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Column 1030Indeed, if the President of the Board of Trade took the opportunity of talking to organisations such as the Engineering Employers Federation or to many manufacturing industries, he would be aware of the importance of manufacturing. Is it not strange that the right hon. Gentleman should have the audacity to ask such a question? Is it not clear that manufacturing is important to Britain because it is the wealth-producing sector of our economy? More than 70 per cent. of Britain's exports, which finance our ability to pay our way in the world, comes from the manufacturing sector. For the right hon. Gentleman to ask why manufacturing is important and why the Labour party devotes its time to it suggests that he is out of touch with British industry and is more concerned with his personal ambitions than with the ambitions of the manufacturing sector. The manufacturing sector is important because it produces our wealth and enables us to buy personal and public services. It is about time that the Conservative party recognised that and dropped the empty rhetoric of the 1980s.
The President of the Board of Trade said that my hon. Friend the Member for Livingston (Mr. Cook) made no reference to
competitiveness. When I heard that, I thought that the right hon. Gentleman's script writer must have written his speech before my hon. Friend delivered his. Then again, given the quality of the right hon. Gentleman's speech, that is unfair to the script writer. It would be better to say that the President clearly did not bother to listen to my hon. Friend's speech. When my hon. Friend talks about investment in plant, skills and people and in developing infrastructure, we can reach only one simple conclusion--that Labour Members are talking about increasing the competitiveness of British industry. It is sad that the President does not recognise that. I suspect that the real difference is not that he cannot see it but that ideologically he does not want to see it.
The Government are committed to some form of industrial policy based on the market, on deregulation and on cheap, flexible, throwaway labour and people. It is a vision that says that Britain in the 21st century can somehow compete by going down market in quality, in labour and in costs. That vision is totally redundant, and it is in no way shared by our world competitors or our European partners. Each of those countries will invest in people and in technology, and recognises their importance. It is a shame for this country that our Government are so divorced from reality that they want to turn the clock back to the economic and industrial strategies of the 19th century rather than going forward to the strategies and policies of the 21st century.
The President of the Board of Trade failed to understand the purpose of the debate, but he should know the importance of manufacturing and of what we say about competitiveness. If he had been here during the debate he would have heard important contributions from my hon. Friends about three key industries--steel, the motor industry, and aerospace and defence-related activities. The right hon. Gentleman did not speak in any detail about any of those during his opening speech.
My hon. Friends the Members for Newport, East (Mr. Hughes) and for Wentworth (Mr. Hardy) made effective speeches about the future of the British steel industry. They recognised the growth in productivity and the extent to which the British steel industry is now a world leader, but they also recognised that the Government have failed to support the steel industry in European negotiations. Before
Column 1031going to Brussels, the Minister for Industry claims that he will stand up for British industry and fight his corner to save jobs in the British steel industry. Would that that be true : would that we had a Minister for Industry prepared to stand up and fight for Britain, but the Government have sold the British steel industry short again.
The figures speak for themselves. My hon. Friends the Members for Newport, East and for Wentworth explained the situation clearly. Percentage job losses in the German, French, Italian and Spanish steel industries over the decade from 1980 were considerably lower than percentage job losses in the United Kingdom. We have lost on capacity and on jobs. Yet our Government are not prepared to fight for our steel industry. I tell the Minister for Energy, who is to wind up the debate, that we need protection for our steel industry, just as we want a Minister who will argue the corner for British steel. At present that simply does not happen.
When the President of the Board of Trade was trying to pretend that all was well in the British steel industry he might have considered the United Engineering Steels figures announced this afternoon. A £48.1 million loss has been returned this year, £27 million of which has gone to pay for exceptional costs in connection with closures and redundancies ; 1,000 jobs have been lost in the past year. And what company is the biggest single customer of United Engineering Steels? It is Rover.
