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Mr. Redwood: Many of my hon. Friends could make equally powerful points about their constituencies. The problems are real, and the Government must listen to us.
Meanwhile, the Secretary of State likens himself to John the Baptist. I think that John the Baptist was closer to being an atheist than the Secretary of State is to understanding British manufacturers. He has invited us all not to a baptism, but to a funeral for British industry. He will discover that his enthusiasm to drive the story of factory closures out of newspapers and off the media will backfire terribly. There is so much worry in the country that the media will have to pick up that concern despite the right hon. Gentleman's guidance to the contrary that it is of no interest to people outside the House.
I trust that, when the Secretary of State speaks, he will not play too heavily on the welcome news of new jobs in construction announced by British Petroleum yesterday. We need lots of such announcements, because, by its nature, construction work expires every time a contract finishes. New contracts are always needed to keep construction workers in employment. The Secretary of State should not be confused into thinking that those jobs are new jobs in manufacturing or chemicals. The jobs tally for BP's investment is plus 225 new jobs for the new plant when it is up and running, but minus 150 jobs at Baglan, where there will be a compensating closure. The sum of the good news for the chemical industry is a gain
of 75 jobs, but that small, though welcome, announcement was more than swamped by yesterday's other announcements of losses elsewhere in manufacturing.
Mr. John Bercow (Buckingham):
My right hon. Friend is advancing a powerful case. In support of it, will he recall the simple, salient fact that there have been 19,000 job losses since the Secretary of State assumed his post?
Mr. Redwood:
I am most grateful to my hon. Friend for that intelligence. I had not counted the figures up in that way, but his figure sounds entirely possible. Perhaps the total is even more. I have noted announcement after announcement in the press, on television and on the radio since the Secretary of State took up his responsibilities.
The Secretary of State recently made a trip to the United States of America. I welcome the fact that he is learning from businesses there; they have things to teach us. However, I hope that he will not ignore successes at home. Far from wishing to talk down British business, I spend much of my time talking it up, to counter the awful words of the Secretary of State. He blames everyone but the Government for what is going wrong in fine, productive, successful companies that are in deep trouble because of the Government's policies.
The Secretary of State claims to have had a flash of inspiration and light, to the effect that clusters work. If lots of large and small investors can be placed side by side, he claims, that will generate more jobs, more companies and more success. I wonder whether he has ever thought about the fact that, just a few miles from here, a little east of Westminster, is one of the oldest and most successful clusters of business in the world. It is called the City of London. The City of London was a successful cluster of inward investors and home-grown businesses before Columbus even sailed to America. But what does the Secretary of State do? He does not go to the City of London to congratulate it and see what he can do to help it; he, with his colleagues in Brussels, threatens it with a withholding tax and with dire consequences if it does not follow his political agenda. He will have to learn that even great success stories such as the City of London need care and attention from Ministers when economies are in troubled times.
Does the Secretary of State ever pause to think that Hatton garden and Harley street are also examples of successful clusters developed by the United Kingdom a long time ago? He is right to think that Silicon valley in the United States of America is a great success story, but is he aware that, if he travelled 40 miles to the west of London, he would be in the heart of a great British success story--another silicon valley called the Thames valley? He may not want to come to my constituency, where there is an enormous amount of enterprise and where unemployment is 0.9 per cent., but he may like to go to the constituencies of his hon. Friends the Members for Reading, East (Jane Griffiths) and for Reading, West (Mr. Salter), where he will see great success. Why does he not go there and learn from those experiences? Why does he not then take an interest in Hartlepool, where unemployment is 10 per cent. and where male unemployment is 13.5 per cent., and why can he not apply some of the success stories from the Thames valley to Hartlepool, which is what I would want him to do if I were one of his constituents?
