Manufacturing Industry — [Joan Walley in the Chair]

Part of the debate – in Westminster Hall at 3:40 pm on 2nd December 2009.

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Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Innovation and Skills) 3:40 pm, 2nd December 2009

May I share in the congratulations to Dr. Pugh, who secured this debate? He gave a very thoughtful analysis-he always does, but this one was particularly thoughtful. Although his father may not necessarily support his vocation, I am sure that he would have been very proud of the hon. Gentleman's helpful analysis of the manufacturing sector's needs and challenges.

As we have heard, British manufacturing has faced a turbulent time in the past year: investment has been cut, production is down and productivity has weakened in a number of sectors. Moreover, more than 280,000 people in manufacturing have lost their jobs in the past year alone. The problem, however, did not start just 12 months ago. Since 1997, 10 per cent. of manufacturing businesses have closed and more than 1.5 million manufacturing jobs have been lost. There has been some frustration among leading industrial businesses about the current Government's policies.

I believe, as most participants in this debate have said, that manufacturing has a future in the UK. It represents more than 12 per cent. of our gross domestic product and produces more than half of our exports, so it helps us pay our way in the world. This country also remains, as we have heard, the sixth largest manufacturing nation. I totally endorse the arguments about partnership between employers and employees. That is a good sign that we should all encourage.

It is clear, however, that we must not now believe that we can return to the period before the recession and simply rely on financial services alone. I think that we have all learnt that lesson. For my party, that means putting manufacturing back at the heart of the economy. It is time we made more, and it is time we exported more. I also want us to be willing to be more challenging to make this country more competitive. For some time, Germany has been the leading European exporter of high-tech goods and services. It is time that that changed. That is why we took a decision at our conference-we had been mulling it over for a period-to set ourselves the goal, should we be elected to office, of setting a target for this country to overtake Germany and become Europe's leading exporter of high-tech products. Rather than being third or second under whichever party has been in office in the past, we should now aim to be first. To fulfil that goal, we need a clear, long-term strategy based on increased investment, technological innovation and raising our skills base. Those changes are going to be vital if we are to ensure that manufacturing can turn from recession to a sustained recovery.

Let me begin by talking about finance. Several hon. Members have mentioned the importance of access to finance. Despite the claims of the leading banks, I think that there remains a gap between their rhetoric and the reality for many firms, especially smaller businesses in industrial supply chains. As the hon. Member for Southport rightly pointed out, the current Government's response with a number of schemes has failed to overcome the problem for many of those firms. We have argued that the schemes are too complex, too many and too narrow. Time and again, businesses tell me that they are too small for one and too large for another. The £1 billion portion of the automotive assistance programme, for example, was announced on 27 January 2009 and, as we head towards Christmas, only one company has been offered any money to date. Indeed, there are now reports that that company, Jaguar Land Rover, may have actually decided to decline that money, because it can get better terms elsewhere. Perhaps the Minister will confirm whether that is true in his response.