That brings me to the second issue which has dominated the debate--the future of the car industry. The linkage is clear not only with United Engineering Steels but with what my hon. Friend the Member for Newport, East said about Llanwern. Rover is a key customer of the Llanwern steelworks, and £4.3 billion worth of high-tech products are involved in the turnover of Rover and Rover-related activities. What has happened now? The key fact, and one that should dominate Government thinking, is that control over those activities--including research and development, and future products--has passed from the United Kingdom to BMW and to Germany. The key question is not the simple debating point that Conservative Members use as to whether we are in favour of the change or whether we are talking down Rover. We are as interested or more interested than any party in the House to see that venture a success because it concerns jobs for our constituents. It is annoying when Conservative Members try to pretend otherwise. The key question is who will control the future in terms of Rover and Britain's car industry. In the past week, the sight of the future of our last major car producer being determined in discussions between a Japanese car company and a German car company annoyed and irritated the British people. Does that not say something about the Government's failure and their abdication of responsibility towards a key industry which is at the heart of our industrial policy and our economic future? The Government have no interest. It reflects the comments of the Prime Minister the other week, when challenged about the practices of British Aerospace and the redundancy payment for their
three-month-a-year chairman. The Prime Minister said that it was nothing to do with him, that it was not his responsibility and that he was only the Prime Minister. Are we not clearly being given the same answer to the question about the future of the motor
Column 1032industry? We have a Prime Minister who is not up to his task, a President of the Board of Trade who is more concerned about becoming Prime Minister, and Ministers who are not able to provide the leadership that is important.
The car industry lacks that leadership, and no other industries lack that leadership more than aerospace and defence. My hon. Friends the Members for Pendle (Mr. Prentice) and for Southampton, Itchen (Mr. Denham) talked about how we needed to look for ways in which the capacity and skills of the defence industries could be used for other purposes. We heard cheap rhetoric and debating points earlier from the President of the Board of Trade, but he is time-stuck and time-warped in his arguments. He must recognise that the issue of the 1990s is how those skills wil be used in the future. If there is to be a cut in the defence budget, which is clearly happening under the Government, we must ask how that industry's skills and technologies are to be used in the future. The Government have no answer. [Interruption.] The hon. Member for Harrow, West (Mr. Hughes), the Government Whip, seems to be full of ideas. He should talk to people in business.
If the hon. Gentleman considers paragraph 108 of the Select Committee on Trade and Industry report on the aerospace industry--a unanimously agreed document--he will see evidence from GEC, which was quoted at length. I would not see GEC as a socialist organisation or one dominated by card- carrying members of the Labour party, but I shall quote the report as an endorsement of what we have been saying on defence-related matters for some considerable time. GEC have caught up with the Labour party. When will the Conservative Government catch up on those issues? The important paragraph states that the division of responsibility is
"if we are not careful, almost a classic recipe for eventual run-down and decline of the aerospace industry, because the Ministry of Defence is, in aerospace terms, the main procurer/buyer without having the responsibility for the health of industry. The DTI, of course, has responsibility for the health but has not got the clout to actually do anything about it."
That sums up the problem in our defence-related industries : it is not just that the DTI does not have the clout--it also does not have the vision of where we are going and what we need to do for those important industries.
The debate concentrated on three industries, but other issues clearly provided a backcloth for the debate. There were three important issues on which comment is needed. First, virtually every Conservative Member talked about the growth in productivity in our manufacturing industries.
Nobody could or would want to deny the statistics. There has been that increase in productivity. Sadly, Conservative Members have not looked at the next page of what should be a research script. The crucial question is not just productivity, but our ability to produce wealth and output. I will explain in simple terms what has happened. While our productivity has increased, our output has not increased compared with our European competitors.
In the 1980s, Britain's manufacturing output increased by an average of 0.5 per cent. a year. Conservative Members should go away and look at the comparable figures for our competitor countries, whose output was growing. The figures for each sector show that in key areas the annual growth rate is simply not sufficient. So productivity is growing, but output is not growing sufficiently and capacity is contracting.
In the 1980s the average growth in output in metals was 1.4 per cent., in metal goods 0.5 per cent., in motor vehicles and parts 1.5 per cent., in food 1 per cent., in textiles
Column 10330.8 per cent., and in printing 2.8 per cent. The total overall manufacturing output was 1.9 per cent. Services grew greater, with an economic growth rate of just under 2 per cent., but the growth rate in manufacturing output was not sufficient. Thus we come to the end of the 1980s with a clear condemnation of the Government's failure to protect our manufacturing base.
The figures for 1979-92 show that at the end of those 13 years output had increased by 3 per cent. under the Government. Despite three proclaimed economic miracles--the first in the early 1980s, the second under the Lawson boom and the third the economic miracle that is supposed to be just around the corner--output has increased by 3 per cent.
That takes us to the next crucial point about the Government's failure. They have argued that our productivity has increased and that we can therefore compete, but it is clear from the trade deficit figures that our base is shrinking. That is why, for the first time since 1982, this country runs a substantial trade deficit in manufactured goods with the rest of the world.
