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Manufacturing (North-West)

6. Mr. David Crausby (Bolton, North-East): What assessment he has made of the recent performance of manufacturing industry in the north-west of England. [144532]

The Minister for Trade (Mr. Richard Caborn): The performance of manufacturing industry in the north-west is being continually assessed by markets operating in conditions of free and fair competition.

The Government are providing the economic stability, which I mentioned earlier, that allows companies to plan ahead with confidence.

Mr. Crausby: Is my right hon. Friend aware that output, exports and employment have fallen in the past four months in the north-west of England? BAE Systems is threatening thousands more redundancies. Things are therefore becoming difficult, to say the least. Bolton has suffered wave after wave of engineering redundancies and two textile factories have closed recently. It is crucial to tackle the scattering of redundancies constructively. What can my right hon. Friend do to reassure me that he will protect the vital north-west industrial base?

Mr. Caborn: The Government have been doing that through several measures since we came to office in 1997. As my hon. Friend knows, we asked the business-led regional development agencies to consider the real structural weaknesses in the regional economies. Those are now beginning to be addressed.

I remind my hon. Friend that the number of manufacturing jobs has increased. For example, approximately 7,000 jobs have been created in fibre optic communications; BAE Systems created 1,700 jobs in Wales. The picture is not all doom and gloom. My hon. Friend knows that more people are in employment now than for many years. The strong macro-economic framework that the Chancellor has created for manufacturing bodes well for the future.

That does not mean that we are complacent; we know that we must move up the value added chain. The regional development agencies and Government offices working with regional partners are addressing those matters.

Mr. Nigel Evans (Ribble Valley): The Minister says that it is not all doom and gloom, but there is too much

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doom and gloom in manufacturing in the north-west. Last year, there were several hundred redundancies in east Lancashire alone. There is currently the prospect of perhaps 2,000 job losses in BAE Systems. We have been told that they will probably fall on the military side. That will affect Samlesbury in my constituency, and Warton, which is not so many miles away. The ripple effect on contractors and small businesses in the area will be devastating. What action will the Government take to ensure that those manufacturing jobs are protected?

Mr. Caborn: Even as recently as two weeks ago, my right hon. Friend the Secretary of State was lobbying hard for the Hawk in India, and we are hopeful that there will be an order from there. In the wider context of BAE Systems, it is a changing scene and we must manage change. BAE Systems is one of the better companies in this country, and is in constant dialogue with the Government. We can assist it in developing technologies and ensuring that the skills base is commensurate with its needs. We must manage change in these modern, globalised times, and we will do that with responsible employers. I emphasise again that there are more people employed now than there were in 1997, when we came to power.

Maria Eagle (Liverpool, Garston): Will my hon. Friend join me in congratulating the work force and management at Jaguar Halewood on the edge of my constituency--it has its front door in my constituency--which is bucking the national trend in car manufacturing and has just taken on 500 extra workers to build the X400? Does my right hon. Friend agree with me that manufacturing on Merseyside is in a very healthy condition?

Mr. Caborn: I agree entirely with my hon. Friend. I remind her that in 1997 £3 billion was invested in car manufacturing in the United Kingdom, which created 9,800 new jobs. Jaguar has been part of that, as my hon. Friend said. Success is being achieved, especially on Merseyside, where partnerships are working well.

Mr. Richard Page (South-West Hertfordshire): It is understandable, with a general election coming, that the Minister's answer had a tad more spin than substance. The hon. Member for Bolton, North-East (Mr. Crausby) put his finger on the problem. Unemployment is increasing in the north-west in sectors such as aerospace, textiles and food processing, in which there have been serious job losses. Is the Minister aware that the TUC has extreme concerns about trends in the area? Is he also aware that the CBI, in its latest survey, says that the north-west has had the second greatest loss of business confidence? Is he not worried, like us, that the Government are creating a north-south divide?

When will the Minister and the Department of Trade and Industry stand up for manufacturing and argue against the raft of regulations that is driving business down? When will they stand up for the sector in the face of the climate change levy, which will cost thousands of jobs? When will the Minister speak up for manufacturing?

