Order for further consideration, as amended, read.
To be further considered on Tuesday 26 March.
1. Dr. Doug Naysmith (Bristol, North-West): What steps she is taking to encourage research and development in the UK aerospace industry. 
7. Mr. Andrew Turner (Isle of Wight): If she will make a statement on the future of the aerospace industry. 
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The Government are taking a number of steps to support and improve the competitiveness of the United Kingdom aerospace industry. These include providing substantial launch investment and we are providing support of £20 million a year through the civil aeronautics research programme.
Dr. Naysmith: I thank my right hon. Friend for that reply. May I, however, press her on the funding of CARADthe civil aircraft research and technology demonstration? The aerospace industry, which has been identified by the Government as a priority area for investment and encouragement, depends heavily on research. Yet UK public investment in research, particularly in aerospace research and development, has decreased significantly over the past decade. Funding through the CARAD programme in particular has fallen by 80 per cent. over that period. Will my right hon. Friend undertake to review that programme and commit more resources to aerospace research and development?
Ms Hewitt: I entirely agree with my hon. Friend's point about the importance of research and development in this world-class sector. I am looking at whether it is possible to do more through the CARAD programme and others to support research and development in aerospace.
Aerospace companies will benefit significantly from the Chancellor's proposal to extend the research and development tax credits from the small and medium-sized enterprises, to which it already applies, to larger companies. I am sure that my right hon. Friend the Chancellor will take account of my hon. Friend's views in reaching the public spending settlement.
Mr. Turner: I thank the Minister for agreeing to visit the Isle of Wight, a visit that is eagerly anticipated by former staff of GKN Westland and the many others on the island who work in the aerospace industry. Can the Secretary of State give some hope to those who still have jobs in the industry that those jobs will be secure in the future, and reassure them that help will be given to attract new jobs to the island for the benefit of the 650 who have lost their jobs at Westland?
Ms Hewitt: I should like to extend my sympathy to the hon. Gentleman's constituents who lost their jobs at Westland and to their families. Talking to a number of business leaders and trade unionists in the aerospace sector, I find that although the sector is going through a very difficult time, exacerbated by the effects of 11 September, the medium-term outlook is very bright as demand recovers in the world economy, and particularly as the impact of the Lockheed joint strike fighter contract is felt. I look forward to my visit to the hon. Gentleman's constituency, and believe that the medium and longer term outlook for workers and companies in the aerospace sector is bright.
Mr. Kevin Barron (Rother Valley): I thank my right hon. Friend for the support that the Government have given, both directlyand, through Yorkshire Forward, indirectlyto the investment in my constituency for an advanced manufacturing aerospace research and development project between Boeing and Sheffield university. I hope that we can get the same support for the neighbouring manufacturing companies that are working on aerospace projects in my constituency to make sure that we build from research and development into the most advanced aerospace manufacturing base not only in the United Kingdom but potentially in the world.
Ms Hewitt: I entirely agree with my hon. Friend. I was delighted to hear Tom Bell, the chief executive of Boeing in the UK, say recently that in order for Boeing to be a world-class company it needed to be in partnership with the United Kingdom's world-class universities. Those partnerships between industry and our science base will ensure that our aerospace companies remain at the forefront of innovation and are thus in the competitive position to take advantage of the upturn in demand that will quite clearly come through in the world economy.
Mr. Richard Page (South-West Hertfordshire): Will the Secretary of State place in the Library details of the support that the Government give to small businesses in the supply chain for this most important industryparticularly for project and development work and enabling them to quote for projects? Will she include comparisons relating to what our European competitor countries do for their small businesses?
Ms Hewitt: I shall be happy to provide a note along those lines. I remind the hon. Gentleman that through
Paddy Tipping (Sherwood): Companies such as Rolls-Royce, which has a strong base in the east midlands, have suffered badly since 11 September, but in the long term they have the opportunity of a very good future. That will come about only if they are able to compete in research and development for the future against countries like Canada.
In my right hon. Friend's discussions with the Chancellor, will she point out the real need for investment in research and development?
Ms Hewitt: I continue to make the case not only for an increase in our investment in the science base but for an increase in both public sector and private sector investment in research and development and in knowledge and technology transfer. Next month I shall open the centre for manufacturing excellence in the east midlands. That will benefit aerospace and manufacturing companies in the region.
We have, of course, examined the Canadian scheme to which my hon. Friend referred. It is always helpful to see what we can learn from other countries' initiatives. However, it is worth pointing out that, according to the latest figures, business research and development investment is lower in Canada than in the United Kingdom.
