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Automotive Industry

2. Lynne Jones (Birmingham, Selly Oak): What action she is taking to support the automotive industry. [66367]

The Minister for Employment Relations, Industry and the Regions (Alan Johnson): Recently my right hon. Friend the Secretary of State announced a package of £45 million for the automotive sector to include an automotive academy, two centres of automotive excellence, and support for cross-regional supply chains as a first step to implementing the recommendations of the automotive innovation and growth team. In 2001 the Department delivered regional selective assistance and training grant offers totalling £35 million. The Department also spent about £2 million last year on various other projects to promote competitiveness and productivity improvements in the sector. The Department is continuing to support process improvements through the Society of Motor Manufacturers and Traders industry forum and

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research and development through the foresight vehicle programme, with commitments to date exceeding £13 million.

Lynne Jones: My hon. Friend is aware that the livelihoods of many families in the west midlands depend on the success of the automotive industry. I welcome the setting up of the innovation and growth team and its report. My hon. Friend has given us some details of the action taken by the Government. What is he doing specifically to assist the components sector, which faces difficulties as a result of increased outsourcing from the eurozone?

Alan Johnson: My hon. Friend raises an important point. We have 17 of the world's top 20 tier 1 component manufacturers located in the UK. The recommendation of the innovation and growth team specifically dealt with that in its work on the supply chain. My hon. Friend knows that we had a project in the west midlands called "Accelerate", which we are spreading across the country, in accordance with the recommendation from Sir Ian Gibson and his team. That focuses on the supply chain, and component manufacturers in particular.

Malcolm Bruce (Gordon): How does the Minister think it will help the automotive industry for the DTI's recommendation that in the end-of-life vehicle directive, responsibility for the final disposal will rest with the final owner? Does he think that people who have bought a cheap car will accept that responsibility at the end of its life, or does he anticipate that we will have an increasing number of abandoned cars, which already cost us £400 million a year? Does he not believe that that will reflect badly on the automotive industry? We need a system that will ensure that vehicles are disposed of safely and quickly.

Alan Johnson: The issue to which the hon. Gentleman refers is still under consideration in Europe. As regards helping the industry, we have been instrumental in removing the block exemption scheme and in particular the location ban clause, which will allow retailers in this country to offer consumers better value in terms of new car sales. That, in turn, will help the automotive industry.

Small Business

3. David Hamilton (Midlothian): What steps she is taking to increase investment in basic skills among small firms. [66368]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The Government are committed to raising the level of adult literacy and numeracy in the work force and aim to provide free high-quality training and advice on basic skills for all small businesses. We have already trained 447 workplace basic skills brokers and we are recruiting employer champions, all with a proven basic skills track record in their sector, to help guide other businesses.

David Hamilton: When I started in the coal industry in Midlothian at the age of 15, there were 12 companies employing more than 1,000 people. In Midlothian now, there are 1,000 companies employing fewer than

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12 people. It is therefore critical that people acquire not just the basic skills, but the trade skills that are needed throughout the area. In the past, it was easy to get plumbers, electricians and so on, but now it costs an arm and a leg to get them, and they come when they choose to come, because there are so few in the area. How can the Government assess those micro-industries, which in most cases are family companies, to see how best they can deliver, so that we remain the fourth state in the world in economic terms?

Nigel Griffiths: My hon. Friend is right. The Government already support training in small businesses through the small firms training loans scheme. We strongly support modern apprenticeships. My hon. Friend will share my pleasure at the fact that 728 young people resident in Midlothian are working towards vocational qualifications through skill seekers' training programmes. We are committed to training and we welcome all the support that we are getting from small businesses, as well as from all hon. Members.

Mr. Richard Page (South-West Hertfordshire): The Minister will be aware that small firms have a limited time horizon, and their employees have great difficulty in getting away from work for any sort of training. As we are speaking of hundreds of thousands, if not millions, of small businesses, what are the Government doing to support Learndirect on the internet? What targets are they hoping to achieve for the hundreds of thousands of businesses that will qualify for such support, and how many people have indicated an interest so far?

Nigel Griffiths: I am grateful to the hon. Gentleman for highlighting Learndirect. I had the pleasure of visiting J. and K. Ross in Warrington on 29 March this year to see the firm's pilot Learndirect pod. It is a worthwhile and valued project. We aim to roll it out as quickly as possible. We will learn from the pilots and then, I hope, apply them nationally.

Mr. Tony McWalter (Hemel Hempstead): Does my hon. Friend agree that one way of improving basic accountancy and engineering skills is for workers in small firms to form that firm as a co-operative? Will he ensure that the Small Business Service is mindful of the virtues of co-operative forms of organisation when it gives advice to small firms about their training needs?

Nigel Griffiths: I am grateful to my hon. Friend for highlighting that aspect. When I was in Plymouth I was able to visit a social enterprise and to learn from my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) the great value of co-operatives there. I also know of co-operatives elsewhere in the country.

I join my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) in stressing the importance of co-operatives, the contribution that they make to the economy and the contribution that they make, which he asked me to highlight, to uprating the skills of the work force. Their commitment is second to none.