Mr. Caborn: I do not know whether a "tad" is imperial or metric: perhaps the hon. Gentleman can tell us how he measures it. Clearly, he has forgotten what was happening

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three years ago when we came to power and there was real concern in the north-west. What has happened since? Yes, we have increased employment in the north-west. Yes, with partners there, we are finding solutions to the long-term problems with which the Tories left us. We need no lectures from the Opposition on manufacturing and the development of the economy.

National Minimum Wage

7. Mr. Jeremy Corbyn (Islington, North): What plans he has to reform the method of setting the figure for the national minimum wage. [144533]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): We have no such plans. The Government have confidence in the independent Low Pay Commission. As the minimum wage is here to stay under this Government, we have decided to make the Low Pay Commission a permanent body.

Mr. Corbyn: Clearly everyone welcomes the principle of a national minimum wage, and I congratulate the Government on introducing it, but does the Minister agree that the current level is far too low? It is extremely difficult for anyone to live and survive on that level of pay. Would it not be better if the national minimum wage were immediately raised to £5 an hour--which would be something approaching a wage on which people could live--and thereafter increased in line with earnings, rather than left to a quango to decide? The poorest workers could then share in the rising prosperity of the rest of the workers in this country.

Mr. Byers: My hon. Friend should not underestimate the positive effect that the introduction of the minimum wage, even at its present level, has achieved. The figures that the Government submitted to the Low Pay Commission in our evidence show clearly that, for the first time in many years, the bottom 10 per cent. of income earners have had a higher increase in their average earnings than the top 10 per cent. Earnings in the north-east and Wales--traditionally low-paid areas--have increased by a larger amount than those anywhere else in the country, so real benefits are coming through.

I ask my hon. Friend to consider the remit that I have given the Low Pay Commission for this year, which makes it clear that when the commission considers an increase, it is not restricted to considering inflation. This year, it will also be able to take into account the increase in earnings.

Mr. Peter Lilley (Hitchin and Harpenden): Will the Secretary of State confirm that self-employed people such as sub-postmasters and postmistresses are not covered by the minimum wage legislation? A Post Office report sent to Members of Parliament shows that the Government's decision to force pensioners and others to have their payments paid into a bank will result in a £550 million loss to the sub-post offices, and that 20,000 sub- postmasters and postmistresses will find their incomes driven below the level of the minimum wage--unless the Secretary of State can replace that money.

Will the right hon. Gentleman confirm, in response to an earlier question, that the maximum that the banks will be coerced into paying is £125 million? Will he tell us by

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what authority he will require them to pay that, and whether all the other money will come from the taxpayer--

Mr. Speaker: Order. That does not have a lot to do with the minimum wage.

Mr. Lilley: It has a lot to do with it.

Mr. Speaker: Order. I am telling the right hon. Gentleman that it does not have a lot to do with the minimum wage. I call Mr. Davidson.

Mr. Ian Davidson (Glasgow, Pollok): Is my right hon. Friend the Secretary of State aware of an economic collapse following the introduction of the minimum wage, of the kind predicted by Conservative Members? That certainly does not seem to have happened in my part of the country. Will my right hon. Friend consider arranging for the level of the minimum wage to be raised, so as to reduce the amount of Government expenditure, such as the working families tax credit, that effectively subsidises bad employers? We should not be paying out Government money to subsidise poor employers.

May I also say that I deprecate those who would try to hold down the level of the minimum wage to £5? It really ought to be far more than that.

Mr. Byers: My hon. Friend is as generous as ever in these matters. It is probably better for the Low Pay Commission to consider any increase in the light of the labour market and the economic conditions at the time.

It is a bit rich for Conservative Members, who campaigned against the introduction of the national minimum wage, to be critical when certain groups are not included. The important point, which reflects points raised by my hon. Friends, is that the national minimum wage under this Government is here to stay. The Low Pay Commission will be there to recommend increases when it is appropriate to do so. We must ensure that the successful way in which the provision has been implemented since April last year can be continued, and that millions of families can continue to benefit from having the dignity of work that is properly paid, and having a safety net below which no one should fall in terms of the income that they receive for their hard labour.

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