which are made worse by the fact that the Chancellor has made a commitment to increase public spending way above the economy's growth rate over the next three years. That, in turn, tends to keep interest rates, as set by the Bank of England, higher than they otherwise would be.

We will ensure that manufacturing industry is represented, not on the Monetary Policy Committee, which would not be right, but as a member of the committee of economic advisers which we will set up to ensure that the fiscal stance—the borrowing, taxing and expenditure profile of the Government—is consistent with keeping inflation under control and having interest rates no higher than they need to be for that purpose. That gives manufacturing a place at the top table, which it has been denied under the Government.

Then there is the question of the regulatory burden. The Government have vaguely woken up to the fact that there is a regulatory problem in this country and have even promised a Bill for this Session, although we have not seen it yet. There are great doubts about whether we will; it will certainly not be enacted by the date of the election. We shall ensure that every Department has a deregulation budget to reduce business's regulatory costs year by year. We shall ensure that that is independently audited and reported to the House.

What we really want from the Government is equivalent action. Instead of blaming every past Government for mistakes, why does the Secretary of State not take some responsibility himself and use his Department to stand up for manufacturing industry? He should listen to those who manage and work in those threatened industries and hear what they say about the burden of red tape, rising energy prices and extra taxation. Above all, will the Secretary of State and the Government stop wringing their hands about those job losses and actually do something so that those industries can regain their lost competitiveness and their vigour in world markets?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 3:58 pm, 24th January 2001

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: welcomes the low inflation and low interest rates that this Government has brought and which bring the economic stability needed by the manufacturing sector; welcomes the measures that this Government has taken to encourage investment, innovation and productivity which will particularly help manufacturing businesses; welcomes the Government's approach in helping businesses and people through structural change as opposed to the previous Government's laissez-faire approach; and condemns the Opposition's record on manufacturing, where employment declined by 2¾ million during its period in office.". Manufacturing matters to the Government, and I want to use this opportunity to outline success stories in the manufacturing sector in the United Kingdom at the beginning of the 21st century. I then want to go on to tell the House how we intend to assist those industries that are going through the painful process of restructuring at present.

Manufacturing matters because it accounts for about one fifth of our national income, with almost £150 billion a year of output. Manufacturing employs about 4 million people directly, and indirectly employs 2.5 million people in service sector jobs. A strong manufacturing sector is therefore a vital part of our economic base, and it includes some of the businesses that have invested most heavily in innovation.

Manufacturing clearly faces challenges, but equally it includes some of the United Kingdom's most successful companies. We have much to be proud of in our manufacturing sector. However, people too often talk down manufacturing, as the right hon. Member for Wells (Mr. Heathcoat-Amory) did in his 20-minute speech—[Interruption.]

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

Some Opposition Members were clearly not listening to the points that the right hon. Gentleman made; but the Official Report will contain his speech.

I want to examine some success stories in manufacturing, particularly in the sectors that have blossomed because of the Government's initiatives. In aerospace, employment has increased by one fifth. There are almost 14,000 extra jobs in the aerospace industry since 1998.

Photo of Michael Jack Michael Jack Conservative, Fylde

BAE Systems in my constituency is facing uncertainty about possible large job losses. The Secretary of State recently visited India. What assurances and guarantees can he give to my aerospace workers that everything possible is being done to enable the United Kingdom and BAE Systems to win an order from the Indian Government for the Hawk aircraft?

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

The right hon. Gentleman makes a very important point, and I am conscious of the importance of the Hawk order for his constituents and for those who work for BAE Systems. He is right to say that when I was in India a couple of weeks ago I met a number of Indian Government Ministers, including the Minister for Defence, George Fernandes. One of the issues that I specifically raised was BAE Systems's desire to provide the Hawk aircraft to the Indian air force.

The right hon. Gentleman will be aware that the negotiations have been going on for an inordinate lime. However, I am clear that they are now very close to a successful conclusion. I hope that the two or three relatively minor outstanding issues can be resolved in the near future. It is a significant order if it can be secured. I also know that, if that can be achieved, it will bring a degree of confidence to his constituents about their future employment prospects.

We shall certainly continue to do all that we can, on a Government to Government level and a Government to industry level, to try to secure that contract. I am sure that it will be secured, but I am also conscious that it needs to be done sooner rather than later. We shall use our best endeavours to that effect, and I shall keep the right hon. Gentleman informed on that important matter. However, there is success in the aerospace industry. I recognise, too, that it is going through structural changes.

In other sectors, such as fibre optics, which underpins the internet, DTI support in programmes such as LINK has helped to establish the United Kingdom as the European leader. In the past 12 months alone, more than 7,000 new research and development and manufacturing jobs have been announced in the United Kingdom fibre-optic sector.

Contrary to some perceptions, we have strengths also in the car industry. Since 1997, £3 billion of new investment has been announced and more than 10,000 new jobs created in United Kingdom car manufacturing.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

The Secretary of State will know that the Toyota plant is not far from my Lichfield constituency. What can he say about the strategic talks currently being held between Toyota and Ford?

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

That is a matter for Toyota and Ford, which are commercial organisations, and the hon. Gentleman and the right hon. Member for Wells would be the first to criticise me and the Government if we were to interfere in those discussions. I should have hoped that the hon. Gentleman would mention the positive announcement, just a couple of weeks ago, that Toyota is switching production of the Corolla from Japan to Derbyshire, increasing its United Kingdom production by almost one third—to 220,000 vehicles by the end of this year—and creating 300 new jobs as a result. But there is no comment from the hon. Gentleman.

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

The hon. Gentleman's constituents will benefit from that investment, and I am pleased that he now recognises its importance. Jaguar is investing £300 million at Halewood to build the new X-type model. Volkswagen is investing £500 million over five years to increase Bentley production at its site in Crewe.

There are success stories, then, and the reason is that we are delivering what manufacturing wants: economic stability. If we turn the clock back just 10 years, inflation was in double figures and interest rates were at 15 per cent. The Government will not return to those days, because we saw the damage that was done to manufacturing in our country. That was ignored by the right hon. Member for Wells.

Photo of Mr Llew Smith Mr Llew Smith Labour, Blaenau Gwent

Would my right hon. Friend care to turn the clock back two years, to when the steel company Corus was formed? I noticed that the right hon. Member for Wells (Mr. Heathcoat-Amory) seemed to imply that the problems facing Corus arose because of the £8 million of the climate change levy. Will my right hon. Friend confirm that the fact that workers in Ebbw Vale are facing redundancy has nothing to do with the climate change levy, and that £8 million is peanuts compared with the £700 million that Corus has handed out as sweeteners to its shareholders; the £900 million that it has appropriated from the worker's pension fund; the £135 that it has wasted in buying up companies abroad, only investing £3 million in this country; the millions of pounds handed out to the sacked chief executive; and the huge payments to former Dutch managers?

Does my right hon. Friend agree that the real issues facing the steel industry have nothing to do with the climate change levy and everything to do with a company that is determined to destroy an industry that generations of people in my community in Ebbw Vale have built up?

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

My hon. Friend speaks with passion on behalf of his constituents, and I intend shortly to speak about Corus specifically. He mentioned the £8 million cost to Corus of the climate change levy, referred to by the right hon. Member for Wells as though it were the foundation of the company's problems. My hon. Friend was right to call it peanuts. The right hon. Gentleman should be aware of the fact that every 1 pfennig movement in currency between the pound and the deutschmark costs Corus £8 million. When it comes to investment and currency stability, his policy of ruling out for ever joining a single European currency would be the worst policy for manufacturing in the United Kingdom.

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

Will my right hon. Friend also recall the position under the Tory Government, when 500,000 jobs were lost in the textiles and clothing sector? Considering the difficult position in the industry at present, including job losses in my constituency, will he reaffirm the Government's policy of working closely with industry to look for new opportunities and to seek to stem job losses—unlike the previous Government, who did nothing whatever and simply sat on their hands?

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

I can confirm that. As with the steel industry, I want to outline the help that the Government can give to the textiles industry, which is going through restructuring and faces challenges as a result of competition from overseas. I will shortly address those points in detail.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Plaid Cymru, Caernarfon

The Secretary of State rightly underlined the significance of currency fluctuations, not only for the steel industry but for manufacturing generally, and the way in which instability militates against long-term development. That being so, should not the Government give much clearer signs of a commitment to enter the euro and to create the circumstances, as a deliberate target of policy, to enable that to happen?

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

Our policy is very clear. We can see the benefits of joining the single European currency. Transparency of costs, improvements in trade and currency stability are probably the three prime benefits of membership. However, the economic conditions have to be right. That is why we have the five economic tests laid down by my right hon. Friend the Chancellor. When those have been met, it will be for Government, for Parliament and for the people to decide. That is a policy that business understands. Business tells me that the worst possible policy would be the one adopted by the Conservative party: to rule out joining a single currency for the lifetime of the next Parliament. It is a policy dictated by dogma. It does not consider the economic prospects of industry and of manufacturing in particular.

That should not surprise us, however, given the Conservative party's record in regard to manufacturing. The right hon. Member for Wells was very selective about the years that he chose to give as examples. We should look at what happened to manufacturing at the beginning of the 1990s.

In 1992, there were 7,500 job losses at British Aerospace, including the closure of the firm's Hatfield plant. More than 4,000 jobs were lost with the 1992 closure of the Ravenscraig steel works. There were 6,000 jobs lost with the closure of Rolls-Royce aeroengines in the same year. In 1991–92, 13,000 jobs were lost at GEC, and more than 20,000 were lost at Ferranti in the early 1990s. In 1992 alone, 1,600 metal and engineering companies went bankrupt, as did more than 1,000 textile and clothing manufacturers.

In total, more than 1 million manufacturing jobs were lost in the early 1990s. That is the Tory record.

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

I want to make some progress, but I shall try and give way to the hon. Gentleman a little later.

The manufacturing sector has told the Government clearly that companies need confidence to invest, and that that requires the right economic climate and stability. That is why, on coming to office, the Government took immediate and decisive action to ensure economic stability and low inflation. Inflation remains around or below the target of 2.5 per cent., and long-term interest rates are at their lowest level for 35 years.

I am sure that Conservative Members would not be content to take the Government's word for that, so I quote David Smith's article in last weekend's edition of The Sunday Times:It has been an extraordinary turnaround. Ten years ago Britain's economy was in a state of deep despair. Inflation was in double figures, unemployment climbing ever higher, house prices collapsing and the country over a year away from the light at the end of the longest recession since the war. Now, according to new figures, we can look hack on an economic golden age that shows little sign of coming to an end … Unemployment, at just over 1 m, is at its lowest since 1975, and a third of its level in the early 1990s, with skill shortages a bigger problem than shortages of jobs. Inflation is the lowest since 1976 … in practice the lowest for a long time before that. The government, far from being strapped for cash, has a big budget surplus. I know that The Sun newspaper is beloved of many Conservative Members.

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

There is no higher commendation. The newspaper's political editor, Trevor Kavanagh, is one of the country's best. In today's edition, he wrote: Britain is the best place in the world to do business, according to a new survey. America is left trailing in second place … The survey by management giant Arthur Andersen and independent analysts GrowthPlus covers 10 nations, and is due to be published tomorrow; but a copy seen by The Sun names Britain the "outright winner". It saysOur benchmark shows the United Kingdom as being the country that overall provides the most entrepreneur-friendly environment. We can see that the UK nurtures growth through tax incentives. That is how The Sun has reported that very important report.

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

I have a choice, so I shall take a pro-European first and give way to the hon. Member for South-West Bedfordshire (Sir D. Madel). I shall then allow the anti-Europeans in.

Photo of Mr David Madel Mr David Madel Conservative, South West Bedfordshire

Will the Secretary of State say why, if everything is so wonderful and the UK is such a good place to invest in, we cannot persuade General Motors to continue building cars in Luton?

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

I have been in touch with the company to see whether it will reconsider the decision, but the hon. Gentleman will know that the decision also affects plants in Germany and north America. It was not just a United Kingdom issue that was being addressed; it was a global restructuring that General Motors had embarked upon. I hope that it will reconsider that decision and will consult its work force appropriately on how it can see itself through the current difficulties.

General Motors has a responsibility to the work force at Luton. I think that the House understands the anger felt by the workers in that plant, who entered into a partnership with the company, a partnership that the company has now torn up unilaterally. The Government understand the workers' concern and share the anger and frustration felt by the work force in Luton. We shall continue, in the appropriate way, to make representations to the company to try to get that decision changed.

Several hon. Members:

rose

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

It is not just the work force who are angry. Many in this House are extremely angry over the way in which General Motors has treated the work force at both Luton and Ellesmere Port. I am pleased that my right hon. Friend said that he would continue to put pressure on the company. I urge him to make representations at a very early date, because we are now coming to the stage at which, if the company does not shift its position soon, it will be too late. It is very urgent that the Government bring the maximum pressure to bear on the company.

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

I can certainly give my hon. Friend the assurance that we shall be doing precisely that.

Several hon. Members:

rose

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire

What my constituents want to know is this: does the Secretary of State expect Vauxhall in Luton to close?

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

Ultimately that will be a commercial decision for General Motors to take. Right hon. and hon. Members will be aware of that. What we can do is to make the case. That is exactly what the Government have been doing, and we shall continue to do it.

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

I shall give way to the hon. Gentleman, but let me make some progress first.

I want to address the concerns of two sectors raised by my hon. Friends: textiles and Corus. I should also like to say a word about Nissan.

The right hon. Member for Wells accused the Government of inaction. I can say that, in relation to Nissan and many other sectors of manufacturing, we are doing all we can to ensure that when companies take important commercial decisions they are aware of the benefits that will come from investing in the United Kingdom. We secured European approval for the £40 million grant aid to Nissan in record time. When I met the chief executive of Nissan just 10 days ago in Tokyo, I made clear to him in a face-to-face meeting the importance of this investment not just for Sunderland, but for the United Kingdom. I hope that when he takes a long-term look at the prospects for Sunderland and for Nissan he will recognise that the right decision must be to build the new Micra in the north-east of England.

With regard to textiles, there is no getting away from the fact that this is a difficult time for parts of the textile industry. Owing to globalisation, new technology and restructuring, the textile industry in particular is under significant pressure. That is why the Government have introduced a package of measures worth over £10 million for the industry as a whole to assist it through this period. It includes measures to help exporters, to support design talent and to promote and develop new technological developments for the industry.

The plan is designed to enable the industry to adapt to the challenges of the knowledge economy. It includes Government support for the development and exploitation of technical textile materials. It provides programmes to help retrain workers who might be affected by decisions that have been taken on closures.

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

I should like to finish the point on textiles.

There is a very important element here that people lose sight of. Because the textile industry is made up of many relatively small factories and plants, the level of support that the Government give to individual factories or individual companies is often seen as quite small compared with very large grants such as the one I have just mentioned in relation to Nissan in the north-east of England.

I have looked back at the support that we have given since we took office in May 1997 specifically for the textile industry, by way of regional selective assistance. That support has been in small am mints of money but given to a large number of companies. In total, more than £40 million has been given to textile companies. That has safeguarded or created 10,000 jobs in the sector and has led to investment by the companies of a further £250 million. That is a good example of how Government support of £40 million to the textile industry has triggered investment of £250 million in the sector, thereby safeguarding or creating 10,000 jobs.

Photo of David Drew David Drew Labour/Co-operative, Stroud

The right hon. Member for Wells (Mr. Heathcoat-Amory) did not, of course, mention the Conservative party's aim of abolishing regional development agencies. My right hon. Friend knows that, in Dursley in my constituency, Lister-Petter has been kept going by the intervention of the South West regional development agency. Thanks to the help of my right hon. Friends the Secretary of State for Trade and Industry and the Deputy Prime Minister, that is indicative of how supply-side changes are as important as demand-side changes. However, the Conservative party is pledged to remove regional development agencies. Will my right hon. Friend comment on that?

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

My hon. Friend makes a good and important point about the role that RDAs can play. That is an exceptionally good example of a positive and proactive approach that has led to employment opportunities for many people in his constituency that would no longer exist had the RDA not been available to act as a catalyst to ensure that those jobs were protected.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

The Secretary of State's earlier remarks about the euro were woefully inadequate. Given that the governing council of the European central bank comprises three Germans, two Dutchmen, two Finns, two Frenchmen, two Italians, two Spaniards, a Belgian, an Irishman, a Luxembourger and a Portuguese, and that the European treaties as drafted specifically prohibit national Governments or Parliaments from seeking to influence its decisions, can the right hon. Gentleman explain why he is so eager to hand over power for the running of the British economy to people whom we do not elect, whom we cannot remove and whom it would be illegal to seek to persuade of the British point of view?

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

The hon. Gentleman has just made what I am sure he considers is a powerful argument for never joining the single European currency. Of course, that is not his party's policy. The Conservatives say that it does not agree with the structure but that they will rule it out for only five years and then we might join. They cannot have it both ways. Our party believes in joining a successful single currency, provided the economic conditions are right. That is the clear policy of the Labour party and of the Government, and I happen to believe that it is the right policy.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

The right hon. Gentleman has spoken of his interest in intervention when large-scale job losses are forecast. Does he agree that there is also a problem with smaller-scale job losses, such as the closure of Cuprinol in Frome? It is a successful brand, acquired by ICI, now relocated to Slough. The closure of another company, Bussmann and Cooper, means 430 job losses. In a town the size of Frome, that has a huge impact. Does he agree that large national and multinational companies should have some regard for the loyalty of the work forces who built their factories and made their brands a success when they make their strategic decisions?

