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Mr. John Sykes (Scarborough) : Will the hon. Gentleman give way ?
Mr. Cook : No. I remember one other thing, since this Government are so adept at claiming that they have no responsibility for what is happening in industry : I also remember that we had a mining equipment industry. I know what has happened to that industry over the past two years. Butterly Engineering has laid off one third of its work force since the President took office ; the Dale Group has more than halved its work force since the President took office ; and the Anderson Group is down one quarter in its work force. There is no point in the Government congratulating themselves in their amendment on achieving low inflation and creating the conditions for business success and then telling those companies that the conditions for business success have been put in place. Those companies are going down because the President has destroyed their market by presiding over the closure of the most profitable pits in
Column 952Europe with the richest coal reserves in Europe. Let us not hear the Government say that that is not their responsibility.
Mr. Jacques Arnold (Gravesham) : Will the hon. Gentleman give way ?
Mr. Cook : I shall give way in a moment--I want to conclude this passage.
There is an evasion of responsibility in the Government's amendment. The opening line of the amendment invites the House to regret the Opposition's denigration of the achievements of United Kingdom companies. For the record, the achievements of United Kingdom companies over the past 15 years have been heroic, given the background against which they had to operate. But I must disabuse the Government. The subject of the debate is not how well companies have done against that background, and it is not the achievements of United Kingdom companies over the past 15 years--it is the Government's record as the stewards of Britain's industrial prosperity over those 15 years.
Dr. Liam Fox (Woodspring) : Will the hon. Gentleman include in that list of heroism of British industry British Steel, which cost the taxpayer £300 million a year when it was in the state sector and which is now a major contributor to this economy ? That is the real success of privatisation under this Government.
Mr. Cook : If the hon. Gentleman wishes to debate steel--I know that a number of my hon. Friends intend to speak on steel--and if he speaks to senior executives in British Steel, he will not find a warm echo for the Government. Those executives remember how only last December a Minister of State, having given an assurance that he would agree to no deal rather than a bad deal, went to a meeting in Europe and agreed to the continuation of subsidies for companies that are undercutting British Steel. The problem for British Steel now is that it has in Britain some of the most successful and most efficient plants in Europe, which are now at risk.
Several hon. Members rose
Mr. Cook : I appreciate the enthusiasm of hon. Members to take part in this debate. I wish to ensure that there is some time for them to take part when I conclude, so if they will forgive me I shall continue my speech. [Interruption.] My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) presents me with some advice with regard to the hon. Member for Scarborough (Mr. Sykes). It may be advice that tempts me to allow the hon. Gentleman to intervene at a later stage, which I would not object to. Why have we seen that decline in investment in British industry over those 15 years ? In case we are accused of running down the British people as well as United Kingdom companies, I must say that there has been no reduction in the inventiveness or creativity of British people. British designers are working all round the world. They are designing Yamaha motor cycles, Pentax cameras and Tefal kettles and they are providing two thirds of the software for Nintendo and Sega. Any other nation would be harnessing that wealth of talent to build its own manufacturing base.
The Government must explain why, after 15 years in charge of Britain's industry, those creative designers, at the
Column 953top of the global profession, are not working in Britain on goods to be made in Britain. One reason is that we have been through 15 years, during which at least one of the predecessors of the President of the Board of Trade told the nation that we need not worry about the decline in manufacturing, because we can all get jobs in the service industry, showing tourists round museums of industrial archaelogy after the factories have shut down.
There is another reason. Those 15 years include two of the worst post-war recessions into which the Government tumbled Britain, by a combination of record high interest rates and an overvalued exchange rate on both occasions. Both recessions closed more industrial capacity than was destroyed by enemy action in a world war. It is permanent loss of capacity. If any Conservative Members doubt that, let them look at the trade figures. In every year until the recession in the early 1980s, Britain ran a surplus in manufacturing trade. In no year since that recession has Britain had a big enough industrial base to avoid running a deficit in manufactured trade.
Last June, the Prime Minister addressed the National Conservative Women's conference. He urged that audience to
"look around Europe. Look at France, at Germany, at Italy. Wherever you look things are worse than they are in Britain."
