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25 Oct 2006 : Column 453WH—continued

However, we must recognise the role that the trade unions have played. It is not about us and them. Both sides, management and trade unions alike, must work together.

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): My hon. Friend talks about good practice and working together. In the north-east, Nissan is a classic example of that and a testimony to how workers and managers can make a success of working together. It has invested £2 billion and employs 5,000 people on the plant. I have seen how people work together and it is a great success story in the north-east. That is in the spirit to which my hon. Friend referred and it should be highlighted.

Mr. Hoyle: I recognise that and had the privilege of going to the Nissan plant soon after it opened. I saw how it had changed and how many more thousands of people are now employed there. Nissan recognises the importance of the component sector as well and we rightly should salute it and other good companies that recognise trade unions and work with them. I congratulate my hon. Friend on raising that point.

I talked about the downside of the situation with TVR, but perhaps we should talk about the upside, which is Land Rover Freelander 2, produced in my region of the north-west. It is an important model for Halewood and it is unique that a Land Rover and a Jaguar are produced on the same line. As we speak, the first vehicles should be rolling off the assembly line. We should highlight that good news. I am very pleased that it will help to secure the future of Halewood. Those are two great vehicles and we need to ensure that Government agencies start using them. I hope that that will be taken on board.

In my constituency, Lex Multipart deal with a lot of parts for cars in the commercial sector. It has just spent £20 million on a 268,000 sq ft site in Chorley to ensure that it has a state-of-the-art back-up spares facility. That is good news as it shows that investment is going in. I am pleased with Lex Multipart, and it is good news for customers, the business and the employers who work in Chorley. That is why we will see parts from there going across the UK and to Europe as well.

Now is an ideal time for the Government to come out with a new vision for our future in the car manufacturing industry and component sector: a vision that puts the UK and component manufacturing
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at the forefront of Government policies and that can influence and shape employment rights. That is what we must do. We know how important it is to ensure that, by working together, the future of manufacturing continues and does not dip any further. We must have growth as it is important to this country, to the future and to the skills of the work force—and apprenticeships must not be forgotten.

I ask the Minister to take my comments on board so we can look to the future with a new vision and not forget how important manufacturing is to the UK.

Mrs. Janet Dean (in the Chair): I remind hon. Members that we have just over 35 minutes for Back-Bench speeches.

2.53 pm

Mr. Andrew Smith (Oxford, East) (Lab): I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate. He was right to stress the enormous importance of automotive and component production to Britain’s manufacturing industry and to the economy as a whole. He also referred to the industry having had bad, indifferent and good news.

I want to concentrate on a bit of good news and congratulate the whole Cowley work force on the outstanding achievements of the BMW Group in producing the Mini. Like other long-standing centres of vehicle production, Cowley has had its ups and downs. Some of the downs were nearly fatal. The plant teetered on the brink of closure in the 1980s and had a succession of different owners—not an unfamiliar story in the car industry—from the British Motor Corporation to British Leyland, and from Austin Rover to British Aerospace, Rover and the BMW Group. While there were some real achievements during that time, there were also a lot of false dawns and a lot of managerial industrial relations failures. It was not a particularly happy or secure period for the work force or the local community.

Today, six years after the BMW Group took full control of the plant in its own right, it is a very different story—indeed, it is a success story. The key ingredients of that are long-term investment; partnership with the trade unions and the work force; a brilliant product that is very carefully researched, designed and marketed; and production to the highest quality standards, which can be achieved only with investment in plant and equipment, and in the skills and commitment of the work force.

The key statistics include more than £380 million invested in upgrading and expanding the Cowley production facilities. The work force, down to 1,500 in 2000, stand at 4,500, with another 200 recently taken on for the new generation of the Mini—launched by my right hon. Friend the Chancellor. The work force skills mix has been enriched as part of BMW’s commitment to long-term skills planning and the Cowley plant has an apprenticeship scheme with more than 115 apprentices between the ages of 16 and 21. They are undertaking a three to four-year apprenticeship with the opportunity to gain a degree while working.

