Manufacturing Industry

Part of Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 26 January 2006.

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Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury 10:30, 26 January 2006

First, may I take the opportunity to express my condolences and support to the workers at the GKN Lichfield plant, which is now to be closed? My understanding of the situation is not exactly the same as the hon. Gentleman's. We are dealing with his constituency and I accept that I may be wrong, but I understand that GKN announced at the same time that it would relocate all the jobs to its 10 other UK plants. That is not entirely consistent with what the hon. Gentleman said, but I recognise that he will have more accurate information.

The loss of manufacturing jobs in the west midlands and the rest of the UK has been going on for some time, but I point out that the service sector in the west midlands has expanded significantly, with more than 300,000 jobs created since we have been in government. Job opportunities exist, and I assure the hon. Gentleman that the Government will support the people who have lost their jobs today.

In relation to the meat of the hon. Gentleman's question, I suggest that his analysis of why this is happening is slightly skewed. I understand why, for political reasons, he wants to skew it, but corporation tax has gone down in this country from 33 per cent. to 30 per cent. We support manufacturing industry through research and development credits, 80 per cent. of which go to manufacturing industry.

The global challenge that we all face in relation to manufacturing will have to be met by a number of activities, and most of those my right hon. Friend the Chancellor announced in the pre-Budget report.