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

The hon. Gentleman touches on two important points. One is the important role that relatively small factories in the grand scale of things can play within particular communities. He is right that the loss of a few hundred jobs in a small town can have a devastating impact, and we need to be acutely aware of that. Secondly, it is short-termism at its worst when multinationals, almost as a kneejerk reaction, close down smaller subsidiaries. Long-term planning is often the best way forward, and sometimes short-term decisions are taken which are not in the companies' long-term interests.

I should like to address the point about Corus raised by my right hon. Friend the Member for Alyn and Deeside (Mr. Jones). As we meet this afternoon to discuss manufacturing, we are all acutely aware that thousands of workers in the steel industry are extremely concerned about their prospects. Last year, Corus replaced its joint chief executives because the two of them were not prepared to adopt a short-term approach to the problems faced by the company and the industry. They were not prepared to embark on plant closures and cuts in capacity. There is no doubt that Corus faces a challenging period. Trading conditions in steel are difficult and the company will need to take steps to address the problems it faces. However, Corus needs to be aware that it will stand condemned of short-termism at its worst if its response is to close plants with the loss of thousands of jobs.

In the first nine months of trading as Corus, there was an operating loss of £96 million—clearly a state of affairs that any company could not ignore, but Corus is particularly affected by movements in exchange rates. Its operating profits closely track the sterling-deutschmark exchange. Little wonder that that is the case, when a 10 pfennig movement in the exchange rate with the pound affects operating profits by £80 million one way or the other.

The House needs to consider, as does Corus, what has happened over the past two months. In November, the pound was trading at DM3.26. Yesterday, the rate closed at DM3.06, or a fall of more than 20 pfennigs—resulting, by Corus' own calculations, in a saving to the company of some £160 million in just two months. The £8 million climate change levy pales into insignificance beside that. The Tory party is trying to play politics with the futures of a crucial industry, communities and thousands of workers.

Photo of Mr Llew Smith Mr Llew Smith Labour, Blaenau Gwent

Earlier, the Minister accepted that the £8 million climate change levy was peanuts compared with what Corus has done to the company. Does he accept that £96 million is also peanuts compared with the £1.5 billion that Corus has asset-stripped from the company in different ways over the past two years?

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

My hon. Friend has an early-day motion on the Order Paper that makes highly effective points about the way the company has been operating. Over the next few days, many people will be turning their attention to the way in which Corus has been conducting itself in recent times.

Photo of Mr Barry Jones Mr Barry Jones Labour, Alyn and Deeside

I am most grateful for the work being done by my right hon. Friend for steelworkers. Does he agree that Britain's manufacturing capability could be hugely impeded if Corus continues to dismantle its capability in Britain? I cannot see how a nation can be great when a company such as Corus takes away one of its foundation industries. Steel is greatness and a strategic industry.

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

My right hon. Friend has been a great champion of the steel industry in general and of the Shotton works in particular over more years than I should remind him of. Starting in 1973, he brought delegations to the House to argue strongly the case for the steel industry. My right hon. Friend makes a powerful point about the industry's significance, which makes it important that Corus should not take short-term decisions over the next few days but look to the long term.

My right hon. and hon. Friends believe that this country's steel industry has a long-term viable future. Its workers have shown a long-term commitment by improving productivity dramatically in recent years. Steelworkers and the Government call on Corus to deliver the same level of commitment to the industry at this time. Corus should not be defeatist. It should not embark on a short-term approach but plan for the long term, in which there is a viable future for the steel industry in the United Kingdom.

There is no doubt in the Government's mind that manufacturing has an important role. We have done much already to support manufacturing by providing economic stability and we continue to do so. Manufacturing matters to this Government and to our country. Once the cradle of the industrial revolution, we can now be at the heart of the knowledge economy at the beginning of the 21st century. Manufacturing faces considerable change, driven by globalisation and the spread of new technology. That calls for an active Government who work positively with industry to ensure that our people can manage the process of change and seize the new opportunities that will come from it.

There will be difficult decisions, but we will face them, working with the communities and the industries affected to build a new future where that is necessary. That is the challenge. To meet it, we need stability, not a return to boom and bust, and full employment, not mass unemployment; we need to invest in the building blocks for a dynamic industry—not the cuts proposed by the Opposition. We have a commitment to build strong communities, not a belief that there is no such thing as society. We are a Government on the side of the people, not a Government who leave them to the market to fend for themselves.

That is the approach of the Government and I commend it to the House.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry) 4:30 pm, 24th January 2001

The motion helpfully identifies a real problem. I broadly subscribe to the view that the British economy is generally in good shape in respect of inflation and growth in output and employment. However, it is clear that in the parts of our economy involved in international trade—notably manufacturing, but also agriculture, trade and services such as tourism—there is great distress, some of which is typified by the events at Llanwern today. It is right that we focus on that. I agree with the motion's highlighting—albeit in a rather exaggerated way—of the problems and costs of regulation.

None the less, aspects of the motion puzzle me. The punch line is a call for an industrial strategy. That sounds like the right hon. Member for Chesterfield (Mr. Benn) during his heyday in the 1960s; if there was a problem in industry, one created an industrial strategy. One of the better lessons of the Conservative years is that industrial strategy is created by companies and not by Ministers and Government officials.

I am also puzzled by the fact that the motion specifically highlights the loss of 300,000 jobs in manufacturing industry. That invites the obvious riposte: according to House of Commons figures, 3 million jobs have been lost in manufacturing industry since 1979. That process is continuous; it is not inherently a matter to be alarmed about, because 4 million jobs have been created in other sectors. Because of productivity growth, manufacturing employment in most industrial economies is declining. The matter is important only if one believes that manufacturing is fundamentally different from the rest of the economy.

I think that the first person to advocate that theory with any conviction was Marx; he believed that manufacturing creates surplus value and that services are rather parasitic. However, we no longer believe that argument these days—I should certainly be surprised if such a belief was held by a right-wing party. It would surprise me if the Conservatives held that view—especially given the fact that the share of manufacturing in the United States economy is about half that in Japan and no one could seriously suggest that the United States is a less successful country than Japan.

Manufacturing is important in this context because it is the largest sector of our economy involved in international trade. It shares its problems with farming, tourism and other traded sectors. It would be helpful if we could get away from the mechanical distinction between manufacturing and other parts of the economy. I often refer to the Twickenham shipbuilding industry, because although we have no shipyards in Twickenham, much of the value-added in the industry is created in London suburbs by designers sitting at computers. With information technology, manufacturing and service industries have become completely interconnected.

My starting point is slightly different from that of the Conservatives. In many respects, the British economy is doing relatively well—certainly in regard to the past and to comparable economies—but it is extremely unbalanced: one large sector, involved in international trade, is seriously under-performing. We can see that in various ways.

The investment indicators for industry from the CBI and others suggest that manufacturing investment declined by about 15 per cent. last year. That has not remotely been cancelled by this year's moderate recovery. The CBI's evidence on investment intention shows a continued negative outlook in industry. Although there is plenty of evidence that output growth is relatively strong in the whole economy, it is below 1 per cent. in manufacturing, and has been for the past few years.

There are two basic reasons why the traded bits of the economy are under-performing in many ways, and they have already been mentioned in the debate. At the centre of the Conservative party's argument is the idea that the problem is entirely caused by regulation. Clearly, that is an issue, but if regulation is the problem, why is not the same pain being experienced in other parts of the economy? After all, the working time directive and similar regulations apply across the board, but we are discussing the fact that a key sector of the economy is under-performing relative to the others. Nevertheless, it is useful to reflect on some of the problems that regulation brings.

I have an example that explains, with some clarity, why the issue exists. Last week, I was approached by representatives of the compressor industry. They are the people who make pneumatic drills and equipment with pneumatic action—an important part of industry. Workers are genuinely concerned about a health problem in the industry. If people work with high-pressure drills, they experience extreme vibrations, which affect the nervous system and their hearing. Clearly, strong health protection is needed. As a result of that problem, the Health and Safety Executive recommended that a regulation should be introduced to put a specific quantitative limit on the amount of vibration that could occur.

Full of enthusiasm, the Government ran off to the European Union and got all the other member states to sign up to a directive, binding across Europe. It was then pointed out that they had gone about the directive in an unhelpful way and that the same objectives could be achieved at far less cost through a different way of defining the regulation. Obviously, they had not consulted the companies.

The British officials set off, chasing around Europe trying to withdraw the directive that they had initiated, but I understand that it is now too late and the directive will come into effect, unnecessarily costing industry about £2 billion over 10 years. The symptoms are always there—no consultation and a lack of proper impact assessment—although in this case a study showed that the costs outweighed the benefits by about 7:1. However, such things happen every week, which is a real problem.

Reference has been made to the climate change levy, but it has not yet had any impact because it has not yet happened. We are stuck with a rather sterile controversy, because the argument is that some people want to do nothing about climate change and the specific proposal of the climate change levy. The Government know that there are other ways to act and that if they had introduced, by stages, an upstream carbon tax, applied throughout the economy, related to the carbon content of product, they could have achieved all their objectives without the discriminatory burden on manufacturing industry, but they pressed ahead with it.

I acknowledge that there are regulatory problems and costs, which are often insensitively applied, but none of us would seriously argue that that is why manufacturing and the rest of the traded bits of the economy are now struggling in a way that the service sector is not. What is the problem? As the right hon. Member for Wells (Mr. Heathcoat-Amory) and the Secretary of State for Trade and Industry briefly suggested, the problem relates specifically to the workings of the exchange rates, but not, as the Conservative spokesman said, simply to the euro-sterling exchange rate. Korea is the steel industry's main, efficient competitor, and there has been an enormous divergence between the appreciation of sterling and the depreciation of the Korean won. That is why Korean steel massively undercuts British steel; it is largely due to the enormous movements in the exchange rate.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

The hon. Gentleman wants to talk about the fluctuations in exchange rates and the effects thereof, but he cannot be allowed so speedily to skip away from the subject of regulation. Given that more than 99 per cent. of British companies employ fewer than 100 people, that they account for 57 per cent. of the private work force and that they produce two fifths of national output, can he tell us whether he signs up to the deregulatory agenda that the Conservative party has announced? In particular, can he tell the House, with all the authority of the Liberal Democrat Front Bench, what assessment he has made of the American Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act?

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

I am sure the hon. Gentleman is well read and has digested my report on unnecessary regulation. It has been endorsed and enthusiastically supported by the Federation of Small Businesses, no less, not just because it sets out an appropriate deregulatory agenda, but because it does something that he and his colleagues rarely do, which is to be specific. My party has identified 25 major categories of unnecessary regulation. Clearly, regulation is needed to protect workers, consumers and the environment, but some of it is unnecessary, and we have tried to identify where that is the case. I thank the hon. Gentleman for allowing me to highlight that matter.

The enormous divergence in exchange rates is not simply a matter of the respective rates of the euro against the dollar and sterling. Figures published by the Organisation for Economic Co-operation and Development show that sterling has appreciated since, I think, 1995, to the extent that Britain has now lost competitiveness, in terms of the unit cost of labour, by about 45 per cent. However, Korea has gained in competitiveness by about 20 per cent. The eurozone as a whole has gained in competitiveness by 15 or 20 per cent. Those are enormous margins. No conceivable improvement in productivity at a factory level will offset that, no matter how hard working the employees or inspired the management.

The central issue is how we make exchange rates stable so that we stop the divergence, and some hon. Members have touched on that matter. That consideration goes to the heart of our position on the European currency. When we argued two years ago that British industry would incur costs because of the lack of clarity on economic and monetary union, we were laughed at and told that we were crying wolf. However, we now have concrete examples to support our stance.

The Nissan management made it clear that its decision to locate new production in either Sunderland or France will be heavily based on being confident that Britain will enter the common euro area. It specifically stated that any industrial incentives or grants will be a secondary consideration. More important in the long term was the statement by Ford of Europe a couple of weeks ago in which it said that unless it is clear that Britain will be part of the European monetary union area by 2006, it will not remain in this country. That employer directly provides 50,000 jobs, and that number can be doubled or trebled if one considers its subsidiary activities. Those are clear and explicit statements by important manufacturers.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

The hon. Gentleman will no doubt have read the report by the Institute of Directors, which comments on the relationship between sterling and the euro. It says that the two currencies are merely ships that pass in the night. Consequently, will he argue, as he is at the moment, for our entry into EMU when the euro is strong and the pound is weak and, accordingly, British manufacturing is competitive?

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

The hon. Gentleman might know that I co-authored a report that received considerable publicity. The group was chaired by the Liberal Democrat MEP, Christopher Huhne, and involved members of the Monetary Policy Committee. It set out what an appropriate competitive exchange rate would be for the United Kingdom. I have read the report by the Institute of Directors. I do not agree with it, but I refer the hon. Gentleman to a more authoritative and less polemical organisation, the National Institute of Economic and Social Research. It argued within the past few weeks that clear evidence exists of a high level of convergence with the British economy.

My criticism of the Government is that, although they are clearly carrying out tests on such matters in private, they will not discuss them with us, perhaps for good political reasons. However, a mature debate would certainly help to clarify the position of the British manufacturing industry. We need to discuss whether we are converging, which was the point raised by the hon. Member for Lichfield (Mr. Fabricant), and to consider the evidence, but we are not doing that; there is no public debate. The Government have been remiss in that sense.

I approach the issue by acknowledging that, in many respects in the conduct of macro-economic policy, the Government can reasonably claim—even though four years is a very short time in economic history—that the problems of boom and bust have been substantially reduced, except in respect of the boom and bust associated with the exchange rate. That problem is still with us and it is severe. That is why we are debating the substantial blows to manufacturing industry that have occurred recently.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East 4:45 pm, 24th January 2001

Manufacturing is doing well if not doing great, which is what we want it to do.

We are debating a Conservative party motion and my first thought was what a brass neck it was for the Tories to table a motion about manufacturing industry. That seems a contradiction in terms. After 18 years in which great damage was done to British manufacturing, Conservatives Members come to the House today to castigate the record of the Labour Government.

Let me appeal across the divide and remind Conservative Members that, during that dreadful period for British manufacturing under their governance, a Minister eventually came into office who cared about British manufacturing and exports. I refer to Richard Needham, who was the sole salvation of any semblance of a Conservative party policy for manufacturing and the important role that it plays in exports. I congratulate my right hon. Friend the Minister for Trade who has not just carried on with that work, but brought to it an enthusiasm worthy of the exporting traditions on which this country has depended and continues to depend.

The hon. Member for Twickenham (Dr. Cable) compared the United States, Japan and the United Kingdom. I remind him that the USA exports about 7 per cent. of its gross domestic product and, strangely, has done for most of the past century. Over the same period, the United Kingdom has exported about 20 per cent. of its GDP, and the overwhelming majority of our exports have been manufactured products. We cannot compare this country with the USA and Japan, because we are still very dependent or the manufacturing sector, which contributes more to our balance of payments than any other industry or set vice sector in this country.

British Trade International, which is now Trade Partners UK, has made a good start to boosting British exports, especially those from the manufacturing sector. I congratulate my right hon. and hon. Friends in the Foreign and Commonwealth Office and the Department of Trade and Industry on the work that they are doing to make joined-up Government a reality for the policy on exports. I know that many have tried that before, but we now take a more coherent view and take a more sensible policy approach to the issue.

I hope that, after the debate, the Conservative party will rediscover some of its former glory and recall the time when it greatly assisted British manufacturing industry. Many of the great industries established in the 19th and 20th centuries were set up by the Conservative party's friends—the people we call "the captains of industry".

We need a consensus on the vital question of industry. I unashamedly appeal to Conservative Members to join us in creating coherent and comprehensive policies for manufacturing that will assist our exporting efforts.

Photo of Nigel Evans Nigel Evans Vice-Chair, Conservative Party

The hon. Gentleman suggests that we should have a consensus on what we can do to improve manufacturing industry, so will he have a word with his colleagues about the climate change levy? He must admit that it will have an enormous impact on manufacturing industry in this country.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

I accept that manufacturers in this country and others complain when any extra costs are added to their bottom line and I understand the reasons for that. I believe that my colleagues in the Department of Trade and Industry are working hard to find ways in which to take account of the understandable concerns and sentiments expressed by manufacturers, especially those that are already highly energy efficient, but I accept the hon. Gentleman's comments and recognise that more work is needed. None the less, I support the climate change levy: we have to take some action in that respect, not only for our own sake, but for the sake of our neighbours worldwide.

We have developed an impressive toolkit with which to assist the regeneration of manufacturing. Much of the selective assistance that has been made available is doing good work. My right hon. Friend the Secretary of State mentioned that in recent years £60 million has been made available via that route. That is welcome. I am not one of those who believes that industry can be left to its own devices. We live in an increasingly competitive world in which every other country values its manufacturing industry and does all it can to develop it. Woe betide Britain if we do not take similar—indeed, better—action to support our own manufacturing industry.