Let us look at France, Germany and Italy--those industrial sick men of Europe. The last six months of trade figures that we have for those countries cover the period conveniently up to June 1993, which was the month of that speech. In the six months before that speech, every one of those countries ran a surplus with Britain--a surplus of £17 million in manufactured goods in every working day. Since 1985, they have all increased their exports faster than Britain ; they have all had a smaller loss of manufacturing jobs than Britain and they have all increased manufacturing output faster than Britain. Those are the countries with which the Government invite us to compare their record.
Mr. Jacques Arnold : Can the hon. Gentleman tell us how British manufacturing exports to Malaysia are assisted by the antics of the right hon. Member for Copeland (Dr. Cunningham) ?
Mr. Cook : There is one reason why British exporters to Malaysia now face the possibility of disruption of their trade and that is the corrupt way in which the Government put together the Malaysian dam deal. [Interruption.] The hon. Member for Gravesham (Mr. Arnold) received an answer to his question. It would be nice if, just once in 15 years, Conservative Members were prepared to accept responsibility for an error they made and which is now hitting manufacturing industry.
We know on whom the Government will try to dump the blame for the poor figures of the past 15 years. We know who stands in for the Attorney- General as a scapegoat for the decline in manufacturing--it is the workers. They are not flexible enough or cheap enough or they are too wedded to what I suppose is now seen as another damaging excess of socialism--an ambition to hold a secure, full-time, well-paid job.
I give the Government this : if their strategy was to destroy secure, full- time, well-paid jobs as the obstacle to growth, their policies have been a runaway success. There have never been so many people working in this nation without a permanent contract of employment, without protection against unfair dismissal or without security at work.
Column 954Mr. Sykes rose
Mr. Cook : The hon. Member for Scarborough is not secure in his place of work, but I will give way to him.
Mr. Sykes : Will the hon. Gentleman tell the House how many manufacturers he has met during his career who agree with the Opposition's policy on the social chapter ?
Mr. Cook : I must say that I addressed 120 industrialists before I came to the House, and not one raised the issue of the social chapter. The concerns that we constantly hear from the
Government--that the social chapter in Britain would deter inward investment--sits oddly with the recorded fact that employees of companies working for foreign firms in Britain receive an income 25 per cent. higher than those working for British firms.
The Government have chosen to create a casual, part-time and low-wage labour market. They not only chose to create it--they boast about their success in creating it. They advertise for foreign companies to come here because British workers are worse paid. The central office brief on the sale of Rover congratulates Conservative policies in creating a work force which is paid one quarter less than the work force in Germany.
We must be the only democracy in which the elected Government hope to run for re-election on the slogan that one is worse off under them. There is a problem. A casual, short-term and low-paid work force will also be a poorly motivated, badly trained and low-skilled work force. One does not get a competitive and keen work force if the workers know that they are treated as disposable assets. One does not get a commitment to invest in the training of a work force from a company that has no commitment to that work force.
Last autumn, the Chancellor of the Exchequer attended the World Economic Forum, which published its 1993 report. I know that the right hon. and learned Gentleman is not a great reader, but he might take the report along with him the next time he slips into the back row of Ronnie Scott's. He might then consult the table that ranks the 22 member states by the availability of skilled labour. He will find that that table puts Britain plumb bottom. That is a measure of the damage that the Government have done by building a deregulated and casual work force.
We will not compete with the low-wage work forces in the far east economies on the basis of wage costs. Not even this Government could advertise for investment on the basis that we can pay workers one quarter less than China. The only way to survive and to preserve a quality of life in Britain is not to trade down in wage levels but to trade up in the value that is added to the things we make, and that takes investment.
Mr. Jacques Arnold : What a revelation.
Mr. Cook : The hon. Member for Gravesham finds that to be a revelation. That brings me to the central crashing failure of his Government's industrial record. They have presided over the collapse in manufacturing investment, which is now at its lowest level as a percentage of GDP since the Central Statistical Office started taking records.
In 1979, investment in manufacturing as a percentage of GDP was 3.5 per cent. I invite the hon. Gentleman to pay attention to the next line, because he will find it to be a revelation. It is currently at just over 2 per cent. For the hon. Gentleman's edification, that is a drop of one third in real terms. Never once in any of those 15 years have the
Column 955Government matched the level of investment in manufacturing as a percentage of GDP of any year under Labour. Even the Government's best year is worse than the worst year under Labour.