What has happened to investment in manufacturing? In only three years under this Government has investment in manufacturing been higher than it was during the last year of the Labour Government. Had Britain achieved the same investment in manufacturing in those intervening years as was achieved in the last year of the Labour Government, £20 billion of additional investment would have taken place. Had that investment gap been filled through the Government's policies, Britain would have been in the first division in terms of ability to compete and could have competed alongside other countries, but we have simply failed to do that.
Nothing better illustrates one of the deep problems of short-termism in British industry, the demand for a return for shareholders and the short- term demands on finance rather than long-term industrial strategic decisions than what has happened in aerospace and, more important, the figures for profits and investments. Will the Minister justify in his winding up speech figures which show that from 1922-93 there has been a 27 per cent. increase in profits but that at the same time investment in manufacturing has fallen by 0.3 per cent.? Again, the short-termism that has bedevilled British industry is evidenced in those figures. This debate is crucial because it shows that Labour Members understand the importance of manufacturing. We understand competitiveness. Above all else, we understand what has happened as a result of the Government's 14 years of neglect of our manufacturing base. Britain will never be able to provide its people with the living standards that they deserve and that we wish for them until we get effective policies for our manufacturing industry.
The Government have failed. Their belief in the market means that the Department of Trade and Industry is not at the centre of industrial policy. It hangs on by its fingertips as a marginal Department with a marginal President of the Board of Trade. We need a Government and a strategy committed to industry and manufacturing. The people of this country recognise that Labour can and will offer that. That is why my hon. Friends will vote tonight for a strategy which will not simply win for Britain but is already winning with the British people.
Column 10349.40 pm
The Minister for Energy (Mr. Tim Eggar) : Far from the debate illustrating how Labour Members understand manufacturing industry, it has shown how they uniquely know how to denigrate our manufacturing successes. It has shown that they uniquely are the purveyors of doom and gloom ; they want to project the bad news outside the Chamber and they want to show what they regard as Britain's failures. If there is one area where they could succeed, it is in the export of doom and gloom. I am not sure whether they could succeed in exporting doom and gloom because in no time at all they would be in the business of managing, and planning and subsidising it.
I feel sorry for Labour Members. They could not possibly have known that when they were announcing to the world the failure of the British car industry--they have not bothered to do their research--there was a headline on the front page of the Financial Times which stated :
"Car output at highest level for nearly 20 years".
Could not they find it somewhere in their hearts to pay a tribute to the British car industry--to say how well the industry has done in reaching that record level?
I do not want to be accused of being uncharitable. At 7.8 pm, the hon. Member for Coventry, North-West (Mr. Robinson), who knows something about manufacturing, was the first Labour Member to praise British manufacturers. He pointed out that we are doing well, the climate is right and there are successes to which attention should be drawn. At 7.8 pm, when the debate had been going for three and a half hours, he was the first Labour Member to recognise that there were real successes out there.
I shall tell Labour Members where the successes have been sector by sector, as did the hon. Member for Leeds, Central (Mr. Fatchett). Several hon. Members rose --
In the data processing and office machinery sector, there has been a 700 per cent. increase in output since 1981. The hon. Member for Livingston (Mr. Cook) should know that, because MIMTEC created 400 new jobs in his constituency, and Bull UK is planning another 200 jobs in that area. Output in the rubber and plastics sector has increased by 70 per cent ; chemicals output is up by 50 per cent ; data printing output is up by almost 40 per cent ; and electronic engineering output is up by almost 35 per cent. Some of that is also in the hon. Gentleman's constituency.
Output in instrument engineering is up 26 per cent. Some new jobs in that industry were created in the hon. Gentleman's constituency. Motor vehicle production is up 20 per cent. and metal manufacturing is up 11 per cent. Those are the facts. That is what the Opposition have sought to denigrate and run down over the past five hours.
Mr. Geoffrey Robinson : In case it is thought that the Minister has misrepresented me, it is appropriate for me to say on behalf of all Opposition Members that when British industry is doing well, we are the first to congratulate it and to recognise the joint efforts of management and workers.
I was trying to draw attention to the fact that a major part of our competitive advantage derives from the fact that, after 14 years of Conservative rule, our wage rates and social benefits are about half the level of our major competitors in Europe. Perhaps the Minister would care to refer to that. That gives us a competitive advantage, but at
Column 1035what cost? Is that such a major achievement? I agree that we have benefited from it, but the Minister cannot claim that it is a super-successful economic policy.
