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Mr. Greg Pope (Hyndburn): I was delighted to learn that the hon. Member for Ealing, North (Mr. Greenway) had been sent a copy of the Labour party briefing for the debate. In the past, even members of the parliamentary Labour party have not received that briefing; this is a clear sign of our improved performance.
It has already been said that the most noticeable feature of the Queen's Speech is what it lacks rather than what it contains. Obviously, the ditching of Post Office privatisation has been mentioned, but the absence of any education legislation is equally noteworthy. The Government have forced through some 20 separate education reforms over the past 15 years, but it would appear that the "permanent" revolution is over. No doubt that has been met with sighs of relief in staff rooms throughout the land, following the introduction of local management of schools, repeated changes in the national curriculum, the flop of grant-maintained schools and other reforms such as the new code of practice for special needs. Teachers are probably dizzy at the pace of change, and can be forgiven for craving a period of relative stability.
The Government were wrong to try to effect so much change so quickly; but it was less the speed of change than the nature of that change that was wrong. I believe that there is a compelling need for further change in education--indeed, the Government accept that to an extent: in the past fortnight they have introduced yet more changes in the national curriculum, which we welcome.
In my view, the Government have consistently got it wrong on league tables- -not because it is wrong to give parents information about school performance, but because it is wrong to give them as little information as the Government do. League tables are a form of performance indicator, and the function of such indicators should be to improve performance and to drive up standards. Crucially, they should try to show the level of
Column 414improvement in pupils' achievements--in short, to demonstrate the difference that a school can make. We want schools to have high academic expectations and good results; but the answer to the question, "What makes a good school?" is not simply, "One with good exam results."
One of the problems with the current league tables is that they are crude and relatively uninformative. A school with a comparatively bright intake achieving an average of five GCSE passes per pupil is not performing as well as a school with a less academically capable intake achieving the same result, or even less. In their current form, the league tables do not highlight such differences.
The present system takes no account of either the circumstances faced by individual schools or the way in which they can boost pupil achievement. There is a better way and, after years of opposing Labour and the other Opposition parties' support for value-added league tables, the Government are now at last commissioning research, some of it from London's Institute of Education. Why on earth has it taken so long for the Government to see sense? The answer, of course, is ideology: the Government have seen teachers as producers and parents as consumers, free to exercise market choice.
Leaving aside the bizarre notion that parents are the consumers of education--I should have thought that, if anyone were a consumer of education, it would be the pupils themselves; surely they should be at the centre of our approach--the league tables are a blunt instrument. The idea that parents should assess the league tables and then make a market choice, so that good schools can flourish and failing schools wither on the vine-- or become subject to education associations--simply is not working; or, if it is working, it is working only at the margins.
We need a more sophisticated system. It should, of course, recognise and identify schools that are performing well, and those that are failing; but, crucially, it should not just recognise schools that are failing, but understand and demonstrate how and why they are failing. If we do not know how and why they are failing, how can we remedy the failings? The league tables are a weapon with which to attack failing schools. We need more information which can be used to turn failing schools into succeeding schools: the market mechanism simply is not enough.
Much research has already been done--by the Institute of Education, by Keele university and by the National Foundation for Educational Research. Surely it is time for the Government to pull some of that research together.
League tables for non-attendance are also inadequate. Although such tables are well meaning, the idea of authorised and unauthorised absence from school is deeply flawed. It fails not least to take account of pupils who register at school and then abscond from it. The Government have tried to deal with the problem by providing a £3 million grant to introduce computerised registration and pupil swipe cards, the idea being that pupils can register at the beginning of each lesson.
Column 415However, according to yesterday's Independent on Sunday , even the company that makes the computerised system admits that it is a failure. The pupils at whom the system is most aimed lose the card, deliberately leave it at home or will not comply with the use of it. I should have thought that, before the Government spent £3 million of taxpayers' money, they might have dealt with that basic problem. The Government's response to truancy has been woefully inadequate. Why do not they understand that the scale of truancy is almost certainly way in excess of the figures that the Government will publish next week? Tens, if not hundreds, of thousands of children are missing from our schools every day and they are missing out on their one big chance of education. Many of them will be exposed to crime. The Government, however, persist in treating the most important service that local education authorities provide in relation to this matter as a mere kid catcher.
The Government could start by recognising that non-attendance is a complex problem with varied causes. Some of the problems are school-based-- bullying, poor academic performance and the unrecognised special needs of children--and some are home-based. It is not enough just to deal with the symptom of the problem--truancy. The Government should deal with its underlying causes. We should recognise that there is a national shortage of education welfare officers. The debate is about not only numbers but quality. The Government should announce that, from now on, all education welfare officers must possess the relevant social work qualification. I hope that the Minister will soon announce that targets will be set for LEAs to ensure that all education welfare officers meet social work training qualifications.
