House of Commons
Thursday 25 March 1999
The House met at half-past Eleven o'clock
PRAYERS
[Madam Speaker in the Chair]
Oral Answers to Questions
TRADE AND INDUSTRY
The Secretary of State was asked--
Aerospace Industry
2. Mr. John Wilkinson (Ruislip-Northwood): When he last met representatives of the aerospace manufacturers in the UK to discuss a national strategy for the industry. [77034]
The Minister for Energy and Industry (Mr. John Battle): I and my officials regularly meet senior representatives of the United Kingdom aerospace and defence industry to discuss matters of strategic importance. My last meeting with them was prior to the Madrid meeting of European Industry Ministers in January.
Mr. Wilkinson: Is the Minister aware that British Aerospace is to make a provision of no less than £25 million for last year against losses incurred by the Airbus consortium amounting to a total of £125 million in its discounting war to obtain market share against Boeing? Will he assure the House that, before there is any question of launch aid from Her Majesty's Government to Airbus Industries for the A3XX ultra large jumbo replacement, the Government will insist that Airbus Industries is turned from a groupement d'interet economique into a limited company with transparency that will show value for money and value for investment?
Mr. Battle: We cannot give the hon. Gentleman an absolute assurance because we cannot control what other countries and other companies do, but his point is valid. When we examine any application for launch aid, we shall take into consideration the need to have open markets in the Airbus industry in Europe as a whole.
Mr. David Borrow (South Ribble): I am pleased that the Government are seeking to develop a strategy for the aerospace industry, which is much needed. I urge the Minister, when consulting the industry, to ensure that organisations representing smaller companies, such as the Consortium of Lancashire Aerospace, are included in the consultation process. Will he also ensure that representatives of local communities that are dependent
on the industry, and trade unions that represent those who work in the industry, are included in the development of a strategy?
Mr. Battle: I thank my hon. Friend for his comments. He champions the industry in his area, and the Consortium of Lancashire Aerospace does a good job. The aerospace and defence industries, including the supply chain, support some 500,000 people. We are keen that everyone involved in the whole structure of the industry is consulted and participates in the conversations to take the industry forward to a prosperous future.
Mr. David Chidgey (Eastleigh): In the Minister's discussions with the industry, was he made aware of its concern about the appalling record of investment in research and development in this country, which is the lowest of our competing nations? Was he also made aware that British Aerospace firms are being persuaded to move their research and development and their production facilities overseas, as they are attracted by better investment support? Will he give a commitment to improve the record for the funding of research and development in this country? Will he start by announcing that he will keep the civil aviation research and development programme in place unchanged--or, better still, improved?
Mr. Battle: I am not sure that I accept the premise of the hon. Gentleman's questions. We are supporting, or have supported, research and development either through launch aid, investment or in previous CARAD programmes. Decisions on the allocation of all Department of Trade and Industry budgets, including the CARAD programme, will be announced at the end of this month when the Department publishes its expenditure plans. I hope that the hon. Gentleman is encouraged by that.
Mr. John Smith (Vale of Glamorgan): Is my hon. Friend aware of the recent announcement of an investment at British Airways maintenance centre in Rhoose in my constituency, which will make it the only deep maintenance aerospace facility that can service Boeing's heavy 777 aircraft and make it a world leader? Is he also aware that south Wales now has one of the most advanced aerospace sectors in the country, which contributes almost £800 million a year to the local economy? The future success of the south Wales economy depends on continued investment in those areas.
Mr. Battle: My hon. Friend also champions the industry, and emphasises the link with the whole economy. We must not underestimate or undervalue that link. In the meetings and constructive dialogue that we have with the Society of British Aerospace Companies, which is the trade association for aerospace, we intend to work in partnership with the companies to ensure that our aerospace industry has a long and successful future.
Mr. Jeffrey Donaldson (Lagan Valley): The Minister will be aware of the importance of the aerospace industry to the economy of Northern Ireland, and in particular the employment provided by Shorts in Belfast. At present, Shorts, in partnership with Raytheon and other UK companies, is making a bid for the new, advanced,
stand-off radar system in the United Kingdom. Does the DTI have a role in the decision-making process on the awarding of that new project for an advance, stand-off radar system? Will the Minister tell us when a decision is expected as to who will be awarded that project?
Mr. Battle: The Department of Trade and Industry has a role, but, because a defence contract is involved, the final decision will be made by the Ministry of Defence. Our role is to represent the industry, and, having been consulted, to spell out the impact of the decision, whether that is positive or negative. I had the pleasure of visiting Shorts not long ago, and I believe that the excellence of its work will be taken into account when the decision is made.
Manufacturing Industry
3. Mr. Tim Loughton (East Worthing and Shoreham): What action he is taking to remove (a) financial and (b) regulatory burdens on the manufacturing industry. [77035]
The Secretary of State for Trade and Industry (Mr. Stephen Byers): The manufacturing sector, along with all business, will benefit from the framework for economic and financial stability put in place by this Government. I am currently reviewing all regulations that have an impact on business.
