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House of Commons

Thursday 15 July 1999

The House met at half-past Eleven o'clock


[Madam Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked--

Engineering Innovation

1. Mrs. Linda Gilroy (Plymouth, Sutton): What steps his Department is taking to encourage innovation in engineering. [90006]

The Minister for Energy and Industry (Mr. John Battle): Engineering companies are eligible for a wide range of Government-sponsored schemes designed to stimulate innovation in industry. There has been a 20 per cent. increase in the innovation budget spread over three years, the purpose being to promote and foster innovation in engineering.

Mrs. Gilroy: Will my hon. Friend acknowledge and encourage the sort of awards that the Design Council and the Royal Academy of Engineering make? Can I draw his attention to a remarkable product made in Plymouth by British Aerospace--the silicon gyroscope, which received the Design Council award and is on the shortlist for the McRobert award?

Mr. Battle: Yes, I want to acknowledge all efforts to promote excellence and innovation in engineering. The Plymouth-based British Aerospace Systems has come up with a highly innovative silicon gyroscope, which is one of the four finalists for that prestigious Royal Academy of Engineering award. The device--which has been referred to as the transistor of the 21st century--will be used in cars, for example, to improve anti-lock braking systems and will improve safety and vehicle performance. That links in with the Government's priorities to build and blend in the cleaner, leaner, safer and smarter vehicles of the 21st century. That is what the Government and the people want.

Mr. David Chidgey (Eastleigh): I join the Minister in his congratulations for British technology. However, is he aware that, over the past 12 months, this country has fallen from fourth place in global competitiveness to eighth place? Studies have shown that the reasons are a combination of the strong pound, new business regulations and an underlying weakness in science and technology. I know that the Minister personally feels this

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way, but will he make a commitment, on behalf of the Government, to provide some joined-up Government in tackling those problems so we can nurture British industry?

Mr. Battle: I wonder where the hon. Gentleman has been. Of course there is a challenge in global competitiveness, but where was he when we boosted the science, engineering and technology budget by £1.4 billion to underpin basic research? We have £25 million for the science enterprise challenge and £20 million for the reach out fund, as well as funds for the SMART schemes and the foresight-link awards to foster engineering. We believe that we will address the shortfall not by doing things for industry, but by putting in schemes to underpin the innovative approach to competitiveness to ensure that our engineers make world-class products and can win their way forward.

Mr. Michael Clapham (Barnsley, West and Penistone): Does my hon. Friend intend to have discussions with his colleagues at the Department of the Environment, Transport and the Regions regarding regional development agencies and the way in which they might be encouraged to promote innovation in engineering, particularly by developing mechanisms to transfer technology from the universities and colleges into industry?

Mr. Battle: My hon. Friend makes a good point. I am encouraged that the RDAs are already drawing up innovation strategies at the regional level. For example, in our region of Yorkshire, the RDA has drawn up an innovation strategy, and the same is true in the west midlands. We look for the template throughout the country, and then our schemes can be tailored in to help encourage the technology transfer to which my hon. Friend refers.

Mr. John Bercow (Buckingham): What does the Minister of State say to the director of policy at the Engineering Employers Federation, who insists that UK-based companies will shift their production facilities to other countries or will simply close down if he and his right hon. and hon. Friends persist with their plans for an energy tax? Now it is clear that that tax will discriminate against high value-added, capital-intensive firms, is certain to cost jobs and will undermine British competitiveness, why does not the hon. Gentleman cease just to be a carpet on which Treasury Ministers trample and instead go to his right hon. Friend the Chancellor of the Exchequer and tell him to withdraw this stupid proposal?

Mr. Battle: I seem to recall that the Conservative party imposed stupid proposals with no consultation in their Budgets. This is the first time that we have had two years of consultation. The consultation document has been put out, and there are sector meetings with the Deputy Prime Minister across Departments, including the Treasury and DTI, to work through the proposals. It has been encouraging that employers in all sectors have said that we need to do something about climate degradation and that they will come in to talk about practical measures to address it. Those details are being discussed.

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Of course the measure will have different impacts on different sites, companies and sectors. That is the whole point of moving forward to a negotiated agreement. That is in stark contrast to the previous Government, who simply imposed taxes on business without a hint of consultation at any point.

Ilisu Dam

2. Mr. Harry Cohen (Leyton and Wanstead): If he will make a statement on his Department's policy toward the proposed Ilisu dam project in Turkey. [90007]

The Minister for Trade (Mr. Brian Wilson): No decision has been taken on whether to make Export Credits Guarantee Department support available. A project of this nature is bound to give rise to major environmental and social issues and I want to be sure that they are properly addressed. That is why we have commissioned our own research, including an assessment of the views of the local population. We are working closely with other Departments, and the other export credit agencies involved, as well as with the Turkish authorities and the contractors. When we have completed our analysis, we will decide whether to make support available.

Mr. Cohen: Is my hon. Friend aware that the dam is being built in an area under emergency rule, to which the Foreign Office has advised against travel unless on essential business? It is a site of on-going ethnic conflict in which the local Kurds have been subject to oppressive action by the Turkish Government. Is my hon. Friend also aware that it has been alleged that the project will flood many Kurdish towns and villages, including the ancient city of Hasankeyf, and violate the World Bank's environmental and resettlement guidelines as well as the European convention on human rights? Hon. Members are highly suspicious of the project. Will my hon. Friend help to reduce that suspicion by guaranteeing that all environmental impact assessment reports that he receives are properly placed in the House of Commons Library?