Mr. Eggar : I am disappointed in the hon. Gentleman. I always thought that he was an independent-minded Member. I had a great deal of respect for what he said in his speech and it does not reflect well on him that when picked out for praise, he feels that he has to reject it and ingratiate himself with his honourable colleagues by saying, "I didn't mean that" and attempting to rewrite his speech. He would earn more respect in the Chamber if he stuck by what he said in his good speech.
I want to continue with the good news because that is what the British people want to hear. Last night, by accident, I met John Neill, the chief executive of Unipart. I talked about today's debate. He told me about his company. Unipart was a buy-out from British Leyland in 1987. Its main midlands factory was losing £1 million a year when the company was bought out. It was regarded as one of British Leyland's worst factories. Seven years later, it is a highly successful and highly profitable business.
Cranfield university, working with "Management Today", voted Premier Exhausts the best factory in the midlands, the best engineering factory in Britain and Britain's best factory. In a detailed benchmarking study comparing nine Japanese plants with their nine British counterparts, conducted by Andersen Consulting, Premier emerged as the only world-class British factory ahead of six Japanese factories in terms of quality.
Forgive me, Madam Speaker, for giving a detailed analysis of success by a British company in a highly competitive area. If we do not send out from the House a clear message that companies have been successful and that we respect and praise them for their success, we do nothing but run down manufacturing industry.
Mr. Hardy : The Minister may have heard my short remarks in which I paid enormous tribute to the success and record breaking of the engineering steel industry. He may also have heard the question I asked him. I said that the Minister for Industry had said that the subsidies that threaten the existence of our steel industry in south Yorkshire had stopped. I do not believe that there was any justification or evidence for the Minister to have made that comment. I asked whether that point would be cleared up tonight. I hope that the Minister does so before 10 o'clock.
Mr. John Evans rose --
Mr. Eggar : The core issue that faces this country and the House is that of competitiveness. Unless we understand that nobody out there owes us a living and that we succeed as a nation by our own efforts and ability to sell in an increasingly competitive world--that was made clear by my hon. Friend the Member for Coventry, South-West (Mr. Butcher) and others--we will never succeed. The primary role for increasing competitiveness is for industry.
Mr. John Evans rose --
Column 1036It is not just the Department of Trade and Industry--all parts of the Government must concentrate on increasing competitiveness. We must work with industry and concentrate on those areas where we can make an improvement. That is why my right hon. Friend the President of the Board of Trade will publish a White Paper on competitiveness early in the summer, and we will be working hard to identify areas where further improvements can be made.
The House heard a thoughtful speech from my hon. Friend the Member for Coventry, South-West who talked about the need to improve training, education and technical skills. I agree with a great deal of what he said, and that was very much what I tried to achieve when I was at the Department of Employment and the Department of Education.
The Opposition motion harks back to the dark days of the late 1970s. Those were halcyon days when the right hon. Member for Chesterfield (Mr. Benn) tried to save British industry by creating co-operatives. The hon. Member for Bradford, South (Mr. Cryer) did not have the time to sit on quangos, because he was busy being the Minister with responsibility for small businesses.
Those were days when the Labour party dared to call themselves socialists, and when the nationalised industries got more than £2 billion at today's prices from the taxpayer in subsidies. The House should contrast that with the position in 1991, when those same companies--now privatised-- paid £3 billion in taxes to the Exchequer at a time when those same companies were winning massive export orders for Britain.
I do not want to be unfair to the Opposition. The speech of the hon. Member for Livingston suggested that there was to be a degree of repackaging of their policies. We heard that, instead of one national enterprise board, the Opposition now want one national investment bank and lots of regional development agencies. They do not want one national enterprise board to be a failure, but lots of regional failures.
It is worth reminding the House about that great socialist invention, the National Enterprise Board. That board tried to pick winners, but more often picked losers because the board's investment performance was appalling. Instead of making an annual return of 15 to 20 per cent., it lost 15 per cent. My hon. Friend the Member for the City of Chester (Mr. Brandreth) reminded the House that the board made just over 100 investments in industry. In no fewer than 35 of those investments, the companies had either to be put into receivership or liquidation. Of the rest, 27 resulted in a loss to the taxpayer on disposal.
Whether making clocks, designing office systems, writing software, tanning hides, selling vehicles or making engineering products--it was all the same to the National Enterprise Board, which lost money on each of those investments.
Mr. Eggar : The hon. Gentleman may say that, but I was not. I was running down the achievements of the National Enterprise Board which was started by the Labour party, and which the hon. Gentleman announced this afternoon that he wants to reinvent in not just one incarnation, but lots of regional agencies.
