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9 Jun 2009 : Column 167WH—continued
A new approach to manufacturing is needed. We must not abandon the view that the market has the answers. It does not have all of them, but it has some. Although we do not like to use the word, we have seen intervention in the banking and car industries. It does not have to be a dirty word that we turn our noses up at. Intervention is important and the market matters—we must bring the two things together. If we do not, within 20 years, countries like China and India will make everything we use. Our European counterparts recognise that they cannot have a successful economy without a robust manufacturing base and have acted quickly to defend it. The UK, too, must adopt a more active industrial policy and should not be afraid to intervene
to support and protect jobs, and to incentivise investment where appropriate. The state should step in to provide the necessary support for manufacturing companies. It is not acceptable to stand by and watch skilled jobs and companies such as LDV go to the wall.
We must look at new ways of working that are used in Europe and the United States. Many problems in the automotive industry are shared. In the global market, we must explore and work together where possible, for example to invest in the production of more environmentally friendly vehicles, to which the Government are committed. It is right to have long-term policies on investing in greener vehicles, but we must not miss out on the short-term policies that are needed.
I congratulate the Government on working with Jaguar Land Rover. It is important that such major companies continue and there can be no excuses if they do not. The Government were right to intervene to tackle the financial crisis and should not hesitate in acting to support other jobs. Such action benefits business, workers, the economy and the taxpayer.
The Government could adopt a number of measures to help manufacturing contend better with the downturn. More direct support is needed to protect jobs. One option is a time-limited wage subsidy targeted at keeping viable businesses open. Short-time working and temporary lay-offs are now a reality. In some cases, they are a stepping-stone to redundancy. For example, workers at Leyland Trucks are being forced to accept short-time working because of the downturn in the orders for vehicles. Each week, more businesses are forced to do the same. Such companies and their workers deserve our support.
A time-limited wage subsidy scheme should be introduced with sufficient safeguards to ensure that only firms directly affected by the recession qualify and to avoid dead weight. It could bring significant benefits such as employers avoiding immediate redundancies and retaining essential staff and skills. If linked to training, it could be a long-term work force investment. Surely it makes more sense to invest in people in the work force, rather than in the jobcentre. Rather than subsidising people to be unemployed, we should subsidise them to keep their jobs.
Bob Spink: Does the hon. Gentleman agree that to build for the future of the manufacturing sector, there must be more genuine, traditional, workplace apprenticeships? Will he congratulate the Government on developing more apprenticeships and press them to develop more traditional, work-based, manufacturing apprenticeships? That is the future.
Mr. Hoyle: I am happy to join in that praise for the Government’s action on what I call traditional, real apprenticeships. I cannot thank the Government enough. Apprenticeships are part of what we need for the future, but are no good if we allow the companies to disappear. We must ensure that the companies are there so that we can provide the long-term jobs that apprentices and the country require.
The TUC estimates that at a cost of about £1.2 billion, we could save 600,000 workers each year through a short-time working subsidy. We have found billions to bail out the bankers, so we can do the same for hard-working people in manufacturing. The banks are now
paying that money back, and we should reinvest it in manufacturing so that we benefit even more in the longer term. A short-time working subsidy would be a quick and effective way of targeting support at the struggling employers providing financial support to employees across the UK. Europe has already recognised the benefits of such schemes, which have been introduced in Germany, France, Spain, the Netherlands and Italy. Closer to home, the Welsh Assembly has introduced a wage subsidy called ProAct, which took only two months to become operational at the beginning of the year and is now benefiting many businesses and workers across Wales—we can learn something from a small country such as Wales.
The proposal to introduce a short-time working subsidy is supported by business leaders such as the Federation of Small Businesses, and organisations such as Corus, JCB and many others. The trade unions also fully support it. As I have said, it is better to pay to keep people in work than to pay them to attend a jobcentre. What are we otherwise going to do with them? Will we train them to do the jobs for which they already have the skills? That is what we seem to do. It makes sense to provide that support, because it helps people to keep their dignity and their ability to pay the mortgage and it stops family break-ups. That alone would bring a major benefit to the Government. It must be a priority to keep viable businesses open and to protect jobs if we are to come out of the recession in a stronger position. If we fail to do so, there is a danger that we could lose many much-needed skills.
I want to discuss workers’ rights. The Government have rightly made progress on introducing family-friendly policies, but those policies benefit people only if they have jobs, so we need to make those things work together. We have not been so bold in other areas, and the UK has a poor record, in comparison with other European countries, on protecting workers who face redundancy. It is worrying that General Motors Europe has admitted that it is easier to sack British workers because of the flexible labour market. Increasingly, when multinationals consider downsizing and shedding jobs, they see British workers as the easy option. We need to reconsider these matters, as it is scandalous that UK workers are among the cheapest to sack. We need a level playing field, and I urge the Government to act to give British workers the same protection as their European counterparts. This is not about favours; it is about fairness.
