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23 Jan 2003 : Column 543—continued
6.30 pm
The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I congratulate my hon. Friend the Member for West Lancashire (Mr. Pickthall) on securing this debate, and on describing so eloquently the effects that the closure of Garrett—the 90-day period has not ended yet, but the situation looks grim—is having in his constituency. I know how hard he has worked to try to find alternatives on behalf of his constituents.
Garrett manufactures turbochargers for the automotive industry. Let me first say something about that industry, about Government support for it and about manufacturing more generally. I will then deal with the case raised by my hon. Friend. I hope to be able to answer most of the questions that he asked at the end of his speech.
Following publication of the enterprise, innovation and skills White Paper in February 2001, the Department of Trade and Industry established the automotive innovation and growth team. It was chaired by Sir Ian Gibson, former chief executive of Nissan's UK and European operations. It consisted of a strategy team comprising trade unionists, industrialists and others who had been in the automotive industry almost all their lives, and several sub-groups. They would examine various issues such as design, development and manufacture, distribution, competition and the consumer, the environment, and technology.
The team's report was published in May 2002. It contained seven recommendations relating to the future of our automotive industry over the next 20 years, all of which the Government accepted. We are committed to implementing the recommendations—many of which are relevant to the points raised by my hon. Friend—and we have allocated £45 million to the process. Following the report's publication, the DTI's automotive unit was restructured to focus on strong and effective relationships with key companies in the UK's automotive sector and on the team's recommendations. We are arranging to fund supply chain groups across the UK, as was announced at the Birmingham motor show on 22 October. Progress has also been made on
implementing the other recommendations: that includes setting up an automotive academy and two centres of excellence, a pilot mobility services project and a retail motor strategy working group. Those initiatives reaffirm the Government's commitment to the automotive sector.I think it highly unlikely that Ford is preparing to end diesel production in Dagenham, although I will do as my hon. Friend asks and look into the ramifications as set out in Amicus's detailed and comprehensive report. Ford has only just invested £340 million as part of a programme to establish the UK as Ford's European diesel centre of excellence. I visited the site recently, and observed enormous excitement about the amount that Ford is investing.
Garrett is in an assisted area and a European funding area, so there is scope for financial assistance. When companies experiencing difficulties, as is the case with Garrett, contact their local Government office—they must want our assistance in the first place—or regional development agency, they can expect advice and assistance relating to all the issues confronting them. Regional selective assistance, which is administered by the RDAs and which Garrett has received at least four times over the last 20 years, can be used to safeguard as well as create jobs when companies are in assisted areas. In the past three years in West Lancashire there have been nine offers of grants totalling £1.3 million, against a capital expenditure of £14.5 million, creating 355 jobs and safeguarding 79.
As a Government, we have helped more than 3,000 businesses across the country, supported £6 billion of investment and ensured that 135,000 jobs, most of them in manufacturing, which attracts 96 per cent. of all regional selective assistance grants, were created or safeguarded. It is clear that there are measures available to persuade Garrett to retain a presence in Skelmersdale but obviously the final decision rests with the company.
The level of assistance available to support companies, and Skelmersdale in the wider economic context, is considerable, and time after time we have succeeded. We must remember in this debate that it is not Romania, Hungary, Poland or the Czech Republic that attracts the most inward investment in Europe; it is the United Kingdom. We are second only to the United States in attracting inward investment, which is one of the reasons why—I will come to the specific problems of manufacturing in a second—last week's figures showed that, even though there is a global recession in manufacturing, we have the lowest unemployment in this country and the highest employment for 30 years.
In addition to having assisted area status, Skelmersdale is supported by objective 2 money, and under objective 2 priority 1, assistance is available to meet the specific needs of small and medium-sized companies. Operating under two action plans, the north and west Lancashire partnerships and the Northwest Development Agency plans have been awarded more than £40 million to date.
Financial assistance is an important means of support but the full range of regional and national support is much wider. Representatives from the north-west automotive sector have met on a number of occasions to discuss the possibility of setting up a north-west
automotive group. The Northwest Development Agency has completed an automotive sector study seeking to take forward the findings.We have invested £15 million in a new manufacturing advisory service to spread best practice. The Northwest Development Agency appointed the Manufacturing Institute as the regional centre of manufacturing excellence, designed to provide a range of support measures to help companies to develop "lean" manufacturing processes and to act as a one-stop shop, providing advice particularly to companies in the supply chain.
