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6.20 pm
Mr. Jim Cunningham (Coventry, South): I begin by noting that two pieces of good news have emerged recently. First, my right hon. Friend the Secretary of State for Defence made an announcement today that will reassure many people in the aircraft industry around the country. Many of my constituents work at the Rolls Royce plant in Coventry, and others work in the supply side of the industry. My right hon. Friend's announcement will be very important for them.
Yesterday's announcement by Marconi is the other piece of good news, especially for Coventry which, like other cities, suffered from the recessions experienced during the years of the previous Government. However, the Marconi announcement owed a lot to the endeavours of the local authority--the leader of the council went so far as to go to America to conduct negotiations. Marconi takes an interest in the education system in Coventry and, as a result, the firm knows that the engineers that it will need in the future will be produced. The firm also contributes to social programmes, and Coventry has benefited from that too.
I was a little alarmed by an earlier intervention about Massey Ferguson, and it would be remiss of me not to mention it. Although we must not be too alarmist about the matter, it is true that Massey Ferguson depends on
exports and that those exports are affected by the strength of the pound. There is no doubt that the strength of the pound is important, but it should not be assumed that Massey Ferguson will pull out of Coventry. The company's labour force deserves a tribute: over the years, many jobs have been lost, but the workers who have remained have increased their productivity and have accommodated changes in management structures and techniques.I hope that the Government will take note of my remarks with regard to Massey Ferguson, and also accept that the strength of the pound was a major factor--if not the decisive one--in what happened recently with Rover. I am a member of the Select Committee on Trade and Industry and we heard much evidence to that effect.
I have contact with businesses small and large, and there is no denying that the strength of the pound is a problem. The Government must think seriously about it, although I note that the shadow Chancellor, the right hon. Member for Kensington and Chelsea (Mr. Portillo), has said that the strength of the pound demonstrates that the economy is very healthy. That may be true, but we must not allow it to destroy the economy. I am not an economist, but my constituents are worried about these matters, and I hope that my right hon. Friend the Secretary of State will consider them.
The hon. Member for Tiverton and Honiton (Mrs. Browning) opened the debate by suggesting that, because members of the Government Front Bench have no experience of business, that somehow disqualifies them from being members of the Government, or that they are incompetent. However, I remind the hon. Lady that one does not have to be able to drive a car to understand traffic regulations or the rules of the road. I think that the hon. Lady should think seriously about that.
Earlier, the hon. Member for Tiverton and Honiton spoke about the negotiations that my right hon. Friend the Secretary of State had conducted, and she acknowledged that over the years I had gained some experience of industrial relations. I can tell her that negotiators are only as good as the information that they get from each other. They also have to rely on the integrity of their opponents.
If there is a loss of trust, negotiations are impossible and no agreement can be reached. That is an elementary truth but, in all negotiations, circumstances can change from time to time. In negotiations about job numbers, for instance, no employer will say that any job will last for ever, and a similar approach applies to all negotiations, including those between companies.
All the evidence gathered by the Select Committee made it clear that my right hon. Friend the Secretary of State did not know what BMW had in mind for Rover. People have said that he should have known, but it must be remembered that the trade unions were caught off balance too. However, what is important is that Rover starts to go from strength to strength. We must stop talking down the company's prospects, and start giving all the support that we can to the new company that has taken over the business.
Mr. Bercow: I acknowledge the hon. Gentleman's industrial experience, but does he accept that the Government continually put out to consultation proposals
that flow from the European Union, yet allow small businesses only six weeks to offer a response? Is not that patently inadequate?
Mr. Cunningham: I am not sure that I agree with the hon. Gentleman, who has no industrial experience and who cannot know anything about what happens in negotiations. He cannot know either how long it takes for small businesses to respond adequately to consultation. In short, I doubt whether the hon. Gentleman really knows what he is talking about.
The Opposition have spoken about a burden of £10 billion that has been imposed on business as a result of regulation. However, when it is broken down, that total covers the costs incurred when employees take time off for hospital appointments, for example, or for holidays. Those costs represent part of the normal overheads of business.
The Opposition must get their act together if they want to move into the enterprise culture. When it comes to trade and industry, the Government have no need to take any lessons from Opposition Members who have no great experience in such matters. They have not run much in the way of business, and so cannot be too critical of other people.
