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25 Oct 2006 : Column 459WH—continued

3.12 pm

Mr. Mark Todd (South Derbyshire) (Lab): South Derbyshire is arguably the heart of UK manufacturing. Nearly a third of the work force there are employed in manufacturing, which is more than double the average for a UK constituency, and it is home to a wide variety of companies. I shall concentrate on one of those.
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However, we make engines for JCB—the main plant is of course in your constituency, Mrs. Dean, but the engines are now made in South Derbyshire—and many Rolls-Royce employees live in my constituency.

We also have Futaba, which makes car parts for Toyota and other car manufacturers. We make steel frames and aircraft parts, and innovative electric power systems for high-performance vehicles. The area is a centre of expertise, hard work and innovation, with committed workers who know what they are doing and owners who are committed to the future of their businesses.

I want to focus on Toyota, which is also based in my constituency. It is, I think, the most successful car company in the world, and 4,200 people are employed at Burnaston, out of the 4,800 in the UK. That is based on an investment over the past 14 years of nearly £2 billion. The plant makes two lines: the Avensis, which I drive—I do not suppose that I could get away with driving much else, as I live a mile and a half from the plant that makes them—and the Corolla. They are vehicles that I commend in public purchasing terms, and certainly commend to other Members of Parliament. Sometimes when one wanders into the Members’ car park, the number of British-made cars sitting down there is noticeable.

Annual production of vehicles at the plant is coming up for 285,000, because a major investment has facilitated further expansion of annual production for this year, and it is used as a source of advice on manufacturing and process quality. The Toyota production system is taught to many people, including those from the public sector who come to learn about how processes can be organised and how teams can work together to produce high-quality output.

Eighty-five per cent. of the Burnaston production is exported, including a proportion that goes to Japan. In 2005, Burnaston produced its 2 millionth vehicle, and it makes a net contribution of £400 million a year to our balance of payments—which is not to be sneezed at. A point that has not yet been picked up in the debate is the fact that such major manufacturing investments make an important contribution to UK plc’s trading status as a nation.

Burnaston is now also a training facility for Toyota employees across Europe. I am pleased that my constituency has been chosen as the base for people learning how to produce in the Toyota way. It also has an enviable reputation as a general car manufacturer: we have already heard about the Toyota Prius, which is a vehicle with a dual power system that is often used in the ministerial fleet. My right hon. Friend the Minister may go around in one—I do not know.

The plant, which I commend as a place to visit, if the Minister has the pleasure of visiting South Derbyshire—I am sure that Toyota would welcome that too—also has a strong focus on the reuse of materials. Anything that can be reused is put aside for recycling or repurposing. It is a model employer and manufacturer, and, when we consider the global statistics, a manufacturer that is winning the race worldwide, not just in Britain.

All that is very positive, and it is my core message: we can succeed in making cars in the UK. Toyota proves that. However, what do such companies need? My right
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hon. Friend the Member for Oxford, East (Mr. Smith) rightly mentioned the importance of a stable economy. Toyota always makes that point: it wants a clear environment in which it can invest in the future, knowing that something desperate will not happen in six months that dramatically changes the mechanism of its business. That includes relative stability of exchange rates. It is a major trading force, as I have emphasised, and it is important that the Government have made admirable progress there. While we have not joined the euro, in the past two years we have, nevertheless, had relative stability in exchange rates with the euro, which has helped companies such as Toyota to predict costs in the relevant area.

Energy costs have been touched on and I shall not discuss them again, but a critical area is logistics. South Derbyshire is right in the middle of the UK. Toyota would love to be able to use our railway system, as that would allow it to ship its high-quality product to UK ports for export. I know that discussions on some relevant issues have been going on with my right hon. Friend’s Department for some time. I would welcome her comments on what progress might be made, because Toyota is an enthusiastic supporter of the opportunity.

My last point is that we need a regulatory framework that is sympathetic to manufacturing activity and takes account of the competitive environment in which it operates. It is no use applying regulatory burdens in the UK that are not applied to major manufacturers in mainland Europe—particularly some of the new-entrant countries. That is hard for a major company such as Toyota to bear.

3.18 pm

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate. He has talked passionately about manufacturing and said that he wanted to talk manufacturing up. I agree wholeheartedly that that is what we should do, because we both, like other right hon. and hon. Members who are present, care passionately about manufacturing.

I agree with what my hon. Friend said about the Government leading by example and considering their purchasing policy. That is something that the Government could do to set an example, and I urge the Minister to take the idea seriously; it has my support.

