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Industry and Employment
Mr. Deputy Speaker (Mr. Michael J. Martin): We now come to the next debate. [Interruption.] Order. Hon. Members should be quiet in the Chamber, and the House must come to order. Madam Speaker has selected the amendment in the name of the Prime Minister.
4.13 pm
Mr. John Redwood (Wokingham): I beg to move,
- That this House regrets the way the Government is making it too dear to make things in Britain; condemns the tax increases, increases in regulation and the poor climate for industry brought about by present policies; highlights the factory closures and 250,000 forecast job losses feared by the trade unions; condemns the New Deal for young people, which has failed to reduce youth unemployment, has disappointed employers and requires radical change if it is to stop wasting billions of pounds of taxpayers' money; and recommends a change of policy to avoid a prolonged and damaging industrial collapse and consequent rising industrial unemployment.
In our motion, we say that we regret the way in which the Government are making it too dear to make things in Britain. We condemn the tax increases, the increases in regulation and the poor climate for industry brought about by the Government's policies. We highlight the factory closures and the 250,000 jobs that the trade unions forecast will be lost from industry in the months ahead. We condemn the new deal for young people, which has failed to reduce youth unemployment. Indeed, that figure is now falling less quickly than it was under the successful Conservative policies that the Government ditched. The scheme now needs radical change to avoid more damage being done and more money being wasted. I ask the House to forbear on the new deal because my hon. Friend the Member for Ashford (Mr. Green), who will wind up the debate, will put the full case on the new deal.
I want to do justice to the parlous plight that industry faces. The debate is particularly timely because I have learned grave news from the north-east which the House should know and discuss as it breaks. We have heard this afternoon that Siemens, which so recently closed a microchip plant in the north-east, is about to open a new microchip facility near Paris. I hope that the Government will now apologise for misleading the House, the constituents of the Secretary of State for Trade and Industry and those of the Prime Minister.
When the closure was announced, the Government were categoric and said, "The work is not going elsewhere because there are no types of microchip that can be made in the north-east that we can secure. The market is saturated. It is a world problem; it is nothing to do with Britain." Already this afternoon, trade unionists, workers and people who have been sacked from Siemens in the north-east have gone on record saying that they have the building, the skills, the people and the wish to succeed, and they would like the chance to make the microchips that will be made near Paris. They cannot do that because they have a Labour Government, who have priced them out of the market and whose policies have done terrible damage to the Secretary of State's constituents. Day after day, week after week, more factories close and more jobs
are lost. Now that problem is in the Secretary of State's backyard, and we have caught the Government misleading the House and the public.
Mr. Alan Campbell (Tynemouth):
Siemens is in my constituency. Is the right hon. Gentleman aware that the company decided, last summer, to withdraw from north Tyneside because of its failure to develop a joint venture, as most microchip plants around the world have done, to guarantee a market for that product? Is the right hon. Gentleman further aware that, in a statement last summer, Siemens explained that its decision to pull out of north Tyneside had nothing to do with the Government's policies but was due to the collapse of the microchip market in the far east, which meant that the joint venture destined to come to north Tyneside went to the far east?
Mr. Redwood:
What a wriggle! However, the hon. Gentleman has confirmed my case. He says that a joint venture went to the far east, and I was saying that it is too dear to make things in Britain because of the Government's policies, so companies are going elsewhere. We now learn that an important new facility will be located in Paris, which is much closer to home and is an area with which we ought to be able to compete. Why cannot we compete with Paris? Because the Government's policies have priced us out of the market. Their taxes, their regulations, their exchange rate and their interest rate are all that we forecast, and, unfortunately, our forecasts have come true. I do not want British industry to be destroyed, but I said that it would happen, and it is happening.
The Secretary of State for Trade and Industry (Mr. Stephen Byers):
Let us have some facts, rather than the prejudice on which the right hon. Gentleman's statements have been based. Will he confirm that Siemens's decision was to set up a joint venture with a company that is already located just outside Paris? Will he confirm the point made by my hon. Friend the Member for Tynemouth (Mr. Campbell), in whose constituency Siemens is based, that the company was unable to find a joint venture in north Tyneside for the simple reason that potential partnerships were already located on the continent?
Will the right hon. Gentleman now start to address the real issues of the Siemens case, rather than relying on prejudice? Prejudice will not help people in the north-east of England and, more importantly, it says more about his failure to lead for the Conservative party on trade and industry matters than anything else.
Mr. Redwood:
That last criticism was wide of the mark and revealed how desperate the Secretary of State has become. The people whom he represents, the constituents of the hon. Member for Tynemouth (Mr. Campbell) and I know that there is a new, purpose-built facility sitting empty in the north-east of England. They know that Siemens was committed to that region because of Conservative policies and is now pulling out under Labour policies. They know that Siemens had a Government grant, which it welcomed, but it does not now think that the grant is sufficient to make up for the cost burden in Britain. They know that if, Siemens wanted to launch a joint venture, it could be done, because the work force, the factory and the
The Secretary of State must understand that a competitive devaluation is under way from the continent of Europe. We are getting the thin end of the wedge on that, and the Government's policies have made Britain the centre for closure, and France and Germany the centre for those new developments.
Mr. Paul Keetch (Hereford):
Will the right hon. Gentleman give way?
Mr. Redwood:
I willingly give way to the rest of the Government.
Mr. Keetch:
Liberal Democrat Members are deeply sorry that Siemens is going. In the right hon. Gentleman's perception, what is the reason that Siemens is relocating in France instead of coming to Britain? Is it the fact that France is joining economic and monetary union or the fact that France has high social costs, as he would perceive them?
Mr. Redwood:
I have explained that the competitive devaluation of the euro--therefore, France's membership of EMU--allied to the high-cost policies being followed by the British Government, obviously lie behind the switch. The numbers do not add up in the north-east, thanks to the Government. They do add up, relatively, in Paris because of the change of exchange rate and the extra costs in Britain.
We have said that, at some point, Britain would have imported enough of the high costs from the continent to make such a switch all too likely. We have now reached that point.
Mr. John Bercow (Buckingham):
Does my right hon. Friend agree that the news that he has just relayed to the House is especially grave in the light of the fact that there have been 7,500 reported job losses in the north and north-east of England since July 1998, and that, in the first three months of this year, there has been a 29 per cent. increase in business bankruptcies in the north-east--the area represented by the Secretary of State for Trade and Industry?
Mr. Redwood:
I am grateful to my hon. Friend. I was hoping to mention later the way in which the disaster has been spreading throughout the north-east region. Siemens is just the biggest and best-known closure, but there have been many others.
Mr. Ian Bruce (South Dorset):
I do not know whether my right hon. Friend has yet seen the May edition of "CBI News"--which contains a smiling picture of the Secretary of State for Trade and Industry. It says that costs of £4.6 billion extra have been imposed on industry simply as a result of the working time directive and the minimum wage, before we get into all the other legislation that takes effect from 1 April. That figure of £4.6 billion is the Department of Trade and Industry's own figure.
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