In this country we have a significant problem regarding investment. We have a system of stock markets, shareholding and company profits that defies the logic that is applied by many overseas companies within their own countries, whereby they retain profits for long-term investment. The pressure on our managers is to deliver dividends. There has to be a change of mind to ensure fairer distribution between distributed and retained profits—and, I say to my Treasury Ministers, to ensure the best possible treatment of those retained profits. Only in that way will we get self-generated investment in our industries.

That has not happened in Britain in the past. Often, hon. Members who visit old manufacturing companies in their constituencies see machinery that must have been fetched up from the sea bed after the first world war—it is pretty dreadful. On the other hand, we have good companies that have modernised and invested because they recognise that only investment in the manufacturing process can bring the competitive edge that they need to compete successfully on world markets.

In British industry—perhaps throughout the whole of Britain—management is not really our strong point. More needs to be done in terms of management education and training. Not that long ago, a management guru who used to control ICI was asked whether his managers were on MBA programmes and taking other opportunities to improve their management skills. He replied, "MBA programmes? I'd be pleased if any of them could read a balance sheet!" Such a comment from a director of a major company about middle and upper management in British industry is damning indeed. We have not made the progress that we need in our universities and colleges in terms of developing MBA courses and related management skills courses.

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury

The hon. Gentleman has touched on an important subject in talking about youngsters taking MBAs and so on, but does he agree that perhaps too many people take that route and not enough take up industrial training, given that many companies are finding it extremely difficult to recruit either trainees or trained people?

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

The hon. Gentleman hits on a very good point, to which I was about to turn. If proper leadership and management are lacking, the potential of employees—even of those who have the best technical skills—is never realised. That is part of the sad story of the failure of British manufacturing: leadership has been lacking. We have been responsible for some of the finest inventions that the world has ever seen, but we have failed to bring them to the marketplace. That has usually happened because of lack of money for innovation, lack of vision among those who should be leading and damned poor management at plant level. We must attend to management and marketing skills. When one talks about marketing to some managers, one might as well be speaking Esperanto. Above-the-line and below-the-line campaigns mean nothing. It is pathetic that we often have good products, workers and even investment, but still do not go to the marketplace with all our guns blazing. We must take those matters very seriously.

We need managers with technical and financial skills. Too often, our best engineers are promoted on to boards where they find themselves completely outmanoeuvred by accountants who do not know anything about the fundamentals of engineering. Such people might know an awful lot about the bottom line of the company without understanding the need to modernise and to build up skills and capital investment.

In the three or four minutes that remain, I should like to turn to two pressing matters in my constituency. I shall not apologise for speaking about them, as they illustrate the difficulties about which I have been speaking: lack of leadership, poor investment and other such problems. There have been massive redundancies in the Goodyear tyre factory in Wolverhampton. I waive towards the hon. Member for Tewkesbury (Mr. Robertson) at this point. People who were made redundant and do not have transferable skills will not get jobs, but those with high skills that are transferable will do so. There are massive skills shortages that we have not properly or fully addressed.

Workers at the Chubb safe company met yesterday to complain about the fact that the company has been taken over yet again, for the third time in just a few years, and that the manufacture of safes is now to cease. Chubb safes have the greatest reputation in the world for quality. Indeed, the company still makes the finest safes in the world, but it is being closed down. Perhaps the safe making will be transferred to Indonesia, after which it might be brought back to Wolverhampton, so that the safes can be rebadged with the words "Chubb Wolverhampton" to suit the insurance markets. It is an absolute disgrace.

My right hon. Friend the Secretary of State is not now in his place; I know that he has to take a rest from time to time. However, I plead with him to recognise that this country needs a different takeover and competition law regime. We also need a regime within the plants and the factories to ensure that it is not easy come, easy go. Those who take over and buy companies must give a commitment to the workers and ensure that their rights are properly protected. I know that we have made considerable moves on the reform of trade union law. We are going in the right direction, but we have to do more and do it more quickly.

The biggest grouse from Chubb workers in Wolverhampton last night concerned the reason why Chubb—or Gunnebo, as it is now called—could move out of Britain just like that, when companies that try to close down in Sweden or any other European Community country must adhere to specific processes and consult in good time with their workers and staff. We need such laws here. If it is right to ensure a level playing field in finance and so on, we should also ensure one for workers' rights, so that our workers can compete fairly and properly with the rest of the world. If they are given that opportunity, they will not fail us.

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury 4:59 pm, 24th January 2001

It is a pleasure to follow the hon. Gentleman, who I think represents Wolverhampton, South-East.

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury

Sorry, I mean the hon. Member for Wolverhampton, North-East (Mr. Purchase), who demonstrated a great knowledge of industry and its failings. He referred in particular to some of the weak management in industry. I do not need to declare an interest, but I worked in industry for most of the 18 years of Tory rule to which the hon. Gentleman referred. I shall return to that subject shortly.

I worked for the textile industry for many years. It faced many pressures and its decline is sad. I agree with the hon. Gentleman that its management was not all that it should have been. We must accept that if manufacturing industry is to return to, or at least approach, its former glories it must be managed better than in the past. That does not apply to all manufacturing industry, some of which is managed extremely well.

I disagree with the earlier part of the hon. Gentleman's speech, in which he referred to 18 years of mismanagement by the Tory Administration. I worked in industry in the 1980s and in the 1970s. Anyone who criticises the Conservative Government's record on industry should compare the two decades. In the 1970s, some disgraceful things went on; it is no wonder that so many jobs were lost. Jobs were lost in the 1980s and the 1990s, but many were also lost in the 1970s.

Worse than the terrible demonstrations of union power in the 1970s was management's fear of managing. That emphasises how desperate matters were in industry in those days. I am proud that the Conservative Government introduced changes to trade union law and other changes that transformed industry. I would dispute the case with anyone who claimed that the predicament of manufacturing was worse after 1979 than before. It is simply not true.

I am sorry that the Secretary of State is not here, but he cannot be here all the time. His speech was contradictory. He referred to many job losses that happened in 1991–92 in what he accurately described as a recession. It was a terrible recession, which affected the businesses that I was trying to help. The small business that I ran then had a difficult time in 1991, which was probably the worst year of my working life. I therefore fully appreciate the pain.

The Conservative Government participated in a European experiment called the exchange rate mechanism, which was a disaster from which they never recovered. The Secretary of State would say that the right convergence criteria did not exist then, and that we went in at the wrong rate. There is no such thing as the wrong rate—whatever the rate, it was right but the system was wrong. The Secretary of State acknowledges that the pound is now even stronger against some currencies. Joining the single currency would therefore lock us into the wrong system for ever: not for Christmas, not for a few weeks, not for two years—the period after which we left the ERM with great pain—but for ever.

The Secretary of State listed all the companies that he claims have brought jobs to this country—if they have, I welcome that. He quoted from The Sun; I am glad that my hon. Friend the Member for Buckingham (Mr. Bercow) takes it daily. He quoted the words: Britain is the best place in the world to do business. However, the right hon. Gentleman contemplates taking us into the single currency when there is no need to do that. If we joined, we would lose control over our interest rates, and be in exactly the same position as we were in the 1991 recession, which the Secretary of State condemned. I stress that his words are contradictory and simply do not make sense.

I want to consider one or two other matters, which I raised in an Adjournment debate some months ago, such is my interest in manufacturing industry. I agree with the Secretary of State about the importance of manufacturing industry to the country. I shall deal with jobs shortly.

The Secretary of State rightly referred to the industrial revolution. It happened a long time ago, but it was important because it created wealth. When manufacturing developed in terms of mechanisation, automation and productivity, we all became better off. We all know how much cheaper electrical goods are now, relatively speaking, than they were some years ago. Productivity improvements in the manufacturing rather than the service sector mean that we are more prosperous and have more goods.

Sadly, as has been said, many manufacturing jobs have been lost. In 1950, 8.3 million people were employed in manufacturing; now the figure is only 4 million at the most. Whereas in 1950, 41 per cent. of the work force were in manufacturing jobs, only 16 per cent. are in such jobs now. That is partly, but not wholly, due to the improvements in productivity, mechanisation and automation that I mentioned. The manufacturing share of gross domestic product has also declined, from 37 per cent. in 1950 to 20 per cent. today.

I have mentioned my concern about the textile industry. It remains, but it dates from the time when I lived in the north-west. Now that I represent Tewkesbury, I am particularly concerned about the aerospace industry, although it is doing well and receiving many orders. The hon. Member for Wolverhampton, North-East mentioned takeovers and mergers, which I think the Government should consider in detail. There were competition worries when British Aerospace merged with Marconi Electronic Systems not long ago, and I wish that they had been examined more thoroughly.

When noting the big orders that the industry may receive, will the Government also give careful attention to the assistance that foreign Governments give companies in their countries? I know that we have competition laws throughout Europe, but I am not entirely convinced that they are being obeyed.

There are different ways of helping industries. There is the launch aid project; and Governments in other countries, especially France, provide subsidies and other help. The Government should be aware of that. If we are to have a level playing field in Europe, we must have a level playing field in every sense of the term. I am not sure that our aerospace companies receive the same kind of help as aerospace companies in other countries. That is of great concern to aerospace companies in my constituency—Smiths Industries, Mossier Dowty, Dowty Aerospace Propellers, Ultra Hydraulics and others. Smaller companies supplying those firms are also very concerned.

In an intervention on the hon. Member for Wolverhampton, North-East, I mentioned the problems experienced by many manufacturing companies in recruiting both trainees and experienced staff. I understand from figures supplied by the House of Commons Library that about 48 per cent. of school leavers are going on to university. I am pleased that many people now go to university—I did not, and I greatly regret it—but when so many are being educated, and industry and, for instance, the technical side of the national health service cannot attract staff, something is not quite right.

The Government can do many things to help the manufacturing industries, but the biggest thing they can do is stay out of the way. We have heard a great deal about competition with companies in Europe, and the hon. Member for Twickenham (Dr. Cable) spoke about the difficulties of competing with companies further afield—I think that he mentioned Korea. Therefore, the last thing we need is the Government piling more and more regulation and taxes on to industry in this country. That is the most stupid thing that anyone could imagine.

The Government have already introduced the climate change levy, as it is euphemistically called. It is actually a tax on energy, and many companies have no option but to use the energy sources involved. If one is deeply concerned about the environment, as I am, and wants to persuade people not to do something, one should provide them with an alternative rather dim tax them. In the absence of an alternative, they will not stop doing what they are doing, no matter how much one taxes them. If we have not realised that in relation to the duty that is added to petrol, it is about time that we started to learn a bit more quickly.

Many of the other laws and taxes that the Government have imposed on businesses have hit industry particularly hard. Such regulations and taxes should be abolished. If the Government are serious about helping the manufacturing industries, the best thing they could do is to stop hindering them by imposing more taxes and laws, which is the last thing they need.

Photo of Eric Joyce Eric Joyce Labour, Falkirk West 5:11 pm, 24th January 2001

I am grateful for this opportunity to address the House so soon after being returned as the Member for Falkirk, West.

Hon. Members might know that my predecessor, Mr. Dennis Canavan, continues to serve the Falkirk, West constituency in his new capacity as the Member of the Scottish Parliament for our area. That adds an extra element of interest to my job and to my new professional life. I notice that in his maiden speech, Mr. Canavan referred to his predecessor as someone who was very independent-minded. That was true, and it is fair to say that during his own career in the House, Mr. Canavan emulated his predecessor in considerable style.

Mr. Canavan made many contributions while he was here, most notably perhaps on issues of international development and foreign affairs. He also argued the case strongly and vigorously for the creation of a devolved Scottish Parliament. His career here followed an arguable logic, and he is now in the appropriate place. I look forward to developing a good, solid working relationship with such an experienced parliamentarian over the coming months and years.

The manufacturing industry of the United Kingdom is important to the people of Falkirk, West, as it is to everyone else in the UK. Another of my predecessors, now the noble Lord Ewing, referred in 1971 to the Falkirk area—in which my present constituency is located—as solely an iron town. He was referring to the ironworks that provided a great deal of employment in the area over the years, and that led to "Falkirk" being stamped on many iron objects across the world today, including cannon in India and Pakistan and the engine blocks of many ships—some still sailing, some long out of service.

Since 1971, in just one generation, the ironworks of Falkirk has been in decline, like the mining industry of central Scotland, and has now closed. Unemployment in my constituency is therefore a considerable enemy today. However, it has fallen sharply in the past few years, and continues to do so, primarily for two reasons. First, some of the secondary industries, the manufacturing industries related to the former iron industry, continue to be very successful—most notably Alexanders, the bus builder, which maintains a strong export order book and whose buses will soon be seen on the streets of New York for the first time.

Although unemployment is still a problem in Falkirk, and there is a great deal further to go, there has been a sharp decline recently. The second reason for that is the expansion of service industries, particularly telecommunications, east along the central Scottish belt towards and beyond Falkirk. Very soon, a new telecoms centre will be established in Falkirk, providing some 700 jobs. That is clearly greatly to be welcomed.

In both industrial sectors, the people of Falkirk are responding well to the new challenges of change. We are extremely well served in that by our local tertiary education institution, Falkirk college, which I believe is a college of the first order. The challenge for individuals and for colleges such as Falkirk is to ensure that workers and future workers develop strong core literacy, numeracy and technological awareness skills, which will enable them to compete on the job market, enable the local economy to compete and, ultimately, enable the national economy to compete on the world market.

Equally, employers have a responsibility to ensure that they involve themselves in that local and national economic and human development. That means taking a close interest in the content of the courses taught in our schools and colleges and also involves the way in which employers run their firms. That means intelligent governance based on sound partnership with the work force, unions and, of course, the local community.

Stretching the indulgence of the House a tad further, may I refer to local heritage in Falkirk, West, which is important because it provides a great many jobs? Falkirk is the home of perhaps Scotland's finest municipal park, Callendar park, and the Antonine wall built by the Romans runs the length of the constituency. The same geographical logic that led to its construction also led to two famous engagements—famous in Scotland, at least. The battles of Falkirk took place in the Jacobite period and, much earlier, in the time of William Wallace.

In addition, and on a more contemporary note, my constituency is unique in Scotland, and possibly the United Kingdom, in having not one nor two but three senior football teams and two junior teams. One team, Falkirk FC, is, I hope, about to get a brand new stadium.

Added to all that will be the Falkirk wheel. Many hon. Members may not have heard of it, but, when it is completed next year, it will represent one of the finest engineering achievements of the early 21st century. The Falkirk wheel will connect two canals that do not quite meet. They run from east to west—or west to east, depending on the direction in which people travel—across Scotland. People will be able to sail from one to the other, although I do not know whether I should call what people do in boats that go along canals sailing; and, again depending on the direction in which people travel, they will be either lifted or dropped 130 ft in one smooth motion. That remarkable achievement will add considerably to the economic life and physical landscape of Falkirk, West. I am sure that every Member present will want to see the wheel, and I can organise a visit should Members so choose.

The people of Falkirk, West look forward to the developing 21st century with considerable optimism, but never complacency, especially in respect of jobs and our manufacturing, engineering and service industries. I am proud to have been allowed to make my maiden speech on such an important topic, and I thank hon. Members for the way in which they have received me.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield 5:18 pm, 24th January 2001

It is a privilege to take part in this powerful debate, which has featured good contributions from the hon. Member for Wolverhampton, North-East (Mr. Purchase), who always speaks on such matters, and my hon. Friend the Member for Tewkesbury (Mr. Robertson). In particular, it is a pleasure to follow the hon. Member for Falkirk, West (Mr. Joyce), who made his maiden speech. I shall take up his invitation to see the big wheel of Falkirk as I am a keen narrow boater; in May, I am going off to the Llangollen canal. I believe that the canals connected by the Falkirk wheel link Edinburgh to Glasgow, or, as he might put it, Glasgow to Edinburgh, depending on the direction in which people happen to travel.

The hon. Gentleman had a military career before being elected and his experience will be useful to the House. He mentioned that his predecessor was independent-minded. I hope that he will be too and will eventually drift down to the Bench below the Gangway to sit next to the hon. Member for Bolsover (Mr. Skinner), where truly independent-minded Members sit. I note that the Government Whip is looking rather nervous at the prospect.

As I said, it is rather disappointing that events earlier today may overshadow the importance of our debate. None the less, it is a particularly important debate. The Secretary of State said over and over as a mantra, "manufacturing matters". He tried to back up the fact that the Labour party and Government care about manufacturing by quoting from this morning's edition of The Sun. He sometimes quotes from that newspaper, but it is interesting that he decided not to quote from today's front page.

The Secretary of State made the point that the climate change levy is peanuts. He may think so, but that is not what the industry says. Car manufacturing in the United Kingdom is at a crucial point in its history. I have been in the Chamber for the past few hours—as we all have—so I do not know wt ether a decision has been made yet by the owners of Nissan. That decision is important: workers at the Nissan Sunderland plant may hear shortly that they have won a key contract, which would safeguard thousands of jobs. However, if members of the Nissan board have voted today that they will site the new Micra plant in France, that will mean huge job losses. That will affect not just the 4,900 workers in Sunderland, but everyone working in the ailing UK car industry. I do not share the Secretary of State's optimism.

