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Maria Eagle (Liverpool, Garston): Would the right hon. Gentleman care to quote Siemens's reasons for closing its factory as carefully as he quoted its reasons for coming here in the first place? As I recall, it spoke about the worldwide recession and the collapse in its market. Is it not easy to see why it would choose to make
redundancies here? One legacy that the previous Government left this country is that it is now much easier to sack people here than it is in other countries.
Mr. Redwood: Of course there are problems in the microprocessor market worldwide. We have always accepted that. [Interruption.] The hon. Lady has not been listening. I have always said that on the Siemens issue. The question that I have always posed is why, given that there are problems, Siemens closed the British factory and not the others. Why has it chosen to close a modern, state-of-the-art factory, having made such a huge investment in Britain so recently, and why has it changed its view of Britain dramatically since 1995? Rather than close factories in Portugal or Germany, it chose to close the most modern plant--in Britain--because it had become too costly.
The Secretary of State for Trade and Industry (Mr. Peter Mandelson): The right hon. Gentleman cannot get away with this. The Siemens management, from the chairman and chief executive downwards, have made it consistently clear in all public statements and all discussions with me that the closure of the plant on north Tyneside had nothing whatever to do with domestic economic considerations. The reason that they cited was the collapse of the world market in semiconductor products. If the right hon. Gentleman is to be taken seriously in the rest of this debate, he would do well to withdraw his ridiculous claim.
Mr. Redwood: The Secretary of State must explain why Siemens closed in Britain and not elsewhere. That is the important question.
Mr. Mandelson: What is more, the right hon. Gentleman should be aware that that was not the only plant that Siemens closed. It even closed down lines in those products in its home city, Munich, as well as elsewhere. He needs to think again and get his facts right.
Mr. Redwood: Britain was the place where Siemens chose to close a complete factory of a most modern kind because the numbers no longer looked nearly as good as they did in 1995, when it was praising the United Kingdom and the policies being followed.
Mr. David Borrow (South Ribble): Will the right hon. Gentleman accept that things are rather more complicated than he suggests, and that currents of investment between Europe and the United Kingdom go each way? Leyland Trucks, in my constituency, will next year produce an extra 4,500 trucks--which means more than 300 jobs--as a result of a transfer of production from Holland and Belgium. That current is going in the opposite direction to that suggested by the shadow Secretary of State. Perhaps he will accept that things are a little bit more complicated than the black and white picture that he paints.
Mr. Redwood: I am not arguing that all the industry will close, but a significant number of factories will close because the Government have made it so much more difficult for business to survive. Of course, there will be some success stories--we shall welcome every one,
because they are good news--but they are a drop in the ocean compared with the massive attrition that is going on in manufacturing.
I remind the Secretary of State of the case of Rover. In 1994, when BMW purchased it, Rover was working at full capacity. A BMW spokesman said:
It is obvious that something has gone horribly wrong. In respect of the particular factor singled out by the chairman of BMW, we know that the Government are about to throw a spanner in the works of our successful industrial relations reform, but we also know that Rover has moved from reasonable profits to heavy losses and has had to issue a warning that it will not be making profits for the rest of this century.
Why is Rover making those losses? The reason is quite obvious. Rover has some good cars--they are not the problem, and the Secretary of State will share our pride in the marvellous new models that it launched at the motor show that he and I visited. The problem is the numbers: the high tax bill, the exchange rate and the high regulatory cost are wrecking the numbers at Rover.
Mr. Lindsay Hoyle (Chorley):
Is the right hon. Gentleman not aware of the price fixing that is taking place in this country? Surely there would be many more benefits to Rover if that were taken away, because it would be able to sell cars much more easily, and surely he must be blaming BMW management in what he is saying.
Mr. Redwood:
I look forward to the Secretary of State's answer to that question, and I should like from him replies to a series of questions that I sent him yesterday in the hope that he would get advice and give us the answers in the House today.