Hon. Members know that part 1 general national vocational qualifications for 14-year-olds will be piloted next year in the subjects of business studies, health and social care, and manufacturing. That strikes me as being an extremely narrow range of subjects. I should have liked at least some emphasis to be placed on arts and the humanities. I hope that the Minister will say how much consultation will take place on course content to avoid a repetition of the fiasco over the national curriculum.
We are entitled to ask what the part 1 GNVQs are for. There is a danger that they will end up simply as an easier alternative to the GCSE. If that happens, we shall be back to where we were 20 years ago. We shall have a two-tier exam system, just as we did with the old CSEs and GCEs. If that happens, the danger is that low public esteem for GNVQs for 14-year-olds will permeate through to post-16 GNVQs, with catastrophic results. I hope that the Government will listen to that point before proceeding with the pilot scheme. It is 22 years since Mrs. Thatcher promised universal nursery provision. As the Tories have been in power for 17 of those 22 years, when will the Government introduce such provision? Long-term supporters of universal nursery provision got used to the previous Secretary of State heaping abuse and scorn on us whenever the subject was raised. It appears that the current Secretary of State has done a U-turn, which I welcome. However, I should like to press her on some points. Will the commitment to nursery provision apply to all three and four-year-olds or will it, as the Prime Minister said, apply only to four-year-olds? When will it become available to all
Column 416parents who want it? Have the Government provided a costed figure for it, a question that the Minister often asked Opposition Members? In the past 10 years, the Government have won a great deal of praise for their policy on special educational needs, not least because that sector--
Mr. Gyles Brandreth (City of Chester): Although education and industry are our themes today, neither word appears in the Gracious Speech. It includes several measures that are designed to encourage the improvement in the supply side of the economy, measures that will have an impact on the industrial performance of the country, but none specifically in the education sector, which is at it should be. Thirteen Education Bills in 15 years have introduced an extraordinary range of reforms, from local management of schools to the spectacular growth of further and higher education. Looking through the education pledges in the Government's 1992 manifesto, I found that all of them have been fulfilled or are being fulfilled, whether it is a matter of completing the introduction of the national curriculum or of introducing regular testing for all children at seven, 11 and 14.
This weekend, I was delighted to learn that the Opposition have come round to testing in part. Having opposed virtually all our reforms in the past 15 years, they seem eventually to have embraced them. I look forward very much to a change of heart on the assisted places scheme. Who knows, we may hear of it in the Opposition spokesman's winding-up speech tonight. The scheme is helping some 30, 000 children around the country, a good number of them in my constituency.
Given the extent and pace of reform in education, it is right to have a period of consolidation. I am not one of those who see the quantity of legislation as a measure of the Government's virility. The same number of Bills has been proposed for this Session as for the last and, although I welcome all of them, it must surely be quality rather than quantity that counts.
Since the war, the annual rate of legislation has shown little tendency to increase, but the length of that legislation has grown. The number of words has increased, and we should perhaps consider the quality of those words. I am one of those who would like privatising parliamentary draftmanship to be considered as one course that we might follow in our privatisation programme.
The cumulative effect of increased legislation is substantial. In the 49 years from 1945, I calculate that Parliament has enacted some 3,232 different Acts. Yes, the mind does boggle. It is no wonder, Madam Deputy Speaker, that at times you must feel a little bit daunted.
In other fields of endeavour, we tend to accept that less means more. The Government have been advertising the fact that the number of directives emanating from Brussels has fallen sharply in the past couple of years and that they see that as something virtuous. I agree. The Government have managed extraordinary change in the past 15 years, but I should be happy if, 15 years from now, Her Majesty got to her feet in her Gracious Speech to tell us that, as her Government had done so much and
Column 417so well in the past 30 years, this year there would be no need for further legislation of any sort. Therefore, I welcome the absence of education legislation in the Gracious Speech. Our manifesto pledges have all been fulfilled or are being fulfilled.
I do not recall that the privatisation of the Post Office was a distinct manifesto pledge. Although I would have welcomed the inclusion of a Bill on that, I recognise that many of my constituents would not.
