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5.33 pm

Mr. Richard Burden (Birmingham, Northfield): I add my welcome to my new hon. Friend the Member for Falkirk, West (Mr. Joyce). I am sure that he will be an asset to the House. Like the hon. Member for Lichfield (Mr. Fabricant), I learned something new today, about the Falkirk wheel. I am sure that a succession of people will go up to see it, and that its legend will go down in the annals of the House.

Let me update the House on the situation at MG Rover. Despite the cynics whom we heard last year, many of them Conservative Members, the company is on course to meet its business plan. It is bringing out a range of new models, or new variants, this year. Nothing in an industry as ruthlessly competitive as the automotive industry is assured, but MG Rover now has a solid basis on which to go forward.

There are a couple of lessons to be learned from that: first, do not take inherited or conventional wisdom for granted, because things can change; secondly, we should congratulate all those involved, including the management and the work force in my constituency, on what they have achieved; and thirdly, in contrast to what was being said by the Conservative party last year, we should also congratulate my right hon. Friend the Secretary of State on the support that he has offered throughout.

The welcome developments at MG Rover and Jaguar, the new investment at Toyota and, we hope, good news from Nissan, demonstrate that the automotive industry has some real successes to celebrate. I hope that the regeneration moneys that have been pledged by the Government for three technology corridors--one of which, down the A38, is very relevant to my constituency--will not only reinforce and modernise the motor industry in the midlands but help to diversify the region's economy.

We know about the problems that have arisen elsewhere in the automotive industry--at the Ford plant in Dagenham, and at the Vauxhall plant in Luton. The way in which BMW sought to dispose of Rover last year, and Vauxhall's lack of consultation with its work force about its decisions with regard to Luton, raise real questions about the adequacy of employee rights in this country to consultation and information. That problem needs to be tackled, either by European action, or by means of domestic legislation, which is the route that my right hon. Friend the Secretary of State prefers.

When Conservative Members talk about regulation, they must recognise that there is a need to address the question of information and consultation in an appropriate legislative form. Indeed, the hon. Member for Lichfield (Mr. Fabricant) said that he did not approve of the way in which General Motors had behaved.

Mr. Miller: My hon. Friend will know of my background and of my involvement in the creation of

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some European-wide works councils. Does he accept that there is greater stability in those companies where consultation is genuine and where business decisions are discussed with the trade unions in confidence? In turn, that benefits the employers through better productivity.

Mr. Burden: My hon. Friend makes his point very well.

It is important to mention some success stories, and one of them is the success of Britain's motor sport and performance engineering industry. Britain leads the world in that sector. New research from the Motorsport Industry Association shows that the industry is worth about £4.8 billion to the economy. It employs 40,000 people, and makes a real contribution to our knowledge-driven economy.

That presents a huge opportunity, but we must not rest on our laurels. The industry in the UK has grown to a position of strength, but that will not necessarily last for ever. We must look at some of the problems that may arise in the future.

First, there is the question of personnel. Problems of skill shortages persist, and we must do all that we can to ensure that the industry has the supply of skilled personnel that it needs to prosper in the future. Today's statement from my right hon. Friend the Secretary of State for Education and Employment stressed the importance of manufacturing and vocational training, and will certainly help in that regard. Moreover, the process works both ways. By promoting the motor sport industry, and similar enterprises, we will begin to attract more people into the manufacturing and engineering sectors.

Secondly, the industrial infrastructure for performance engineering and motor sport needs to be considered. Developments such as the new Rockingham speedway are to be welcomed, but we must also look closely at some of the ideas regarding the development of Silverstone as a pinnacle for motor racing and the motor sport industry. Consideration must be given as to how such developments can be used to help the manufacturing and engineering industries as a whole.

There is a solid base for optimism and, as my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said, manufacturing is doing well at present, but some challenges remain to be addressed. I shall describe them only briefly, as I know that other hon. Members want to contribute to the debate.

