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6.34 pm

Mr. Tony Baldry (Banbury): It was a little difficult to follow the comments of the hon. Member for Coventry, North-West (Mr. Robinson). Can the House agree that it is pointless for everyone to try to find someone to blame--the Germans, the family, and so on? For many of us, there are large numbers of jobs, families and households at stake--in Oxford, East, in Banbury and in the whole of Birmingham.

My hon. Friends on the Front Bench are to be congratulated on initiating the debate, without which hon. Members on both sides of the House would not have had the opportunity of speaking on this matter today. We all have a bad feeling in the pit of our stomach about what is happening. When the Secretary of State said in his closing comments that our thoughts were with the families at Longbridge, he was right, but it was a rather funereal peroration. Perhaps we can all move away from trying to find somebody to blame and, instead, think about what we can do to improve the situation for the future.

It seems that we all agree that the people at Longbridge have done their very best to deliver. Productivity is high and anything that has been asked of the company has come across. So where do we find the problems and what can we do to improve matters?

I have two requests of the Minister for Competition and Consumer Affairs and the Secretary of State. First, I ask the Government to give an undertaking that if need be they will return to this matter in Government time in the not-too-distant future. It should not be only for the Opposition to initiate debates on the subject.

We know nothing about Alchemy, as my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) said. I am sure that it is a perfectly respectable company, but it has no proven track record in such a large enterprise. I hope that the Secretary of State will give an undertaking that he will return to the House to debate these matters. He says that he wants to obtain a great deal of information about Alchemy, and I hope that, perhaps on Monday, he will make a statement so that we can be kept up to date with what is happening.

I agree with the hon. Member for Twickenham (Dr. Cable) and others that we must recognise the impact that the strength of the pound is having on manufacturing industry throughout the country, and not only in the west midlands. There have been a number of comments from BMW spokesmen. I will not go through them because they have been listed in The Independent and other newspapers recently. They have said that they have been watching the exchange rate on almost a daily basis. It seems that, as much as anything, the exchange rate and the strength of the pound caused BMW to abandon its £1 billion investment in Longbridge.

This is not an issue that we can duck. If the strength of the pound is damaging UK manufacturing capability and capacity, the Bank of England Monetary Policy Committee must take account of that when setting and determining interest rates.

Dr. Lynne Jones: What would the Conservatives do about the high value of the pound? If we want a loosening of monetary policy, it is hardly appropriate that the Tories should be calling for tax cuts and a loosening of fiscal policy as well.

Mr. Baldry: I hoped for better from the hon. Lady. To engage in point scoring in this debate is pointless. If the

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strength of the pound is damaging UK manufacturing industry, we are entitled to say to the Bank of England that, when determining its policy, it should not focus only on inflation rates but should have regard to what is happening to the core of our manufacturing base.

The hon. Member for Coventry, North-West (Mr. Robinson) talked about what is happening in terms of the UK--

Mr. Deputy Speaker: Order. The hon. Member for Meriden (Mrs. Spelman) should not be reading a newspaper in the Chamber.

Mrs. Caroline Spelman (Meriden): I am sorry, Mr. Deputy Speaker.

Mr. Baldry: The hon. Member for Coventry, North-West talked about what was happening in terms of UK competitiveness and the UK manufacturing base moving overseas. Those matters should be of concern to every Member of this place and should not be used for the scoring of political points. We are talking of jobs that, once lost, will not return. I urge the Secretary of State and the Minister to accept that we must all consider, in the absence of the blame culture, how we can turn the situation round.

I am sure that there are macro-economic issues that require consideration. The Secretary of State told us frequently what had not influenced BMW in its decision. He said that it had not been influenced by a lack of grant. However, he did not tell us what had influenced the company in deciding to move away from Longbridge. I suspect that one factor was the exchange rate and the fact that it could see itself continuing to make substantial losses while the pound stayed as strong as it did. If this House continues to be totally myopic about that, we cannot be surprised if the UK manufacturing base continues to be eroded.

6.39 pm

Mr. Nick Gibb (Bognor Regis and Littlehampton): We have had an important debate on an issue that is crucial to the British economy and vital to the jobs and prospects of 50,000 people. The Secretary of State has presided over a catalogue of incompetence. Incompetence characterised his handling of the Post Office network, the computerisation programme, and the level of the Post Office monopoly: is it £1 or 50p? He handled the Utilities Bill incompetently--it required 400 Government amendments, and the telecom and water sectors were removed from it halfway through Committee stage.

The Government's original approach to the Electronic Communications Bill was incompetent. There is confusion about competition policy and the Secretary of State made errors of judgment in his rip-off Britain campaign. I wonder how much damage that campaign has done to the sale of Rover cars in Britain and world wide? The Secretary of State now displays incompetence in his dealings with the European Commission on state aid to Rover.

The Government originally announced state aid with a flourish in March 1999 and the details were announced in June. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, between those two dates, only one meeting with the Commission took place.

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The Commission was not formally notified until August 1999; the EU began its inquiry four months after that. Why did the Secretary of State take so long--six months after the first announcement in March 1999--to make the formal application? We have to wait until June this year for a formal EU decision. That is too late. Industry has to work at a different pace from that to which the Secretary of State is accustomed. However, the writing is on the wall for the right hon. Gentleman. In the row between the Secretary of State and his junior Minister over the site for the Synchrotron research facility, the Prime Minister backed Lord Sainsbury rather than the Secretary of State--another incompetent judgment.

When he opened the debate, the Secretary of State simply read out the BMW press release and the results of hours of research into previous aid notifications by the Conservative Government. His dismissal of the delay in achieving EU approval of the grant is astonishing. He now claims that the grant is irrelevant. When Rover achieves new investment, the grant is crucial and the success is a triumph for the Government, but when Rover is in difficulty, the grant is irrelevant and the problems have nothing to do with the Government.

Mr. Ian Bruce: I have just returned from watching the Chief Secretary and his constituents in Oxford on television. They were celebrating BMW's actions, yet the mood on the Floor of the House is completely different. Do we know whether the £140 million will go to Oxford rather than being lost to BMW?

Mr. Gibb: I am grateful for that intervention. It is good news for Oxford. Perhaps the Secretary of State is more concerned about that than the difficulties at Longbridge.

Mr. Burden: Will the hon. Gentleman give way?

Mr. Gibb: I shall not give way because we are running out of time. The hon. Member for Twickenham (Dr. Cable) blamed the problem on the exchange rate; that is also BMW's view. He acknowledged that nothing could be done about the exchange rate, but he agreed with us about the damage that the rip-off Britain campaign causes.

The hon. Member for Birmingham, Northfield (Mr. Burden) denied that the exchange rate had any effect in view of successful exports of BMWs, even when the Deutschmark was strong.

In an informed and balanced speech, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) made the important point that a period of six months to investigate the £152 million grant by the Commission is unacceptable in this day and age.

The hon. Member for Birmingham, Hall Green (Mr. McCabe) pointed out that 2,000 companies could lose up to 30 per cent. of their business if Longbridge closes.

My hon. Friend the Member for Bromsgrove (Miss Kirkbride) rightly pointed out that, but for the Conservative Opposition, the Secretary of State would not even have made a statement. She raised the important concern about jobs at Longbridge, on which the Secretary of State was so coy.

A bigger issue is at stake. There has been incompetence, delay and dither, and the Secretary of State incompetently failed to examine the aid issue in detail.

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Had he done so, he would have worked out that the Commission would not accept that there was any realistic possibility of the Longbridge operation being transferred to Hungary. On the radio this morning, he also made the extraordinary statement, which he repeated in the debate, that--

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