The Northwest Development Agency also delivers the supply chain programme, which helps and encourages north-west businesses to use north-west suppliers as well as assisting small businesses to devise recovery plans should their main customer reduce production or move from the area.
I turn to the substantive issue. I was extremely sorry to hear the announcement by Garrett of its plans to close the plant in Skelmersdale. As my hon. Friend said, as many as 350 jobs are to be lost, with consequential negative effects, no doubt, both locally and further afield. The effects will be devastating for staff and their families.
I understand that the company has given a guarantee that no one will be forced to leave before 1 May 2003 and is in consultation with staff representatives over the proposed move of production to Romania. West Lancashire district council has already liaised with Jobcentre Plus in order to find out what help could be offered to Honeywell if assistance is needed after the consultation period. On 16 January, an advisor from Jobcentre Plus met with the company to discuss the current situation.
It is obviously essential that Government agencies provide help to the company and most especially to the employees in dealing with the traumatic effects of the closure.
The question of skills, retraining and the redeployment experience of those who face redundancy is crucial both for those affected directly and for the country more generally. The Northwest Development Agency has published its framework for regional employment and skills action—FRESA—the purpose of which is to promote a healthy labour market in which employers and individuals get effective help to meet their employment and skills needs. We have a good record of getting people back into work quickly after plant closures and major redundancies. Ensuring that training is training is crucial to that effort.
The Government are committed to manufacturing, not least because it comprises one fifth of our national output, employs in excess of 4 million workers, produces the majority of our exports and is a key driver of productivity and innovation in the economy. These are difficult times for UK manufacturers, and for manufacturers in Japan, the US and Germany. For the
first time since 1974, a synchronised global slowdown in manufacturing is affecting all the world's major industrial regions. We must see the sector through this recession and ensure that it is well placed to take advantage of the upturn, when it materialises.Here in Britain, traditional manufacturing industries such as car making have been transformed through new technologies and techniques. Computers, robotics, and innovative processes and design have been harnessed for greater efficiency and productivity. The zenith of car manufacturing in Britain was not, as some maintain, in the 1960s. It is now: we export more than 1 million cars a year—five times more than in 1986—and we have nine major car manufacturers in the UK, which is more than any other EU country. We also have the world's most successful motor sports industry, and both Ford and Nissan have established their design centres in London.
I very much regret the Garrett announcement and the terrible consequences that it will have for employees. Representatives of the Northwest Development Agency and other agencies stand ready to talk to the company about options for retaining jobs and capacity at the site. Jobcentre Plus staff are ready to help Garrett employees if those discussions fail to bear fruit. I should be happy to meet trade unionists and managers from the company if my hon. Friend the Member for West Lancashire wants to set up arrangements with my office.
I have tried to put the matter in the context of what is happening with manufacturing in this country. Manufacturing makes up 19 per cent. of the UK's gross domestic product, compared with 14 per cent. in France, 18 per cent. in the US, and 22 per cent. in Germany. It is therefore wrong to say that manufacturing in Britain is suffering adverse effects that do not hit other countries. Our manufacturing industry needs the skills and abilities to compete effectively. We cannot stop companies moving to countries with low-wage economies, but—like Japan, Germany and the US—Britain has never wanted to compete on low wages, and never will. We compete on high wages, high skill and high added value. We must continue to do so, even through these difficult times.
To sum up: the Government will make advice and help available to the workers concerned in this matter. I will meet those workers, and look at the scale of exportation that could emerge from this, as set out by Amicus. In addition, I shall look at the validity and implications of the Garrett case, although that may be an academic exercise, as we do not live in a command and control economy and therefore cannot prevent companies from locating where they wish.
It is important that we learn from situations such as that described by my hon. Friend the Member for West Lancashire, and that we continue to help manufacturing businesses to raise their game so that we can develop and maintain a sound manufacturing sector in this country—one that is fit to face the challenges of the 21st century.
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