While checking through the manifesto, I found an interesting pledge on page 34. I came across it only because it happened to be facing the section on education, which I was studying. Before my arrival at the House, that pledge would have made little impact on me. It reads:
"We will propose Parliamentary reforms to ensure that the House of Commons conducts its business more efficiently and effectively". In that regard, I endorse all that my hon. Friend the Member for Orpington (Mr. Horam) said, and I shall not say any more about it. In the hope of seeing further inward investment in my constituency, I recently visited all the businesses that have arrived in Chester in recent years to ask them what prompted them to locate in this country and in our part of the world in particular. Not one of them mentioned legislation of any sort, although several called for further deregulation and all acknowledged the role of Government in helping to create the right economic climate. They said that they came to the United Kingdom because of the exchange rate, because of low corporate tax rates, because of low interest rates, because inflation is at its lowest level for a quarter of a century, and because they believe that the Government mean business when they talk about sustained growth in a climate of low inflation.
Those businesses also talk of something that we now almost take for granted, although we do so at our peril: the transformation of the industrial relations landscape. Today, our strike rate is the lowest in Europe. Not only that, but we have the finest work force. The largest recent example of inward investment in Chester was the arrival last year of the Maryland bank of North America. It is a £30 million project and one of the largest United States investments in the United Kingdom for several years. MBNA's chief executive, Tom McGinley, said that a principal reason for choosing Chester was the readily available work force, and the quality of the work force--a young and enthusiastic group of people of exactly the type that his bank liked to bring on board.
In recent years, Chester has been particularly successful in attracting inward investment. From America, the quality soap makers Original Bradford and NEBS Business Stationery are two recent examples. From the rest of Europe, Cacao Barry has invested the equivalent of £10 million in its factory. Even from the Isle of Man, another £10 million has been invested in a business manufacturing thermostatic controls for kettles and jugs.
Private sector investment in Chester has reached about £150 million in the past year, creating some 1,500 full-time new jobs. That is an exciting achievement. Those businesses join already well-established businesses with headquarters in Chester ranging from North West Securities and M and S Financial Services to Shell Chemicals and BICC.
Column 418In manufacturing, it is interesting how we have got so much into the habit of running ourselves down that we do not recognise reality. The right hon. Member for Copeland (Dr. Cunningham) was a good example of that this afternoon. In the past decade, Britain's output of manufactures has risen by 22 per cent. compared with 21 per cent. in Germany and 11 per cent. in France. Our productivity growth has outstripped theirs.
I welcome the Government's contribution to that success story. I welcome the encouragement of inward investment and in particular the work of INWARD in relation to the arrival of MBNA in Chester. I welcome the Government's commitment to competitiveness. We have recently opened our business link in Chester. I particularly look forward to the success of our bid for single regeneration funds. The Chester bid is a brilliant one and it needs to succeed because, despite our successes, we face very real challenges.
Unemployment in the city of Chester is down again. It is 7 per cent. lower than last month, 13 per cent. lower than last year, 16 per cent. lower than two years ago and 41 per cent. down on the level in 1986. Yet we do not live in cocooned isolation. In our area, unemployment is running at 12 per cent., against a national average of 9 per cent.
I am particularly worried about what has happened recently just across the border in north Wales and the fate of the work force at Raytheon Corporate Jets. I am pleased to see the hon. Member for Alyn and Deeside (Mr. Jones) in his place. Many of the people who work at Raytheon live in my constituency. Until September this year, the plant had been a major British industrial success story. When Raytheon acquired the Hawker Corporate Jets business from British Aerospace in 1993, the management and work force together set about undoubtedly the most impressive restructuring programme undertaken in the world's aerospace industry. In 12 months, a transformation was achieved. That transformation was recognised by the Department of Trade and Industry when it carried out a formal assessment of the company and confirmed its status as a centre of excellence under the "managing in the 90s inside UK enterprise" initiative.
Productivity increased by 33 per cent. The overhead cost was reduced by $19 million. The labour charging rate was reduced by 16 per cent. The product cycle time was reduced by 20 days. At Broughton, a world-class team is creating a world-class product. A significant track record it has, too. In the past 30 years the Hawker products have generated some $7.5 billion in exports for this country. In September, all that was threatened when Raytheon decided to transfer the production of the Hawker aircraft to the United States. I am concerned at two levels. The first is the human level, with the future of the 900 and more men and women who work for Raytheon in Broughton, many of whom are my constituents. Secondly, at the industrial level, the loss of skills involved, which is an issue not only for north Wales or Chester but for the whole of the United Kingdom. The DTI should be concerned, too. I have written to my right hon. Friend the President of the Board of Trade asking for the fullest details of what the DTI did or did not know about Raytheon's intentions for the business at the time of its acquisition and asking for as much helpful intervention as possible, not before any particular meal but before it is too late.