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The plant is completing more than 200,000 models a year, which is up from 48,000 in its first year of production, and production is scheduled to rise further to 240,000 units in the medium term. Every model has a customer’s name on it and the plant can sell all the cars it can produce. There is a wonderful advertising hoarding that anyone who drives down the eastern bypass in Oxford will see. It says,

and then it shows the flags of more than 70 countries.

The plant’s productivity has been rising year on year since production began in 2001. There are no subsidies or regional support from the Government and basic wages, not including bonuses, for grade 2 workers are £20,516—many earn significantly more.

All that has resulted from the BMW Group’s skill in bringing to fruition what would be a tough challenge in any industry: the reinvention and complete reconstruction of an iconic brand, through the commitment of the Cowley work force to making a success of it. Going back to the roots of that, there were some far-sighted and brave decisions by shop stewards to make a success of partnership. They fought for their members’ interests while recognising that there had to be a successful plant for their members to have an interest in.

There are other important lessons and hopeful signs for other areas of the automotive industry. Indeed, certain developments confound some of the conventional wisdom on global manufacturing. My hon. Friend the Member for Chorley mentioned the importance of components, and rightly so. When Mini production started at Cowley, the proportion of components that were UK produced was 40 per cent. It is now up to 60 per cent.

BMW Group has established a manufacturing triangle with Cowley as the production centre, body pressings in Swindon and engine manufacture at Hams Hall. Those engines were previously manufactured at Curitiba in Brazil. It is interesting to note that the BMW Group explained that it repatriated engine manufacture for the flexibility of just-in-time production, and because it is more efficient and cost-effective to have the engines made 70 miles up the road in a state-of-the-art engine plant than for them to be made several thousand miles away.

That is a positive story, and I am confident there are a lot more chapters to go. It is an example of how Britain can compete successfully with the best in global manufacturing. The key is to have a business committed in the long-term to working in a framework of economic stability and that designs its models carefully for what customers want and are prepared to pay. It should invest in the long-term and have a skilled and flexible work force equally committed to quality. BMW Group in the UK is an outstanding example of British-German partnership, but most importantly everyone at Cowley is proud to be part of a British manufacturing success story. That should be celebrated.

The last time my right hon. Friend the Minister visited my constituency, she went to a disabled workshop and bought a very good garden bench. The next time she visits, she must come to the Cowley car plant and buy a Mini.

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3 pm

Peter Luff (Mid-Worcestershire) (Con): I congratulate the hon. Member for Chorley (Mr. Hoyle) on securing this important debate and on the manner in which he introduced it. As the Chairman of the Select Committee on Trade and Industry, I am privileged to have him as a member of my Committee—[Interruption.] I will not say that it is a dubious privilege.

The Select Committee is coming to the end of an inquiry on the reasons for success and failure in the automotive sector, although we had hoped to have produced the report by now. In that respect, I am grateful to the hon. Member for Birmingham, Northfield (Richard Burden) for the excellent evidence that he gave us, which came out of concern about the Rover group. However, the inquiry is being held up because we are waiting for further evidence from Advantage West Midlands, although I hope that we will finalise the report when it arrives.

We are also considering the broader issues facing manufacturing industry, and we have touched on many of those outlined by the hon. Member for Chorley. In particular, we are looking at public procurement, which has big ramifications not only for the car industry, but for many other parts of British manufacturing.

I want to echo the hon. Gentleman’s comment that energy costs have recently emerged as a major issue for UK manufacturers. The Committee has received evidence on that issue, and he is right to highlight it. We cannot afford to be complacent. However, I also want to challenge him a little on his definition of Britishness. I had the privilege of being a special adviser in the Department in the mid-1980s.

Mr. Hoyle: It is your fault.