I will be even more insulting to the hon. Gentleman, who may find this more difficult to swallow. Even in the Government's best year, the figure was lower than in any year under the Government of the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) which it was once fashionable to denounce even more virulently than the Opposition.
The Government cannot come up with another alibi--they were present at the scene of the crime. They have been in power throughout the period in which investment in manufacturing industry has declined. They share some of the responsibility for that historic low rate of investment because, during the same period in which they weakened trade union power at the workplace, they strengthened the financial power over industry.
The results are there for all to see. Under the Government, the proportion of profits paid out as dividends has gone up from about 50 per cent. to almost 70 per cent. We are now distributing in dividends almost double the proportion of profits of Germany or Japan, which is why our investment performance is weaker. They retain two thirds of the profits to be reinvested in the company ; British companies retain only one third of their profits for reinvestment. That is why every German worker and every Japanese worker is backed by more capital, more plant, more machinery and more investment than every British worker. I concede to the hon. Member for Gravesham that industrialists know that.
Industrialists are aware of the need to invest more and to pay out less in dividends. They keep their dividend up because if they do not the price of their shares will fall and they will become vulnerable to a takeover. They know that if they become vulnerable to a takeover, they will receive no help from the Government, who have presided over a record number of takeovers with a minimum number of interventions. They have not once referred a hostile takeover to the Monopolies and Mergers Commission on the grounds of its threat to a technological base, its threat to employment or its threat to the regional balance of our economy. Even in the recession, dividends went up one sixth while investment went down one fifth. How can it be right to increase dividends when we cannot afford to invest ? The real problem in British industry that the Government should attempt to resolve is not the high cost of wages, but the high cost of capital. The question that the Government should ask is why the rate of return expected on a research and development project in Britain is 50 per cent. higher than in Germany and 200 per cent. higher than in Japan. They should ask why Britain is the only one of those three countries that invests less in research and development than it pays in dividends.
Mr. Roy Thomason (Bromsgrove) : Does the hon. Gentleman agree that the reason might be that we have had high inflation, which is why returns have had to be higher ?
Mr. Cook : I am confused. I do not know how often the hon. Gentleman has dropped into Treasury questions, but I understood that we were now in a permanent
Column 956non-inflationary economy. I understood that the Government's prime claim to achievement was to have knocked inflation on the head. But last year investment in manufacturing industry did not rise in response to that decline in inflation ; last year, investment in manufacturing industry fell by 2 per cent. Therefore, while I welcome the hon. Gentleman's doubts about the Government's inflation record, he cannot use that as an explanation for the figures that I have given.
We live in an age of rapid technological change. The future belongs to those nations that develop new technology and manufacture the products that other nations want to buy. The method of entry for joining those nations is to be found not through low wages and skills, but by putting Britain on the road to high investment and advanced research.
Central office briefs for such debates always contain another traditional feature. Somewhere in the brief--no doubt it will appear again today--is the accusation that Labour has no policies. If Conservative Members cannot put their finger on the passage in today's brief, I can tell them that it is usually found at the end of a three-page attack on Labour for making too many commitments. In case a Conservative Member, such as the President of the Board of Trade, is tempted to try that one on, I shall spell out how Labour will put Britain back on the road to higher investment of the sort that was achieved under the last Labour Government.
The proposals are contained in the document published last year. It proposes reforming the tax system to encourage investment and reviewing the changes to corporation tax that were introduced by a previous Conservative Government who placed bigger taxes on profits invested and lower taxes on profits paid in dividends. The document contains a proposal to provide industry with the security to retain profits for investment by protecting them against hostile takeovers that threaten our technological base. It proposes examining what new institutions are needed to step into the investment gap, such as a development bank on the lines of the German KFW, which specialises in providing support to help small businesses grow into medium-sized enterprises.
We will set up a network of regional development agencies to decentralise to local people the initiative to promote their own local economic development and to encourage them to match local savings to local investment. We will set up a defence conversion unit so that we can make the best use of the skills that are now being taken out of the defence economy. That would end the waste of those skilled resources that have been going through the door of redundancy into the waste of the dole queue.