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Mr. Paddy Tipping (Sherwood): Earlier this afternoon we had some remarkable self-justification from the President of the Board of Trade. First, he told us that he was right about privatising the Royal Mail but he was unable to deliver the goods. Secondly, and more astonishingly, he told us that in retrospect he was right about the privatisation of British Coal. No collieries had closed. Unemployment was not spiralling in coalfield communities. Those phrases will bring hollow laughter in coalfield communities across the country and in particular in Nottinghamshire.
Unemployment in Nottinghamshire and in the Mansfield travel-to-work area is higher now than it was at the last general election. The most worrying thing is that although unemployment is falling across the country, the gap between unemployment in the Mansfield travel-to-work area and the rest of the country is increasing. It has increased from 4 per cent. at the time of the general election to 7.5 per cent. now. The gap between the rich and the poor is getting wider. That should not surprise us because pits have closed in Nottinghamshire. At the general election there were 13 pits in Nottinghamshire; today there are just six. At the general election, 12,270 men were working in the coal industry in the county of Nottinghamshire. Today there are 2, 440. In the space of 30 months 10,000 jobs have been lost. The future of the coal industry has yet to run its course. The preferred bids are now on the table. It is up to the bidders to put the money on the table. There are doubts about whether that can be achieved. I hope that the Government will insist that the bid that was made is the bid that is finally achieved. I hope that there will be no talking down of the bid. I also hope that the Government will look carefully at some of the preferred bidders. Some of them have a history of directorship of companies that have gone into liquidation. There must be real probity among the people who buy the coal industry. The worst is yet to come, so it is clear to me that whoever buys the coal industry will immediately throw the contractors out of work. There is a real possibility that further pits will close. The coal industry has been in chaos in the past two and a half years because there is no energy policy. The only policy that can be identified is one in which the market operates. The energy market does not operate on a level field. Nuclear power, for example, has real advantages because of the levy. One is tempted to ask what has happened to the nuclear review that the Government promised. When will it report? What are the timetables? What will the conclusion be? There is an air of silence about the great debate that we were promised.
In the Gracious Speech another part of the energy industry--British Gas--is to be opened up. The domestic market will be subject to competition. Clearly, there will be winners and losers. As competition occurs, there will be more transparency in the market. We saw that last week when we were told that people who had a bank account and could afford to pay by direct debit would in effect get cheaper gas. People who paid by standing order or had regularly paid promptly would not benefit. The average bill payer would pay an extra £10 a year for the privilege of paying on time but not by direct debit. Clearly, there will be winners and losers. People who had
Column 420paid regularly were annoyed about that. They are angry today about the massive pay increases that the directors of British Gas are to receive.
Clearly, the gas market will have to be regulated. Regulation has to ensure that all suppliers operate on a level playing field--that they take the rewards and the responsibilities. It may well be that that cannot be achieved by regulation alone. I hope that, as they produce the Bill, the Government will look at the notion of a levy on all suppliers so that everyone can take their share not just of the rewards, but of the responsibilities, too.
The Gracious Speech talked about continued economic growth, rising employment and plans to promote enterprise. But what has happened to the notion of enterprise, as in the phrase "enterprise zone"? Two years ago we were promised that 16 enterprise zones would be up and running producing 16,000 new jobs. Not one enterprise zone has yet been established. It looks as though, at best, it will be another two years before enterprise zones are operating.
There is wide-scale unemployment in Nottinghamshire. We have a private and public sector partnership at the Sherwood business park which could create 3,000 new jobs. The Government should put people first: they should cut out the bureaucracy, get the enterprise working and get the people back to work.
We also need some enterprise in the Department of Transport. We have to plan for a flagship business park north of Ollerton. It would create 3,300 new jobs through a private and public sector partnership. But it cannot go forward because a lack of enterprise in the Department of Transport forbids the construction of an access to the trunk road. It argues that the Ollerton roundabout is too small. But it is the Department's responsibility to do something about it. Why does it not create enterprise and new jobs and put people back to work?
What about the great unresolved mystery in British Coal? What will happen to its property and landholdings? The company is a major landholder across the country. That land should be put to work to create new jobs. Local authorities and English Partnerships want to develop that land and put the nation back to work.
But there is a lack of clarity about what will happen. I suspect that the valuable land will be sold to the private sector, leaving the contaminated land to the public sector for it to pick up the liabilities.