Peter Luff: The hon. Gentleman says that it is my fault, but he should wait to hear what I am going to say. The Secretary of State at the time—now Lord Young of Graffham—had a clear industrial strategy and sought to attract to the UK all the internationally mobile major car investment going. He played a big part in getting Toyota, Nissan and Honda here, and they have had precisely the effect that we hoped for.

In that respect, I was powerfully struck by something that I was told anecdotally by a constituent who made car components before the Japanese companies arrived. He said that the big motor manufacturers procured their components from companies on the basis of who bought them the best lunch. It was not the quality of the component, but what was on their plate that dictated who got the contract. The Japanese had no truck with that, and I am sure that they have played a major part in driving up standards in the UK component industry, much of which, I am glad to say, is located in my constituency.

I am afraid that I also disagree with the hon. Gentleman—I suspect that we will have a debate on this in the Select Committee—about his point that people in this country are easy to sack. People here might be easy to sack, but it is also easy to establish a business here, which is one reason for Nissan, Toyota
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and Honda coming here in the first place. There are two sides to the equation, and both need to be considered.

In conclusion, what does it mean to buy British? I suspect that the hon. Gentleman—perhaps I should call him my hon. Friend, for these purposes—and I will disagree slightly about this, but I would say that buying British means buying from any company that is committed to the UK. For someone who does not want a Mini, buying a BMW 1, 2 or 3 series might be a good way of, in effect, buying British. The Minister can carry on driving her Toyota Prius for exactly the same reason.

3.3 pm

Richard Burden (Birmingham, Northfield) (Lab): I echo other hon. Members in congratulating my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate. Much of what he said struck a chord with me, and that was particularly true of his comments on the responsibility of public authorities to have some regard to the effect of their decisions on British manufacturing.

As my hon. Friend said—the hon. Member for Mid-Worcestershire (Peter Luff) also referred to this, and I thank him for his comments—I had the privilege of representing Longbridge when MG Rover was in operation there. The causes of MG Rover’s ultimate demise are complex, and today is not the time to go into them, but I say to my right hon. Friend the Minister that we hope it will not be too much longer before the official investigation into MG Rover reports, because people in the area want to see the results. I know that the matter is not entirely in her control, but I hope that she will pass the message on.

There was constant concern among workers and members of the community about the fact that vehicles manufactured at Longbridge, such as the MG ZT and the Rover 75, were not being used by police forces, although I do not say that that was the cause of the company’s demise. My hon. Friend the Member for Chorley is right, however, that the same point can also be made about Jaguars and some other vehicles.

Given the situation facing Peugeot, memories of the 6,000 people who lost their jobs at MG Rover last year have come back to all of us in the west midlands. Again, it would be wrong to go into the issue in detail, and there is not enough time to do so today, but I urge all hon. Members and the Minister, who was present for some of our earlier debates, to look again at the important words of my hon. Friend the Member for Coventry, South (Mr. Cunningham) and other Coventry Members, who have spoken in recent Adjournment debates about the disgraceful way that Peugeot has behaved over the Ryton plant.

I am pleased to say that the vast majority of former Longbridge employees have now got other jobs. That is good news, but it is important that we set it in perspective: a substantial minority still do not have jobs, and those who do are often on much lower pay rates. It is therefore important that we do not abandon those people.

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The taskforce that the Government set up has achieved a great deal, and I pay credit to it and its successor body. However, it is important that that work goes on. Not all the money that the Government allocated to the issue has been spent. If the needs are still there, it is important that the money is still there. Indeed, I shall be speaking to my right hon. Friend the Minister in just a couple of hours about some of the issues involved. However, I make this appeal to her: we should not be over-concerned about whether money is allocated in one financial year rather than another. The really important thing is what the money is needed for and what use it should be put to.