We have already seen the closure of the Ford car manufacturing plant in Dagenham, which was announced only a few weeks ago. It seems almost certain that the Vauxhall plant at Luton will close. When the Secretary of State was asked in the Chamber whether he envisaged closure of the Luton plant, he could not answer. He gave a cry that is common among Ministers—"Not me, guv: not my responsibility"—and said that that would be a commercial decision. However, the climate that the Government are creating for car manufacturing is influencing those decisions.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I remind the hon. Gentleman that, earlier today, my right hon. Friend the Secretary of State sad that he was using his influence to try to persuade Vauxhall to keep its plant in Luton open. I certainly encourage my right hon. Friend in that.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

That is the least that I would expect from the right hon. Gentleman. However, at the same time, he says that the matter has nothing to do with him: the two statements are in direct conflict with one another and, frankly, make no sense at all.

The Society of Motor Manufacturers and Traders says that the current rate of output in car manufacturing is disappointing. It says that that is partly due to a lot of plant restructuring programmes. It continues: In the short-term, things are not looking good. That is primarily because of the climate change levy, about which I spoke a little earlier.

Martin Temple of the Engineering Employers Federation said: We have never opposed the need for action on climate change, but believe the Levy to be one of the most badly designed economic instruments in recent times. Martin Temple is right, and if people want to know why, it is because of a point made by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in his opening speech. A firm such as Sony, which is far-reaching and green-conscious and has already invested money in making its plant one of the healthiest and safest in Europe, will still pay the climate change levy and will receive no refund.

It makes no sense at all to put companies in that position. Such an arrangement acts as a disincentive for firms such as Sony that want to play a real part in the community of nations which seeks to enhance our lives and those of future generations. The levy is a disincentive for those firms to invest in plant that minimises emissions of greenhouse gases.

Nick Turner of Ernst and Young's environmental and sustainability services group said: There is no doubt that the climate change levy will penalise a number of manufacturing enterprises in the UK, particularly those who have made considerable improvements to their energy efficiency prior to the introduction of the levy. Sony, in south Wales, is in that very position.

The Secretary of State mentioned The Sun, which is of course a part of the Murdoch empire. However, he chose not to mention The Times although it is in the same stable, at Wapping. The Times has highlighted the fact that small businesses will be the biggest losers arising from the levy. It states: Those who have not followed the levy through its various transformations may be shocked that the smokestack end of industry fares rather better than the rest, The article also points out the irony that Massive users of energy, such as steel, cement, glass and chemicals industries can strike deals with the Government to reduce levy charges by up to 80 per cent. in return for meeting targets to cut energy use. Many other businesses, such as those in the car industry, cannot strike such deals.

I should like to deal with the statement made by the Society of Motor Manufacturers and Traders. As I mentioned in an earlier intervention, the society has said that the Climate Change Levy will result in substantial increases in production costs for the UK motor industry. Net energy costs are estimated to increase by 10 to 15 per cent— which we should consider in relation to changes in the euro-sterling exchange rate or, perhaps equally relevantly, the sterling-dollar rate— for vehicle and component manufacturers as a result of the levy. The statement continues: In a globally competitive market it is not possible to pass on these cost increases, and there are fears that UK based businesses will lose out as a consequence. We are seeing just such an effect. Time and again, we see on television advertisements for cars that are heavily discounted or available for hire-purchase at zero interest. Around the world, it is a competitive industry. We must never forget that the United Kingdom is a great manufacturing nation and a great exporter. However, is it not disappointing that, since 1997, we have dropped from being the fourth to the 10th most competitive nation, and that we are still falling? Such a change can offer no comfort at all to UK manufacturers, including those, such as Toyota, that are near my constituency.

I welcome Toyota's decision to move Corolla production to Derby. However, when I asked the Secretary of State whether he would like to say something about the far-reaching strategic talks between Ford and Toyota, which could result in a major merger between them in the United Kingdom and elsewhere, he declined. A merger could have a traumatic effect on the car manufacturing industry not only in the United Kingdom but in other parts of the world. It was disappointing that, yet again, he simply said, "Not me, Guy; it's not my business. It's a commercial decision."

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

I appreciate the fact that the hon. Gentleman has recognised that there is a problem in the vehicle manufacturing industry throughout the world. Will he join me in firm criticism of the way in which General Motors has handled the situation in the UK?

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Yes. General Motors will have made its commercial decision—now I am sounding like the Secretary of State—but the way in which it dealt with its staff showed a lack of finesse and of modern management practice. At least Ford at Dagenham discussed the issue with the staff before making its announcement. I know how the Vauxhall workers felt, because quite often I turn up at the House and hear about what the Government are doing because it has been announced on radio and television first. Those workers heard the news first on radio and television and were not consulted beforehand, and of course that is wrong.

The Government continue to say that they are not responsible for the state of manufacturing in the UK, but I refer them to the excellent British Chambers of Commerce website, which publishes a "burdens barometer". I will rattle through the list, but I promise to give Hansard a copy of the table.

The costs are as follows: trade union recognition, £15.2 million; ordinary maternity leave, £4.5 million: wider entitlement to additional maternity leave, £35 million; parental leave, £72 million; right to time off, £17.25 million; right to be accompanied in a dispute, £4.6 million; part-time workers directive, £29.4 million; national minimum wage, £674.5 million; stakeholder pensions, £200 million; working time directive, £7.65 billion; working families tax credit, £240 million; student loan repayment, £359 million; young people's time off for studying and training, £237.5 million; fire precautions regulations, £37.5 million; European works councils, £36.25 million; IR35, £5.4 million.

That makes a whopping £9.62 billion. The Government say that manufacturing matters, time and time again, but in practice, while the Government spin, manufacturing sinks.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 5:33 pm, 24th January 2001

I add my welcome to my new hon. Friend the Member for Falkirk, West (Mr. Joyce). I am sure that he will be an asset to the House. Like the hon. Member for Lichfield (Mr. Fabricant), I learned something new today, about the Falkirk wheel. I am sure that a succession of people will go up to see it, and that its legend will go down in the annals of the House.

Let me update the House on the situation at MG Rover. Despite the cynics whom we heard last year, many of them Conservative Members, the company is on course to meet its business plan. It is bringing out a range of new models, or new variants, this year. Nothing in an industry as ruthlessly competitive as the automotive industry is assured, but MG Rover now has a solid basis on which to go forward.

There are a couple of lessons to be learned from that: first, do not take inherited or conventional wisdom for granted, because things can change; secondly, we should congratulate all those involved, including the management and the work force in my constituency, on what they have achieved; and thirdly, in contrast to what was being said by the Conservative party last year, we should also congratulate my right hon. Friend the Secretary of State on the support that he has offered throughout.

The welcome developments at MG Rover and Jaguar, the new investment at Toyota and, we hope, good news from Nissan, demonstrate that the automotive industry has some real successes to celebrate. I hope that the regeneration moneys that have been pledged by the Government for three technology corridors—one of which, down the A38, is very relevant to my constituency—will not only reinforce and modernise the motor industry in the midlands but help to diversify the region's economy.

We know about the problems that have arisen elsewhere in the automotive industry—at the Ford plant in Dagenham, and at the Vauxhall plant in Luton. The way in which BMW sought to dispose of Rover last year, and Vauxhall's lack of consultation with its work force about its decisions with regard to Luton, raise real questions about the adequacy of employee rights in this country to consultation and information. That problem needs to be tackled, either by European action, or by means of domestic legislation, which is the route that my right hon. Friend the Secretary of State prefers.

When Conservative Members talk about regulation, they must recognise that there is a need to address the question of information and consultation in an appropriate legislative form. Indeed, the hon. Member for Lichfield (Mr. Fabricant) said that he did not approve of the way in which General Motors had behaved.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

My hon. Friend will know of my background and of my involvement in the creation of some European-wide works councils. Does he accept that there is greater stability in those companies where consultation is genuine and where business decisions are discussed with the trade unions in confidence? In turn, that benefits the employers through better productivity.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

My hon. Friend makes his point very well.

It is important to mention some success stories, and one of them is the success of Britain's motor sport and performance engineering industry. Britain leads the world in that sector. New research from the Motorsport Industry Association shows that the industry is worth about £4.8 billion to the economy. It employs 40,000 people, and makes a real contribution to our knowledge-driven economy.

That presents a huge opportunity, but we must not rest on our laurels. The industry in the UK has grown to a position of strength, but that will not necessarily last for ever. We must look at some of the problems that may arise in the future.

First, there is the question of personnel. Problems of skill shortages persist, and we must do all that we can to ensure that the industry has the supply of skilled personnel that it needs to prosper in the future. Today's statement from my right hon. Friend the Secretary of State for Education and Employment stressed the importance of manufacturing and vocational training, and will certainly help in that regard. Moreover, the process works both ways. By promoting the motor sport industry, and similar enterprises, we will begin to attract more people into the manufacturing and engineering sectors.

Secondly, the industrial infrastructure for performance engineering and motor sport needs to be considered. Developments such as the new Rockingham speedway are to be welcomed, but we must also look closely at some of the ideas regarding the development of Silverstone as a pinnacle for motor racing and the motor sport industry. Consideration must be given as to how such developments can be used to help the manufacturing and engineering industries as a whole.

There is a solid base for optimism and, as my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said, manufacturing is doing well at present, but some challenges remain to be addressed. I shall describe them only briefly, as I know that other hon. Members want to contribute to the debate.

I hope that the Government will take on board some of the representations from organisations such as the Engineering Employers Federation. Capital investment has improved under this active Government, who promote manufacturing investment, but all too often it lags behind that of our competitor s. There may be a case for reviewing again the question of capital allowances, to see whether investment could be stimulated further. That is especially important at a time when we suffer from the competitive disadvantage associated with the weakness of the euro.

Moreover, there is a problem with research and development. All too often our spending in that regard—and especially on development—lags behind that of our competitors. Maybe again we can look at what extra action we can take in that area.

Lastly, I want to say something on a matter that Conservative Members have mentioned: the climate change levy. We on the Labour Benches take no lessons from them on that matter. All that we have heard from them is "Scrap it". Protection of the environment is a matter that concerns us all. Nevertheless, the operation of the levy in its current form needs to be reviewed, because all too often, companies that have improved their productivity are still hit by it in a way that can be seen to be anomalous. That is precisely why we need—not, as Conservative Members seem to think, to throw the baby out with the bathwater—to look at how the levy is targeted and how it could be reviewed to be made fairer.

We also need to look at the issue of revenue neutrality within sectors of industry, not just across the economy as a whole, and to consider the issue of negotiated agreements, an initiative brought in by the present Government. We should see whether the scope of those agreements could be modified so that the impact is more even across industry and so that some of the possible effects on manufacturing industry do not arise.

That is a very different formula from the "Scrap it and don't worry about the consequences" approach of the Conservative party. But Ministers need to take on board the legitimate concerns of manufacturing industry about the operation of the climate change levy, and before it comes in to look at possible reviews to ensure that its operation is fairer and that it is part of a package that helps to promote manufacturing industry success rather than have a detrimental effect.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Plaid Cymru, Caernarfon 5:42 pm, 24th January 2001

I too congratulate the hon. Member for Falkirk, West (Mr. Joyce) on his maiden speech. I very much hope that he will enjoy his time in the House. Perhaps he will indeed follow in the footsteps of Dennis Canavan in the independence of spirit that his predecessor showed.

I speak in this debate as someone whose background was in manufacturing industry. I started my career with Ford in Dagenham, in about the same intake as Ian McAllister. I started at the metal stamping division there. What has happened recently is a cause of considerable sadness.

I want to speak particularly to the position of manufacturing industry in Wales, against the background that gross domestic product per hem there has dropped to 79 per cent. of the UK average, compared with a figure of 115 per cent. in south-east England. Unfortunately, the gap is still widening.

Manufacturing has a considerable significance for the Welsh economy. Compared with its being a fifth of the UK economy, to which the Secretary of State referred, manufacturing represents between a quarter and a third of the Welsh economy. Since 1997 we had lost 6,000 jobs in manufacturing up to last June. We have lost a further 2,000 since then. That 8,000 loss compares with 2,000 lost in the agricultural sector, which puts the figures into context.

We have seen the drift, drift, drift of loss of jobs in sectors such as textiles and clothing, about which we have heard from other hon. Members. Now we face the possible loss of thousands of jobs in the steel industry in Wales, a sector that has been of so great importance to us over the years. If we lose these jobs, there will be a knock-on effect way beyond Llanwern itself. It will directly hit areas such as Ebbw Vale and Shotton; it will also indirectly hit other jobs in manufacturing, in transport and in many of the support services. Therefore, we were hoping that when the First Minister from Cardiff, the right hon. Member for Cardiff, West (Mr. Morgan), met with the Prime Minister yesterday some progress might be announced. We still hope that these jobs can he safeguarded. As I have said before, one can mothball a plant, but one cannot mothball the work force.

Steel and most of the rest of the manufacturing sector are hit by the effects of currency fluctuations. The stability of the pound against the euro is basic. That stability must be at a fair parity. The over-priced pound has undoubtedly been a central factor in undermining the manufacturing sector over the past couple of years, as it hampers exporting and sucks in imports. The too high rate of the pound has that effect not just on manufacturing, but on agriculture and tourism. It is desperately necessary now to get the pound to an appropriate parity against the euro. Once that has been secured, there is a need to move into the common currency, so that never again do we suffer the uncertainties of currency fluctuations within Europe, which is so much of the domestic market for our manufacturing sector.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

I understand the vantage point from which the right hon. Gentleman approaches currency movements and prospective entry to the euro. However, is he content—as apparently the Secretary of State is—that under the terms of the treaties there is no entitlement for national Governments or Parliaments to influence the decision-making bodies of the European central bank in its conduct of monetary policy?

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Plaid Cymru, Caernarfon

I am not altogether convinced that Governments influence the Bank of England's decisions in the United Kingdom. Governments are entitled to opinions and I agree that those should be voiced and heard. However, there needs to be a coherence on Europe if we are to enjoy the stability that is necessary for our manufacturing sector. That is why I am looking for a commitment from the Government not only to entering the European currency zone but to creating the circumstances that will enable that to happen, and to happen as soon as possible.

We need three changes. First, we need the clear commitment to which I referred. Secondly, we need lower interest rates to help lower the pound's parity and, if inflation is seen as a threat, to use taxation as a tool to dampen it down. Thirdly, we need to ensure that the terms of reference of the Bank of England include a responsibility to keep an eye on what is happening to employment as well as inflation. Those terms exist in the United States, and I believe that they should apply here as well.

These changes are particularly important for manufacturing industry in Wales. We have as many as 348 manufacturing plants in Wales which are owned by overseas corporations, and they employ some 75,000 workers. They are in Wales not to sell to the Welsh market or even the UK market. They are there, overwhelmingly, to sell to the European market, and they need a level playing field to do so.

Other specific steps need to be taken to help foster the manufacturing industry in Wales, as elsewhere. We need more investment in research and development in Wales.

I noted with interest the comments of the Secretary of State when he was addressing the "Investing in the Regions" conference on 15 November. He said: Since 1990 the share of GDP within the UK has declined significantly in the North East, the North West, the West Midlands, Wales and Scotland. It has increased significantly in the Eastern Region, London and the South East.These are symptoms of something fundamental. We don't have to look far for some of the causes. In 1998 manufacturing businesses invested over ten times as much in research and development in the South East—£l.9 billion—than in the North East—£164 million. In Wales, that investment is even less. Therefore, we need positive incentives for investment in research and development.

Secondly, we should learn in Wales from the experience of Ireland and the way in which its GDP per head has increased not only beyond that of Wales but of the UK. The most important tool used by Ireland was the lower corporation tax rate, which acted as an incentive to attract and expand industry. We need to take advantage of the provision allowed within the European rules for operating aids of this sort to be permissible at least within the objective 1 areas in the UK.

Photo of Mark Hendrick Mark Hendrick Labour, Preston

Does the right hon. Gentleman accept that the corporation tax rate set in Ireland at the time was discriminatory, with foreign firms encouraged to invest by being given a preferential rate of corporation tax? I think that that has since been outlawed in the European Union.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley Plaid Cymru, Caernarfon

I accept that that is exactly what happened. It happened with the agreement of the European Union, and the recent agreement, that will run for the best part of the next decade in Ireland, allows a lower rate of corporation tax to continue there. As there are objective 1 areas in not only Wales but Merseyside, South Yorkshire and Cornwall and derogation for operating aid is possible within those areas—as the Prime Minister recognised in his statement following the recent Nice conference—it is within the Treasury's powers to reach agreement. I was encouraged when the Select Committee on Welsh Affairs included in its report last week a specific call for regional variations in taxation, which I welcome. That policy is supported by the Lib-Lab government in Wales. I urge the Secretary of State to persuade the Treasury to make such provision possible.

Thirdly, the House needs to consider other opportunities for improving regional competitiveness in the UK. I draw attention to a report published by Robert Higgins of the centre for advanced studies at Cardiff University, entitled "An Index of Competitiveness in the UK: Local, regional and global analysis". Wales ranks last but one in the UK regional competitiveness index. The report's summary states: At a global level, London and the South East are performing as well as the top-ten most competitive nations … at the lower end of the scale, Wales, the North East and Yorkshire and Humber rank alongside such nations as Hungary, Chile and Israel. The disparity in competitiveness is substantial and needs to be addressed by the Government.

