Budget Resolutions and Economic Situation — amendment of the law

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 6:42 pm on 24th March 2010.

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Photo of Rob Marris Rob Marris Labour, Wolverhampton South West 6:42 pm, 24th March 2010

Sadly, 'twas ever thus, was it not, with certain Janus-faced politicians in certain local authorities in the west midlands, and, I believe, elsewhere?

Let me end by thanking the Government for acceding to a campaign that I, and others, have been running for some time on the question of capital allowances, which are vital to areas such as the west midlands that depend heavily on manufacturing. Let us be clear about the facts. Although there has been a huge decline in the number of people in the United Kingdom who are employed in manufacturing-it is awful for those who lose their jobs, across the west midlands and elsewhere, when factories close-there has been no decline in manufacturing output.

This is partly to do with what my hon. Friend Barry Gardiner said about productivity. Productivity in UK manufacturing across the piece, not necessarily in every sector or every workshop but in terms of the broad figures, has increased a great deal. There are very similar levels of manufacturing output-in fact, they have slightly increased under the present Government-along with markedly lower levels of employment. That is what we get if we increase output per person hour.

Manufacturing remains vital to the UK economy and its future, both in the context of the way in which the economy runs and as a motor to help us emerge from the recession. It still accounts for roughly 50 per cent. by value of our exports, and I am pleased to say that we are still the sixth biggest manufacturer in the world. I read nonsense in newspapers like The Daily Telegraph about the death of manufacturing and the fact that we do not make things here any more. It is complete balderdash. I want more manufacturing-especially in the west midlands, obviously-and I want more manufacturing employment in an expanding sector that is helping to take us out of the recession.

Leaving aside what the Government have done for research and development and so on in the Budget and the pre-Budget report, I can tell the House that in the Budget capital allowances have been increased markedly, which will have a particularly beneficial effect on smaller businesses. We need those capital allowances to encourage the investment that will enable us to drive forward for the future, and the Government were absolutely right to increase them.

I must, with some sadness, contrast that with the position of the Conservative party. Some of its members may not know this, but the Conservative party has a clearly enunciated policy of cutting capital allowances. It seems absolutely potty to me to take billions of pounds away from manufacturing by cutting capital allowances just when there is a consensus in our economy and our society that we need to nurture manufacturing, and that we must enable it to expand so that it can help to pull us out of the recession.

I am proud that the Government are increasing capital allowances to help manufacturing. I contrast them with a Conservative party which seems to have learned very little, if anything, about manufacturing, and wants to cut capital allowances. How sad can you get?

Ordered, That the debate be now adjourned.-( Kerry McCarthy.)

Debate to be resumed tomorrow.

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