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Mr. Skinner: If everything in the garden is lovely, why, in the 17 years that the Tory Government have been in power, has the manufacturing base in Britain been reduced by nearly 40 per cent? Until 1983--shortly after a Labour Government were in power--we had a surplus of manufacturing goods in Britain. But now, despite the fairy story that this tin-pot Minister is trotting out this morning, his own statistics, from the Office for National Statistics, show that there was a current deficit on trade in goods in the third quarter of 1996 of £2.7 billion--those are the latest figures available. Over the past 13 years, the Tory Government have transformed the surplus on manufactured goods, which Britain proudly held during the period of a Labour Government, to one of continuing deficit, year after year after year.
Mr. Lang: Clearly, the hon. Gentleman did not hear the figures that I gave the House earlier. Is he aware that manufacturing industry has been growing in the past few years? We have increased employment in manufacturing by 150,000 jobs in the past three years. We now manufacture more than we ever did under any previous
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Labour Government in our history. That is the turnaround that we have achieved in this country. The Government play an active part in helping exporters into new markets.
Mr. Michael Stephen (Shoreham): Does my right hon. Friend agree that there is sometimes a problem of definition of what we mean by manufacturing? Is the creation and development of software regarded as manufacturing or as the provision of services?
Mr. Lang: My hon. Friend makes a good point. There has been a definitional change. Many manufacturers have now subcontracted many of their processes to outside industries that are regarded as service industries--one such industry is transport. Despite the change in the structure of the definitions, our manufacturing output has expanded dramatically, our productivity has doubled in the lifetime of this Government and exports are at an all-time record. That is the telling picture that we are now able to present to the British people.
We in government play an active part in helping our exporters into new markets. I and my ministerial colleagues have taken thousands of British business men, from large and small companies, on trade missions to open up new markets for our exports. Everywhere we go--from Mexico to Mauritius, from China to South Africa--we are welcomed with open arms and with respect for the new competitiveness and quality for which Britain is now renowned.
Our embassies and consulates abroad now know that promoting Britain's commercial interests is at the centre of their mission. Our best overseas embassies are true launching pads for British industry. We operate a joint export promotions directorate with the Foreign Office so that we can work together to best advantage. In the Department of Trade and Industry, we have specialised country desks for export promotion, where businesses that want to export to a particular part of the world can get rapid, expert advice, often provided by people seconded from top private sector companies who have particular knowledge of the market or industry that they are helping.
Small firms are a particular priority for us. The business links network operates a national network of export counsellors, who have a specific responsibility for helping small firms to boost their export effort.
I believe in small government and would not operate those schemes if I was not absolutely convinced as to their value for money, but that value is irreproachable. In April this year, the National Audit Office published its report on our overseas trade services. Analysing our work in four key south-east Asian markets, the report found that £4.5 million in public spending had helped to generate an extra £345 million of additional business--in other words, every pound we spent generated £77 in additional exports for Britain.
Britain's export performance is now nothing short of spectacular and the world knows it. It is clear that without those policies, that success would be a world away, as it was during the 1970s under the previous Labour Government. The world is backing Britain by buying more of our goods and services than ever before; but the world's business community is paying us an even greater compliment by coming to locate its businesses here and doing so in record numbers.
Since 1979, the Invest in Britain Bureau has registered nearly 5,000 separate inward investment projects, and the exciting point is that that trend is accelerating. An inward
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We are top of the European league for inward investment. We win a third of all inward investment into the European Union from the rest of the world. We win some 40 per cent. of all Japanese and American investment into the European Union and 50 per cent. of investment into the EU from Canada. For the world's fastest growing economies--the Asian tigers, such as Korea and Taiwan--Britain is the investment base of choice: we have more than half of all their investments in Europe.