I urge the Government to consider those points, heed the TUC's warning that manufacturing industry in Wales is haemorrhaging and take the radical action needed now—before it is too late.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 5:51 pm, 24th January 2001

I add my congratulations to my hon. Friend the Member for Falkirk, West (Mr. Joyce), who is not in the Chamber now. As a friend and admirer of his predecessor, I would welcome him on this Bench. I shall speak to him afterwards.

We should take no lectures from the Tories about jobs and manufacturing. In the two worst British recessions since the second world war, the Tories showed that they had contempt for manufacturing. Swathes of it disappeared and millions of jobs were lost. When Nigel Lawson was Chancellor of the Exchequer, he was heard to say that manufacturing did not matter any more; the economy could be left to operate by itself; and the financial and service sectors would be enough. Some Opposition Members now seem to be changing their minds about manufacturing and share our view.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

The hon. Gentleman spectacularly misquoted my right hon. and noble Friend, Lord Lawson of Blaby. In view of the hon. Gentleman's enthusiasm for the former Chancellor's judgments, does he agree with Lord Lawson when he famously and succinctly said that the business of government is not the government of business?

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Gentleman's intervention illustrates the profound difference between us. I was about to state my belief that it is the business of government to intervene, to ensure that the economy operates well and to the benefit of the people—which is a different point. If I had time, I would' make greater criticisms of Lord Lawson—whose management of the economy led directly to the chaos at the end of the 1980s and early 1990s. The Tories showed malign indifference to the fortunes of manufacturing. They created a casino economy in which people were more interested in making money than in making things. Buying, selling and gambling are interesting and one can make money doing them—but they cannot sustain an economy for long. I suspect that we are seeing crocodile tears today.

We congratulate the Government on getting 1 million more people in work. There is no question but that many sectors of the economy are doing well, but some have done less well and there are concerns about manufacturing. In my constituency in my first year in Parliament, there were two serious closures with a significant loss of jobs, at Electrolux and a smaller firm named Coulters. More recently, there was the announcement about Vauxhall that many of us are campaigning to reverse. I have written to my right hon. Friend the Secretary of State, trying to convince him to use Government efforts and even Government money to persuade Vauxhall to reverse its decision and stay in Luton. The short-term cost of sustaining Vauxhall's car manufacturing in Luton would be far less than the cost of letting it go—in terms of extra benefits payments, the loss to the manufacturing sector and the effect on the balance of trade.

Clearly, the pound is overvalued at present. I agree with the hon. Member for Twickenham (Dr. Cable) that there is a problem with overvaluation against other currencies as well as eurozone currencies. I support the Government in resisting the siren voices that are calling for immediate entry to the euro. Entry at anything like the present parity would be a disaster for manufacturing. Vauxhall had a special pay agreement that took account of the strong pound. That has been brushed to one side and the company proposes to sack all its workers anyway, but we hope to reverse that plan. Even though Vauxhall started to import a higher proportion of components to offset the currency costs, the company said that the pound should be down to DM2.70 as a sensible, competitive base.

Fixing the value of the pound, then entering the euro even at an appropriate exchange rate for now, would not necessarily be appropriate in the long term. Although currency stability is wanted, a single currency is a different matter. The postwar stable exchange rate system produced the highest employment and growth in our history. That is the best way to run the developed world and the world economy—using a system of managed exchange rates at sensible parities, not a single currency.

I recently attended a conference that was addressed by Válav Klaus, until recently Prime Minister of the Czech Republic. He is not of my political persuasion but made the strong point that single currencies work only in coherent, integrated economies in Which the factors of production are genuinely mobile. They do not work when one tries to push together different economies. There are some historical precedents; Válav Klaus used the example of the Czech Republic and Slovakia.

There are, historically, problems surrounding investment in manufacturing, but the latest four quarters for which figures are available snow slightly higher investment than in the last four quarters of the previous Conservative Government. That is rot good enough, but it is better. Manufacturing production is also 2.5 per cent. higher. It is not yet a total disaster, hut if nothing is done about the currency and investment, mere could be greater problems in future.

I want to see not just Vauxhall saved but the whole motor manufacturing sector boosted by short-term Government assistance and appropriate macro-economic policies, to make sure that the industry is sustained. I have made the point before in the House that Britain is still a net importer of motor products. It does not have overcapacity. We ought to sustain the industry and expand motor manufacturing and other sectors. We must maintain a substantial manufacturing sector, rot just let it go. The previous Government's hands-off policy did not work. We must intervene.

Last year saw a record trade deficit in goods, which is most worrying. That deficit is more substantial in respect of non-EU countries, which suggests a problem not just within the European Union but with the rest of the world.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I am listening with great interest to the hon. Gentleman's speech—especially to some of the insights that he offers us. He says that the problem with the value of our currency relates not only to the euro but to other parts of the world. Earlier, he mentioned Korea—as did other hon. Members, including the hon. Member for Twickenham (Dr. Cable). Does the hon. Gentleman agree that our biggest single trading partner is the United States of America, and that the pound is quite weak against the US dollar? Does he also agree that the Korean currency is especially weak at present because of the turmoil in that nation? Is it not unfair of him to say that the pound is overvalued against other major currencies?

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I define strength or weakness by the trading position. If there is a massive trade deficit with a particular country, that might indicate that the currency is overvalued against that country's currency. It is said that our currency is weak against the dollar, but we need to demonstrate the truth of that before I would accept the case. I do not accept that we have a big trade deficit with America.

We could go into details, but I shall mention one country that was condemned during the far east meltdown a couple of years ago—Malaysia. It was said then that one must suspend, or not impose, exchange controls and not devalue; however, Malaysia did the opposite and within a year the country bounced back. It imposed exchange controls and quickly devalued. That upset the International Monetary Fund and the World Bank, but Malaysia recovered and everyone said, "How clever". People were astonished that the strategy worked—but I thought it was obvious, basic economics.

Last week, an interesting article in The Guardian referred to a rumour that my right hon. Friend the Secretary of State plans to intervene in the steel sector over Corus, to try to help to sustain the industry for the future. I am glad about that. It is important not only electorally—obviously—but for the future of our country. We cannot let the steel industry go, although its volume has declined relative to that in similar economies. We must sustain steel, motor manufacturing and other sectors.

The headline of the article was "Intervene—or kiss goodbye to industry". In the 1970s, I worked for the Trades Union Congress where I was heavily involved with Labour's industrial strategy and with an organisation called NEDDY—the National Economic Development Council. Although NEDDY was not the greatest show in the world and did not achieve much, it focused attention on the problems of particular industries and tried to find solutions. It was extremely useful in exposing the problems of industry.

The Conservative Government—Mrs. Thatcher's Tories—abolished NEDDY at a stroke; they did not believe in even discussing the problems of industry, let alone in trying to solve them. At least the Labour Government are trying seriously to consider industry. I hope that the rumours about intervention are true and that the Government will go much further than the article suggests.

Photo of Nigel Evans Nigel Evans Vice-Chair, Conservative Party 6:03 pm, 24th January 2001

I agree with the hon. Member for Luton, North (Mr. Hopkins) that manufacturing industry is vital to this country; we must not let it die. At the winding up of the debate, we look forward to hearing what action Ministers propose to take to stem the decline in manufacturing industry.

I am delighted that the Minister for Competitiveness, who has responsibility for the aerospace industry, is in his place on the Treasury Bench, as I shall refer to the threat of job losses in BAE Systems. We believe that those losses will fall disproportionately on the military side in the north-west.

When we consider the statistics for total employment in manufacturing, the House will realise how important manufacturing is to the north-west of England and to Wales. In the north-west, almost 21 per cent. of total employment is in manufacturing; the figure is surpassed only in the east midlands and the west midlands. In Wales, the figure is 18.5 per cent, but if we compare England with Wales, manufacturing employment is proportionately more important to Wales. In London, the figure is only 8.4 per cent.

If only Islington had been the centre of manufacturing industry in this country, perhaps the Prime Minister and the Government would take manufacturing more seriously. I hope that the Government's concentration on all things London will not continue and that manufacturing will not carry on taking such a beating.

On 19 January, the front page of my local newspaper—the Lancashire Evening Telegraph—carried an article with the headline, "Fear of Job Melt-down". The article lists some of the manufacturing job losses that have occurred recently in east Lancashire: 590 at Leoni Wiring Systems in Accrington … 450 at car firm TRW in Burnley, followed by 150 at Caligen Foam in Accrington and Viktor Achter in Burnley … 300 at wallpaper manufacturer John Wilman in Nelson; 110 at Blackburn firm SSL … 100 at Crown Wallcoverings in Darwen; 90 at Time Computers in Simonstone— in my constituency—and 50 at the Sappi Paper Mill in Blackburn. That is one heck of a roll-call of job losses in manufacturing industry in east Lancashire. I am extremely concerned about them and have already written to the Prime Minister asking him to visit east Lancashire and look for himself. I could not persuade the right hon. Gentleman to go there a few years ago to look at the plight of the farming industry in the Ribble valley. I had another go today. I hope that he will take manufacturing job losses seriously—the industry is a bread and butter one. I have always been involved in the service sector—in retail—but I realise how important manufacturing is for jobs and certainly for skills. My hon. Friend the Member for Tewkesbury (Mr. Robertson) pointed out how important it is for our work force to have the right skills.

The greatest fear for many people—especially those in their 50s, because there is an underlying ageism about jobs in this country—is that if they lose their manufacturing jobs, they will be unable to find other work at all; they will certainly not find work that uses the skills that they have built up. The hon. Member for Wolverhampton, North-East (Mr. Purchase) referred to that matter. We need to consider multi-skilling to ensure that, when changes in manufacturing are needed—for all sorts of reasons—people will have the skills to make the switch more easily.

In 1999, there was decline in every manufacturing sector in the north-west except the chemical sector. The announcement on jobs from BAE Systems caused me great fear; the unions have given a figure of 2,000, but the problem is that we are not certain. There has been much discussion of the way that redundancies are announced in motor manufacturing. It is not fair to the work force when the first they hear of such redundancies is when they switch on the radio. Indeed, when I listened to the "Today" programme—through gritted teeth, as ever—and heard that there were to be redundancies at BAE Systems, I was pot happy, as a Member representing a north-west constituency where there are many aerospace jobs, that that was the first I had heard of the matter.

Those are not the first redundancies at BAE Systems; several restructurings have taken place over the past few years and thousands of job losses were the result. That does not affect only those people directly employed by the company: contract jobs disappear or are not renewed; small businesses depending on BAE Systems are affected—not only in the manufacturing sector but in services.

The Consortium for Lancashire Aerospace includes more than 100 companies which get together and network like crazy to ensure chat the north-west remains a centre of military manufacturing skills. Strategically, the area is vital to aerospace manufacture; we have enormous skills. If those redundancies fall disproportionately in the military manufacturing sector—Samlesbury is in my constituency, while Warton is only a few miles away in the constituency of my right hon. Friend the Member for Fylde (Mr. Jack)—there will be an enormous ripple effect throughout the whole north-west.

My fear, therefore, is that jobs will be lost in other, smaller contractor firms—the small businesses that rely on a healthy, vibrant BAE Systems. Many service sector jobs were created 133 the healthy manufacturing climate that used to exist in Lancashire. Those service sector jobs will also be lost.

Several Members, including me, met the unions on 16 June 2000, when they had a campaign called, "Let's put the British back into aerospace." I totally endorse that campaign. I do not like the name BAE Systems. I like the name British Aerospace, so I shall call it that for the rest of my speech; it is easier. I am proud that the aerospace industry is British and that some of it is located in the north-west—much of it in my constituency. The unions feared that much of the manufacturing that used to take place at British Aerospace would be contracted out to some of the former Soviet bloc eastern European countries, which ant now knocking on the European Union's door for membership. Of course that has happened, and some; of those manufacturing jobs are going to the Czech Republic, Poland and Hungary.

Some managers at British Aerospace told me that the jobs involved were low level and far better suited to those countries. In fact, it is much cheaper to manufacture there than in the north-west. Irrespective of whether those manufacturing jobs are low level, we cannot stand idly by while they are lost. They could easily be done in this country by British people, some of whom have the required skills; others would be only to happy to get them. So I ask the Government carefully to consider such contracting out to other European countries.

I understand that, in many respects, British Aerospace has to compete with other aerospace industries throughout the world, and that if the company is disproportionately more expensive here, we may well lose contracts elsewhere; but we should not allow that to happen. That is the dilemma. The Government should negotiate with the company to encourage manufacturing jobs to remain in this country. I also fully understand such things as offset, where we look for contracts abroad and part of the deal is that manufacturing will be carried out there. I have no problem with that, but when such jobs go abroad simply because of cost and I am told, "They are low level. Don't worry about it, Nigel", I start to worry if that is the excuse. I ask the Government to consider such matters and small businesses.

I ask the Government to consider the enormous impact that the climate change levy will have on manufacturing. The levy will cost jobs, and the Government could do something about it. It is their tax; they are introducing it, but we will certainly abolish it when we form the next Government. Labour Members agree that there are real problems with the climate change levy, so please look at it, especially as many companies are desperately worried about it.

Given my responsibility for Wales, I want to refer to manufacturing there in the remaining few minutes available to me. There have been enormous job losses in the manufacturing sector in Wales, and I shall mention a few. Courtaulds lost 167 jobs in Wrexham. I shall deal with Corus separately. Jobs have been lost at Corus, but I am deeply concerned about the threat of 4,500 job losses that it is considering. Job losses are feared at British Aerospace in Wales. Dewhirst in Pembrokeshire has lost 300 jobs.

Attracting manufacturing jobs to west Wales is a problem, and distribution is proportionately more expensive there. On Saturday, Stephen Crabb—a Conservative prospective parliamentary candidate—showed me the blight that has occurred in Milford Haven. We must find ways to attract more jobs into that area. Some 900 jobs were lost at BICC General—a power cable business in Wrexham.

The M4 used to be a magnet for inward investment; it is now job loss alley. Around the M4, Hitachi has lost 350 to 500 jobs. Sony has been mentioned by my hon. Friend the Member for Lichfield (Mr. Fabricant), and it is losing 400 jobs. Panasonic is losing 1,500 jobs. Those manufacturing job losses have hit south Wales particularly badly, but there is now the prospect of 4,500 job losses at Corus, in Llanwern. We have heard how important steel manufacturing is to this country. It is the guts of manufacturing, and we must ensure that those jobs are preserved.

The impact on south Wales and the ripple effect throughout the United Kingdom will be enormous. The loss involves 4,500 people directly employed by Corus, but its effect will be multiplied. The Western Mail estimates that about 12,500 could be affected if Corus decides that those jobs will go.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

Does the hon. Gentleman agree that more could have been done for the Ravenscraig plant, which is in the area where I live? If those jobs and the industry had been a protected there, we would not be in the current position.

Photo of Nigel Evans Nigel Evans Vice-Chair, Conservative Party

Ravenscraig is an example of the devastation that has occurred in that area, but it cannot be corrected overnight. The closure has had an enormous impact throughout the area, and it took place several years ago. That is why I hope that we will redouble our efforts. There is a lot of talk, but we need action. That is what the Corus workers will be looking for—not a meeting with the Welsh Assembly or the Prime Minister, and so on.

Given the current fragmentation of government, people wonder where the buck stops. I can tell the Minister that the buck stops with the Government. If jobs are lost at Llanwern, the people there and in south Wales generally will hold the Government responsible for not pulling out their finger and making absolutely certain that everything has been done to protect the manufacturing jobs there.

The Government should be looking at the fact that rules and regulations cost an extra £5 billion and that taxation on business involves an extra £5 billion. The Government are fixated on the euro. They are telling industry to prepare for a switch to the euro, which is putting enormous costs on industry. Let us concentrate on manufacturing and find out how we can assist it. That is an enormous responsibility for the Government, but they must act now.

Photo of David Crausby David Crausby Labour, Bolton North East 6:18 pm, 24th January 2001

I shall never cease to be amazed by the brass-necked audacity of the Tories. I worked in manufacturing industry throughout the 1970s, 1980s and 1990s, and I watched at close quarters as the Tories vandalised and almost completely devastated our manufacturing base. I was employed for most of the period by a paper machine manufacturer, and there were 3,000 when the Conservatives first came to office. As the trade union representative, I took part in all the frequent redundancy discussions that occurred during those years.

The Tories then in government viewed those job losses as statistics—casualties of the market. We were exhorted to stop whingeing and to get on our bikes and find a job, but I knew those people personally. Every forced redundancy was, and is, a personal tragedy, involving not just the workers themselves but their families and communities. Redundancy can be a brutal affair.

In the early 1970s, I worked in a small factory as one of three vertical machinists in the machine shop. The company decided to reduce its numbers and to make one vertical machinist redundant. I had two small children at the time, and hon. Members can imagine the tension that we felt when I went home, knowing that the odds were only 2:1. I fully expected that I would be chosen because I was the last to start working there, and we had to wait two agonising weeks while the company made up its mind.

On the day of the decision, the foreman walked around the shop-floor, clutching a wad of brown envelopes, which he handed out here and there. We all knew exactly what they were. He passed me by without giving me an envelope, and I still remember the feeling of relief and guilt, because I knew that one of the other two would be going on the dole.

