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Mr. Fabricant: I am listening with great interest to the hon. Gentleman's speech--especially to some of the insights that he offers us. He says that the problem with the value of our currency relates not only to the euro but to other parts of the world. Earlier, he mentioned Korea--as did other hon. Members, including the hon. Member for Twickenham (Dr. Cable). Does the hon. Gentleman agree that our biggest single trading partner is the United States of America, and that the pound is quite weak against the US dollar? Does he also agree that the Korean

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currency is especially weak at present because of the turmoil in that nation? Is it not unfair of him to say that the pound is overvalued against other major currencies?

Mr. Hopkins: I define strength or weakness by the trading position. If there is a massive trade deficit with a particular country, that might indicate that the currency is overvalued against that country's currency. It is said that our currency is weak against the dollar, but we need to demonstrate the truth of that before I would accept the case. I do not accept that we have a big trade deficit with America.

We could go into details, but I shall mention one country that was condemned during the far east meltdown a couple of years ago--Malaysia. It was said then that one must suspend, or not impose, exchange controls and not devalue; however, Malaysia did the opposite and within a year the country bounced back. It imposed exchange controls and quickly devalued. That upset the International Monetary Fund and the World Bank, but Malaysia recovered and everyone said, "How clever". People were astonished that the strategy worked--but I thought it was obvious, basic economics.

Last week, an interesting article in The Guardian referred to a rumour that my right hon. Friend the Secretary of State plans to intervene in the steel sector over Corus, to try to help to sustain the industry for the future. I am glad about that. It is important not only electorally--obviously--but for the future of our country. We cannot let the steel industry go, although its volume has declined relative to that in similar economies. We must sustain steel, motor manufacturing and other sectors.

The headline of the article was "Intervene--or kiss goodbye to industry". In the 1970s, I worked for the Trades Union Congress where I was heavily involved with Labour's industrial strategy and with an organisation called NEDDY--the National Economic Development Council. Although NEDDY was not the greatest show in the world and did not achieve much, it focused attention on the problems of particular industries and tried to find solutions. It was extremely useful in exposing the problems of industry.

The Conservative Government--Mrs. Thatcher's Tories--abolished NEDDY at a stroke; they did not believe in even discussing the problems of industry, let alone in trying to solve them. At least the Labour Government are trying seriously to consider industry. I hope that the rumours about intervention are true and that the Government will go much further than the article suggests.

6.3 pm

Mr. Nigel Evans (Ribble Valley): I agree with the hon. Member for Luton, North (Mr. Hopkins) that manufacturing industry is vital to this country; we must not let it die. At the winding up of the debate, we look forward to hearing what action Ministers propose to take to stem the decline in manufacturing industry.

I am delighted that the Minister for Competitiveness, who has responsibility for the aerospace industry, is in his place on the Treasury Bench, as I shall refer to the threat of job losses in BAE Systems. We believe that those losses will fall disproportionately on the military side in the north-west.

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When we consider the statistics for total employment in manufacturing, the House will realise how important manufacturing is to the north-west of England and to Wales. In the north-west, almost 21 per cent. of total employment is in manufacturing; the figure is surpassed only in the east midlands and the west midlands. In Wales, the figure is 18.5 per cent, but if we compare England with Wales, manufacturing employment is proportionately more important to Wales. In London, the figure is only 8.4 per cent.

If only Islington had been the centre of manufacturing industry in this country, perhaps the Prime Minister and the Government would take manufacturing more seriously. I hope that the Government's concentration on all things London will not continue and that manufacturing will not carry on taking such a beating.

On 19 January, the front page of my local newspaper--the Lancashire Evening Telegraph--carried an article with the headline, "Fear of Job Melt-down". The article lists some of the manufacturing job losses that have occurred recently in east Lancashire:

in my constituency--and

That is one heck of a roll-call of job losses in manufacturing industry in east Lancashire. I am extremely concerned about them and have already written to the Prime Minister asking him to visit east Lancashire and look for himself. I could not persuade the right hon. Gentleman to go there a few years ago to look at the plight of the farming industry in the Ribble valley. I had another go today. I hope that he will take manufacturing job losses seriously--the industry is a bread and butter one. I have always been involved in the service sector--in retail--but I realise how important manufacturing is for jobs and certainly for skills. My hon. Friend the Member for Tewkesbury (Mr. Robertson) pointed out how important it is for our work force to have the right skills.

The greatest fear for many people--especially those in their 50s, because there is an underlying ageism about jobs in this country--is that if they lose their manufacturing jobs, they will be unable to find other work at all; they will certainly not find work that uses the skills that they have built up. The hon. Member for Wolverhampton, North-East (Mr. Purchase) referred to that matter. We need to consider multi-skilling to ensure that, when changes in manufacturing are needed--for all sorts of reasons--people will have the skills to make the switch more easily.