I want to focus on the positive aspect of manufacturing and particularly motor manufacturing in the north-east and on a great success story, Nissan, which was mentioned by the hon. Member for Mid-Worcestershire (Peter Luff), the Chairman of the Select Committee on Trade and Industry. The Nissan plant in the north-east was set up in 1986 and has been one of the most productive car plants in Europe. I put it on the record for my right hon. Friend the Minister that it has enjoyed tremendous support from the Government office for the north-east and from the regional development agency—One NorthEast. The local council has also given tremendous support over
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the years to help to make the plant work. Everyone has worked together to recognise the sector and played their part.

The Nissan plant produces nearly a third of a million Micra, Almera and Primera models each year. It now accounts for one in five of all cars produced in the UK. Nissan works closely with the university of Sunderland and with local colleges. A two-year foundation degree—the first—in lean manufacturing has just been launched in the north-east, with more than 40 students enrolling. Sunderland has also been selected to take forward production of a new sport utility vehicle range, with £500 million of investment and the creation of a further 400 jobs.

The plant is highly technically advanced. A total of 435 functioning robots provide for nearly 80 per cent. automation of the assembly process at the plant. About 75 per cent. of production is exported, with markets in 45 countries, including Nissan’s home nation of Japan. Nissan contributes about £500 million to the local economy each year, with 240 suppliers in the region. Nissan’s total investment exceeds £2 billion, with about 5,000 people employed at the plant.

Nissan has also been the agency for creating a large supply base in the region with significant suppliers, including Hashimoto, Magna Kansei, Calsonic Kansei, TRW Automotive and Johnson Controls. Much of that work is concentrated around Sunderland, and the city continues to build on its worldwide reputation as a centre for car manufacturing. The sector employs about 12,000 people in that city alone.

As I said, the Nissan plant is a great success story and has enjoyed tremendous support, certainly from the Government. I ask the Government to continue to provide support in future so that the plant can continue to flourish and we will have a great success story to tell for years to come.

3.22 pm

Andrew Miller (Ellesmere Port and Neston) (Lab): My experience of the motor manufacturing industry goes back more than 30 years. In those days, I regularly used to visit the Standard Triumph factory in Speke, which has long since closed for what are now obvious reasons. It was a depressing, noisy place, with bad human resources practices, and the products were not of the highest quality. There was no vision for the future and no ambition at the time. Sadly, that reflected the period in which we were living.

The Government have changed the emphasis quite considerably, but we need more vision now. I echo the words of my hon. Friend the Member for Birmingham, Northfield (Richard Burden) on that. We need a vision that encompasses a strategic future that engages the hydrogen fuel cell industry. Otherwise, it will end up in Germany. We need a vision that engages bioethanol products. I saw the same race on television. Knowing my hon. Friend’s love of the sport, I am sure that he was there. We need to engage the performance industry as well.

I agree with the comments about public procurement. The strategy on public procurement is important because it sends a powerful message. The fact that many police forces drive Vauxhall Astras is a huge plus in the bid that we have just made for the new
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vehicle for Ellesmere Port. If none of our police forces drove the vehicle and there was not significant public procurement of the vehicle, the company would perhaps focus elsewhere. I shall return to that issue.

We have to recognise that we are now dealing with global vehicles, which are designed by giant corporations seeking to meet market needs across the world. My right hon. Friend the Member for Oxford, East (Mr. Smith) is fantastically lucky that his area is hitting the world market from the very good factory there. We need to recognise, though, that many vehicles are manufactured in a large number of countries and we have to ensure that, if we are in this for the long term, the strategic changes that we engage in make sense in relation to the needs of those big corporations.

My hon. Friend the Member for Chorley (Mr. Hoyle) mentioned energy, which is a huge issue. In relation to the Vauxhall bid, we are working closely with the company not only on engaging with our friends in the Treasury about energy prices in this country, but on finding innovative solutions, working with energy suppliers in the area that might be able to make provision directly into the grid. Such innovation is highly desirable.

We have also been working on estate management and ensuring that the estate is fit for purpose, because it was designed in a different era of vehicle manufacturing, when it was quite common to have long rambling production lines that did not make a great deal of sense in terms of integration, because that was not the way in which production worked. A huge amount of work is taking place on that. My right hon. Friend the Minister may have seen, in a paper that I sent to my right hon. Friend the Chancellor of the Exchequer last week, that we have achieved a deal on the rates for the building, putting them in line with the rates that apply to Gliwice in Poland and thus removing one of the obstacles that would mean that we lost out on the bid.

A huge amount of work is taking place on training with the Northwest Development Agency. This is enormously important. If we are going to take the Astra platform forward for the next model and over the projected 15 years, we must have the most highly trained work force to be able to compete with sister plants elsewhere in Europe.

My hon. Friend the Member for South Derbyshire (Mr. Todd) touched on the transport infrastructure. It is utterly absurd that a railway siding goes through the Vauxhall factory, yet not one single component travels on railways. I shall not make a party political point, but the reason for that goes back to the failure of Railtrack, which simply was not interested in the business. Therefore, Vauxhall has invested in fleets of lorries, and its actions, together with those of all the other manufacturers in my area, cause the clogging of the M6. If anyone wants to find a quick solution to traffic-flow problems on the M6, they should invest in rail freight, which would help Vauxhall, Shell and all the other big players in my area.