Two months ago, I produced a document showing how we would encourage the development of small businesses by providing them with a statutory right to interest on late payments from big businesses and by providing a moratorium on insolvency proceedings to give them the possibility of being rescued as going concerns instead of simply joining the swelling ranks of bankruptcies.
Only last week, I and my hon. Friends the Members for Dunfermline, East (Mr. Brown) and for Kingston upon Hull, East (Mr. Prescott) published a document showing how we would take the Treasury straitjacket off public sector enterprise to give it the freedom to mobilise financial investment.
If anyone outside the House wants to see one sharp difference between our commitment to manufacturing
Column 957industry and the Government's absence of commitment, they can find it best in the months that the Government have spent dithering over the proposal by London Underground to lease new stock for the Northern line from the Derby works. That proposal is urgent because the present rolling stock is near the end of its life and the Derby works is near the end of its contracts. It would save the Treasury cash by keeping 1,200 people off the dole queue.
If the President wants to persuade us that the Government are serious about boosting British manufacturing, let us hear from him that he will throw his weight behind a project that will both improve the quality of public service and hold together a skilled production team for the future of the British manufacturing base.
When we published the documents that I have placed on the Table, setting out an industrial strategy that realises a vision of Britain in which we are once again a manufacturing nation, leading and not lagging behind our competitors, we were accused by Conservative Members of socialism, interventionism and other things that they pronounce with distaste. Conservative Members are the only people I know who can make a four- syllable word such as interventionism sound like a four-letter word. The irony is that it is they who are out of step ; all the rest are practising interventionists. Every other country in Europe provides a higher level of support to its manufacturing industry. Even Ireland and Portugal provide a higher level of support per capita for manufacturing industry.
In the far east, the state plays a leading role in industrial strategy. In Taiwan, the state identified 10 new sectors for high-technology production and where the companies did not exist, the state brought in the private sector to set them up.
In north America, home of capitalism, the Clinton Administration have brought the automobile industry together in a national project to design the car of the future : a car low on gas and pollution and high on safety and export orders. What a contrast that is with the British Government, who look the other way while Rover is taken over. They are the real oddballs ; they are the odd ones out, the only ones who believe the future of a sophisticated industry can be left to the market. They are the only ones who believe their own rhetoric about the market always producing the best result. The real result is the worst performance among our competitors. In 15 years, it has produced the slowest growth in output and biggest drop in manufacturing investment as a percentage of GDP.
It is a measure of the extent to which the Government have spiralled out of touch with ground control that Ministers still make speeches in which they claim that the worst industrial performance is actually the best. They have had 15 years to try out their ideology and the result is that, of all the British Governments of the post-war period, they have clocked up the lowest growth in GDP. Fifteen years is long enough for a social experiment ; it is time that they accepted one of the principles they keep pushing on everybody else--that the great advantage of a flexible work force is that we can dismiss it when the enterprise fails. The Government have failed Britain. The time is coming when Britain will dismiss them.
Column 9584.24 pm
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : I beg to move, to leaveout from "House" to the end of the Question and to add instead thereof :
regrets that the Opposition persistently denigrates the achievements of United Kingdom companies ; recognises the importance of manufacturing to this country's economy ; congratulates Her Majesty's Government on its success in achieving the conditions for sustained non-inflationary growth- low interest rates, low inflation and good industrial relations ; and welcomes the fact that both the OECD and European Commission are forecasting that the United Kingdom will be the fastest growing major economy in the EC in 1994 and 1995.'.
The hon. Member for Livingston (Mr. Cook) spent the morning with the CBI. It has been helpful to the CBI that he spelled out this afternoon the policies of the Government of which he would like to be a member. My colleagues and I listened with interest as he went through the strategy-- the proposals--with, if I may say to him frankly, refreshing detail.
I had not known until today that we would have dividend control under a putative Labour Government. I had not known, although I confess that I had suspected, that the one condition that would not matter in the conduct of the future business of a company was that it should make profits. It could make cars, toothbrushes, refrigerators or notepaper, but the one thing that would not matter is profit, because that was the one thing that the hon. Gentleman did not know about all the companies that he lauded so much on the continent of Europe.