Mrs. Claire Curtis-Thomas (Crosby):
I am sure that my right hon. and hon. Friends will agree with me on the right hon. Gentleman's record on clusters. I am pleased that he acknowledges that clusters are vital to our economy, but, having admitted that, will he reflect on the Conservative Government's performance after 1992? I offer some statistics. In 1992, under the Tory Administration, 62,767 businesses failed--such a glowing acknowledgement then of clusters and their effectiveness in the economy. In 1993, there was a rapid improvement, with 55,000 failures. Why do we not go to the year before the Conservative Government were unceremoniously ousted, when their glorious achievement in recognition of the significance of clusters throughout the nation resulted in only 36,000 business losses?
Madam Speaker:
Order. I hope to call the hon. Lady during the debate.
Mr. Redwood:
The hon. Lady has probably made her speech already; she clearly has not been listening, because I dealt at the beginning of the debate with the point that she has rather tardily made.
The truth is that the Government have transformed the United Kingdom from being the number one place for new investment for multinational companies to the number one place for closures. Now that there are some problems in the world economy, where do such companies turn to to dismiss their staff and close their factories first but the United Kingdom, because they know that it is in the United Kingdom that the climate has deteriorated most dramatically.
Mr. Michael Clapham (Barnsley, West and Penistone):
The right hon. Gentleman refers to investment, but he must be well aware from the figures shown, for example, in the McKinsey studies for the Treasury that, because for 18 years the Conservative Government failed to invest at the rate of our competitors, we are now in a situation where the Germans invest 67 per cent. more per worker than we do, the Americans invest 52 per cent. more, the Japanese 55 per cent. more and the French 46 per cent. more. Moreover, it is a little rich of him to talk about clusters when he was part of a Government who, in one fell swoop, put 32,000 miners on the dole.
Mr. Redwood:
The hon. Gentleman has not realised that the McKinsey report is based on entirely arbitrary exchange rates--purchasing power parity rates--considerably below recent market exchange rates. That is why it shows output per head in the United Kingdom as lower than output per head in west Germany. Incidentally, it compares us not with the whole of Germany, just with west Germany. Were we to make the comparison at recent high market exchange rates, we would have a very different picture of Britain's relative success.
Mr. Desmond Swayne (New Forest, West):
Johnson and Johnson, which makes orthopaedic parts, is closing its plant in my constituency and moving to Cork. It is doing so not because it is unwilling to invest--it will invest a great deal in Cork--but because the Government have made the climate for investment so hostile.
Mr. Redwood:
That is another good example of the point that I am making. The danger--indeed, the reality--
Mr. Edward Leigh (Gainsborough):
The hon. Member for Barnsley, West and Penistone (Mr. Clapham) has clearly read not the original McKinsey report but only a briefing supplied to him by the Labour party. Had he read the report, he would have seen that it makes it clear that we should compare ourselves with America, and that our economy and that of Europe generally are becoming increasingly less competitive because of over-regulation of the type imposed by the Labour Government on British industry.
Mr. Redwood:
My hon. Friend is right. The exchange rate differential is less important in the case of America because McKinsey believes that its rate is closer to the true rate and because, in recent months under this Administration, it has not been as high, relatively, as the Deutschmark rate. Thus there is a technical as well as a sound reason, based on the relative performance of economies. I agree with my hon. Friend that labour productivity in this country is not as high as it is in the US. Later in my speech, I shall discuss what the Government should do about that.
The House may like to remember what some large overseas investors were saying about this country just a little while ago when they decided to set up business here. For example, when Siemens decided to build an important plant in Britain in 1995--quite recently--it said:
"Our decision to build the new semiconductor plant here in the UK is a recognition of the pro-business environment which exists and the skills and commitment of the British workforce. . . . we have not invested here because we see the UK as a low-wage economy."
Siemens recently decided to close that plant because none of those conditions remains true, as the Government have decided to make it too dear to make things in Britain. [Hon. Members: "That is not true."] Hon. Members say that that it is not true. What other explanation is there? Siemens has not closed its factories elsewhere in the world, but it has decided to close the British factory, despite the fact that, a short while ago, it felt that Britain was the best place to invest.
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