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House of Commons

Thursday 17 January 2002

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Research and Development

1. Mr. Mike Hall (Weaver Vale): What steps she is taking to encourage research and development in UK manufacturing industry. [25545]

The Minister for Employment and the Regions (Alan Johnson): We have a range of policies to encourage manufacturing research and development. Recent steps have included the announcement on 26 November by my noble Friend Lord Sainsbury, who has ministerial responsibility for science, of the creation of 12 innovative manufacturing research centres, backed by £60 million of Government cash.

Mr. Hall: I thank my hon. Friend for his answer. Does he agree that centres of excellence and research facilities are vital to manufacturing in the regions? Will he comment on the Casim project, which is vital to the future of Daresbury laboratory in my constituency and fundamental to securing a key part of the knowledge base of the north-west?

Alan Johnson: My hon. Friend is right to stress the importance of the two Casim projects. I am happy to give him and the House an update on the fourth generation light source project. The proposals are undergoing peer review to establish the science case, which is due to be completed in March. The business case will be reviewed thereafter. As for the Sirius project, the science case passed peer review last year and the outcome of the business case is due in March.

Brian Cotter (Weston-super-Mare): I wish to highlight the situation at Westland helicopters, where 900 jobs are being lost: 300 in my constituency and 600 in that of my hon. Friend the Member for Yeovil (Mr. Laws). First, will the Minister take on board the need for support for the rapid funding response bid that will be made this week, and follow that up? Secondly, the hon. Member for Weaver Vale (Mr. Hall) talked about development of manufacturing industry. In Weston-super-Mare, we are going to lose a high-quality manufacturing facility. Will the Minister consider seriously whether he can do anything to

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avoid that closure? Once we have lost that facility, we will have lost it for ever. I understood that the Government previously made a commitment to keep it going

Alan Johnson: The hon. Gentleman is right to stress his concern about Westland, which is an important British company and has been mentioned before in the House on various occasions in the last 10 to 15 years. We shall do everything that we can to help it through its current difficulties. I agree that it is an important manufacturing base that we should strive to keep.

Mr. Gordon Prentice (Pendle): My question is about research and development in the UK aerospace industry. My hon. Friend will know that 46 per cent. of research and development by Rolls-Royce now takes place outside the UK. The commitment of other countries to their aerospace industries is much bigger than that of the UK. Rolls-Royce is a huge employer—in my constituency, it employs 1,200 people—but a third of the work force are being made redundant. It is important that the Government address that to see whether more help can be given to keep research and development in the UK and to tie launch aid to research and development programmes.

Alan Johnson: My hon. Friend is right about the importance of aerospace and research and development. We have invested £1 billion in launch aid for the aerospace industry, some of which is associated with research and development. I fully accept his point about the importance of research and development in all sectors, particularly aerospace. He knows that we have various projects designed to help the aerospace industry and other industries in that important area.

Mr. Nicholas Winterton (Macclesfield): I recently wrote to the Secretary of State to ask whether she would meet a small delegation to discuss the heavy redundancies announced by BAE Systems, not least in respect of the regional jet division at Woodford on the periphery of my constituency. I deeply regret the decision of her junior, the Minister for Industry and Energy, who has just had a quiet word with her, to decline to meet me because he is too busy—[Interruption.] Oh yes, that is exactly what the letter said; he was too busy.

Does the Minister for Employment and the Regions not think that 1,000 redundancies at Woodford, on top of more than 600 redundancies in other parts of BAE Systems, is a serious matter? Considering the limited research and development that this country puts into the aerospace industry, it would be appropriate if the Secretary of State or one of her Ministers met me to discuss the matter at an early date.

Alan Johnson: Of course we will. My right hon. and hon. Friends are pleased to meet any Member to discuss such important issues. There may be some confusion in respect of the hon. Gentleman's point, but we would be delighted to meet him to discuss that important issue, not least because the aerospace industry has suffered in the context that he mentioned and experienced considerable adverse effects after the horrendous events of 11 September.

Mr. Stephen Hepburn (Jarrow): Is the Minister aware that in the Treasury report, the north-east appeared at the bottom of the league table for research and development

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in both the public and the private sectors? If we are to get manufacturing to flourish in the north and move out of a Burger King economy, we need one of those centres of excellence in the north-east. Will he tell us whether we will get one?

Alan Johnson: Yes. My hon. Friend will get a centre of excellence. We have introduced centres of excellence in six regions so far, and we have another six regions to go. That is an important part of our strategy on research and development. I assure him that there will be a centre of excellence in the north-east.

Mr. John Whittingdale (Maldon and East Chelmsford): Is the Minister aware that the figures for manufacturing output announced this week show the biggest drop for a decade, and that the Trades Union Congress predicts the loss of another 150,000 jobs in manufacturing this year? Did not the Secretary of State's much-vaunted summit last month send out the message that the Government would continue to sit on their hands and watch manufacturing industry in this country disappear?

Alan Johnson: That accusation is ludicrous. Yes, manufacturing is having a tough time. Around the world, imports have declined across all the economies of the G7 countries. Manufacturing in the US has fallen by about 7.3 per cent. and it has fallen faster and further in Germany than in this country. We cannot insulate ourselves against world events, but the accusation that we are not taking the issue seriously is ludicrous.

It is politic to examine the policies that we have heard from the Opposition about what we should be doing. If we speak to manufacturers, some of them say that there is a problem with the single currency and the weak euro—no help from the Opposition there. Some say that they need more help through regional development agencies, but the Opposition would scrap them. Our approach is to raise the game of British manufacturing industry, improve skills and investment, and introduce projects such as the industry forum. That is the way to help manufacturing and enable it to compete in a difficult global situation.

Mr. Lindsay Hoyle (Chorley): I hear what my hon. Friend says, and I agree with much of it. However, many of the problems could be put right in other ways. We ought to ensure that grants are made available to non-assisted areas for manufacturers who need to invest in new technology to compete with the rest of the world. Does my hon. Friend agree?

Alan Johnson: I always like to agree with my hon. Friend. Grants are available, and we have assisted many companies. We do not simply sit back, like the previous Government, and leave the issues to market forces. Hon. Members who represent the north-east will remember the help that we have given in respect of ViaSystems, particularly the help directed through the RDAs. We give assistance through enterprise grants and other grants. We are not looking to prop up failing industries, but we are ready to help and advise companies that need it in difficult times.

Mr. Whittingdale: May I pursue the Minister on Government grants? The manufacturing summit resulted in a package worth £20 million, a large part of which will

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go to the partnership fund, whose major success so far has been to establish an employee forum at Pizza Express. Meanwhile, the climate change levy is costing the engineering sector alone an extra £100 million, even after the cut in national insurance contributions. Was not the general secretary of the Amalgamated Engineering and Electrical Union right when he said two weeks after the summit:

Alan Johnson: Once again, that is the wrong analysis of the problems facing manufacturing industry. It does no service to manufacturing to make such comments. According to the hon. Member for Buckingham (Mr. Bercow), the Tory party is defined more by what it is against than by what it is for, and it is time to stop point scoring. [Laughter.] I am only quoting the hon. Member for Buckingham. The problems that manufacturers face were discussed at the manufacturing summit. The £20 million investment is for the partnership fund and the industry forum. The industry forum, which has been introduced into the automotive industry, into the aerospace industry and now into chemicals and other parts of manufacturing, has had huge success. I remind Opposition Members that the TUC and Confederation of British Industry report on productivity, particularly as it pertains to manufacturing industry, is what we are taking forward from the manufacturing summit on 5 December.

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