Indeed, two of the most spectacular investments of 1996 have come from Korea. In July, the LG group announced Britain's largest single inward investment to date in terms of job creation, with its plans to spend £1.7 billion on two manufacturing plants in south Wales and so create some 6,100 jobs. In October, Hyundai announced that it would spend £2.4 billion on two microchip manufacturing facilities in Scotland, bringing 2,000 new jobs. If I had time, I could give many more examples and describe how every part of Britain is benefiting from the surge in inward investment, but let me illustrate the point by focusing on the effect of inward investment on one sector--the motor industry.
Last month, I was delighted to be able to announce confirmation by the BMW group that its new generation engine, the NG4, would be built in the west midlands. That £400 million project will safeguard 1,500 jobs at Rover and 5,000 more in the components supply industry. It was magnificent news, ensuring that we have a vibrant, world-class car manufacturer in the midlands with the strategic capability to design and build engines--the first plant outside Germany to build BMW engines. Land-Rover's commitment to a new sports vehicle and Rover's to the new Mini, and the recent investment decisions by Nissan and Vauxhall and by Proton of Malaysia, reinforce that picture of success.
What are the benefits of the riptide of inward investment? First, it brings jobs: since 1979, inward investment has brought over 800,000 associated jobs and the pace is quickening. In the past three years alone, 289,000 jobs have been created or safeguarded and last year the figure was around 100,000. Jobs resulting from inward investment are making a big contribution to the fact that unemployment in Britain--just over 7 per cent. and falling--is more than 4 per cent. lower than the EU average.
Mr. Skinner:
Is the Minister aware that a couple of weeks ago, on 17 November, an editorial in the News of the World--a Murdoch newspaper--said that the Government's figure of just over 2 million unemployed was totally false? The newspaper had carried out a survey, which showed that there were 4.1 million people out of work--about 2.1 million were claiming unemployment benefit, but a further 2 million were either claiming other forms of benefit or not receiving any benefits at all.
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The truth of that calculation is amplified by a survey in Bolsover, which discovered that 50 per cent. of the population were out of work in the ex-mining villages in three wards of my constituency, because not a single pit is left and there is hardly any work to be had. Not only are Labour Members saying that the Government's unemployment figures are false, but Tory newspapers are now saying out loud that the figures are false. There are more than 4 million people out of work but, sadly, only slightly more than 2 million receive unemployment benefit.
Mr. Lang:
I can understand the hon. Gentleman's sensitivity about unemployment, given the previous Labour Government's appalling record on job losses. The unemployment count carried out in this country is supported by broadly comparable figures from other surveys, including international ones.
Jobs are not the only benefit of investment. Investment improves our capacity to compete in the future. More than £11 billion of capital expenditure was brought to the United Kingdom by foreign investors in 1995. New techniques are introduced into British industry by foreign investors. Major projects give rise to a flurry of activity among small and medium-sized firms, which act as suppliers to larger companies. Competition is enhanced by expanding the number of players in the domestic market, leading to more choice for consumers. Whole swathes of the country have been regenerated by inward investment, which has often been based on redeveloping derelict sites.
Why do overseas companies choose to locate in Britain? They do so because, during the past 17 years, we have been building the enterprise centre of Europe here. In the words of Jan Timmer, president of that great Dutch company, Philips:
Not only does Labour have a shameful record on strikes when in government; it has an equally shocking record when in opposition. The Labour party opposed each and every one of the trade union reforms that foreign companies endorse so warmly. If we had had a Labour Government during the 1980s, we would still have secondary action and flying pickets, the closed shop and car park mass meetings instead of secret ballots, and a strike rate way above that of our competitors.
"The most competitive country in Europe today is the United Kingdom . . . The factories we have in the UK are the most changed factories in the world".
I spoke earlier about our flexible labour market, with low burdens on business; and about our stable economy, with low inflation and low interest rates. We have also transformed industrial relations in this country. Our strike record under the previous Labour Government was a national disgrace, but through a series of step-by-step reforms of our industrial relations law, we have brought order, and indeed harmony, to labour relations here. The number of days lost to strikes is now less than one twentieth of the level that we inherited from the previous Labour Government, and that helps to bring inward investment--and jobs--to Britain. One of this country's big inward investors has cited our improved industrial relations as one of the attractions.
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