Much has been said about the value of inward investment. But, given the scale of problems in Nottinghamshire and coalfield communities, it is important that there be a mechanism to make that happen. In the east midlands we have a fledgling development company. Two years ago its budget was £250,000, now it is £400,000. But there is talk about cutting the grant from the Department of Trade and Industry next year. The other partners want to keep the company going; they want to expand it. A real commitment to coalfield communities and to promoting economic growth would be to increase the grant and give new firms an opportunity to come to the east midlands for a new future. For that to happen, we need to raise the landscape too. That is why I hope that the environmental protection agency and the new legislation when it is produced will contain a clause which makes it clear who is responsible for mine water discharge. At the moment, everyone denies responsibility.
Column 421The Gracious Speech gives us the opportunity to clear up this matter. It also gives us the opportunity to plan the landscape-- new industry in a new landscape; a new community forest. If British Coal landholdings were sorted out, we could create that forest across Nottinghamshire. We could create a new Sherwood forest; a place in which to live and work.
In Nottinghamshire today 7,498 young people aged 16 to 19 years are looking for permanent work. There are just 121 available job vacancies-- none in Hucknall and one in Newark. There are 62 youngsters chasing every vacancy. They are our future; we need to invest in them. Investing in them is investing in our future. 8.44 pm
Mrs. Cheryl Gillan (Chesham and Amersham): I am extremely pleased to make a contribution to the debate on the Queen's Speech because I believe that the legislative programme which has been outlined for this Session is not only comprehensive, but reflects an extremely steady hand on the tiller of government.
I wish to raise merely two matters in my brief contribution to the debate-- one about proposed legislation, and another that has not been raised at all. I was surprised that many Opposition Members concentrated chiefly on matters that were not included in the speech rather than on what has been laid down for our legislative programme in the coming Session.
I am also surprised by the omission in Opposition coverage of the two privatisation measures proposed in the Queen's Speech. I say now how delighted I was to see the privatisation of Atomic Energy Authority technology included in the speech. It will no doubt be seen as legislation which reflects the Government's confidence in the operation, products, services and staff of AEA technology. I have visited AEA twice this year and on both occasions members of the AEA team have expressed great eagerness to make progress on privatisation. I am pleased that we have been able to satisfy its requests.
The nuclear industry receives its fair share of attention--indeed, some would say more than its fair share. But the focus is normally placed on power generation, and I do not wish to cover that ground again tonight. Instead, I want to draw attention to some of the so-called by-products of our original investment in nuclear research and development. As a result of that investment, we have several centres of expertise: of highly skilled and world-acclaimed scientists and engineers using their skills to the benefit of mankind.
AEA technology is not a nuclear energy business and should not be confused as such because of its name. It is a science and engineering services business which is solving technical safety and environmental problems for Governments and industrial clients throughout the world. More than 70 per cent. of its contracts require a combination of skills in product development, plant and process performance, safety management and environmental protection. The business offers a large, multi-disciplinary capability, independent and impartial advice, and integrated solutions to a broad range of industries and markets. If I sound like a commercial, Mr. Deputy Speaker, I make no apology for my recommendation of this organisation.
Column 422Science and engineering is a huge growth market in the world. It is an area in which the United Kingdom has long been recognised as having particular strengths, and it is exactly these types of high technology areas in which we must invest and on which we should build our economic future. Our future will depend on our industries being not only at the front edge of technology, but competitive in international markets.
A privatised AEA technology will do better in the private sector because it will be liberated from the constraints of the public sector and be able to raise capital more freely to invest in the business. So long as it is part of the AEA involvement in nuclear power, which dominates the rest of the business, it will inevitably be impeded by the shadow of the nuclear power industry. If it is independent, it will be free to exploit the expertise that it has developed in the international market place.
This is not a pipe-dream born out of political conviction. We have only to look at my constituency and Amersham International which, following privatisation in 1982, has grown into an international business with 90 per cent. of its turnover outside the UK. Amersham International represents only 9 per cent. of the United Kingdom's nuclear industry turnover, but it generates more than 50 per cent. of the industry's overseas earnings. It is no longer a nuclear company. It is a help science group, depending only in part on radiochemicals to produce its products. Its contribution now to health care, life science and research is indisputable and is one of the great benefits to come from nuclear science, as I am sure hon. Members on both sides of the House agree.
Before leaving the subject, I introduce a cautionary note for my right hon. and hon. Friends on the Front Bench. In some respects, AEA technology is intertwined with the rest of AEA simply because of its parentage. I hope that great care will be taken not to damage its prospects by the demands of the nuclear energy sector or the anti-nuclear lobbies. The new industries that have descended from the original nuclear programme have developed sufficiently to justify reorganisation separately from the nuclear generating industry. They have special needs and their problems, such as low-level nuclear waste disposal, are different from those of the rest of the industry.