The management had decided to pick the man on the night-shift, because he was the only one who was not married. Some people might think that that was a fair decision, but he did not appreciate it and I very much doubt whether a tribunal would find such a reason acceptable today. The management delivered his brown envelope to his house while he was in bed. We all found the experience of being made redundant humiliating. It made us feel as though we had done something wrong.

I have recalled just one incident, but, over the years, there were thousands of similar experiences. Slowly but surely, the 3,000 of us were gradually whittled away with redundancy after redundancy—100 here, 50 there. It happened in factory after factory right across the country, but especially in the north. My Conservative predecessor, Peter Thurnham—who later joined the Liberal Democrats—blamed the redundancies on the trade unions. The Tory Governments of the day accepted no blame whatsoever. They brushed aside each announcement of more job losses with senseless comments about market forces and not being prepared to support lame ducks. For Conservative Members to stand here today and shamelessly pretend that they had no part in the decline of British manufacturing takes my breath away. They invented the decline of our manufacturing base, and they enacted the crime with malice.

It was not just incompetence, although the Conservatives' monetaristic ideas certainly displayed some of that. It may well have been acceptable, or at least understandable, if their policy had been successful, but, in reality, it was an economic disaster, from which we may never recover as a nation. We will certainly never be the same again. The responsibility for that will remain with the Conservatives, especially with their hero Margaret Thatcher, who did more damage to Britain's industrial base than Adolf Hitler achieved in the whole of the second world war.

I watched as thousands of highly trained and highly skilled craftsmen were driven into any job that they could find—should they be so lucky. At the same time, there was a virtual end to the training of apprentices. The termination of so many apprenticeship opportunities is comparable to a premier league football club abolishing its youth policy. It is not possible to have a successful football team without nurturing young talent, and we will not have a successful manufacturing sector without providing the necessary skills to our young people. During those Conservative years, Britain lost one of its most valuable assets—the skills of our people. They were sacrificed on the altar of market forces. We lost a generation of talent, and it will take mammoth effort to halt the slide of our manufacturing base.

In my constituency this week, Sandusky Walmsley—my old company—announced more redundancies. My predecessor blamed such a decline of industry on militant trade unions, yet Walmsley has good industrial relations and has not experienced a single minute of industrial action for more than 20 years. In the early 1980s, more than 17,000 people were unemployed in my constituency, and the unemployment rate in Bolton was more than 17 per cent. Today, my constituency has an unemployment rate of 3.9 per cent. and slightly more than 1,700 people claim benefit. It lessens the pain when alternative jobs are available, but the jobs that replace those in manufacturing are rarely better than the jobs that people previously held. That is especially true of people who are older and less able to retrain.

I recognise that the Government have done much good work for manufacturing, but there is clearly much more to do, especially in the north-west. We are still losing jobs, in particular in textiles and engineering. I very much welcome their efforts and this week's announcement of £54 million for the regional innovation fund. That can only help, especially in the north and the west midlands, which will be main beneficiaries. However, there is only so much that direct Government assistance can do. The high value of the pound against the euro is, quite frankly, much more important.

I am certainly not a euro enthusiast. I was born right after the war and brought up on war comics and black and white movies about the evils of the third Reich, but that is all behind us. To be anti-European when our involvement in Europe is clearly in the best interests of our country is pure stupidity; it is based on the ignorance of sheer prejudice.

I accept that entry into the euro will inevitably mean a loss of sovereignty. Labour's proposed referendum on that will enable the public to decide. We must engage in an intelligent and informed debate on the subject that weighs the loss of sovereignty against our prospects for economic survival. But who took us down the long European road to the point at which we have no choice but to join the euro? It was, of course, the Conservative party under the leadership of Edward Heath, Margaret Thatcher and John Major. They made our membership of a common currency virtually inevitable. If that is the case—I believe that it is—we had better make the best of it and become members at the right time and at the right level while there is still something left of our manufacturing base.

The Government have provided a stable economic climate. We have low inflation, low unemployment, strong public finances and a once-in-a-lifetime opportunity to regenerate Britain's proud history of production. I call on the Government not to concentrate only on the large company job losses in the car manufacturing and steel industries—important though they are—but to keep a wary eye on the supply chain of industry, which is suffering the slow trickle of decline in small company after mall company. It will only be with the success of small energetic enterprises that we will secure a stronger industrial base and a healthy manufacturing future.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 6:28 pm, 24th January 2001

I must declare an interest. I have connections with a couple of companies that supply manufactured goods, service manufactured goods and repair manufactured goods.

My first pleasurable task is to congratulate the hon. Member for Falkirk, West (Mr. Joyce) on his maiden speech. Every hon. Member vividly remembers his or her maiden speech, and he can recall his with pride because he delivered it in a positive and humorous way. As a by-election victor myself, I know the trials and tribulations that he had to go through to get to this place. It is slightly different to the easier ride of a general election. I congratulate him on that and commend him for the tactful way in which he referred to the splendid independence of his predecessor.

Let me just give the hon. Member for Falkirk, West a tad of advice. My hon. Friend the Member for Lichfield (Mr. Fabricant)—who, I must warn, leads people astray—suggested that the hon. Gentleman should sit on the same Bench as the hon. Member for Bolsover (Mr. Skinner). I have to tell him that that is the old lags' Bench. If he goes there, it will be a career-inhibiting move and, as he has only just arrived in the House, I suggest that he chooses a more up-market Bench from which to start his political career.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

There is nothing up-market about that lot on the Benches behind me.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

The hon. Gentleman can relax because I shall come to him shortly.

The authors of "1066 and All That" suggested: History is not what you thought. It is what you can remember. Another famous person said, "He who writes the history writes the truth". The selective memories of political parties are notorious and it is time that we stopped quoting historical references and started to look to the future.

We all remember the dramas and the traumas of the mid-1970s. We were the sick man of Europe and had 26 per cent. inflation. I am grateful because but for that, I would not have been successful in a by-election in a strong Labour seat. Equally, we can all remember the difficulties that we faced in overcoming the problems of the nationalised industries, which were grossly overmanned in the 1980s. We can go on and on, and even go back to William the Conqueror to make all the necessary partisan points. However, that would not be helpful. We must look to the future and consider what we can do to help.

The Labour party had 18 years in opposition to prepare its policies and it has had four years to implement them. However, the present position is very worrying for manufacturing. Something is certainly going wrong. I know that it will not help the hon. Member for Wolverhampton, North-East (Mr. Purchase) and his career, but I agree with much of what he said. We have an exporting tradition and we should change the culture of investment. Our companies that do well, such as the pharmaceutical companies, have a culture of extra investment in their businesses. They invest a greater percentage than firms in many other sectors.

Members on both sides of the House, with the exception of members of the Government, are aware of the difficulties facing manufacturing industry. I remind the hon. Member for Bolton, North-East (Mr. Crausby) of what he said in Trade and Industry questions last week. He asked the Minister of Trade: What assessment he has made of the recent performance of manufacturing industry in the north-west of England. The Minister said that its performance was being continually assessed and implied that it was going from strength to strength, so the hon. Gentleman asked: Is my right hon. Friend aware that output, exports and employment have fallen in the past four months in the north-west of England? BAE Systems is threatening thousands more redundancies. Things are therefore becoming more difficult, to say the least. Bolton has suffered wave after wave of engineering redundancies and two textile factories have closed recently.—[Official Report, 18 January 2001; Vol. 361, c. 501.] Therefore, I took some of the hon. Gentleman's earlier strictures slightly amiss.

Photo of David Crausby David Crausby Labour, Bolton North East

Does the hon. Gentleman not accept that manufacturing industry has declined in the north-west, because the industrial base has been damaged to the point that there are not the skills available to provide local industries with the people they need?

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I am glad that the hon. Gentleman has mentioned this issue, because it helps me to explain why he is living in the past. Last year was dominated by the problems of the motor manufacturing industry—by the threats to the future of BMW in the midlands, the prospective closure of the Ford plant at Dagenham and the end of the Vauxhall plant in Luton. The only exception is the Nissan plant in Sunderland, and the whole House hopes and prays that a decision is made to keep production of the Micra there.

The hon. Member for Birmingham, Northfield (Mr. Burden) was right. We must have a critical mass of various activities, such as motor sport and the steel industry, in this country. If we do not have such a critical mass, we will suffer the downside. Smaller businesses suffer because they will not be able to supply a main industry and many redundancies will result.

The prime example of that problem is Corus. My hon. Friend the Member for Ribble Valley (Mr. Evans) said that there could be 4,500 redundancies but, every time I see a figure, the number seems to rise. The last figure that I saw was 6,000. I sincerely hope that it is not correct.

Not only Conservatives Members express concern about unemployment. Only a few months ago, John Monks said that he anticipated that unemployment in manufacturing will rise at the rate of 10,000 every month—a staggering amount and a worrying figure.

Two debates on manufacturing have been held in Westminster Hall recently. I have accused the Government of abandoning manufacturing and, if not the crime of malice, of the sin of indifference. I am glad that the Minister for Competitiveness has just arrived; he is his normal charming self. He said: We are taking action on the three key issues of the European exchange rate, the climate change levy and energy prices. —[Official Report, Westminster Hall, 10 January 2001; Vol. 360, c. 238WH.] I shall discuss what the Government are doing about them.

The plain fact is that matters are being allowed to slide. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) pointed out that, in the early 1990s under a Conservative Government, there was a continual and steady rise in employment in manufacturing as opposed to the collapse in the number of jobs by 350,000 that has occurred since 1997. The prospects are worse.

The hon. Member for Twickenham (Dr. Cable) made some valid and telling points. I do not normally like to agree with the Liberal Democrats, but I will on this occasion. He mentioned the way in which unit labour costs have moved. Relative to our major competitors, they have moved by 45 per cent. since 1995. There are also serious underlying trends in the balance of trade. Export volumes have risen by 38.5 per cent. over that period while import volumes have risen by 57.7 per cent. As the hon. Member for Wolverhampton, North-East pointed out, we are an exporting nation. When our imports start to exceed our exports, that is a sign of trouble.

Overall manufacturing output rose by only 2.2 per cent. between 1995 and 1999, and that is lower than our GDP growth of 2.9 per cent. in the past 12 months. The relative strength of sterling against the euro and the dollar has made our exports less competitive and Member after Member has driven that point home. However, I do not know whether the Government have taken the message on board.

It is no surprise that the Government do not wish to address these serious issues—they are far too embarrassing for them. However, we have a positive programme to help manufacturing. First, we would remove the damaging climate change levy. We are below the Kyoto targets, and our serious problems will come when our nuclear plants start to close. Therefore, we should consider what we should do about this country's energy production now, and not wait for those plants to close with all the problems that that will create.

As my hon. Friend the Member for Lichfield said, the levy is a blunt instrument that is not properly tuned to the needs of our industry. I noted how dismissive some Labour Members were; the Secretary of State seemed to regard the cost of £100 million as a mere bagatelle. However, £100 million is a lot of money to manufacturing industry and such a cost would be a hammer blow to something that is already being hit.

The Conservative party would have a seat for manufacturing industry on our council of economic advisers to the Chancellor of the Exchequer when the shadow Chancellor takes on that role. We want manufacturing to be at the heart of the political process.

Several of my hon. Friends spoke about deregulation. My hon. Friend the Member for Lichfield made a powerful speech and I shall return to that shortly. However, the British Chambers of Commerce has estimated that industry will face an enormous bill of approaching £10 billion.

My hon. Friend the Member for Tewkesbury (Mr. Robertson) rightly discussed the pound and the euro. He made some positive points. Until the Chancellor stops his fiscal policy of spending more money than we earn, our interest rates will not come down sufficiently to enable the pound to reach a better level against other currencies.

We have also made commitments to help small village shops by a reduction in their rates and we have a clear policy for 3p off fuel. To put it delicately, the Government's policy on fuel is slightly unclear.

I want to put some flesh on to the bones of our deregulation policy. We have a positive policy that we have announced and shall use. Its main element is an independent assessment process outside of government, so that officials will not decide whether the regulations that they have drawn up will have a particular impact. We will appoint independent people who know industry and who know what is what. They will provide the advice.

I have to smile recalling that, when my party was in government, jumping about at the Opposition Dispatch Box was the hon. Member for Hornsey and Wood Green (Mrs. Roche), now a Home Office Minister. I have to commend the hon. Lady on having brilliantly badgered and harried us about our efforts on deregulation; sometimes, she tabled 50 questions in one week—bang, bang, bang. She said that when a Labour Government came to power, they would do something magnificent. She spoke the truth. The Labour Government broke the record: in 1999, they introduced more than 3,700 new regulations, and every figure emerging now suggests that in 2000 they managed to top that record of hammer blows on industry.

Of course, the deregulation unit is in place and working to remove regulations that are crippling our industry. I recently heard about the unit's major triumph: it has done away with a restriction on Sunday dancing. Hon. Members can now dance on a Sunday without fear of the law coming down upon them. At this point in my speech, I was hoping to look up from my copious notes to see happy and smiling faces on the Government Benches, but I do not see a single smile. Are my hon. Friends happy that they can now dance on Sundays? [HON. MEMBERS: "Yes, ecstatic."] What a positive step.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I have only a few minutes and I want the Minister to be able to give a full account of the Government's crimes when she responds to the debate, so I am reluctant to bite into her time.

I turn to the Government's approach to payment times. My right hon. Friend the Member for Wells mentioned that it was the hon. Member for Hornsey and Wood Green who pushed questions about payment times and said how disgraceful the situation was, but as soon as the hon. Lady left the Department of Trade and Industry, it all went to the dogs. The percentage of bills promptly paid is now down to 93 per cent. from the original figure of 97.7 per cent. Let me quote from The Sunday Telegraph—the Secretary of State may quote from The Sun if he likes. A headline from last Sunday reads: "MPs slam DTI for late bill payments", and the following article states: The report by the trade and industry select committee is expected to be a catalogue of failure, with muddled figures and lack of focus in many DTI objectives. Apparently the Committee will also say the department's aim of building "an enterprise society" amounts to "a dog's breakfast" and urge ministers to look again at defining such a goal. Finally, the report states that the Committee has discovered there are no definitive figures for staff numbers at the department. nor accurate statistics on sick leave. That is why this country is in such trouble. With a Department like that responsible for our manufacturing, no wonder unemployment and job losses are mounting daily.

The Chancellor said that he wanted to do away with boom and bust. Well, he is certainly doing away with the boom. I hope that we can prevent a bust.

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe) 6:43 pm, 24th January 2001

Replying to the debate gives me the privilege of welcoming the maiden speech of my hon. Friend the Member for Falkirk, West (Mr. Joyce). It is a particular pleasure for me do so, because I know his constituency well and my parents lived there for a while. However, despite my detailed knowledge of the constituency, I was unaware of the Falkirk wheel, and I, like the hon. Member for Lichfield (Mr. Fabricant), will happily take up my hon. Friend's invitation to visit it.

My hon. Friend represents a very impressive constituency made up of very impressive people. I hope that it will benefit fro n the assistance that we have been able to give Longannet to secure the future of coal mining on the Forth—many of the constituents of Falkirk, West work at Longannet. I have no doubt that my hon. Friend has begun a distinguished career, but if the hon. Member for Lichfield intends to visit my hon. Friend's constituency, I should warn him that, as an ex-major, my hon. Friend is probably even fitter than the hon. Gentleman.

Mid-debate, I found myself checking whether this was an Opposition day, given that the Opposition Benches had the appearance of the Mary Celeste. That is a clear sign of the consideration that Conserve Live Members give to our manufacturing industry. It is significant that the hon. Member for South-West Hertfordshire (Mr. Page) said in mitigation at the start of his speech that he did not want to think about the past—let us forget the past and look to the future, he said. If I were in his position, especially if I had been a Minister in the Conservative Government, I would want to forget the past as well. The hon. Gentleman failed to point out that unemployment in his constituency has fallen by 56.7 per cent. between 1997 and 2000, and by a further 14.7 per cent. since 2000—directly as a consequence of the policies of the current Government.

Both the hon. Gentleman and his right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) spoke of the killer, devastating policy that is supposed to win their party the next general election a Conservative Government would appoint to a council of economic advisers someone from the manufacturing sector. The World Bank, the International Monetary Fund, the Bank of England and everyone else will be quivering in the face of that killer Conservative policy. Yesterday, one of my colleagues said that the Conservatives' economic policy would disgrace Mickey Mouse, but that was an insult to Mickey Mouse.

The right hon. Member for Wells made much of the climate change levy. Let me take up some of his points relating to the Engineering Employers Federation report and the Ernst and Young survey which other speakers mentioned. I do not recognise the figures contained in the press release to which the right hon. Gentleman referred. The EEF estimates that the net cost of the levy will be £100 million, but the basis of those figures is wholly unclear. The EEF appears to be confused about which sectors are eligible to enter into negotiated agreements and it has missed the fact that, in a modern economy, the ability to use energy efficiently is not merely a matter of having a sensible environmental policy, but one of being globally competitive. One of the strengths of the levy is that it is designed to make companies examine their use of energy and use it much more effectively.

