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Mr. Bercow: I recognise the figures that my hon. Friend has just given to the House. Am I not also right in thinking that British Steel calculates that its costs will increase as a result of this measure by something in the order of £200 million? I believe that that is an annual figure, but perhaps my hon. Friend knows better than I do.
Mr. Butterfill: My hon. Friend, in his customary way, is extremely well informed and accurate. Those are the figures that were quoted by British Steel.
I really do not see how, at this very delicate time for British Steel, the Government can realistically contemplate increasing its costs by £200 million a year. It is enormously difficult to see how the company can make savings in other areas to compensate for that level of imposition. It is not just British Steel, of course. The director of policy at the Engineering Employers Federation is immensely critical and has said:
There will be odd regional effects. Representatives of Transco and some of its partners in the energy industry in Northern Ireland came to express their concerns to me yesterday. They said that the programme of modernising the energy production industry in Northern Ireland that they are committed to would be severely prejudiced by the measure. The fine margins that they calculated for their investment would be almost entirely eroded. Under the rules that the regulator has to follow they would not be permitted to recover a significant proportion of the cost from their consumers. They estimate that the increased burdens placed on Northern Ireland businesses as a result of the levy would make them increasingly uncompetitive, particularly in comparison with their rivals in the Republic of Ireland.
We are trying to increase prosperity in Northern Ireland. There are sensitive negotiations about the future and economic prosperity is probably the one factor that can help to bind the parties together in a common
objective. Destroying that burgeoning prosperity would cause profound damage and may be a considerable contributory factor if the Government's political efforts--which I praise--fall apart.
Mr. Hilton Dawson (Lancaster and Wyre):
It is good to join in the debate at this late stage. I have very much enjoyed the past four hours of discussion. There have been some worthy contributions from hon. Members on both sides. The hon. Member for Bournemouth, West (Mr. Butterfill) has just made a balanced and interesting speech.
In just under 12 hours' time I shall still be out at a rather nice do in Lancaster. When I am celebrating with my constituents, I shall enjoy an extra little frisson at the thought of the hon. Member for Buckingham (Mr. Bercow) sitting up in bed with his Ovaltine learning copious amounts of Hansard so that he can quote it back at us on another occasion.
Mr. Dawson:
It is only a joke. I shall not give the hon. Gentleman further opportunity to entertain us. He has done so for long enough.
I particularly want to talk about Lancaster and the opportunities for business development of research expertise and ideas from higher education. That is the most important development that the Government are trying to introduce. For decades under successive Governments, British industry has failed to make anything like the most of the opportunities presented by some of the best and most innovative and inventive brains in the world. I greatly welcome the range of Government initiatives, including partnership with the Wellcome trust, increased investment in scientific research, the new round of the foresight programme and the new opportunities for investment created by the provision of capital for small business innovation.
The key concepts of enterprise and innovation, taken with the opportunities presented by the Government, will galvanise Lancaster's economy. We can establish Lancaster as a regional centre at the heart of the north-west, but with potent economic links to the world, to attract business investment to our superb environment. Our communications links to the north and south are important, and those to the west--to Northern Ireland and the Republic of Ireland--are increasingly important. We have excellent educational resources, particularly--but not solely--the world-class university of Lancaster, the engine for the future of Lancaster.
I profoundly believe that the small and beautiful city of Lancaster has the potential to build a great knowledge-based economy. The university has first-class resources across the board, but the resources in applied science, computing, biochemistry and management are world class. Academics and students are attracted from around the world to study in Lancaster.
I am talking about a knowledge-based and environmentally sustainable economy. Enterprise, innovation, development and investment in our
knowledge, expertise and skills could provide a good model on a small scale for the whole country, and could certainly transform the economy of Lancaster, which is important to the north-west, but which needs transforming in many respects.
We have heard much today about the golden economic legacy, but I have not seen that in Lancaster over the past 20 years. Lancaster once led the world in the manufacture and production of floor and wall coverings. However, only about 10 per cent. of people in employment in the city are now employed in manufacturing.
Lancaster has pockets of high and endemic unemployment and is being denied the investment that it manifestly needs for its transport infrastructure. The city requires radical measures and major investment to deal with congestion and to develop integrated and sustainable transport. Lancaster has large areas of industrial dereliction.
Frankly, Lancaster was comprehensively failed by the Conservative party which, for 27 years, exerted political dominance in the city and represented it in this House. The Tories took the place for granted and let slip our assisted area status. They had no ambition for the area and allowed it to run down. I believe that, with our resources, our local people's ability to work together and the opportunities provided by the Government, we have a chance to put all that behind us.
Last week, I was at Lancaster royal grammar school to witness innovation and enterprise at first hand. There is unique collaboration between that school, one of the country's best; Lancaster university; British Energy, from Heysham nuclear power station; Linklaser, a software firm; and an extremely bright ex-student, John Fawcett. They are using the national grid for learning and have developed a programme that makes live data about the operation of the power station immediately accessible to schools on the internet.
I quit physics as soon as I could, but even I can see that that could transform science education. The knowledge, experience and skills at Lancaster university and in local colleges, schools, business and the local authority can produce business innovation and enterprise and the skilled well-paid jobs of the future.
At a recent business breakfast, we considered a vast range of Government initiatives to develop science and enterprise and incubate business from higher education research, encouraging investment and innovation in small business. There are plenty of bright ideas that can be transformed into future opportunities. That is the great hope for the city of Lancaster and for the national economy.
I have witnessed the development of robots at Lancaster university and heard of small businesses setting up all along the coast around Morecambe bay, from Lancaster up to Sellafield. There is the embryonic network of a mechatronics coast, linking innovative industry with business and university research and development, developing new applications and pioneering the use of robots under the sea and in hostile industrial environments.
There is a growing initiative in applied sciences, with engineering students being placed in local companies and gaining experience of the real working world. In a few
short weeks, there has been a complete revamping of the IT systems of a small local firm, DMS Meters, which from humble beginnings--in someone's shed, I think--is ploughing into worldwide electric metering markets in the middle east and Asia.
My favourite example is of two local farmers, Ken and Colin Newsham, who, with intelligence and courage and through their sheer willingness to engage with people, listen and learn, are linking with one of the best management schools in the country, at Lancaster university, to turn a traditional north Lancashire family farm into a management training centre and a model for sustainable development and diversification in the countryside.
Those are but a few examples of how the university can be the engine of the new economy in Lancaster. That is where our competitive future lies. We are building the knowledge-driven economy and transcending the devastation that was bequeathed to us in the 1980s. That is not an easy process. Although all sides are willing to work together to grasp the many opportunities being provided by the Government, we have a long way to go. The cultural differences between the academic and business worlds can be profound and we need to marry them together to achieve a change. As Professor Richard Davies of Lancaster university has said, we need to put the D firmly back into R and D.
"This is more than a bit of a scare. If you end up with an asymmetric position on energy taxation you will find that either UK based companies will move their production facilities to other countries or they will simply close down."
That is a fairly apocalyptic prediction from such a person as the director of policy at the Engineering Employers Federation. Can the Government really contemplate that sort of action when they claim that they are particularly supportive of engineering and manufacturing industry? It just does not add up.
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