Column 1037As if that is not enough, the Opposition want to go further. Instead of good, old-fashioned clause 4 socialism, the Labour party wants a new relationship--as they term it--between the Government and nationalised industries. The modern Labour party cannot bring itself to say what it means, and expresses itself in accountancy- speak. We were told the other day that it wants a new set of accounts and a new balance sheet. What the Labour party means is that it wants more state control, and more taxpayers' money spent on more nationalised industries.
The Labour party wants the private sector's money, but not its expertise. The test of the Labour party's intentions is not its glossy pamphlets or honeyed, well worked-out words, but what it will do when faced with difficult choices.
Mr. Eggar indicated dissent.
Madam Speaker : Order. I understand that the hon. Gentleman has been attempting to intervene for a long time and I appreciate his frustration. But he must understand that the word that he has used is unacceptable. I hope that he will withdraw it.
"Scargill defeats Smith in vote to renationalise British Coal". Since then, I have been asking the Labour party for its policy on British Coal. Eventually, in a world exclusive interview gained by the Yorkshire Post, we were given the answer. The right hon. and learned Member for Monklands, East (Mr. Smith) was smoked out. He said :
"We ought not to hesitate to take back some"--
of the pits
"into the public sector if their activities are not consistent with national energy policy. Or if there is a doubt about safety of their operation. Or they don't have the confidence of the workforce". Let us examine that statement. If the Labour party ever comes to power, it will have an energy plan that details tonnages and quality for each pit. If the private sector does not produce from a pit in a way that the Government want, the answer is clear : the pit can be arbitrarily renationalised. That is not socialism, but Soviet planning of the sort that went out 20 years ago.
It gets worse--if the operation is not safely run, it will not be a matter for the tripartite Health and Safety Executive, but an excuse for arbitrary renationalisation. Even worse, there is the Arthur charter to pay off the National Union of Mineworkers. The right hon. and learned Member for Monklands, East, the Leader of the Opposition, has said that if the work force does not have confidence in the management of the mine, renationalisation will follow.
Presumably, all Arthur has to do to meet the confidence test is to make a single 10p telephone call to the right hon. and learned Member for Monklands, East and the pit will immediately be renationalised on the spot. That is not
Column 1038industrial strategy, but an extremists' charter. That is the reality behind the honeyed words, glossy pamphlets and fancy presentations that form such a part of the Opposition Front-Bench team.
The coal industry may be a difficult issue for the Labour party to confront, but where will it turn next? What about the privatised industries that it has got its sights on--it will renationalise British Steel, British Aerospace, Rover and British Gas. The Opposition should come clean and tell us what they are going to do. It is clear that they do not want simply to return to 1970s state planning and ownership--that is not enough--but are determined to destroy British industry's competitiveness. The motion does not mention that, but we should not forget that the Opposition are committed to a minimum wage.
The minimum wage will lead to the loss of up to 2 million jobs. The Opposition have never denied their commitment to it. It has never worked ; there is no logic to it ; it does not work in any other country and certainly would not work in Great Britain--
[Interruption.] It is no good Opposition Members scoffing--those are not my words, but the words of Gavin Laird speaking on Channel 4 news.
They are not content with a minimum wage ; they are determined to undermine competitiveness. They have signed up to the European socialist manifesto-- to a 35-hour, four-day working week which is estimated to cost British industry as much as another £20 billion. If we add all that to the social charter, they will have destroyed British industry before they even get around to working out a strategy. The only right strategy is a competitive strategy followed by a Conservative Government.
Mr. Derek Foster (Bishop Auckland) rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to. Question put accordingly, That the original words stand part of the Question :--
The House divided : Ayes 277, Noes 319.
Division No. 153] [10 pm
Abbott, Ms Diane
Adams, Mrs Irene
Ainsworth, Robert (Cov'try NE)
Anderson, Donald (Swansea E)
Anderson, Ms Janet (Ros'dale)
Ashdown, Rt Hon Paddy
Banks, Tony (Newham NW)
Beckett, Rt Hon Margaret
Beith, Rt Hon A. J.
Benn, Rt Hon Tony
Berry, Dr. Roger
Bray, Dr Jeremy
Brown, Gordon (Dunfermline E)
Brown, N. (N'c'tle upon Tyne E)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Campbell-Savours, D. N.
Carlile, Alexander (Montgomry)
Clark, Dr David (South Shields)
Clarke, Eric (Midlothian)
Clarke, Tom (Monklands W)
Clwyd, Mrs Ann
Cook, Frank (Stockton N)
Cook, Robin (Livingston)
Corston, Ms Jean