The difficulty with making no profits is that one cannot get investors-- with one exception. The state will invest in
non-profit-making businesses. But there is a difficulty, because the right hon. and learned Member for Monklands, East (Mr. Smith), the Leader of the Opposition, who has wisely left the Chamber, has promised us that there will be no ownership of companies by the state.
Indeed, my hon. Friend the Member for Colne Valley (Mr. Riddick) kindly asked--he seems to have gone as well, which is a shame but his question was nevertheless a good one--whether, within the purpose of the Labour party, there would be any further ownership as laid out by clause 4. That is a good question. I, too, have asked that question. I took the trouble to write to the Leader of the Opposition and ask for an answer. He wisely did not give one.
What has been revealed in the House this afternoon beyond peradventure is that, if companies do not make profits, only the state can intervene ; but the state is apparently not going to intervene. The logic of that is that we shall not have any companies. That seems to me to be a fundamental lacuna in the argument of the hon. Member for Livingston.
I have to say to my hon. Friend with due apology, if he will bear with me-- he will see this if he reads Hansard tomorrow--that I have tried to address the pertinent question which he put to the House, and which in his absence I have answered.
The hon. Gentleman went on to deal with competitiveness. It is a remarkable achievement to address the House on one of the single greatest challenges that faces this country--the competitiveness of our industrial base, on which the hon. Gentleman is about to produce a report--without going through any of the significant factors that add up to competitiveness. I will take a little time of the House to address the real issues.
Column 959The next step forward of the hon. Gentleman's brave new policy initiative was regional development agencies. They are mini national enterprise boards. There will not be one granddaddy National Enterprise Board, with great and worthy figures chosen from national life. Instead, they will be chosen from local and regional areas, will do the work locally and will therefore be much less exposed to national scrutiny than was the original National Enterprise Board. I single out one issue on which apparently there are real difficulties. We are to have a defence conversion unit. For most of the past decade, when it fell to me to comment on these subjects, the Labour party tried to close down the defence industries. Now that, mercifully, we do not face quite such an international threat as previously, the Labour party wants to spend time converting the defence industries, which, if it had had the power, would have already been closed down.
I ask my right hon. and hon. Friends to ponder the spectre of those defence conversion units. Where will the civil servants who will give advice to the leading British industrialists come from ? We would have some trade unionists, presumably to give them a representative view from the shop floor. We shall need some academics to bring that searching analysis that we have heard from the Labour party, which is based on one conviction ; its Members have never spent a day in their lives making anything in any company. Then we shall need some bishops to draw up a code of morality to ensure that no British product goes to any company in the world whose practices can be found in any way to be undermining those of the party in power. All those people will then sit down in a great huddle to design the car of the future.
Mr. George Stevenson (Stoke-on-Trent, South) : The right hon. Gentleman said that Opposition Members had not worked in industry. Would he care to tell us how many coal mines he had worked in before he closed them, and how many industries of any kind he has worked in, as part of a Government who have presided over the destruction of manufacturing in this country ?
Mr. Heseltine : I have never worked in any industry as part of a Government. I have spent my life trying to take industries out of the hands of Government--and, as a result, we have returned the commanding heights of the economy to the private sector, where they are winning for Britain in the markets of the world.
Perhaps I may digress by taking the House back to the essence of the motion, which concerns the competitiveness of the British economy. The hon. Member for Livingston may not wish to deal with that in general and wide terms ; it seems to me, however, that anyone making a serious analysis of the state of the British economy would want to consider the exchange rate, which is competitive. I think that such a person would want to ask questions about the state of British exports, which are now at an all-time high--63 per cent. higher in volume terms than when Labour was last in government. We have low interest rates : the United Kingdom base rate now stands at 5.25 per cent., the lowest rate since 1977 and among the lowest in the European Union. Interest rate cuts since 1990 are worth more than £13 billion per year off companies' interest charges. Inflation has fallen dramatically : the retail prices index, excluding mortgage
Column 960interest payments, is 2.8 per cent. Over the past four months, underlying inflation has been the lowest since 1968. UK inflation is below the European Community average on all measures.