Companies can seek exemptions and they can make changes to improve their energy efficiency. They can use new forms of renewable energy and good quality heat and power. The levy will be revenue neutral: it is estimated that in its first year it will raise £1 billion, all of which will be recycled back to business, via a 0.3 per cent. reduction in employers' national insurance contributions; £100 million in enhanced capital allowances for investment in energy-saving technologies, the need for which was mentioned by my hon. Friend the Member for Birmingham, Northfield (Mr. Burden); and £50 million for the Carbon Trust that will provide energy-saving advice and audits and promote low carbon technologies, which were mentioned by the hon. Member for Twickenham (Dr. Cable).

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

In what way is the levy revenue neutral to companies such as Sony, which have already made the investment? They will have to pay the climate change levy, but will be unable to get back any of the investment that they have already made.

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe)

As Lord Marshall said in his report on the environment, which I think was published in 1998, energy efficiency is not a one-off venture and should continue throughout the company's operations. That is common sense.

The right hon. Member for Wells also told us how Conservative economic policy would lead to reduced interest rates and lower inflation. No wonder the hon. Member for South-West Hertfordshire asked us to forget history, as this week 10 years ago the inflation rate was 8.5 per cent. and the interest rate was 14 per cent. The Government's economic policies have moved us away from the boom and bust of the Conservative years. We have economic stability, as was recognised in the report that was outlined in The Sun and to which my right hon. Friend the Secretary of State referred.

Manufacturers need economic stability and Labour is delivering that. Public borrowing has been cut by more than £45 billion in three years, inflation is lower than it has been for 30 years and long-term interest rates are at their lowest level for more than 35 years. Those policies are giving businesses the opportunity to expand and create employment.

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe)

I should like to make some progress.

The Government regard manufacturing as a key part of the economy that makes a major contribution to Britain's productivity, innovation and trade performance. We recognise, however, that some sectors of manufacturing industry are going through considerable difficulty. We are helping them by providing the macro-economic stability to which I referred. Low interest rates, low inflation and sound public finances will help all UK manufacturers in the long term.

We recognise that some companies are affected by global circumstances. Such companies are often in traditional sectors where they are unable to benefit from technological changes. I do not blame Opposition or Labour Members for concentrating on high-profile cases involving job losses, but there are also good news stories, as my right hon. Friend the Secretary of State pointed out.

Photo of David Winnick David Winnick Labour, Walsall North

The situation in the west midlands is undoubtedly better now than during the two major recessions of the 1980s, as all hon. Members who represent west midlands constituencies recognise. However, is my right hon. Friend aware of my concern about a Swedish-owned company that is based in my constituency and which is being closed? Sandvik is to be completely closed by August, with the loss of 139 jobs. Will she or one of her ministerial colleagues receive a deputation on that important matter, about which I have already written to my right hon. Friend the Secretary of State?

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe)

I am aware of the case to which my hon. Friend refers and I recognise his concern. I know that my right hon. Friend the Minister for Trade will be only too happy to receive a delegation.

In addition to the specific measures that we have taken to support manufacturers—my right hon. Friend the Secretary of State referred to the assistance that we have sought to give to the textile industry—we have also introduced the lowest ever rate of corporation tax. The right hon. Member for Caernarfon (Mr. Wigley) made much of corporation tax, but we have the lowest rate in Europe.

My hon. Friend the Member for Birmingham, Northfield asked about research and development. We have made a £150 million research and development tax credit available for small and medium enterprises and introduced new 100 per cent. allowances for small and medium-sized businesses to help them in adapting to information technology. Those are concrete measures that are of direct assistance to industry in dealing with the management of change.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

The verdict of the director general of the British Chambers of Commerce, Chris Humphries, is that the Government has dramatically increased the regulatory burdens that threaten small business competitiveness. In the Queen's speech of 1999, however, the Government promised to address inappropriate and over-complex regulation … —[Official Report, 17 November 1999; Vol. 339, c. 5.] In the light of those statements, is the right hon. Lady proud of the fact that, all this time later, the Regulatory Reform Bill has still not been given a Second Reading?

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe)

We heard from the hon. Member for Lichfield about the some of the regulations that the hon. Gentleman, and presumably other Opposition Members, would like the Government to get rid of. Those include measures on maternity pay and the national minimum wage. However, I am interested in conscious measures that have a direct relevance to ordinary people as they go about their lives.

Opposition Members are determined to ignore the fact that the Government have been prepared to act to assist business. [Interruption.] The hon. Member for Buckingham (Mr. Bercow) is parroting on, but he could not even manage to make a speech in this debate. His remarks will not change our attitude in any way. We make no apologies for introducing improved workers' rights, as such rights are an important part of a civilised society.

My hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) spoke about the need to extend management development and training. The hon. Member for Tewkesbury (Mr. Robertson) made the same point. Management development and training are a key aspect of a knowledge-driven economy. Such an economy is not only about increasing technical skills, but about ensuring that our businesses have the best possible management and leadership skills. I take on board the point made by my hon. Friend in that respect. He also made a telling point about the need for flexible skills in a changing economy—a concern that was also mentioned by Opposition Members. That issue underpins every aspect of the Government's economic, industrial and education policy.

The hon. Member for South-West Hertfordshire spoke about the sorts of regulations and measures the Government see as positive. The CBI recognises the work that we are doing through the regional development agencies, which are the instruments that allow us to provide assistance at the very sharp end.

Photo of Mrs Helen Liddell Mrs Helen Liddell Minister of State (Science, Energy and Industry), Department of Trade and Industry, Secretary of State, Scottish Office, Minister of State (Energy and Competitiveness in Europe)

The hon. Gentleman uses the word "ghastly". That is what he thinks about giving direct assistance to parts of the country that require such help as they cope with economic change.

The Government understand the challenges faced by manufacturing industry, but we cannot wish them away. Opposition Members have repeatedly referred to the euro. They fail to recognise that their policy is not only economically illiterate, but does nothing to help manufacturing industry to plan for the future. We recognise the values of a successful single currency, but the economic preconditions must be right. Of course, Opposition Members say no to the single currency, or at least that it will not be introduced for a period that will be decided arbitrarily.

The hon. Member for Ribble Valley (Mr. Evans) spoke about the aerospace industry, but he failed to acknowledge the 22,000 additional jobs that are being created in British Aerospace. [Interruption.] It is BAE to which I am specifically referring. The hon. Member for Ribble Valley also failed to point out that 55.9 per cent. fewer people were on the unemployment register in his constituency in 2000 than there were when the Government were elected. That was helped by a further drop of 3.6 per cent. He failed also to recognise that we are dealing with a modern economy and creating jobs and opportunities. He had some cheek to speak to us about Ravenscraig. I represent one of the constituencies affected by Ravenscraig. It took a Labour Government to bring about the changes being made to the site, which are transforming it into a section of Lanarkshire that will be a beacon for all of Scotland. It was the actions of the Conservative party that closed Ravenscraig in the first place. Perhaps he would like to take up the matter with my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy), who worked as a shop steward in the Ravenscraig plant at the time in question.

My hon. Friend the Member for Wolverhampton, North-East asked about information and consultation. My right hon. Friend the Secretary of State announced only last week that we will review all UK arrangements affecting collective redundancies. That review will consider whether current laws are working and, in particular, whether more should be done to promote effective consultation with employees. We will involve both the Trades Union Congress and the CBI. That is a sensible way forward that does not resemble the jingoistic, knee-jerk response of Opposition Members. As I said, they have only one killer proposal: putting somebody else on to a committee. Opposition Members do not understand manufacturing industry. If they did, they would be ashamed to come to the House in view of their record. From 1979 onwards, 3 million manufacturing jobs disappeared.

We will address the difficulties of parts of manufacturing industry that are suffering through changes in the global economy and in their industries. However, we shall also celebrate those manufacturing industries that are growing and exporting, and form part of the knowledge-based economy. In partnership, we will ensure that stability, a sound economy and the sort of economic climate in which companies can plan and grow will lead to more jobs and improved competitiveness.

I urge the House to reject the motion and support the amendment in the name of the Prime Minister.

Question put, That the original words stand part of the Question:— The House divided: Ayes 171, Noes 286.

Division No. 84][7 pm
AYES
Ainsworth, Peter (E Surrey)Gillan, Mrs Cheryl
Allan, RichardGorman, Mrs Teresa
Arbuthnot, Rt Hon JamesGreen, Damian
Ashdown, Rt Hon PaddyGreenway, John
Atkinson, Peter (Hexham)Grieve, Dominic
Baldry, TonyHague, Rt Hon William
Ballard, JackieHammond, Philip
Beith, Rt Hon A JHarris, Dr Evan
Bell, Martin (Tatton)Harvey, Nick
Bercow, JohnHawkins, Nick
Beresford, Sir PaulHayes, John
Blunt, CrispinHeald, Oliver
Boswell, TimHeath, David (Somerton & Frome)
Bottomley, Rt Hon Mrs VirginiaHeathcoat-Amory, Rt Hon David
Brand, Dr PeterHogg, Rt Hon Douglas
Brazier, JulianHoram, John
Breed, ColinHoward, Rt Hon Michael
Browning, Mrs AngelaHowarth, Gerald (Aldershot)
Burnett, JohnHunter, Andrew
Burns, SimonJack, Rt Hon Michael
Burstow, PaulJenkin, Bernard
Butterfill, JohnJohnson Smith, Rt Hon Sir Geoffrey
Cable, Dr Vincent
Campbell, Rt Hon Menzies (NE Fife)Jones, Nigel (Cheltenham)
Keetch, Paul
Cash, WilliamKennedy, Rt Hon Charles (Ross Skye & Inverness W)
Chidgey, David
Chope, ChristopherKey, Robert
Clappison, JamesKing, Rt Hon Tom (Bridgwater)
Clark, Dr Michael (Rayleigh)Kirkbride, Miss Julie
Collins, TimKirkwood, Archy
Cormack, Sir PatrickLaing, Mrs Eleanor
Cran, JamesLait, Mrs Jacqui
Curry, Rt Hon DavidLansley, Andrew
Davies, Quentin (Grantham)Leigh, Edward
Davis, Rt Hon David (Haltemprice)Letwin, Oliver
Day, StephenLewis, Dr Julian (New Forest E)
Dorrell, Rt Hon StephenLidington, David
Duncan, AlanLilley, Rt Hon Peter
Duncan Smith, IainLloyd, Rt Hon Sir Peter (Fareham)
Emery, Rt Hon Sir PeterLoughton, Tim
Evans, NigelLuff, Peter
Ewing, Mrs MargaretLyell, Rt Hon Sir Nicholas
Faber, DavidMacGregor, Rt Hon John
Fabricant, MichaelMacKay, Rt Hon Andrew
Fallon, MichaelMaclean, Rt Hon David
Fearn, RonnieMaclennan, Rt Hon Robert
Flight, HowardMcLoughlin, Patrick
Forth, Rt Hon EricMadel, Sir David
Foster, Don (Bath)Malins, Humfrey
Fowler, Rt Hon Sir NormanMates, Michael
Fox, Dr LiamMawhinney, Rt Hon Sir Brian
Fraser, ChristopherMay, Mrs Theresa
Gale, RogerMichie, Mrs Ray (Argyll & Bute)
Garnier, EdwardMoore, Michael
George, Andrew (St Ives)Moss, Malcolm
Gibb, NickNicholls, Patrick
Gidley, SandraNorman, Archie
Gill, ChristopherOaten, Mark
O'Brien, Stephen (Eddisbury)Swayne, Desmond
Öpik, LembitSyms, Robert
Ottaway, RichardTapsell, Sir Peter
Page, RichardTaylor, Ian (Esher & Walton)
Paice, JamesTaylor, John M (Solihull)
Pickles, EricTaylor, Matthew (Truro)
Prior, DavidTaylor, Sir Teddy
Randall, JohnThomas, Simon (Ceredigion)
Redwood, Rt Hon JohnTonge, Dr Jenny
Rendel, DavidTredinnick, David
Robathan, AndrewTrend, Michael
Robertson, Laurence (Tewk'b'ry)Tyler, Paul
Roe, Mrs Marion (Broxbourne)Tyrie, Andrew
Rowe, Andrew (Faversham)Viggers, Peter
Ruffley, DavidWalter, Robert
Russell, Bob (Colchester)Waterson, Nigel
St Aubyn, NickWells, Bowen
Sanders, AdrianWhitney, Sir Raymond
Sayeed, JonathanWhittingdale, John
Shephard, Rt Hon Mrs GillianWiddecombe, Rt Hon Miss Ann
Shepherd, RichardWigley, Rt Hon Dafydd
Simpson, Keith (Mid-Norfolk)Willetts, David
Smith, Sir Robert (W Ab'd'ns)Willis, Phil
Soames, NicholasWinterton, Mrs Ann (Congleton)
Spelman, Mrs CarolineWinterton, Nicholas (Macclesfield)
Spicer, Sir MichaelYeo, Tim
Spring, RichardYoung, Rt Hon Sir George
Stanley, Rt Hon Sir JohnTellers for the Ayes:
Streeter, GaryMr. James Gray and
Stunell, AndrewMr. Geoffrey Clifton-Brown.
NOES
Abbott, Ms DianeCawsey, Ian
Adams, Mrs Irene (Paisley N)Clapham, Michael
Ainger, NickClark, Rt Hon Dr David (S Shields)
Allen, GrahamClarke, Charles (Norwich S)
Anderson, Rt Hon Donald (Swansea E)Clelland, David
Clwyd, Ann
Anderson, Janet (Rossendale)Coaker, Vernon
Armstrong, Rt Hon Ms HilaryCoffey, Ms Ann
Ashton, JoeCohen, Harry
Atherton, Ms CandyColeman, Iain
Atkins, CharlotteColman, Tony
Bailey, AdrianConnarty, Michael
Barron, KevinCook, Frank (Stockton N)
Bayley, HughCook, Rt Hon Robin (Livingston)
Beckett, Rt Hon Mrs MargaretCooper, Yvette
Begg, Miss AnneCorbett, Robin
Bell, Stuart (Middlesbrough)Cousins, Jim
Benn, Hilary (Leeds C)Crausby, David
Bennett, Andrew FCryer, John (Hornchurch)
Benton, JoeCummings, John
Bermingham, GeraldCunningham, Rt Hon Dr Jack (Copeland)
Berry, Roger
Betts, CliveDalyell, Tam
Blackman, LizDarling, Rt Hon Alistair
Blears, Ms HazelDarvill, Keith
Blizzard, BobDavey, Valerie (Bristol W)
Blunkett, Rt Hon DavidDavidson, Ian
Boateng, Rt Hon PaulDavies, Rt Hon Denzil (Llanelli)
Borrow, DavidDavies, Geraint (Croydon C)
Bradley, Keith (Withington)Dawson, Hilton
Brinton, Mrs HelenDean, Mrs Janet
Brown, Russell (Dumfries)Denham, John
Browne, DesmondDismore, Andrew
Buck, Ms KarenDobbin, Jim
Burden, RichardDobson, Rt Hon Frank
Byers, Rt Hon StephenDonohoe, Brian H
Caborn, Rt Hon RichardDoran, Frank
Campbell, Mrs Anne (C'bridge)Dowd, Jim
Campbell, Ronnie (Blyth V)Drew, David
Campbell-Savours, DaleDrown, Ms Julia
Caplin, IvorDunwoody, Mrs Gwyneth
Casale, RogerEagle, Maria (L'pool Garston)
Caton, MartinEdwards, Huw
Efford, CliveLiddell, Rt Hon Mrs Helen
Ellman, Mrs LouiseLinton, Martin
Ennis, JeffLock, David
Field, Rt Hon FrankLove, Andrew
Fisher, MarkMcAvoy, Thomas
Fitzpatrick, JimMcCafferty, Ms Chris
Fitzsimons, Mrs LornaMcCartney, Rt Hon Ian (Makerfield)
Flint, Caroline
Follett, BarbaraMacdonald, Calum
Foster, Michael Jabez (Hastings)McDonnell, John
Foulkes, GeorgeMcIsaac, Shona
Galloway, GeorgeMackinlay, Andrew
Gapes, MikeMcNulty, Tony
George, Rt Hon Bruce (Walsall S)Mactaggart, Fiona
Gibson, Dr IanMcWalter, Tony
Gilroy, Mrs LindaMcWilliam, John
Godman, Dr Norman AMahon, Mrs Alice
Godsiff, RogerMallaber, Judy
Goggins, PaulMarsden, Gordon (Blackpool S)
Golding, Mrs LlinMarshall, David (Shettleston)
Griffiths, Nigel (Edinburgh S)Marshall, Jim (Leicester S)
Griffiths, Win (Bridgend)Marshall-Andrews, Robert
Grogan, JohnMartlew, Eric
Hall, Patrick (Bedford)Maxton, John
Hamilton, Fabian (Leeds NE)Meacher, Rt Hon Michael
Hanson, DavidMerron, Gillian
Harman, Rt Hon Ms HarrietMichael, Rt Hon Alun
Healey, JohnMichie, Bill (Shef'ld Heeley)
Henderson, Doug (Newcastle N)Milburn, Rt Hon Alan
Henderson, Ivan (Harwich)Miller, Andrew
Hendrick, MarkMitchell, Austin
Hepburn, StephenMoonie, Dr Lewis
Heppell, JohnMoran, Ms Margaret
Hesford, StephenMorgan, Ms Julie (Cardiff N)
Hewitt, Ms PatriciaMorley, Elliot
Hill, KeithMowlam, Rt Hon Marjorie
Hodge, Ms MargaretMudie, George
Hood, JimmyMullin, Chris
Hope, PhilMurphy, Denis (Wansbeck)
Hopkins, KelvinMurphy, Jim (Eastwood)
Howarth, George (Knowsley N)Naysmith, Dr Doug
Howells, Dr KimNorris, Dan
Hughes, Kevin (Doncaster N)O'Brien, Bill (Normanton)
Humble, Mrs JoanOlner, Bill
Hutton, JohnO'Neill, Martin
Iddon, Dr BrianPearson, Ian
Illsley, EricPickthall, Colin
Jackson, Ms Glenda (Hampstead)Pike, Peter L
Jackson, Helen (Hillsborough)Pond, Chris
Jamieson, DavidPope, Greg
Jenkins, BrianPowell, Sir Raymond
Johnson, Alan (Hull W & Hessle)Prentice, Ms Bridget (Lewisham E)
Johnson, Miss Melanie (Welwyn Hatfield)Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Jones, Rt Hon Barry (Alyn)Primarolo, Dawn
Jones, Helen (Warrington N)Prosser, Gwyn
Jones, Jon Owen (Cardiff C)Purchase, Ken
Jones, Dr Lynne (Selly Oak)Quinn, Lawrie
Joyce, EricRammell, Bill
Keeble, Ms SallyRaynsford, Nick
Keen, Alan (Feltham & Heston)Robertson, John (Glasgow Anniesland)
Keen, Ann (Brentford & Isleworth)
Kemp, FraserRobinson, Geoffrey (Cov'try NW)
Kennedy, Jane (Wavertree)Roche, Mrs Barbara
Khabra, Piara SRogers, Allan
Kidney, DavidRooker, Rt Hon Jeff
Kilfoyle, PeterRooney, Terry
King, Andy (Rugby & Kenilworth)Ross, Ernie (Dundee W)
Kumar, Dr AshokRowlands, Ted
Lammy, DavidRuane, Chris
Lawrence, Mrs JackieRuddock, Joan
Laxton, BobRyan, Ms Joan
Leslie, ChristopherSalter, Martin
Levitt, TomSarwar, Mohammad
Lewis, Ivan (Bury S)Sawford, Phil
Lewis, Terry (Worsley)Sedgemore, Brian
Shaw, JonathanTodd, Mark
Sheerman, BarryTouhig, Don
Sheldon, Rt Hon RobertTrickett, Jon
Simpson, Alan (Nottingham S)Turner, Dennis (Wolverh'ton SE)
Skinner, DennisTurner, Dr George (NW Norfolk)
Smith, Rt Hon Andrew (Oxford E)Turner, Neil (Wigan)
Smith, Angela (Basildon)Twigg, Stephen (Enfield)
Smith, Rt Hon Chris (Islington S)Tynan, Bill
Smith, Jacqui (Redditch)Walley, Ms Joan
Smith, John (Glamorgan)Watts, David
Smith, Llew (Blaenau Gwent)White, Brian
Soley, CliveWicks, Malcolm
Southworth, Ms HelenWilliams, Rt Hon Alan (Swansea W)
Squire, Ms Rachel
Starkey, Dr PhyllisWilliams, Alan W (E Carmarthen)
Steinberg, GerryWilliams, Mrs Betty (Conwy)
Stewart, David (Inverness E)Wills, Michael
Stewart, Ian (Eccles)Wilson, Brian
Strang, Rt Hon Dr GavinWinnick, David
Straw, Rt Hon JackWood, Mike
Stuart, Ms GiselaWoolas, Phil
Sutcliffe, GerryWorthington, Tony
Taylor, Rt Hon Mrs Ann (Dewsbury)Wright, Anthony D (Gt Yarmouth)
Wright, Tony (Cannock)
Taylor, David (NW Leics)Wyatt, Derek
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)Tellers for the Noes:
Thomas, Gareth R (Harrow W)Mr. Mike Hall and
Timms, StephenMr. Robert Ainsworth.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):