In addition to privatising AEA technology, our programme involves creating a new environmental agency, a nuclear review and a review of radioactive waste management and policy. Although I welcome those initiatives, I do not want the benefits and the position of the nuclear-related companies strangled by the provisions that might be deemed necessary for their parent industry. I hope that the Department of Trade and Industry and the Department of the Environment--and, in due course, the environment agency-- will establish separate machinery for consulting the smaller nuclear- related industries, especially in relation to regulation. We should not forget that low-level waste disposal is a problem faced not only by those industries, but by a whole range of organisations, including hospitals, clinics and research laboratories. Their needs are totally different from those of the nuclear power-generating industry and must be reviewed in a different light. I know that Amersham International would be willing to bring the benefit of its scientific knowledge and its business experience to produce safe, sensible and economically beneficial solutions to these difficult problems.
Column 423I now move on to a subject that was not raised in the Queen's Speech; I am sure that the House will be relieved to know that it is not Post Office privatisation. I had the privilege of raising on the Adjournment before the recess the question of space, expenditure and benefits. As we face such an important year of decisions on future space activities, I make no apology for touching on the subject again. I congratulate my hon. Friend the Member for Esher (Mr. Taylor) who, since his appointment as Under-Secretary of State for Trade and Technology, has taken such an active and intelligent interest in space. I believe that he now has the opportunity to make an important personal contribution during the preparations for the European Space Agency ministerial council meeting next year as well as at the meeting itself.
I am sad to say that our involvement and expenditure in European Space Agency programmes has been diminished in recent years. Frankly, we are at serious risk of damaging the industries that we have built up through our past contributions, primarily to ESA. We have now reached the stage where we can no longer just depend on the Department of Trade and Industry for funding for space. Virtually every Department now has a present and future identifiable interest in space and its development. I listed a few in a recent article in a magazine for the Bow group. The Home Office may have an interest in space in terms of drug traffic monitoring and drug crops growth monitoring. The Department for Education may have an interest in space in terms of communications and science and technology education. The Foreign and Commonwealth Office may have an interest in terms of aid to the third world--in water discovery, crop growing and the identification of natural resources, for example. I should like to see more cross-departmental co- operation and funding, and now is the time to start.
We should not neglect the increasing convergence between military and civil systems. I know that the military in all countries has a penchant for its own systems and that it talks about security requirements as a justification. Obviously, those requirements need consideration. Even in the Gulf war, however, the United States' military depended on the French SPOT satellite for some of its observation data and on communications satellites, some of which were civil systems. There are real problems in transforming convergence from a comforting buzz word into a common-sense and money-saving reality. Instead of debating the pros and cons of a European defence earth observation satellite system, it might be more practical to identify the actual data needs. We might find that much of the required data were available from the existing civil systems or that it could be provided by the private sector. It would be well worth an impartial evaluation before we went further.
We certainly need some new thinking about the way in which we approach space. I hope that in this Session, the Department of Trade and Industry, as well as other Departments, will take a special interest in the area and will increase their co-operation. It can only be for the advantage of our industries and the benefit of this country.
In common with all my colleagues, I wish the Queen's Speech and the legislation that it proposes a safe and speedy passage.
Column 424the ground of what was in the Queen's Speech and what was not. I intend to touch on matters of industrial competitiveness and to look at other matters on a micro and a macro level.
Laissez-faire policies have not improved Britain's competitive position. Throughout the 1980s, the message to business was that fewer rules led to greater prosperity. I am afraid that that dogmatic approach to the economy ruled out useful Government intervention of the kind that has assisted our competitors.
It was hoped that in the labour market the agenda of deregulation would reduce labour costs and improve Britain's ability to compete. It is certainly true that our wages have fallen compared with those in other European countries. Even the Secretary of State for Employment now accepts that Britain cannot compete simply on low wages. Wages rates in the newly industrialised countries are often 50 per cent. lower than ours and unless we are all prepared to take cuts of 50 per cent. or more in our standard of living--that is what is implied--to hope to compete on wage levels is pure pie in the sky. Whenever we asked the Government to tell us what they felt minimum wages should be, their answer was always the same: "Whatever the market demands. People will price themselves into jobs." The Secretary of State for Employment now tells us:
"Low-wage economies present formidable competition. Their wages are so much lower than ours that we cannot hope to compete by driving down our wage levels."
We have heard a lot about U-turns in the newspapers and in the House this evening. As a U-turn, that is breathtaking from the person who, above any other, has talked about the need for people to price themselves into employment. He now says that we cannot hope to compete with the low levels obtaining in other countries. Is not it remarkable what responsibility brings to people? The Secretary of State made those comments to the Institute of Personnel Management. It is interesting that once Ministers understand the subject they soon start to trim the cloth a little.