Manufacturing productivity is at an all-time high : it is more than 3 per cent. higher than a year ago. Between 1979 and 1992, total plant and machinery investment increased by nearly 50 per cent. The only way in which the hon. Member for Livingston can make any kind of case is to select one sector of the economy. I shall deal with his reasons for doing that in a moment.
Mr. Geoffrey Robinson (Coventry, North-West) : The right hon. Gentleman said that we should be posing questions about the exchange rate. He will recall that, at our last Trade and Industry Question Time, I asked him a direct question on the subject, and was given the usual brush-off of an answer that we expect on such occasions. The right hon. Gentleman knows as well as I do that the exchange rate is crucial to our competitiveness. Will he now state categorically that we want no further appreciation of the rate against the dollar or the deutschmark, in the interests of maintaining that competitiveness ?
Mr. Heseltine : How can the hon. Gentleman sit on the Benches of a party whose Front Benchers hardly ever make a speech without demanding larger and larger items of public expenditure, which would stoke inflation and cause the depreciation of the exchange rate ? That is why the Government's counter-inflationary policies are fundamental to competitiveness.
We now have the best industrial relations for over 100 years. Moreover, nearly 1 million new small businesses have been formed since 1979. If the hon. Member for Livingston had analysed our competitiveness against that broad horizon, and explained how his party would address and improve the position, I would have respected him.
Mr. Peter Hain (Neath) : Will the right hon. Gentleman give way ?
Our industrial production has increased by 3.5 per cent. in a recent quarter ; it fell in France, Germany and Japan. Both the Organisation for Economic Co-operation and Development and the European Commission are forecasting that the United Kingdom will be the fastest-growing major EC economy in 1994 and 1995. To make a speech in the House against that background is simply to indulge in the traditional practices of the Labour party--mischief-making and running the country down.
So, because he dare not face up to the realities of addressing competitiveness, the hon. Member for Livingston has to single out three specific issues, three industries--and I want to deal with them.
Let me start with cars. I doubt whether a sector of the British economy has been so transformed over the 1980s as our car industry. The motion calls for high investment. Let the hon. Member tell us how much higher the investment by Ford, at £3.4 billion, he thinks should have been. Let him send a message to Vauxhall, complaining about the £650 million that it has invested here. Let him tell Nissan to take its £930 million back to Japan. Let him explain to Toyota that its £840 million was not welcome or Honda that its £370 million was insufficient.
Column 961If he were prepared to tell all those companies that, I would at least understand what he was saying, but to pretend that it has not happened and that it does not matter is a travesty of the truth. Mr. D. N. Campbell-Savours (Workington) rose
Mr. Heseltine : The hon. Member for Livingston did one thing for which I am grateful, one thing that I praise and admire : he quoted from my book. I was going to tell all right hon. and hon. Members that it is available from the Library but, much better than that, it is available at all good booksellers. I did write the words that the hon. Member quoted and that many other commentators have quoted, and I do not in any way draw back from them.
As Ministers responsible, when faced with the issues surrounding the recent sale of Rover, we did not stand back from them. It so happens that I was in the far east on a trade mission, but my right hon. Friend the Minister for Industry (Mr. Sainsbury) saw the leading figures in BMW, as a result of which assurances were given. Are Opposition Members going to sneer and laugh at those assurances ? No, they go very silent.
The fact is that Rover now has a major interest in working with BMW, and Labour Members are longing to find a way to undermine the credibility of that position. They are at it again, as they always are ; when faced with straight questions, they go quiet--and they should go quiet.
Several hon. Members rose
Mr. Heseltine : My right. hon. Friend the Minister for Industry received assurances from the BMW chairman that Rover would be maintained as a separate enterprise, based in Britain, with independent manufacturing, design and development facilities and with purchasing and distribution functions. I am proud that it was one of my Ministers who asked for and received those assurances. It means that Rover now has the opportunity to take advantage of the international dealer base and the expertise of BMW in increasing the scale and strength of the British motor industry, so that it will be a part of what we now perceive to be the opportunity to close the deficit in our balance of trade.