The House divided: Ayes 313, Noes 132.

Division No. 85][7.15 pm
AYES
Abbott, Ms DianeBrinton, Mrs Helen
Adams, Mrs Irene (Paisley N)Brown, Russell (Dumfries)
Ainger, NickBrowne, Desmond
Allan, RichardBuck, Ms Karen
Allen, GrahamBurden, Richard
Anderson, Rt Hon Donald (Swansea E)Burnett, John
Burstow, Paul
Anderson, Janet (Rossendale)Byers, Rt Hon Stephen
Armstrong, Rt Hon Ms HilaryCable, Dr Vincent
Ashdown, Rt Hon PaddyCaborn, Rt Hon Richard
Ashton, JoeCampbell, Mrs Anne (C'bridge)
Atherton, Ms CandyCampbell, Rt Hon Menzies (NE Fife)
Atkins, Charlotte
Bailey, AdrianCampbell, Ronnie (Blyth V)
Ballard, JackieCampbell-Savours, Dale
Barron, KevinCaplin, Ivor
Bayley, HughCasale, Roger
Beckett, Rt Hon Mrs MargaretCaton, Martin
Begg, Miss AnneCawsey, Ian
Beith, Rt Hon A JChidgey, David
Bell, Martin (Tatton)Clapham, Michael
Benn, Hilary (Leeds C)Clark, Rt Hon Dr David (S Shields)
Bennett, Andrew FClarke, Charles (Norwich S)
Benton, JoeClelland, David
Bermingham, GeraldClwyd, Ann
Berry, RogerCoaker, Vernon
Betts, CliveCoffey, Ms Ann
Blackman, LizCohen, Harry
Blears, Ms HazelColeman, Iain
Blizzard, BobColman, Tony
Blunkett, Rt Hon DavidConnarty, Michael
Borrow, DavidCook, Frank (Stockton N)
Bradley, Keith (Withington)Cooper, Yvette
Brand, Dr PeterCorbett, Robin
Breed, ColinCousins, Jim
Crausby, DavidIddon, Dr Brian
Cryer, John (Hornchurch)Illsley, Eric
Cummings, JohnJackson, Helen (Hillsborough)
Darling, Rt Hon AlistairJamieson, David
Darvill, KeithJenkins, Brian
Davey, Valerie (Bristol W)Johnson, Alan (Hull W & Hessle)
Davidson, IanJohnson, Miss Melanie (Welwyn Hatfield)
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)Jones, Rt Hon Barry (Alyn)
Dawson, HiltonJones, Helen (Warrington N)
Dean, Mrs JanetJones, Jon Owen (Cardiff C)
Denham, JohnJones, Dr Lynne (Selly Oak)
Dismore, AndrewJones, Nigel (Cheltenham)
Dobbin, JimJoyce, Eric
Dobson, Rt Hon FrankKeeble, Ms Sally
Donohoe, Brian HKeen, Alan (Feltham & Heston)
Doran, FrankKeen, Ann (Brentford & Isleworth)
Dowd, JimKeetch, Paul
Drew, DavidKemp, Fraser
Drown, Ms JuliaKennedy, Rt Hon Charles (Ross Skye & Inverness W)
Dunwoody, Mrs GwynethKennedy, Jane (Wavertree)
Eagle, Maria (L'pool Garston)Khabra, Piara S
Edwards, HuwKidney, David
Efford, CliveKilfoyle, Peter
Ellman, Mrs LouiseKing, Andy (Rugby & Kenilworth)
Ennis, JeffKirkwood, Archy
Fearn, RonnieKumar, Dr Ashok
Field, Rt Hon FrankLammy, David
Fisher, MarkLawrence, Mrs Jackie
Fitzpatrick, JimLaxton, Bob
Fitzsimons, Mrs LornaLeslie, Christopher
Flint, CarolineLevitt, Tom
Follett, BarbaraLewis, Ivan (Bury S)
Foster, Don (Bath)Lewis, Terry (Worsley)
Foster, Michael Jabez (Hastings)Linton, Martin
Foulkes, GeorgeLloyd, Tony (Manchester C)
Gapes, MikeLock, David
Love, Andrew
George, Andrew (St Ives)McAvoy, Thomas
George, Rt Hon Bruce (Walsall S)McCafferty, Ms Chris
Gibson, Dr IanMcCartney, Rt Hon Ian (Makerfield)
Gidley, Sandra
Gilroy, Mrs LindaMacdonald, Calum
Godman, Dr Norman AMcDonnell, John
Godsiff, RogerMcIsaac, Shona
Goggins, PaulMackinlay, Andrew
Golding, Mrs LlinMaclennan, Rt Hon Robert
Griffiths, Win (Bridgend)McNulty, Tony
Grogan, JohnMactaggart, Fiona
Hall, Patrick (Bedford)McWillian, John
Hamilton, Fabian (Leeds NE)Mahon, Mrs Alice
Hanson, DavidMallaber, Judy
Harman, Rt Hon Ms HarrietMarsder, Gordon (Blackpool S)
Harris, Dr EvanMarshall, David (Shettleston)
Harvey, NickMarshall, Jim (Leicester S)
Healey, JohnMarshall-Andrews, Robert
Heath, David (Somerton & Frome)Martlew, Eric
Henderson, Doug (Newcastle N)Maxton, John
Henderson, Ivan (Harwich)Meacher, Rt Hon Michael
Hendrick, MarkMerron, Gillian
Hepburn, StephenMichael, Rt Hon Alun
Heppell, JohnMichie, Bill (Shef'ld Heeley)
Michie, Mrs Ray (Argyll & Bute)
Hesford, StephenMilburn, Rt Hon Alan
Hewitt, Ms PatriciaMiller, Andrew
Hill, KeithMitchell, Austin
Hodge, Ms MargaretMoonie, Dr Lewis
Hood, JimmyMoore, Michael
Hope, PhilMoran, Ms Margaret
Hopkins, KelvinMorgan, Ms Julie (Cardiff N)
Howarth, George (Knowsley N)Morley, Elliot
Howells, Dr KimMowlam, Rt Hon Marjorie
Hughes, Kevin (Doncaster N)Mudie, George
Humble, Mrs JoanMullin, Chris
Hutton, JohnMurphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)Smith, Sir Robert (W Ab'd'ns)
Naysmith, Dr DougSoley, Clive
Norris, DanSouthworth, Ms Helen
Oaten, MarkSquire, Ms Rachel
O'Brien, Bill (Normanton)Starkey, Dr Phyllis
Olner, BillSteinberg, Gerry
O'Neill, MartinStewart, David (Inverness E)
Öpik, LembitStewart, Ian (Eccles)
Pearson, IanStrang, Rt Hon Dr Gavin
Pickthall, ColinStraw, Rt Hon Jack
Pike, Peter LStuart, Ms Gisela
Pond, ChrisStunell, Andrew
Pope, GregSutcliffe, Gerry
Powell, Sir RaymondTaylor, Rt Hon Mrs Ann (Dewsbury)
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)Taylor, David (NW Leics)
Prescott, Rt Hon JohnTaylor, Matthew (Truro)
Primarolo, DawnTemple-Morris, Peter
Prosser, GwynThomas, Gareth (Clwyd W)
Purchase, KenThomas, Gareth R (Harrow W)
Quinn, LawrieTimms, Stephen
Raynsford, NickTodd, Mark
Rendel, DavidTonge, Dr Jenny
Robertson, John (Glasgow Anniesland)Touhig, Don
Trickett, Jon
Robinson, Geoffrey (Cov'try NW)Turner, Dennis (Wolverh'ton SE)
Roche, Mrs BarbaraTurner, Dr George (NW Norfolk)
Rogers, AllanTurner, Neil (Wigan)
Rooker, Rt Hon JeffTwigg, Stephen (Enfield)
Rooney, TerryTyler, Paul
Ross, Ernie (Dundee W)Tynan, Bill
Rowlands, TedWalley, Ms Joan
Ruane, ChrisWatts, David
Ruddock, JoanWebb, Steve
Russell, Bob (Colchester)White, Brian
Ryan, Ms JoanWicks, Malcolm
Salter, MartinWilliams, Rt Hon Alan (Swansea W)
Sanders, Adrian
Sarwar, MohammadWilliams, Alan W (E Carmarthen)
Savidge, MalcolmWilliams, Mrs Betty (Conwy)
Sawford, PhilWillis, Phil
Sedgemore, BrianWills, Michael
Shaw, JonathanWinnick, David
Sheerman, BarryWood, Mike
Sheldon, Rt Hon RobertWoolas, Phil
Simpson, Alan (Nottingham S)Worthington, Tony
Skinner, DennisWright, Anthony D (Gt Yarmouth)
Smith, Rt Hon Andrew (Oxford E)Wright, Tony (Cannock)
Smith, Angela (Basildon)Wyatt, Derek
Smith, Rt Hon Chris (Islington S)
Smith, Jacqui (Redditch)Tellers for the Ayes:
Smith, John (Glamorgan)Mr. Mike Hall and
Smith, Llew (Blaenau Gwent)Mr. Robert Ainsworth.
NOES
Ainsworth, Peter (E Surrey)Davies, Quentin (Grantham)
Arbuthnot, Rt Hon JamesDavis, Rt Hon David (Haltemprice)
Atkinson, Peter (Hexham)Day, Stephen
Baldry, TonyDorrell, Rt Hon Stephen
Bercow, JohnDuncan, Alan
Beresford, Sir PaulDuncan Smith, Iain
Body, Sir RichardEmery, Rt Hon Sir Peter
Boswell, TimEvans, Nigel
Bottomley, Rt Hon Mrs VirginiaEwing, Mrs Margaret
Brazier, JulianFaber, David
Browning, Mrs AngelaFabricant, Michael
Burns, SimonFallon, Michael
Butterfill, JohnFlight, Howard
Cash, WilliamForth, Rt Hon Eric
Chope, ChristopherFowler, Rt Hon Sir Norman
Clappison, JamesFox, Dr Liam
Clark, Dr Michael (Rayleigh)Fraser, Christopher
Collins, TimGale, Roger
Cormack, Sir PatrickGarnier, Edward
Cran, JamesGibb, Nick
Curry, Rt Hon DavidGill, Christopher
Gillan, Mrs CherylMoss, Malcolm
Gorman, Mrs TeresaNicholls, Patrick
Green, DamianNorman, Archie
Greenway, JohnO'Brien, Stephen (Eddisbury)
Grieve, DominicOttaway, Richard
Hague, Rt Hon WilliamPaice, James
Hammond, PhilipPickles, Eric
Hawkins, NickPrior, David
Hayes, JohnRandall, John
Heald, OliverRedwood, Rt Hon John
Heathcoat-Amory, Rt Hon DavidRobathan, Andrew
Hogg, Rt Hon DouglasRobertson, Laurence (Tewk'b'ry)
Horam, JohnRoe, Mrs Marion (Broxbourne)
Howard, Rt Hon MichaelRowe, Andrew (Faversham)
Howarth, Gerald (Aldershot)Ruffley, David
Hunter, AndrewSayeed, Jonathan
Jack, Rt Hon MichaelShephard, Rt Hon Mrs Gillian
Jenkin, BernardShepherd, Richard
Johnson Smith, Rt Hon Sir GeoffreySimpson, Keith (Mid-Norfolk)
Soames, Nicholas
Key, RobertSpelman, Mrs Caroline
King, Rt Hon Tom (Brigwater)Spicer, Sir Michael
Kirkbride, Miss JulieStanley, Rt Hon Sir John
Laing, Mrs EleanorStreeter, Gary
Lait, Mrs JacquiSwayne, Desmond
Lansley, AndrewSyms, Robert
Leigh, EdwardTapsell, Sir Peter
Letwin, OliverTaylor, Ian (Esher & Walton)
Lewis, Dr Julian (New Forest E)Taylor, John M (Solihull)
Lidington, DavidTaylor, Sir Teddy
Lilley, Rt Hon PeterThomas, Simon (Ceredigion)
Lloyd, Rt Hon Sir Peter (Fareham)Tredinnick, David
Loughton, TimTrend, Michael
Luff, PeterTyrie, Andrew
Lyell, Rt Hon Sir NicholasViggers, Peter
MacGregor, Rt Hon JohnWalter, Robert
MacKay, Rt Hon AndrewWaterson, Nigel
Maclean, Rt Hon DavidWells, Bowen
McLoughlin, PatrickWhitney, Sir Raymond
Madel, Sir DavidWhittingdale, John
Malins, HumfreyWiddecombe, Rt Hon Miss Ann
Mates, MichaelWigley, Rt Hon Dafydd
Mawhinney, Rt Hon Sir BrianWilletts, David
May, Mrs TheresaWinterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)Tellers for the Noes:
Yeo, TimMr. James Gray and
Young, Rt Hon Sir GeorgeMr. Geoffrey Clifton-Brown.

Question accordingly agreed to.
MR. DEPUTY SPEAKER forthwith declared the main Question, as amended to be agreed to.

Resolved,That this House welcomes the low inflation and low interest rates that this Government has brought and which bring the economic stability needed by the manufacturing sector; welcomes the measures that this Government has taken to encourage investment, innovation and productivity which will particularly help manufacturing businesses; welcomes the Government's approach in helping businesses and people through structural change as opposed to the previous Government's laissez-faire approach; and condemns the Opposition's record on manufacturing, where employment declined by 2¾ million during its period in office.