As regards the future for Longbridge, the Chinese firm Nanjing Automobile Corporation has guaranteed that it will be producing MG sports cars at the plant from next year. That is good news, and I wish the company the best of luck. However, although the announcement that Nanjing will locate its European headquarters at Longbridge is welcome, we need to think about what else needs to happen, because the future of Longbridge and, in many ways, the British car industry can be about much more. Part of that future should involve looking at where our strengths have been, still are and will be in future.

My hon. Friend the Member for Chorley referred to performance engineering, and motor sports technology is also relevant in many ways. Just two weeks ago, the final round of the British touring car championship took place at Silverstone. The car that won was a Honda, and the firm running it was a performance wheel manufacturer called Rimstock, which is based in West Bromwich. Interestingly, two teams in that performance series were running on bioethanol and one was running MGs. There is huge potential for synergies in the performance engineering and environmental technology fields. I hope that Longbridge can be part of that and that the Government can take an active role in promoting such ventures.

Such things can also happen in other parts of the motor industry. Just down the road in the west midlands, at Fen End in Warwickshire, the performance engineering firm Prodrive has just secured final confirmation that it has received planning permission, so a Formula 1 car produced in Warwickshire will be on the grid from 2008.

Tata and Shanghai Automotive Industry Corporation—erstwhile partners of MG Rover—also have committed to new design centres. Nanjing’s supplier Stadco is moving to the Longbridge plant to build bodies. JCB in Staffordshire is collaborating with Ricardo Consulting Engineers to produce state-of-the-art diesel engines. My right hon. Friend the Member for Oxford, East (Mr. Smith) rightly paid tribute to the work of BMW at Cowley and, significantly, to the production of the new generation of engines at Hams Hall.

There are therefore several different examples of where we are succeeding in new areas and with traditional, iconic brands. My hon. Friend the Member for Birmingham, Erdington (Mr. Simon) referred to Ford, Land Rover and Jaguar. Equally, London Taxi International has just teamed up with a Chinese partner, which will, I hope, see their production increase tenfold in the midlands.

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We might have fewer and smaller manufacturing plants, and we cannot duck the challenges of globalisation, but if we stay ahead of the game and play to our strengths, there can be a bright future not only for manufacturing, but, as my right hon. Friend the Member for Oxford, East rightly said, for the components industry. I pay tribute to programmes such as Accelerate, which celebrates its 10th anniversary this year. It has been encouraging components suppliers to improve processes and to get ahead of the game, and they have been very successful in so doing. Such programmes were important in ensuring that the loss of MG Rover last year was not half as serious as it would have been had it happened in 2000.

There are one or two things that the Government need to think about, and I want to describe a couple for the Minister. First, if I am right about the kind of future that I am sketching out for the motor industry, we need to think about the supportive mechanisms and attitudes that are needed to back that up. The planning system has a role. It is right that we involve local people in planning decisions and that we look to protect the environment, but there should be a framework of trying to make things happen, rather than always getting in the way of things happening. That is very much the view of people living in and around Longbridge.

These days, we all celebrate motor sport and performance engineering, which I have mentioned today. However, we need to think about whether all Departments of State, parts of local government and different agencies are working together to make those as effective as possible, and whether we are using the expertise of our performance engineers as effectively as we can to meet the environmental challenge. As I say, the synergies are there. The Low Carbon Vehicle Partnership, for example, has done some great work, but are we really doing all we can to be world beaters in the business of alternative fuels? Could we do more on biofuels or, for the long-term future, on hydrogen power?

We need to consider those issues, as well as planning policies. We need to examine whether our industrial policies link with our environmental policies. Equally, we should consider whether they both link with our transport policies and whether we are using the transport innovation fund, for example, as creatively as we can to obtain the spin-off industrial and technological benefits, as well as the transport benefits.

We have a proud manufacturing history. In Longbridge, we know that the tenacity and skills of the work force and the vision of people such as Herbert Austin built the 20th century for Austin in Longbridge. The tenacity and skills of the work force there, and those of the motor industry, can now also build a future. It will be a different future, but I think it can be a bright one.

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