I know that some of my colleagues have waited two or three hours to contribute to the debate, so I shall end by urging the Government to consider the effect that the strong pound is having on this country's manufacturing base. That effect is especially evident in the west midlands and Coventry.
6.28 pm
Mr. Nicholas Winterton (Macclesfield): I start by expressing my long-held view that manufacturing industry is the only sustainable, non-inflationary source of economic growth. Governments or political parties neglect or ignore that fact at their peril.
Most of the Macclesfield borough is in my constituency, and a study published over the weekend showed that a higher proportion of the major businesses there make a profit than in any other town or city in the northern half of the United Kingdom. The tables in the report, which was compiled by the business information service Dun and Bradstreet, are based on the country's 50,000 largest businesses, and cover 162 towns and cities across Britain.
I am delighted that Macclesfield should be found to be the most successful northern town, and that it came 12th in the table of the top 20 towns in the United Kingdom. However, although large businesses such as Astra Zeneca and British Aerospace Systems Regional Aircraft plc contribute to that success, there are many small and medium-sized businesses in the area. They include Spectus plc, Gradus Ltd., Rosslab Ltd., County Labels Ltd., Whitaker Technical Plastics Ltd., Statiflo Ltd., Flock Print Ltd. and Henry and Leigh Slater Ltd. They are some of the range of businesses that contribute to the success of the area that I represent. I am very proud of their achievements too.
In July, I will have the important and pleasant task of presenting an Investor in People award to an excellent company called Microshape, which has been based in my Macclesfield constituency since 1993. Microshape is one such success story, having brilliantly bridged the yawning
gap between innovation and marketing. It is a specialist extrusion tooling manufacturer--of PVC windows and doors--for the plastics industry. It is the United Kingdom's leading supplier of extrusion tooling. The company designs, manufactures and commissions extrusion tools. There are very few independent extrusion toolmakers, as the hon. Member for Dudley, South (Mr. Pearson) knows well, so Microshape has a virtual niche market. The majority of its competitors are in Germany and Austria.In the past year, Microshape has invested £500,000 on improved machinery to automate the manufacturing process. As a result of its growth, the company is due to relocate to new purpose-built premises in Macclesfield. That represents an opportunity for a company to create a world-class environment, for the benefit of employees and customers alike. I believe that the future of Microshape now looks brighter than at any time in the past.
I say that not to give the Government a pat on the back. Macclesfield, after all, is represented by a Conservative and independent Member of Parliament and Conservatives have had overall control of the council, even through the Conservative party's bleak times.
There were certainly heavy job losses in manufacturing under the previous Government, from 1979 to 1997. However, in May 1997, despite sometimes avoiding admitting it, the new Government inherited low inflation and the lowest unemployment rate of the major European Union states. I say that not just as a Conservative--it was said by someone who was not a particular supporter of the Conservative party. Adair Turner, the former head of the Confederation of British Industry, said in September 1999:
- Like the US, but unlike some other European countries, we now achieve low unemployment with minimal inflationary pressure . . . this reflects the impact of the profound Labour market liberalisation introduced by the previous Government in the eighties and early nineties.
This country has had a long history and a proud tradition of inventiveness and enterprise. To the present day, we enjoy a wealth of innovation and talent. Although the UK has the innovation and enterprise required to stimulate and sustain economic growth, a key link is broken then with the further development and marketing stages that I believe are vital for a manufacturing success story. After all, the second report of the Select Committee on Science and Technology states:
- The major part of university and public sector activity is research, directed at acquiring knowledge. The major part of industrial activity is development, directed at achieving what the market wants.
I turn now to the clothing and textiles industry, which I know well. We appear to have a death wish as far as manufacturing is concerned. Have successive Governments ever been able to understand the worn-out cliche "being competitive"? With the retail chain stores looking for price reductions year on year, and taking into consideration the balance sheets of all the suppliers to the retail outlets, it is my view that the writing has been on the wall for the past 18 or 20 years.
In Germany, firms can borrow money at one third of the price that applies in the United Kingdom, and they have three times as long to pay it back. In addition, retail stores in this country are looking for a 320 per cent. mark up on the goods that they purchase from their suppliers.
The continuous drain on retail companies competing against each other at lower and lower prices has virtually destroyed the clothing and textiles industry in the UK.
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