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Manufacturing Industry (Investment)

9. Mr. John Cryer (Hornchurch): What plans he has to promote an increase in the level of investment in manufacturing industry. [82366]

The Minister for Energy and Industry (Mr. John Battle): One of the main factors holding back investment was the UK's record of macro-economic instability. Our Government have now put economic management on to a more stable footing and the recent competitiveness White Paper and the Budget introduced measures to encourage investment, especially in manufacturing.

Mr. Cryer: I thank my hon. Friend for that answer; he is correct. However, does he agree that the multilateral agreement on investment constituted a menace to British manufacturing and to investment in manufacturing, given the unstable nature of the world's financial markets and the number of multinational cowboys roving the planet?

Does the Minister agree that the proposals dreamt up by the European Commission in December, which basically amount to MAI mark 2, serve no purpose other than to act as an attack on living standards and on investment in manufacturing--not only in this country, but in other countries in the European Union? Does he agree that we should tell the EC to stick its proposals and to get on with what it knows best--maintaining the biggest gravy train in western Europe?

Mr. Battle: Like my hon. Friend, I am not into gravy trains. However, I understand that the MAI was dropped; our Government regarded it as flawed. As my right hon. Friend the Secretary of State has pointed out, it is fair to say that, in general, we are in favour of open markets, but we are determined to blend and hold together economic efficiency and social justice--nationally and internationally. We shall campaign and fight for that not only here, but in international forums.

Mr. John Wilkinson (Ruislip-Northwood): If Her Majesty's Government's policies for manufacturing are so admirable, why have those who earn their livelihood from manufacturing been suffering so much? There is a squeeze on profit margins and, above all, a squeeze on employment. Is the Minister aware that the Trades Union Congress expects that no fewer than 250,000 jobs in manufacturing industry will be lost during this year and that the Confederation of British Industry records that, in recent months, the rate of job losses in manufacturing under this Government has been the fastest for six years?

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Mr. Battle: As someone who comes from a city built on manufacturing throughout the 20th century, I saw that manufacturing base in my city sink from 52 to 22 per cent. of the economy under the previous Administration. There were 1.5 million jobs lost during the recession of the 1980s; under the Conservative Government, a million jobs were lost during the recession of the 1990s. Under the Labour Government, there are 400,000 new jobs; we have set about salvaging manufacturing from the wreckage of the previous Government's savage economic policies.

Mr. David Chidgey (Eastleigh): Notwithstanding the comments that the Minister has just made, is he aware that the number of firms going into receivership has increased by one quarter during the first three months of this year, and that one third of them are manufacturing firms? It is indeed correct that jobs in manufacturing are now being lost faster rate than at any time during the past six years. Given the continuing high interest rates in this country and the continuing high value of sterling, does he accept that hundreds of firms are being driven out of business, and that that will not stop until the Government make a firm commitment on a programme for the UK to enter the euro?

Mr. Battle: In response to that general ragbag of proposals, I point out to the hon. Gentleman that our economy is not immune to international forces. I absolutely accept the pressure on manufacturing that now exists; I realise that--it is evident. However, we are putting in place the fundamentals to ensure that manufacturing has a chance in the future. All the measures that we have implemented--whether on corporation tax, or those introduced as a result of the competitiveness White Paper--will bolster and support manufacturing, when other people prematurely wrote it off. The hon. Gentleman should check his facts; he will find that long-term interest rates are currently the lowest for 30 years.

Mr. John Redwood (Wokingham): With regard to modern industry, the Minister is living in a dream world. We all know that forecasters are saying that investment by many companies will fall or be slashed, and that jobs are being lost day by day.

Will the Minister explain what he and his colleagues are up to in relation to regional assistance? Is he planning big cuts in the map? Why has he delayed making the necessary announcement? Have Ministers met recently to decide to delay the timetable of publication of the new map not only until after today's elections, but until after the European elections?

Do not manufacturers need to know whether they will be eligible for grant support, at a time when investment is under so much pressure because of the bungled economic policies of this Government? Do not voters need to know today and on 10 June what the Government's plans are for the worst-affected industrial areas?

Mr. Battle: It is vital to get regional selective assistance right, but more than half the European countries have not yet submitted their plans. It is important to get it right; we shall get it right; and we shall publish the report in due course, at the appropriate time. I am tempted to point out that the right hon. Gentleman would have

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been first to jump up and accuse us of using the report for political ends had we published it during the election campaign. We are doing exactly the opposite.

