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House of Commons

Thursday 25 February 1999

The House met at half-past Eleven o'clock


[Madam Speaker in the Chair]

Oral Answers to Questions

Madam Speaker: Mr. Burden.

Mr. Christopher Gill (Ludlow): On a point of order, Madam Speaker.

Madam Speaker: I always take points of order after questions.

Mr. Gill: It relates to my question, which has been wrongly printed in the Order Paper.

Madam Speaker: May I deal with that when I call the hon. Gentleman to put his question? He can make a correction then. I think that that is how we shall do it, so that it gets printed properly in Hansard.


The Secretary of State was asked--

Automotive Engineering

1. Mr. Richard Burden (Birmingham, Northfield): If he will make a statement on the prospects for automotive engineering in the United Kingdom. [71592]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): With £3 billion of new investment and the creation of 6,500 new jobs announced in 1998, and with yesterday's announcement by Vauxhall that it will locate its European centre of research at Luton, it is clear that the overall prospects are good.

Mr. Burden: I welcome the announcement by Vauxhall of the investment in Luton. Does not that show that it makes sound business sense for motor manufacturers to invest here in the United Kingdom? Against that background, would not it also make sound business sense for BMW to confirm production of a new model range at Rover in Longbridge? My right hon. Friend visited the plant a few weeks ago and I welcome the positive attitude that he has shown to that possibility. Will he confirm that Government assistance to back such investment by BMW would in no sense be a bail-out, but would be investment to transform the plant and ensure that motor manufacturing remains here in the European Union?

Mr. Byers: I compliment my hon. Friend on the role that he has played in representing the interests of his many

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constituents at the Longbridge plant in Birmingham. I was pleased to visit the Longbridge plant with my hon. Friend a few weeks ago to discuss the situation with management and representatives of the work force.

The House will know that BMW is at present reviewing the position regarding the development of a new medium-sized car. I am confident that Longbridge is in a strong position. Provided that skills can be raised and improved productivity achieved--and also that BMW is prepared to make a substantial investment in Longbridge--the Government will do all that we can to assist the plant financially, to save the 14,000 jobs of people directly employed there, and to save the jobs of the many tens of thousands of people in the west midlands economy who depend on Longbridge.

Mr. Nicholas Winterton (Macclesfield): Will the Secretary of State accept that the automotive engineering sector is a vital part of the manufacturing element of the United Kingdom economy? Does he also accept that added social costs at a time of globalisation and increased competitiveness across the world are very dangerous to the sector, which is already highly competitive? Will he also have a word with the Chancellor of the Exchequer and suggest that he should not adopt such a hostile attitude to the motorist, who sources so much employment in this country?

Mr. Byers: I am afraid that the hon. Gentleman is denying what is happening in reality. Yesterday, Vauxhall announced its new research and development centre here in the United Kingdom, and last month Nissan announced an extra 800 jobs in Sunderland. Those companies are looking world wide and choosing to invest in the United Kingdom. This is a good place to do business, and the Government are taking the steps and putting in place the measures to ensure that it will remain so.

Jacqui Smith (Redditch): Does my right hon. Friend share my concern about the comments that have appeared in a national newspaper calling for the withdrawal of support from the Longbridge plant, presumably with a consequent loss of jobs and investment there? Will he assure me that he will continue to give positive support to the west midlands and to the Longbridge plant? Will he call on the Opposition also to condemn the comments in that newspaper, which they usually support?

Mr. Byers: The Opposition have been notable for their total silence on the question of support or otherwise for Rover at Longbridge. Not a word has been said--apart from by the right hon. Member for Wokingham (Mr. Redwood), who speaks on these matters for the Opposition and who sought to denigrate Longbridge in a debate a couple of weeks ago. I regret the words that he used on that occasion.

I can however confirm that there is no question of the Government bailing out Longbridge. We are prepared to support the plant, to help to improve productivity and raise skill levels there, and to work towards leveraging in much more money from BMW. If we can secure that, the prospect for Longbridge is bright, and I look forward to visiting the plant in the not-too-distant future, when its future is secured.

Mr. John Redwood (Wokingham): The Secretary of State should withdraw his last remarks about Longbridge.

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The Opposition have made it very clear that we want a strong motor manufacturing industry in Britain, and we have supported the case for strong manufacturing in the west midlands.

Does the Secretary of State accept that the problems experienced by Rover and other motor manufacturers stem largely from the high value of sterling, which is the result of this Government's policy? That has meant that it is one fifth dearer to make things in Britain than in France or Germany. Will he confirm that stability of exchange rates is crucial to the euro scheme? Does not that mean locking Britain into an uncompetitive exchange rate that will make it too dear to make things in Britain?

We welcome the odd piece of good news, but the overall background is one of factory closure after factory closure and job loss after job loss. The Secretary of State does not care, and does not seem to realise the consequences of the Government's actions. Does he now accept that the Government's change of gear on the euro is a crash of gears for British industry?

Mr. Byers: The right hon. Gentleman talks about a single piece of good news, which Vauxhall's decision yesterday certainly was. However, it was not the only one. Last month, Nissan created 800 jobs in Sunderland. Last year, Honda announced investment of £500 million in Swindon, creating 1,000 jobs. In addition, Peugeot has announced 900 jobs in the past three months, Vauxhall has announced an additional 1,000 jobs at Ellesmere Port and Toyota has invested £180 million at Deeside, which will create 310 jobs. That makes nearly 4,000 new jobs in the past 12 months.

The right hon. Gentleman allows prejudice to rule over fact, and he cannot see the good news. He should listen to the managing director of Vauxhall, who has said that if the Government were to adopt the policies proposed by the right hon. Gentleman on the single currency, Vauxhall would not consider further investment in the United Kingdom. He should talk to the managing directors of Nissan, who say exactly the same. That is the reality that the right hon. Gentleman chooses to ignore because he is not prepared to recognise that our future lies in Europe. Business believes that it does, but for prejudiced reasons, the right hon. Gentleman will not recognise it.

Mr. Dennis Skinner (Bolsover): My right hon. Friend needs no lectures from that lot opposite about the manufacturing base because 40 per cent. of it went during the 18 years of Tory Government. They shut nearly every shipyard in the country, and they closed every coal mine in Derbyshire. And Deadwood walked through the Division Lobby with the rest of the Tories to close down the pits.

Madam Speaker: Order. The hon. Gentleman tends to get carried away. I thought we might have a good kick-off this morning, not an abusive one. Please use appropriate language when referring to Members of the House.

Mr. Skinner: I did not think you had caught on, Madam Speaker.

Madam Speaker: I am wide awake this morning.

Mr. Skinner: I only got "Deadwood" from the Tory paper, The Sun, when the right hon. Gentleman stood for the leadership.

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If BMW starts to throw its weight about and fails to honour the pact agreed with the Transport and General Workers Union and other unions by saying that Rover is worthless, will the Secretary of State tell BMW that we will take Rover back--just as we did when we nationalised Rolls-Royce--so that we can run it for the public benefit?

Mr. Byers: I have to say that that is not one of the options being considered by the Government. To be serious, however, the work force at Longbridge showed their clear commitment to the future of the car industry by voting last autumn for radical changes to their working practices. We all want BMW to show a similar commitment to Longbridge.

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