I hope that the Government will take on board some of the representations from organisations such as the Engineering Employers Federation. Capital investment has improved under this active Government, who promote manufacturing investment, but all too often it lags behind that of our competitors. There may be a case for reviewing again the question of capital allowances, to see whether investment could be stimulated further. That is especially important at a time when we suffer from the competitive disadvantage associated with the weakness of the euro.

Moreover, there is a problem with research and development. All too often our spending in that regard--and especially on development--lags behind that of our competitors. Maybe again we can look at what extra action we can take in that area.

Lastly, I want to say something on a matter that Conservative Members have mentioned: the climate change levy. We on the Labour Benches take no lessons

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from them on that matter. All that we have heard from them is "Scrap it". Protection of the environment is a matter that concerns us all. Nevertheless, the operation of the levy in its current form needs to be reviewed, because all too often, companies that have improved their productivity are still hit by it in a way that can be seen to be anomalous. That is precisely why we need--not, as Conservative Members seem to think, to throw the baby out with the bathwater--to look at how the levy is targeted and how it could be reviewed to be made fairer.

We also need to look at the issue of revenue neutrality within sectors of industry, not just across the economy as a whole, and to consider the issue of negotiated agreements, an initiative brought in by the present Government. We should see whether the scope of those agreements could be modified so that the impact is more even across industry and so that some of the possible effects on manufacturing industry do not arise.

That is a very different formula from the "Scrap it and don't worry about the consequences" approach of the Conservative party. But Ministers need to take on board the legitimate concerns of manufacturing industry about the operation of the climate change levy, and before it comes in to look at possible reviews to ensure that its operation is fairer and that it is part of a package that helps to promote manufacturing industry success rather than have a detrimental effect.

5.42 pm

Mr. Dafydd Wigley (Caernarfon): I too congratulate the hon. Member for Falkirk, West (Mr. Joyce) on his maiden speech. I very much hope that he will enjoy his time in the House. Perhaps he will indeed follow in the footsteps of Dennis Canavan in the independence of spirit that his predecessor showed.

I speak in this debate as someone whose background was in manufacturing industry. I started my career with Ford in Dagenham, in about the same intake as Ian McAllister. I started at the metal stamping division there. What has happened recently is a cause of considerable sadness.

I want to speak particularly to the position of manufacturing industry in Wales, against the background that gross domestic product per head there has dropped to 79 per cent. of the UK average, compared with a figure of 115 per cent. in south-east England. Unfortunately, the gap is still widening.

Manufacturing has a considerable significance for the Welsh economy. Compared with its being a fifth of the UK economy, to which the Secretary of State referred, manufacturing represents between a quarter and a third of the Welsh economy. Since 1997 we had lost 6,000 jobs in manufacturing up to last June. We have lost a further 2,000 since then. That 8,000 loss compares with 2,000 lost in the agricultural sector, which puts the figures into context.

We have seen the drift, drift, drift of loss of jobs in sectors such as textiles and clothing, about which we have heard from other hon. Members. Now we face the possible loss of thousands of jobs in the steel industry in Wales, a sector that has been of so great importance to us over the years. If we lose these jobs, there will be a knock-on effect way beyond Llanwern itself. It will directly hit areas such as Ebbw Vale and Shotton; it will also indirectly hit other jobs in manufacturing, in transport

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and in many of the support services. Therefore, we were hoping that when the First Minister from Cardiff, the right hon. Member for Cardiff, West (Mr. Morgan), met with the Prime Minister yesterday some progress might be announced. We still hope that these jobs can be safeguarded. As I have said before, one can mothball a plant, but one cannot mothball the work force.

Steel and most of the rest of the manufacturing sector are hit by the effects of currency fluctuations. The stability of the pound against the euro is basic. That stability must be at a fair parity. The over-priced pound has undoubtedly been a central factor in undermining the manufacturing sector over the past couple of years, as it hampers exporting and sucks in imports. The too high rate of the pound has that effect not just on manufacturing, but on agriculture and tourism. It is desperately necessary now to get the pound to an appropriate parity against the euro. Once that has been secured, there is a need to move into the common currency, so that never again do we suffer the uncertainties of currency fluctuations within Europe, which is so much of the domestic market for our manufacturing sector.

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