The Economy and Business, Innovation and Skills

Part of Corporation Tax Bill – in the House of Commons at 5:01 pm on 26th November 2009.

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Photo of Geoffrey Robinson Geoffrey Robinson Labour, Coventry North West 5:01 pm, 26th November 2009

I apologise for not having been present for earlier parts of the debate, but I am very pleased to have been called to speak now.

I shall discuss a particular incident that took place in recent weeks in my city, Coventry-namely, the sudden, unexpected closure of the Ericsson research facility with its 700 highly qualified scientists and engineers. I am pleased to see on the Front Bench my right hon. Friend the Minister for Business, Innovation and Skills and my hon. Friend the Economic Secretary to the Treasury, who, like me, has a west midlands seat and has witnessed, over many years, the relentless, remorseless decline in our manufacturing sector. That is a matter for many in the House, not least Mr. Clarke, who speaks for the Opposition on these matters. When he was Chancellor, he did his best in some ways to protect manufacturing and was always willing to speak up for it.

Nevertheless, the situation has occurred year in, year out, decade in, decade out, and not just over the past 10 years. It is sobering to think that over that period we have lost a further 1 million manufacturing jobs, but this is not a question of 10 years: the situation has been going on for 50 years. Ever since the war or, at any rate, the 1970s, we have seen that remorseless decline.

This is hardly a good thing, but one inescapable consequence of the recession from which we are now perhaps emerging, although we are a long way from returning to the growth rate that we enjoyed, is that people suddenly see how out of balance the economy had become. It looked great that the bonuses in the City could make good so much deficiency and decline elsewhere, but we should all have realised, and perhaps some did, that we were living in a fool's paradise. We now know that, if not all, then a massive chunk of those service industries have disappeared for good, and the huge bonuses that the City brought with it are not going to return. We have to face up over the next period to rebalancing the economy, in which manufacturing will inevitably have to play a major role. It is not going to be easy, however.

From the Front Bench and elsewhere in the House, we all speak airily of how the green economy will bring the jobs of the future, through wind energy and, eventually, solar energy and wave energy, but when I look around and see the UK output and actual and prospective employment from it, I fear that it is yet another growth area on which we will all miss out. However, one area where we and the Government in particular could give a lead is clean coal technology. There, all the areas at which we, nationally, can excel come together-particularly in making different sectors work together. We have the straightforward engineering skills, and clean coal will be a massive engineering job; we have the science aspects, including chemical process engineering; and, not least, we have the physics aspects that will inevitably be involved. We do not need to pull together a committee that works out of the Department for Energy and Climate Change, even though it would be useful, and it would no doubt give a push here and there to make us go quicker. If we could pull together people in this country-inside and outside government and in institutions-as a combined team of engineers and scientists, and set out to crack the remaining technical difficulties that stand in the way, we could at least get back into one sector.

As things stand, we are certainly not going to get back into telecoms. The work force at Coventry-700 qualified scientists and engineers-represent the very last capability that Ericsson has in telecoms communication, in both systems and optics. No one is going to pretend that telecoms is an old-fashioned technology to which we are sentimentally attached, like motorcycles were at one time, but it is a technology of the current age.

I am not sure whether it should concern us that we have no indigenous presence, let alone a British-owned presence, in that vast and important area, but it worries me that the Government are not sure about that. I do not think they have even thought about it, because we do not have a strategy Department-I do not want to hear about picking winners or anything like that-or a basic capacity to evaluate the relative importance of new, modern technologies, which are vital to the persistence of an industrialised state. I believe telecoms to be one such technology. That we do not have the capacity to ask, "Does it matter at all that Britain is about to lose its last capability in that area?" concerns me.

I put it to my right hon. Friend the Minister for Business, Innovation and Skills that he should quickly convene a group not of the great and the good, but of people who know their business, and he should ask, "Does this really matter?" Those 700 people at Ericsson may get jobs in telecoms in this country in either maintenance or servicing, but not at the sharp end of research and development for the future, particularly in optics, which is the sector that seems to be going ahead very much at the moment, and in systems.

The Government could find a way of saving some of those 700 jobs-it would not be a case of saving the whole 700 and I doubt whether more than 300 or 400 are actually involved in that key area. Let me be perfectly direct with the Minister about this. It has been put to me by people not a million miles away from the Ericsson plant that it is involved in key areas that are at the forefront of everything that the company does. The whole integrated systems work, on which Ericsson depends, in turn depends on those few key areas.

The Minister spoke the other day about all the key funds that we have set up to enable people to move forward, which are excellent. Many of the funds are working very well, and we could use them on contractual arrangements for those key areas. Perhaps the research and development and the intellectual property rights would, initially and understandably, have to remain with Ericsson, but we should nevertheless retain the key element of that work force.

Instead, we have done what we always do. I make no excuse for that, because like everybody else, I do it. The unions phone up and we say we will have a meeting, at which they say, "Look, you've got to get the Secretary of State." We say, "Yes, we're going to a meeting with the Secretary of State." We then go to the management, who say, "That's great. Let us know how you get on. Are you going to help us?" We have a meeting here, and the Secretary of State, who is active long before we get to him-all deference to him for that-is on the phone twice, laying the law down, saying, "This isn't good enough," and Ericsson management reply, "Too bad."

That is what happened, and it was to a very formidable Minister in another House that I put those suggestions. Only if we can create a sanction of some kind or an incentive that a company cannot resist will anything happen. Something along the lines of my suggestions to the Minister could well amount to such a sanction or incentive.

As the Minister knows, we are due to meet him next week- [ Interruption. ] I apologise if he did not know that. The meeting is tentative until he confirms. I may bring not only the unions, but one or two of the key technologists in the area, if they will come, who know what they could do and how the matter can be taken forward. What we do not want is to roll over once again, without knowing how critical it may be to our economy, and say, "Another 700 jobs gone. Isn't it terrible? That's 1,000,700 this year and in another five years it will be another 500,000." We simply cannot carry on like that, especially now that the recession has bitten so deep. Look at the strength of Germany, France, Italy and Japan, let alone the newly industrialised countries. We have to have a more nationally focused effort, without picking winners, and I think that Ericsson would be a good place to start.

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