That type of cross-cutting Government thinking is needed and we need to send out a powerful message. I hope that the Minister, in her reply, will do just that. We need to send to potential investors and, in my case, particularly to General Motors a powerful message that says that we are serious about ensuring that we
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continue to be a great place to do business and that part of that will involve working with them to try to address some of the energy and transport infrastructure issues, to ensure that we invest in training and to address the issues of estate management and so on.

If we get those things right, we can continue to produce the Vauxhall Astra in my constituency. Those messages reflect across the broader industry. I hope that the Minister will speak with enthusiasm about the industry, which is hugely important to the country and needs to be so in the future.

3.30 pm

Lorely Burt (Solihull) (LD): I, too, congratulate the hon. Member for Chorley (Mr. Hoyle) on securing today’s important debate. I come from Solihull, the home of Ford and Land Rover. Obviously, the hon. Gentleman is delighted that the Freelander rolled off the production line at Halewood today, but that has been to the cost of Solihull and 1,200 jobs there. Having said that, because its hugely successful products contribute enormously to British exports, I think that Land Rover should be congratulated, as should the other excellent car production companies that have been mentioned today, such as Honda, Toyota, Nissan and BMW Mini.

The west midlands has more jobs in car manufacturing than any other region in Britain: 78,000 jobs. Unfortunately, when Labour came to power it had 95,000. The figure for the drop in car manufacturing from last year to this, which was released yesterday, is 15 per cent., but I am sure that the sad tales of Rover and Peugeot have contributed to that. I am hopeful that there might be something of an upturn next year. If there is not, it will not be for want of effort on behalf of the excellent companies that I have mentioned.

I want to discuss car component manufacturers, on whom there are enormous pressures. It is important that they are located close to car manufacturers wherever possible because of the pressures of just-in-time technology, which is hugely valuable, but there are problems with the transport infrastructure, and it becomes increasingly problematic when components do not get to their destination within the required time.

We are moving away, particularly in the west midlands, from low added-value components and the metal-bashing era to using much more technically challenging, high-spec systems that involve computer-aided design and electronics. That is a good move because it brings a great deal more added value in the cars that we manage to export, which is good for our balance of payments. However, we are a net importer of vehicles to the tune of 1 million vehicles a year at a cost of almost £6 billion to the UK economy. Clearly, the more vehicles we manufacture here for export, the better it will be for prosperity in the country generally.

As we are being technically challenged all the time, particularly with car components, it is important to keep research and development ahead of that in China, India and the rest of Europe. We therefore need skills and investment to create an environment that overseas car manufacturers will welcome.

There seems to be a global problem in car manufacturing with surplus capacity. Strong unions
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that are, obviously, against cuts in the volume of manufacturing cause profit pressures, and the tight margins to which manufacturers have to work will filter down the supply chain through price-downs, where suppliers on each tier demand price cuts from the suppliers below. That phenomenon, and the investment that is required in research and development and new technology, mean that many car component companies are highly geared. There is a constant need to upgrade manufacturing plant and tooling, and they are less able to withstand the shocks of lack of demand or changes to do with economic pressures and interest rates, so Government help to a create stable environment is important.

However, it is not all gloom and doom. The British success stories that we have discussed are hugely welcome. Foreign manufacturers come to this country because of flexible jobs. While jobs are very important, the route to more success is more partnership working between unions and manufacturers rather than there being a protectionist approach to British jobs.

The hon. Member for Chorley talked about buying British, which is hugely important. I wish that the British public would buy British as well—

Mr. Hoyle: And MPs.

Lorely Burt: Indeed. Renault does not make a single vehicle in this country, yet there are many Renault vehicles on the road. I totally agree with the hon. Gentleman that we should encourage a better awareness of where vehicles are made and the link between buying vehicles that have been made in Britain and the prosperity of Britain. We do not laud that enough. The game is definitely worth the candle, but we need skilled people and R and D support. The transport infrastructure is also important.

I echo the comments of the hon. Member for South Derbyshire (Mr. Todd) about regulation, particularly with regard to car components, and the need for sensitivity to the enormously changing environment. I encourage the Minister to consider regulation in relation to component manufacturers, and I am sure that she and her Department would be pleased to hear from those manufacturers how regulation is hampering them.

3.38 pm

Mr. Mark Prisk (Hertford and Stortford) (Con): I, too, congratulate the hon. Member for Chorley (Mr. Hoyle), who has long had an interest in this matter. He spoke with real passion on the subject, and I suspect that not only we in the Chamber but many of his constituents will have heard what he has to say.

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