What the Secretary of State for Employment said represented almost a triumph of the virtue of good management over political ideology, and that is very welcome. As the Opposition know, it is true that cost alone does not make an economy competitive. Innovators seek a quality work force, with high skills and team work, who can make quality products. Successful British companies all recognise that competitive advantage relies on investment, innovation and training.
The Government, who have deregulated British industry, cannot credibly offer something different. There is nothing in their tool box to suggest that they have anything different to offer. Despite the fine words of the Secretary of State for Employment, the policies of his Government foster short-termism, which destroys the long-term relationships between investors, management and the work force which are necessary to encourage investment.
Investment, of course, has been another theme of the Tories. "How successful we are", they say, "we attract more inward investment than any other European country." I do not doubt that that is so. As we advertise ourselves across the European continent as a country of low wages and low costs, it is hardly surprising that we attract some inward investment, which has been running at about £9 billion per annum.
Column 425That is only half the story. The other half is that outward investment has been running at an annual rate of about £18 billion. That leaves, in my humble estimation, a net shortfall of about £9 billion between income and expenditure--not a very good record. Much of the inward investment has been made merely to acquire shares. Has the Rover-BMW deal produced one more car? Not yet, but we are told to wait and see.
British industry is now littered with foreign holdings. Profits generated by the work force are being exported to the country of origin, from where the capital is gained. Britain lags behind every G7 country on the scale of investment. More than 29 per cent. of Japan's gross domestic product is reinvested in its infrastructure and industry. In the mid-range, even Italy reinvests 21 per cent., but the UK lags well behind--bottom of the table. The average level of GDP invested in Britain is 17.6 per cent--more than 12 per cent. less than the Japanese.
The lack of investment has, of course, led to British industry falling behind. We have also declined in innovation. We have specialised and have been very good at, for example, formula 1 racing and--I say with tongue in cheek--arms production, but we have failed to produce the mass products that would have made Britain a real leader in new technology.
Britain should be able to capitalise on the undoubted talents of its people and prevent the loss of our innovations to our competitors. One of the themes of our history is that we have invented--we have had the brain-wave and have done the
brainstorming--but have had to go to overseas entrepreneurs to launch our products on the market.
Having looked at that side of the equation--the macro side, broadly speaking--I shall consider some of the micro issues, especially those affecting small firms. As hon. Members have expressed an opinion on the matter, I was very disappointed to find no mention in the Queen's Speech of the recovery of debt by small and medium-sized companies from large companies. Last weekend, the black country witnessed the failure of Bean Industries and the Reliant motor car company--I know that it produced only a wee three-wheeler, but it was the only remaining British car company and it went down the pan this weekend. Part of the reason for the failure was, according to the Bean company, that it had not been paid on time by its debtors. It is an important problem that must be tackled, and it could be tackled on the basis of a British standard along with a statutory right for industry. Small companies do not always have access to finance. Time and again, we find that relatively small amounts of money--up to £150, 000 --are not available to small companies. The loan guarantee scheme, for which I applaud the Government, has simply not been taken up, mainly because the banks believe that its setting-up costs are too high and often because the premium that they levy on the interest rate is too high for a small company to bear. The irony is that the greater the risk the company has to take--usually with the owner's own money--the higher the interest rate the bank wants and the more certain it is that the company will not be able to keep to the schedule of payments.
Column 426In an attempt to offer proper funding to small and medium-sized companies in the west midlands, Midland bank and West Midlands Electricity have got together to start a small investment fund, which they are having managed for them. It is providing loans of up to £150,000. I commend that on the basis that utilities throughout the country could be required to pay into regional industrial development funds --perhaps managed by finance houses, banks or whatever--and have their tax remitted at a level commensurate with the amount of the surplus, windfall profits that they were prepared to put into regional development funds. Those utilities would benefit themselves because there is not a company on the market that does not need a supply of electricity or water, so there is a self-interest element. I hope that, at some stage, we shall consider that in depth and quite seriously.
Training for business is also important. The focus is now on skill training. We had such a focus in the 1960s and 1970s, but it was lost in the early 1980s. At last something is now being done to bring a new focus to skill training.
On many occasions, people with excellent skills and a good product know nothing about business. Such people very quickly experience difficulties. We need a system in which business skills can be taught to the smallest companies, comprising three or four people, as well as the largest companies.
When asked whether we should copy the American system whereby MBAs are available in every down-town university, Sir John Harvey-Jones said that he would be very pleased if his employees could read a balance sheet let alone obtain an MBA. I believe that business skills in smaller companies in Britain leave rather a lot to be desired. In that regard, I want schemes that will assist.