Several hon. Members rose
Mr. Heseltine : So I have no apologies to make. Indeed, I would go further. As many right hon. and hon. Members will recall, we had a debate in the House not that long ago about Leyland DAF, when the hon. Member for Livingston was at it again. He wanted us to do what the Europeans do, but we refused. We gave every possible help to the receiver to find people who would take over those businesses. Today, the three businesses are back in the private sector in their own names and are increasing production, and the Government have contributed, at the very most, £5 million-worth of regional aid. What the Europeans did was to become deeply involved. It cost their taxpayers over £100 million, and the European Commission is investigating the aid programme that they put forward.
I can imagine that that would have squared the hon. Member's circle. What a joy. He would have pushed us further into Europe, he would have put social costs on the backs of those companies, the whole thing would have
Column 962been referred to the European Commission, and the Labour party could have paraded it as a triumph for the internationalisation of the European process.
Let me now move on to the second of the hit targets that the hon. Member for Livingston singled out--our steel industry. The motion is very interesting, because it refers to industries that should not be allowed to fail. I do not think that anyone thinks that those industries should be allowed to fail, but what did the hon. Gentleman have in mind when drafting the motion and referring to the industries that must not be allowed to fail, including steel ?
The hon. Member for Livingston said that the British steel companies were among the best in Europe. Why ? Because we privatised them. Because they have improved their output and their cost structure and their profitability, we no longer have to subsidise them as taxpayers, and the hon. Gentleman said that they are among the best in Europe.
In that case, why are they in this Labour party motion ? Why should anyone think that they are in danger of failing if they are the best in Europe ? The answer is that it is only the Labour party that wants to create the impression that they will fail in order that Labour Members can pander to the worst anxieties of their constituents in order that they can do what has to be done in their party interest, regardless of the interests of Britain's companies, which are undermined in the process. [ Hon. Members :-- "Hear, hear."] The third issue singled out by the hon. Member for Livingston was, interestingly enough, airframes. I have been Secretary of State for Defence and Minister for Aerospace and Shipping. I have been deeply involved in the aerospace industry. [Interruption.] There is not much point in talking to Opposition Members. They do not listen--and, much worse, if they did listen they would not understand. I have spent many political years involved with that industry and I have never yet heard anyone in that industry say, "We want a policy for the airframe industry." We do not build gliders in this country. We have an aero-engine industry ; we have an avionics industry. Why, therefore, did the hon. Member for Livingston single out airframes ? I will tell you why, Mr. Deputy Speaker-- because if he had mentioned aero-engines he would have had to face the fact that the triumph of Rolls-Royce plc is a triumph for privatisation, and he cannot bear success.
Mr. Robin Cook : I am sorry to disabuse the President of his hypothesis. The reason why those three words are there in the second line of our motion is that they are a direct quotation from page 111 of his book.
Mr. Heseltine : Absolutely-- [Interruption.] I will do a deal with the hon. Gentleman. If, from now on, he will follow my policies and my quotations, I will cease to attack him across the Dispatch Box. The aero- engine business is a critical one. Rolls-Royce is an example of just how successful British manufacturing industry can be, with an order book of £6.4 billion and 25 per cent. of the world market.
The hon. Member for Livingston asks again for a strategy. Perhaps I can tell him the strategy. For example, in the case of the airbus, we have provided £700 million of financial support to British Aerospace. The EH101 helicopter, a joint Ministry of Defence/Department of Trade and Industry project, costing £57 million ; the
Column 963Tornado, with £7.5 billion of Government money ; the European fighter aircraft, with £1.4 billion of support ; and the Hawk, one of the most successful aircraft of its type that has been launched in this country, were all built with the help of British taxpayers. Those are the facts ; those are the results.
The hon. Member for Livingston wants to substitute, for that real support for real projects and real success, a vague range of platitudes, which will add not one whit to national wealth.
Mr. Campbell-Savours : The President, as he chooses to call himself, tells us that he spent all that taxpayers' money. Can he explain to us why he spent that taxpayers' money in that way ? Why ?
Mr. Heseltine : I did it to help Britain's defence industries and to help Britain's defence capability. I have always been prepared to acknowledge that, if we do not understand that, we shall not be able to face the fact that other countries--America, France and a range of other countries--support their defence industries, and it is a world competitive process. I have always argued that case, and I have never heard it seriously questioned by Conservative Members.
Let me discuss one other aspect.
Mr. Richard Caborn (Sheffield, Central) rose