In 1999, there was decline in every manufacturing sector in the north-west except the chemical sector. The announcement on jobs from BAE Systems caused me great fear; the unions have given a figure of 2,000, but the problem is that we are not certain. There has been much discussion of the way that redundancies are announced in motor manufacturing. It is not fair to the work force when the first they hear of such redundancies is when they switch on the radio. Indeed, when I listened

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to the "Today" programme--through gritted teeth, as ever--and heard that there were to be redundancies at BAE Systems, I was not happy, as a Member representing a north-west constituency where there are many aerospace jobs, that that was the first I had heard of the matter.

Those are not the first redundancies at BAE Systems; several restructurings have taken place over the past few years and thousands of job losses were the result. That does not affect only those people directly employed by the company: contract jobs disappear or are not renewed; small businesses depending on BAE Systems are affected--not only in the manufacturing sector but in services.

The Consortium for Lancashire Aerospace includes more than 100 companies which get together and network like crazy to ensure that the north-west remains a centre of military manufacturing skills. Strategically, the area is vital to aerospace manufacture; we have enormous skills. If those redundancies fall disproportionately in the military manufacturing sector--Samlesbury is in my constituency, while Warton is only a few miles away in the constituency of my right hon. Friend the Member for Fylde (Mr. Jack)--there will be an enormous ripple effect throughout the whole north-west.

My fear, therefore, is that jobs will be lost in other, smaller contractor firms--the small businesses that rely on a healthy, vibrant BAE Systems. Many service sector jobs were created by the healthy manufacturing climate that used to exist in Lancashire. Those service sector jobs will also be lost.

Several Members, including me, met the unions on 16 June 2000, when they had a campaign called, "Let's put the British back into aerospace." I totally endorse that campaign. I do not like the name BAE Systems. I like the name British Aerospace, so I shall call it that for the rest of my speech; it is easier. I am proud that the aerospace industry is British and that some of it is located in the north-west--much of it in my constituency. The unions feared that much of the manufacturing that used to take place at British Aerospace would be contracted out to some of the former Soviet bloc eastern European countries, which are now knocking on the European Union's door for membership. Of course that has happened, and some of those manufacturing jobs are going to the Czech Republic, Poland and Hungary.

Some managers at British Aerospace told me that the jobs involved were low level and far better suited to those countries. In fact, it is much cheaper to manufacture there than in the north-west. Irrespective of whether those manufacturing jobs are low level, we cannot stand idly by while they are lost. They could easily be done in this country by British people, some of whom have the required skills; others would be only to happy to get them. So I ask the Government carefully to consider such contracting out to other European countries.

I understand that, in many respects, British Aerospace has to compete with other aerospace industries throughout the world, and that if the company is disproportionately more expensive here, we may well lose contracts elsewhere; but we should not allow that to happen. That is the dilemma. The Government should negotiate with the company to encourage manufacturing jobs to remain in this country. I also fully understand such things as offset, where we look for contracts abroad and part of the deal is that manufacturing will be carried out there. I have

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no problem with that, but when such jobs go abroad simply because of cost and I am told, "They are low level. Don't worry about it, Nigel", I start to worry if that is the excuse. I ask the Government to consider such matters and small businesses.

I ask the Government to consider the enormous impact that the climate change levy will have on manufacturing. The levy will cost jobs, and the Government could do something about it. It is their tax; they are introducing it, but we will certainly abolish it when we form the next Government. Labour Members agree that there are real problems with the climate change levy, so please look at it, especially as many companies are desperately worried about it.

Given my responsibility for Wales, I want to refer to manufacturing there in the remaining few minutes available to me. There have been enormous job losses in the manufacturing sector in Wales, and I shall mention a few. Courtaulds lost 167 jobs in Wrexham. I shall deal with Corus separately. Jobs have been lost at Corus, but I am deeply concerned about the threat of 4,500 job losses that it is considering. Job losses are feared at British Aerospace in Wales. Dewhirst in Pembrokeshire has lost 300 jobs.

Attracting manufacturing jobs to west Wales is a problem, and distribution is proportionately more expensive there. On Saturday, Stephen Crabb--a Conservative prospective parliamentary candidate--showed me the blight that has occurred in Milford Haven. We must find ways to attract more jobs into that area. Some 900 jobs were lost at BICC General--a power cable business in Wrexham.

The M4 used to be a magnet for inward investment; it is now job loss alley. Around the M4, Hitachi has lost 350 to 500 jobs. Sony has been mentioned by my hon. Friend the Member for Lichfield (Mr. Fabricant), and it is losing 400 jobs. Panasonic is losing 1,500 jobs. Those manufacturing job losses have hit south Wales particularly badly, but there is now the prospect of 4,500 job losses at Corus, in Llanwern. We have heard how important steel manufacturing is to this country. It is the guts of manufacturing, and we must ensure that those jobs are preserved.

The impact on south Wales and the ripple effect throughout the United Kingdom will be enormous. The loss involves 4,500 people directly employed by Corus, but its effect will be multiplied. The Western Mail estimates that about 12,500 could be affected if Corus decides that those jobs will go.

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