The hon. Member for Chesham and Amersham (Mrs. Gillan) revealed her interest in science and technology. Even if it is simply a sandwich course in science and technology training, instruction should be given in business principles so that the arguments that need to be made in the boardroom for product development can be made with the force with which they are usually made only by accountants and the legal profession.
There is so much to be done. The Queen's Speech must be seen as a miserable disappointment because it fails to recognise Britain's big problems in terms of its world relationships and competitiveness and because of its lack of attention to the detail and micro matters which, alone, can make Britain competitive.
Mr. Barry Jones (Alyn and Deeside): My right hon. Friend the Member for Copeland (Dr. Cunningham) laid about himself today to some good effect, but the President of the Board of Trade was over-sanguine; he tried to make his brick, but there was no straw for it.
There is no shred of policy in the Queen's Speech on British manufacturing industry. There is no Cabinet policy to promote, assist and develop Britain's remaining manufacturing industries. The glaring inadequacy in the Queen's Speech is that no thought is paid to tomorrow or the next century. There is no thought, plan, strategy or consideration of the needs of Britain's manufacturing industries.
Column 427As the new century hurtles towards us, the future of our nation and of our manufacturing must be defined as serious for as long as the Government are not prepared to produce plans, proposals and strategies. Without manufacturing, there will be no wealth, and without wealth we will not be able to sustain in the next century the welfare state as we now know it.
Having said that, I take issue with the President of the Board of Trade. I seek his active intervention in an industrial problem facing my constituency. It relates to a company called Raytheon, which is a worldwide conglomerate. Raytheon has decided to move 900 jobs in the aerospace industry in my constituency to Wichita in Kansas. That has perplexed and greatly appalled my constituents and I look to the Government, even at this late stage, to intervene. Ideally, the President should go to the Wichita headquarters of Raytheon and argue our case with the company's chairman.
The hon. Member for City of Chester (Mr. Brandreth) raised an issue that I have raised consistently in the House. It is of the utmost importance to Wales and to the north-west. Our problem relates to the decision of the British Aerospace board actively to canvas the sale of the corporate jet division of British Aerospace. It approached Raytheon, which saw a bargain and made the sale. A British Minister with responsibility for aerospace sanctioned the sale, and now my constituents are in a predicament. Time is running out, and we need intervention by the President of the Board of Trade and the Prime Minister.
Tomorrow, I shall take a small delegation to the United States embassy. We will plead with the American ambassador to intervene and persuade the company that it has made the wrong decision and that it should retain the 900 jobs in my constituency, where the great, world-beating, competitive twin-engined corporate jet should remain in production.
I emphasise that the Raytheon issue, although it might be called scandalous and unjust, highlights the problems from which Britain suffers when the Government, despite sanctioning the sale, will not face their responsibilities and will not support manufacturing in a meaningful way.
Before the end of the year, the Government will probably place an order with another American company, Lockheed, for 20 Hercules aircraft. At the end of this century, it surely cannot make sense for the British Government to place an order with an American aircraft company while sanctioning the loss of 900 jobs and the loss of production of a jet aircraft. It cannot make sense for those jobs to be taken by the United States. That is offensive to my constituents. The issue is complicated further because my constituency is an aerospace constituency. At the moment, 2,300 of my constituents make European airbus wings. They are desperate for the Government to place an order for the future large aircraft, but, by the end of the year, there will be orders for 20 or more Hercules aircraft. At the same time, the Government will permit an American company to take from my constituency 900 jobs and a complete production process that is part of the great British aerospace industry. That cannot be right. The President of the Board of Trade is present. I have said that I want his active intervention. I want him to journey to the United States, go to the Raytheon
Column 428boardroom and insist that the chairman, Mr. Dennis Picard, reverses the board's decision. I ask the right hon. Gentleman to intervene and tell me whether he can offer any assistance to my constituents. In recent months, his Department has been of great assistance to me, as have his Ministers. So serious is my constituents' predicament that I beg him to intervene at the last minute to save not only my constituents' jobs but the aerospace industry.
We cannot allow any more of our great aerospace industry to be whittled away; it must have assistance. It needs cash for research and development and an order for the future large aircraft. It needs the intervention of the President of the Board of Trade. I urge the right hon. Gentleman to say that he will intervene and insist that Raytheon reverses its decision.
As there is no active, urgent intervention by the President, I suggest that the Gracious Speech is seriously flawed. It has no plan, no strategy and no proposals for British manufacturing. As long as members of the Cabinet are prepared to opt for day-to-day short-termism the future of British manufacturing will be very bleak indeed.