I asked the Secretary of State a series of questions about how he intended to respond to the detail of the McKinsey report. Although I disagree with the McKinsey methodology, the report concludes that the reason for the apparent or actual productivity shortfall that it identifies is, largely, Government policy. McKinsey says that it is a series of mistaken restrictions imposed by Brussels and London Governments on various product markets.
I hope that the Secretary of State will answer my questions, building on the point made by the hon. Member for Chorley (Mr. Hoyle) about the car market. Is it correct that the right hon. Gentleman is to lift all restrictions on car imports into the United Kingdom? Why did he not know about that last week, when it was announced by the Chancellor of the Exchequer? The Secretary of State seemed to be completely unaware of the policy, although it should fall in his bailiwick.
Is it correct that the Government think that we have insufficient milk quota from Brussels, and what will they do about it? Would we not have a much more successful
dairy industry if we had more milk quota here in the United Kingdom, so that we had more raw milk to process in this country for higher value-added uses by the food industry? Will the Secretary of State and his colleagues fight in Brussels to get us the milk quota that we need to deal with the problems identified in the McKinsey report?
Will the Secretary of State and his right hon. Friends remove the restrictions on the building of large out-of-town retail developments? The McKinsey report says that that is the main reason why our productivity in food and non-food retailing is lower than that of the United States of America, where out-of-town hypermarkets with large, free car parks are common. How does that square with the Government's much-vaunted policy of restricting out-of-town developments--the very policy that McKinsey says lies at the heart of the productivity difficulty?
Do the Government intend to remove the restriction on building new hotels? That policy is based on arguments similar to those used about hypermarkets, and is also identified in the McKinsey report as the main reason why hotel productivity is lower than in the United States of America.
Does the Secretary of State, as the ultimate regulator of our telephone system, intend to switch our system to that used in America, where local calls are free or very cheap, but where it is more expensive to get access to a phone? I thought that that was against the whole thrust of Labour's policy of opening up access to a phone. The McKinsey report says that, without such a system, our productivity in telephones will never match that of the United States of America.
Does the Secretary of State intend to remove planning restrictions on high-tech developments? The McKinsey reports says that we do not have bigger and better high-tech clusters, like Silicon valley in the United States, because of planning restrictions.
Will the right hon. Gentleman lift the restriction on the licensing of pharmacies, because McKinsey says that the main constraint on higher pharmacy productivity is the restriction on the number, size and type of development?
Will the right hon. Gentleman lift the wholesale exclusive distribution franchise arrangements in the automotive industry? Of course, car prices could be lower if there were car hypermarkets without franchises, but does he think that this is the right time to make that change, given that all manufacturers in the United Kingdom are struggling for profits because of the terrible problem of costs that they face as a result of the Government's policy?
Will the right hon. Gentleman give us more detail on the competition policy that he wants to follow in other sectors? Let us take the newspaper industry. The right hon. Gentleman said that the Competition Act 1998 will provide a more competitive system. Does that mean that he will get rid of the recommended cover price for newspapers? Will he abolish all protected price systems in the newspaper industry? Will he open up distribution to anyone who wants to distribute, thus breaking the current exclusive distribution arrangements?
Those are serious questions, and I gave the Secretary of State full notice of them so that he could prepare serious answers. We shall give him scope to answer, even though
he has not yet published his competitiveness White Paper. Many of the answers have been leaked or have already been given to the country: many of them were supplied by the Chancellor of the Exchequer in the green Budget papers. I hope that the Secretary of State has now read them, and has caught up with what the Chancellor has already announced.
"Plants at Rover are operating at the limits of capacity, and in some instances special shifts were worked."
In 1995--as late as October--the chairman of BMW said:
"Great Britain is currently the most attractive country among all European locations for producing cars. This results from the structural reforms initiated by Margaret Thatcher in the early 1980s, the most significant factor being the rearrangement of industrial relations between companies and trade unions".
That was said by the company that is now talking about the possible closure of all or most of Longbridge, which is one of our most important car plants.
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