Mr. Jonathan Djanogly (Huntingdon): Basic skills, including reading and writing, are grossly inadequate in this country and rapidly falling behind those of our European competitors, and yet the Government

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consistently fail both to support the further education sector in the way that they should and to put in place initiatives to encourage businesses to work productively with the FE sector to the benefit of all concerned. Would the Minister care to comment?

Nigel Griffiths: I was shocked to learn that as many as 7 million people in the work force are functionally illiterate; that is the case, according to Digby Jones of the CBI. I believe that that figure is an indictment and an indicator of the sad decline in education in the 18 years from 1979. We are doing a great deal, as I have highlighted in earlier answers, to reverse functional illiteracy in the work force, and my right hon. Friend the Secretary of State for Education and Skills is doing a great deal to ensure that before people reach the work force we eliminate that sort of functional illiteracy—a shameful legacy of a previous Government.

Jim Sheridan (West Renfrewshire): Will my right hon. Friend recognise, as many of the more progressive employers throughout Britain do, the valuable work that the trade union learning reps do at the workplace? Will he use his good offices to work with the trade union movement in rolling out that programme, particularly among small businesses?

Nigel Griffiths: My hon. Friend is quite right, and I am very pleased that in the Employment Act 2002 we have extended those facilities. Indeed, it is one of the great benefits of employers working with and recognising trade unions that they can ensure that the work force embrace that learning experience and upgrade their skills. That is vital for the modern economy and, as my hon. Friend the Member for Midlothian (David Hamilton) pointed out, as more and more small businesses become the driving forces in the economy, it is vital that they too have the skills to allow us to compete in the modern world.

Agricultural Produce

5. Mr. George Osborne (Tatton): What action her Department is taking to reduce barriers to trade in agricultural produce. [66371]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): We are working with our partners in the European Union and the World Trade Organisation to deliver the Doha development agendas, which commits us to substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support.

In parallel, of course, we are pressing within the European Union for significant reform of the common agricultural policy.

Mr. Osborne: I thank the Secretary of State for that answer. She will be aware that while the developed world spends £50 billion on aid to developing countries, we also spend £250 billion on agricultural subsidies and on tariff barriers which shut the poorest countries of the world out of our markets. I would agree with the right hon. Lady that we should practise what we preach when it comes to free trade and open markets. Will she assure me that the British Government will do all that they can not to let

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other European Governments—particularly the French Government at the moment—stop proper reform of the CAP and to pursue that agenda through the WTO?

Ms Hewitt: I am entirely in agreement with the hon. Gentleman. We welcome the publication earlier this week of the European Commission's mid-term review document on agricultural support. It will certainly form a good basis for discussion within the European Union, which reflects United Kingdom thinking on many topics but does not go as far as we would like. However, we will continue to argue very strongly within the European Union for a shift away from subsidies that are linked to production, to income support for farmers that is linked directly to environmental maintenance, and to a slashing—indeed, elimination—of the appalling export subsidies that do so much damage to farmers in developing countries. I am very glad that we shall have the support of at least the hon. Gentleman, and I hope his party, in pursuing those very important reforms.

Mr. Andy Reed (Loughborough): In discussions between the all-party third world debt group this week and high commissioners from west Africa and other countries in the region, it was clear that, despite all the efforts that we are making on debt relief and on aid, the crucial difference that will be made for these countries will be by our giving them free access to western European markets, particularly for goods that are both produced and have value added in those countries. I understand that the negotiations will take some time, but will my right hon. Friend ensure that real urgency will be put into them? The situation facing Africa as a whole is so urgent that, unless things are done in months rather than years, many will suffer as a consequence.

Ms Hewitt: I entirely agree with my hon. Friend's points. He will know that my right hon. Friend the Prime Minister has been pushing and working immensely hard for a new partnership for Africa that will include not only access for African producers to markets in the west—following the example of the European Union's everything but arms initiative—but will also encourage Governments in those developing countries to pull down the tariff and trade barriers that they apply against other developing countries. There is huge scope there for greater trade. I also agree that there is an enormous responsibility on the European Union, as we are the biggest provider of agricultural subsidies in the world, and we must stop that.

Mr. Roy Beggs (East Antrim): What action have the Government taken to promote fair trade in agricultural produce within the United Kingdom, which would provide the primary producers of agricultural products with cost of production and some fair reward for their investment in labour, which wholesalers and retailers can achieve with much less risk than primary producers?

Ms Hewitt: The hon. Gentleman raises an extremely important point. As he will be aware, the whole issue of the relationship between the supermarkets in particular and the producers in the farming community has been considered extensively by the Office of Fair Trading and the Competition Commission. We now have a code of

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practice agreed by the retailers with the Office of Fair Trading that is designed to give the producers of our food a much fairer deal in that marketplace.

Mr. Ian Davidson (Glasgow, Pollok): Can I urge the Secretary of State to do as much as she can to abolish the common agricultural policy, not only to ensure that imports are allowed from the developing world and to cut the costs of living for families in this country—each of whom pay more than £20 a week in additional food costs—but to try to reduce the dependency culture that we have built up among farmers?

Ms Hewitt: I agree entirely with my hon. Friend that radical reform of the common agricultural policy will deliver enormous benefits to our consumers, benefits to farmers and rural communities, and, as we have been saying, real benefits to farmers and communities in some of the poorest countries of the world.

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