On the subject of jobs, I repeat what my right hon. Friend the Secretary of State said: 3,000 new jobs have been created in Scotland and 6,500 in south Wales; more than 400,000 new jobs have been created under this Government; and a job has been created every two minutes for the past two years--that is different from what happened under the previous Government. We are working on that agenda and clawing back an economy that was sinking under the previous Administration.

On a personal note, in the privacy of the Chamber, may I ask the right hon. Gentleman whether he is really on the shortlist for the Institute of Directors job? Given the Tory prospects today, I think that we should be told.

Steel Industry

10. Mr. Denis MacShane (Rotherham): What assessment he has made of the effect of the current value of sterling on the UK steel industry. [82367]

The Minister for Energy and Industry (Mr. John Battle): Our Government have had frequent discussions with the steel industry, both management and trade unions, on the export difficulties arising from the current value of sterling. Notwithstanding current problems, the UK steel industry achieved exports of nearly £3.2 billion in 1998 while addressing underlying long-term competitiveness issues. That is a significant achievement in the circumstances.

Mr. MacShane: I am grateful to my hon. Friend for recording that success story, but the steel industry has suffered from two huge problems: first, the high rate of sterling inherited from the previous Government and, secondly, the fanatical anti-manufacturing culture of the Tory years. However, is he aware of some little rays of sunshine on the horizon? First, in its estimate for the end of the year, Goldman Sachs predicts the pound coming down significantly against the euro, which is good news for steel, although my hon. Friend should spend his wage-frozen salary on holidays abroad now, rather than wait for a weaker pound in nine months' time. Secondly, in Asia, prices are being posted higher and order books are picking up.

Will my hon. Friend consider three specific issues? First, will he ask the Chancellor of the Exchequer to put somebody from manufacturing on the Monetary Policy Committee? Secondly, will he look harder and faster at excessive electricity prices? There is no doubt that we need harmonisation with Europe on that matter, because we need lower electricity prices. Thirdly, will he agree to meet representatives of the industry to discuss those problems in the near future?

Mr. Battle: My hon. Friend champions the steel industry at every opportunity and he should be applauded for doing so. The message from the Government is loud and clear: we positively support manufacturing and we shall do what we can to ensure that there is an economic climate of support for manufacturing. To achieve lower electricity prices and to ensure that heavy industrial users of energy are not unfairly priced out is precisely the

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purpose of the reform of the energy pool electricity trading arrangements. That is why we are working on that project, and I am glad to report that the work is going well. I shall be happy to meet John Bryant, the new chief executive officer of British Steel--indeed, I hope to meet him soon--and I shall continue to hold frequent discussions with the steel industry.

Milk Marque

11. Mr. Nicholas Winterton (Macclesfield): When he intends to publish the Monopolies and Mergers Commission report on the selling of milk in the United Kingdom. [82368]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): As I said earlier in reply to the hon. Member for Somerton and Frome (Mr. Heath), I expect to publish the Monopolies and Mergers Commission report before the House rises for the summer recess.

Mr. Winterton: Does the Secretary of State accept that dairy farmers in England, especially those in Cheshire and my constituency of Macclesfield, face grave uncertainty about the Government's intentions and plans for the future of Milk Marque? Does he agree that, because they deal with a perishable commodity, it is essential that dairy farmers have the right collection and distribution organisation to enable them to get that perishable commodity to the market?

It is quite wrong that Milk Marque should be held to ransom by the big boys in the dairy trade. That is not good for our countryside. In the face of what I would describe as the tragic fall in milk prices, strict quotas and the threat of increased milk imports, will the right hon. Gentleman seek to respond before July to the report by the Monopolies and Mergers Commission? The industry is in crisis and we should do something to help an essential and vital element of the countryside.

Mr. Byers: I understand fully the concerns raised by the hon. Gentleman. He may be interested to know that some 200 right hon. and hon. Members have made representations on this issue, and they will need to be considered when we examine the recommendations in the Monopolies and Mergers Commission's report. We will do that. I am conscious of the uncertainty, which is certainly not helpful to the industry, and I will do all that I can to publish the report as soon as possible. I give an assurance today that that will occur before the House rises for the summer recess. However, as I said in my evidence to the Trade and Industry Select Committee, we will need to take account of the many representations received before we publish our response. We must recognise and consider that information properly if we are to discharge our legal responsibilities. I assure the hon. Gentleman that we will publish as soon as we can practically do so.

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