Mr. Loughton: Why, then, has the president of the Confederation of British Industry--along with the CBI itself--calculated that, over the lifetime of this Parliament so far, Labour has imposed more than £39 billion of excess charges on industry by introducing the national minimum wage, the working time directive and European works councils? Why has the president of the CBI said that the business horizon has darkened since Labour took office, and that unless the creeping paralysis of red tape stops, the only growth markets in 1999 will be in regulation?
Mr. Byers: I am disappointed to hear that rather selective quotation from what was said by the president of the CBI. I shall have a word with Sir Clive, and put him right. It is a shame that he was not the CBI representative at a meeting that I convened last Thursday, involving the CBI, the Institute of Directors, the British chambers of commerce and representatives of small business, to discuss constructively how we can lift the burden of regulation from business. That is a serious agenda, and one that I intend to pursue with vigour.
Mr. Christopher Leslie (Shipley): Will not manufacturing industry be helped considerably by the new small business service that the Government are setting up? Will it not help to cut through the thicket of bureaucracy and red tape that the Conservative Government put in place, and also help small firms with such matters as payroll administration?
Mr. Byers: I am sure that the Small Business Service will play an important role in helping what is clearly a vital part of the economy. We need a small business sector that is vigorous and prosperous, and we are introducing measures to ensure precisely that.
Mr. John Redwood (Wokingham): The way in which to sort out the president of the CBI is to do what he asked,
and abolish the stealth taxes and extra regulatory costs that have been heaped on industry by this dreadful Government.
Does the Secretary of State realise that the pound has risen by 7 per cent. against the euro so far this year? Does he accept that means that British goods are now 7 per cent. dearer in relation to the French, German, Spanish and Italian goods produced by our main competitors, with which we ourselves are trying to compete? Will the right hon. Gentleman and the Chancellor of the Exchequer stop ducking the question of how many jobs will be lost as a result of their policies? They have made it too dear to make things in Britain, and as a result we have a balance of payments crisis and an industrial meltdown. Will the right hon. Gentleman tell us how many jobs will be lost, and will he tell the 474 people in his constituency who have lost jobs in the past six months what message of hope he has for them?
Mr. Byers:
I can tell the right hon. Gentleman that we will not lose 1 million manufacturing jobs, as happened under his party's Government in the early 1990s.
If the right hon. Gentleman wants to talk about the value of sterling, he should reflect on the fact that, in the last 12 months of the Conservative Government--between May 1996 and May 1997--the value of sterling rose by nearly 20 per cent. That is the difficulty that the present Government face.
The right hon. Gentleman has form, of course: he was a Minister in the Department of Trade and Industry with responsibility for companies. In 1989, when he took office, there were 21,000 insolvencies; but then the Redwood magic began to work. In the following year, there were 33,000 insolvencies. In 1991 there were 55,000, and in 1992, when the right hon. Gentleman departed from the DTI--thankfully--there were 69,000. That is the right hon. Gentleman's record, and it is one that we do not intend to repeat.
Mr. Denis MacShane (Rotherham):
Does the Secretary of State agree that stability must be the key? It is not just the rise in sterling, but the fact that, between May 1990 and May 1997, sterling changed value 87 times against the deutschmark. It is Tory instability that we have to put right.
We also acknowledge that, in helping business, the most charmless words in the British vocabulary are, "Good morning. I am from the Ministry in Whitehall and I am here to help you." What business wants is just the ability to get on with its success. In Rotherham, the chamber of commerce has merged with the training and enterprise council and incorporated the business link. Now there is a real partnership feel in the town. We are worried about whether there are any proposals emanating from Whitehall to pull all that up by the roots and replant them. Where it is working, let it get on with working.
Mr. Byers:
I agree that, where things are working, they should be allowed to proceed accordingly, but the success that Rotherham United might be achieving is not reflected throughout the country. We have not only to build on best practice, but to recognise that, in certain parts of the country, we are not providing the service that small businesses need. We intend to do that.
Mr. Brian Cotter (Weston-super-Mare):
In view of the great concern about the burden of regulation on small
Mr. Byers:
As I have said, there are a number of issues that we will discuss with the business sector to find out how we can lift the burden of regulation from business. We have started that process. It would be premature to identify today one particular proposal that may or may not be supported, but we intend to take a radical approach to the issue. I take it seriously. I intend to take action quickly to ensure that that burden can be lifted.
Mr. Geraint Davies (Croydon, Central):
My right hon. Friend may be interested to know that this morning I visited Landis and Gyr Communications Ltd.--I do not know whether Opposition Members ever go to factories--which produces high-tech telephone systems. I was giving out Kaizen awards, which Opposition Members may not know are for converting innovative ideas into action and viable products.
Does my right hon. Friend agree that the role of Government is not just about finance and tax, but about creating an entrepreneurial atmosphere within the broader economy through the education and trade and industry systems, so that we can convert good ideas into saleable products in the global marketplace? May I bring the good wishes of Landis and Gyr to the House for the creation of a much stronger dialogue with the business community, something that I have personally been encouraging in south London?
Mr. Byers:
My hon. Friend is a great advocate in south London for the initiatives that he has outlined. I assure him that the Government are committed to the knowledge-driven economy. The initiatives to which he has referred will play a key part in ensuring that we have world-class companies that are able to prosper in the environment of stability that the Government have been able to establish.
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