Mr. Wilson: I am aware of all those concerns. Some of them have been overstated and are not quite in accordance with the facts. It is precisely because such concerns exist that we have sent our own independent mission to the area to assess all aspects of the project, including of course the views of the local people.

It is not in my power to say that reports that do not belong to the British Government will be placed in the Library without the consent of those to whom they belong, but I have undertaken to place the report by our own consultants in the Library as soon as it is available.

Manufacturing (Job Losses)

3. Mr. Nick St. Aubyn (Guildford): How many jobs have been lost in manufacturing industry since 1 May 1997. [90009]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): In the two years between April 1997 and April 1999, 118,000 manufacturing jobs were lost, compared with an annual average loss of 150,000 manufacturing jobs in each year between 1979 and 1996.

Mr. St. Aubyn: We have already heard how the index of the World Economic Forum, based in Geneva, has

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shown that we have dropped under this Government from our zenith of fourth in the world competitiveness rankings to eighth. Which of the Department's measures have most contributed to that loss of competitiveness and how many more jobs will have to be lost before they are reversed?

Mr. Byers: The hon. Gentleman ignores the fact that the labour market figures published yesterday show that more people are working in this country than ever before. I would have hoped that he would welcome this morning's report from British Chambers of Commerce showing manufacturing orders up, which is good news for the manufacturing sector. We are witnessing a clear trend of strength not only in the service sector and construction, but now in manufacturing as well. That is because we are steering a course of economic stability in an uncertain world.

Mr. John Healey (Wentworth): It is not the past two years that bother people in Rotherham; it is the two preceding decades that they cannot forgive, when we lost nearly 12,000 manufacturing jobs in metal-working industries alone.

Despite the pressure that manufacturing is under, will my right hon. Friend pay tribute to the work of local agencies such as the Rotherham industrial development office, which is bringing new jobs to our area at firms such as Toyoda Gosei, the Japanese car company in the constituency of my hon. Friend the Member for Rotherham (Mr. MacShane), and the United States tool manufacturer, Morgan Leigh, at Hellaby in my constituency?

Mr. Byers: I am very pleased to endorse the excellent work carried out by many agencies, including those in Rotherham. During my visit to Japan, when we formally announced the decision of Toyoda Gosei to locate in Rotherham, creating about 400 jobs, it struck me that one of the reasons why it was so enthusiastic was that it could see a real sense of partnership in the agencies in Rotherham. That stands in stark contrast to the situation under the previous Government, when on average 150,000 manufacturing jobs were lost every year from 1979 to 1996. That is the Conservative record in office.

Mr. Richard Page (South-West Hertfordshire): Is the Secretary of State aware that several Labour Members are calling the climate change levy the industrial equivalent of the poll tax? When will his Department argue with the Department of the Environment, Transport and the Regions and the Treasury that any changes must be sustainable, otherwise they are not worthwhile? Is he not aware that if those changes take place, they will mean the loss of tens of thousands of jobs and a reduction in production in this country that will lead to imports coming in that have been made by processes that would not be allowed here? When will he fight for British industry on that issue?

Mr. Byers: The climate change levy is a principle that is accepted by many businesses and the hon. Gentleman should accept that. We are consulting on the detail of its implementation and I believe that our proposals will command broad support in the House and in the business community.

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Mr. Barry Sheerman (Huddersfield): Will my right hon. Friend comment on the fact that we have seen yet again this week that Britain is the No. 1 choice for overseas investors looking for the right place to manufacture and to invest in the high technology, innovative sectors? Is that not a cause for celebration, rather than the whingeing that we hear from the Opposition?

Mr. Byers: Yesterday we were pleased to announce the results from the Invest in Britain bureau for 1998, which showed clearly that the United Kingdom was an attractive place for inward investors because they support our policy on the single currency. They do not like the Opposition's policy of ruling out joining the single currency for 10 years and most of those inward investors would not have come to the United Kingdom if we had a Government with that policy. We do not, which is why we remain an attractive place for inward investors.

Mrs. Angela Browning (Tiverton and Honiton): Office for National Statistics figures show 140,000 fewer jobs in manufacturing than this time last year. Does the Secretary of State still support the words of the Prime Minister at last year's Labour party conference, when he told business:

Mr. Byers: I support the comments made by the Prime Minister and I hope that the hon. Lady would agree that we need to improve productivity and the management of British companies. That is certainly on the agenda of my Department and will remain there. The hon. Lady should reflect on why this country is so attractive to inward investment. Some 40 per cent. of all Japanese investment in Europe comes to the United Kingdom, because those investors recognise the positive measures we have taken. That is a strength of this country and, instead of carping on the sidelines, the Conservatives should occasionally celebrate the success of our economy.

Mrs. Browning: Perhaps the Prime Minister was referring to his Front Benchers. With manufacturing jobs slumped to their lowest in six years, a north-south divide now clearly evident and a widening traded goods deficit, does the Secretary of State think that it will be of help to manufacturing for the Prime Minister to hold a conference on manufacturing to tell people how they should run their businesses?

Mr. Byers: We make no apology for consulting the manufacturing industry, because that is important. The hon. Lady should reflect on the record of the Government for whom she was a Minister. Under them, on average, 150,000 manufacturing jobs were lost every year. We will not repeat the days of Tory boom and bust, with interest rates at 15 per cent. for a year, inflation at 10 per cent. and more than 1 million manufacturing jobs lost. That is the record of her Government, but we will not repeat those mistakes. Manufacturing industry recognises that we are putting in place the policies that will lead to long-term success and strength.

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