Lady Hermon (North Down): As I shall be visiting Shorts-Bombardier Aerospace in Belfast tomorrow afternoon, could the Secretary of State outline what measures are being taken to encourage research and development there?
Ms Hewitt: I have had several discussions with executives and trade unionists at Shorts-Bombardier since I became Secretary of State. That company, like others in the sector, will benefit from the tax credit for R and D from larger companies as well as from the support that we can give, for instance, through the Export Credits Guarantee Department. We shall continue to support the company, and many others across the country, in ensuring that they have the skills, technology and access to export markets that they need to continue to succeed and to provide good jobs in high-technology manufacturing.
2. Rob Marris (Wolverhampton, South-West): What action she is taking in respect of her policy on fairness at work. 
The Minister for Employment and the Regions (Alan Johnson): Since 1997 the Government have shown their commitment to minimum standards and fairness in the workplace with the introduction of the national minimum wage, paid holidays and many other measures. We are building on that commitment in our second termfor example, by introducing new family-friendly rights such as paid paternity leave and measures to support flexible working, and new protections from discrimination in the areas of age, religion, and sexual orientation. We are about to review key parts of the Employment Relations Act 1999, to revise Transfer of Undertakings (Protection of Employment) Regulations 1981 protections and to implement the information and consultation directive. That is a substantial agenda to deliver the Government's commitment to fairness at work.
Rob Marris: I am grateful to the Minister for reminding the House of the great steps that the Government have taken in their goal of modernising labour relations in this country and of the welcome steps that they propose to take to further that modernisation, leading to greater protection for employees and a better work-life balance.
Does the Minister agree, however, that this country remains in breach of some of its obligations under some International Labour Organisation and other labour relations conventions to which the United Kingdom is a signatory? If so, by what date do the Government propose to comply with those treaty obligations?
Alan Johnson: No, I do not accept my hon. Friend's point. The UK has ratified all the ILO core conventions. In those and other ratified conventions we work across Government to ensure that we are meeting all the necessary requirements. We report to the ILO accordingly. We also keep all the conventions under review and try to increase ratifications as appropriate. The ILO itself reviews the application of conventions in member states as part of a process of peer review and continuous improvement in which we play a full part.
Dr. Vincent Cable (Twickenham): Is the Minister not even mildly embarrassed when such modernising, reform-minded trade unionists as the general secretary of the Trades Union Congress describe the Government's employment policies as "bloody stupid"? More specifically, have Ministers met to reconcile their differences about contracted-out public services in view of the growing concern among not only trade unionists but responsible employers about the way in which training, pensions and holiday pay are being eroded by cowboys in industry?
Alan Johnson: As the Minister responsible for employment relations, I feel that it is a sign of my abject failure that I have made the TUC speak to the Conservative party. That is a terrible thing to force anyone to do. I also wonder whether the hon. Gentleman is mildly embarrassed at having launched for the Liberal Democrat party the policy not of a national minimum wage but of a regional minimum, only to ditch it a year later, describing it as "politically illiterate". No, we are not at all embarrassed.
My right hon. Friend the Secretary of State has saidindeed, I said it as recently as 14 Februarythat we will protect the pensions of public sector workers transferring under the TUPE regulations.
Mr. David Watts (St. Helens, North): May I draw to the Minister's attention the fact that many British workers still do not receive bank holiday pay? With the Queen's jubilee holiday on the horizon, will he take action to ensure that all employers face up to their responsibilities and pay their workers for all bank holidays?
Alan Johnson: We have introduced the right for every worker to have four weeks paid holiday a year. Bank holidays are a matter for contractual arrangements with individual companies. We are aware that the TUC has recently produced a report and we will look at it, but we do not think that that should detract from the real and tangible benefits that we have introduced since 1997.
Mr. Jonathan Djanogly (Huntingdon): As strike days increased from 235,000 in 1997 to more than 500,000 last year, does the Minister accept that, for all this Government's employment regulations, guidances and so forth, the reality is that industrial relations are getting worse?
Alan Johnson: That is frankly ludicrous. A couple of years ago, under this Government, we had the lowest level of industrial action since records began in 1841.
Michael Fabricant (Lichfield): The Minister is referring to two years ago.
Alan Johnson: Let us leave aside the Thatcher years when there was an incredible level of industrial action, and consider the Major years, 199097, when the average for days lost through such action was 833,857. Since we came to power, the average has been 353,540, which is almost a third of the level that we inherited. Employment relations are good and they are made better by the fact that we have established minimum standards in the workplace. We are pro minimum standards and pro free, independent trade unionism. The Conservative party is anti-worker and anti-union.