Linked to all that, we need further incentives to support companies that invest in our manufacturing sector. We could do that by giving better tax incentives or by demanding the repayment of grants, so that we would help them on one hand, but they would have to pay back with penalties. We would have to include penalties because some people want to come in, make a quick buck and disappear. Companies must decide which is the best option for them: is it to repay the advantage they have had in order to move quickly somewhere offshore?
We need to send the message that Britain is the best place to invest, and we can do that. We have the best skills and the best work force, and we make the best products in the world. We are world leaders in areas such as pharmaceuticals and aerospace, and we have a great skills base in the north-west, particularly in Lancashire. There are no better skills than those we
have in aerospace in Lancashire. When we look at BAE Systems and at what flies out of there, we see that those skills and the research and development that go into that manufacturing base are second to none. The Americans look at us with envy, and rightly so, as we are building the best aircraft in the world.
I would like all that skill, knowledge and know-how to be linked with technology transfer, as that is where we miss out. We invest in military aircraft that are the best in the world, but we need a spin-off from that investment to create jobs in the civil sector. People always ask, what good is the military? It is good when it protects us, but I want to be able to say that it goes much further than that. I want to say, “Look at what we’ve created by transfer to the automotive industry and other industries such as shipbuilding, with submarines.” There must be skills that we can transfer across to our other UK manufacturing bases. We have put in the research, development and investment, but we do not hear about technology transfer. When a space shuttle is put into space, we hear about the spin-offs and other jobs being created through that investment. We need to do the same and to recognise what we could gain from such major investment. I repeat that we are still the world leader in pharmaceuticals. We need to go forward with that kind of blue chip company, and we need to send the message that Britain is the best place to invest and do business.
Warm words from the Government in support of manufacturing are commendable, but they need to be matched by direct action. The Government have rightly embarked on record investment in our schools, hospitals and transport infrastructure, but that investment must be matched by a policy that prioritises British manufacturing, thus protecting British jobs. We invest in our railways, but we have trains that are built in Japan and other rolling stock that is built in Spain. Why is that continuing? Does the Minister think that Japan or Spain would let us export trains to them? The answer is no, they would not. When we are making all that investment with taxpayers’ money, we must consider how to use it to help British jobs. We have missed a trick which we must not miss in the future. The Government spend more than £120 billion a year on buying manufactured goods, so the introduction of such measures would make a real difference to our manufacturing sector. For a start, why should not all the vehicles used by the Government and the public sector be made in Britain? What about Building Schools for the Future and Sure Start children’s centres? Why should the desks and chairs that our children use in the classroom not be made in Britain? I could go on and on about how much more we could do. As I have said, British uniforms could be made in Chorley. Public infrastructure projects such as Crossrail and the 2012 Olympics should always prioritise in favour of British companies and British jobs, and should make sure that the steelwork, materials and everything else are from the UK.
We also need to invest more in skills and training if we are to reinvigorate the manufacturing sector. The Leitch report highlighted the importance of investing in skills and workers. The planned investment initiatives will go only so far, and we need to go further if we wish to remain at the cutting edge of manufacturing. We need to address this issue urgently, as it cannot be right that companies such as Rolls Royce have to recruit from
abroad to fill the skills gap. We ought to recognise that problem immediately and put it right. I welcome the increasing number of apprenticeships and I commend the work of companies such as BAE Systems, which has invested significant resources in such apprenticeship schemes and in the company’s future. One has only to look at its graduate and apprenticeship scheme in Barrow, which has benefited more than 600 people. About 13 per cent. of its Submarine Solutions work force has come through that scheme, proving that investment quickly brings rewards.
Train to Gain is also making a difference, but we must go further. We need to be bold and radical in offering training and development opportunities for those who are already in work to upskill and give them the diversity to meet the change in demand for skills. However, the Government cannot do that alone. Employers need to work together on that, but there should be greater incentives, particularly for small and medium-sized companies to invest in their work forces.
We will face challenges in future, but we must not shy away from them. Our manufacturing is something that I can be proud of, that Britain should be proud of, and that the rest of the world is very envious of. We are one of the leading exporters of high-technology products, and our productivity has risen by half since 1997, thereby outpacing Germany and France. The key test is whether we make the necessary investment to build on those achievements or whether we stand by and let our manufacturing industry deteriorate further. We cannot afford to do that. We have been through the painful measures and difficulties of the 1980s, and I know the impact that they had in Lancashire at that time and the problems that we faced. We have come through all that, and we must never return to it by doing nothing. This is not a political point: doing nothing would have taken us from recession into a depression, and that is why we were right to invest. We must not shy away from investment, although there will be critics. Fruit is now beginning to appear on the tree and it will not be long before we can pick it, so it benefits the Government. We must acknowledge when they get things right, and we should not be ashamed of what we have done. I repeat that doing nothing is not the way forward, and that we would have been in a depression if we had done nothing.
The weakness of the economy is dependent on the financial sector, as I said earlier. With a strong manufacturing base, we can secure continued economic growth and stability and help to support workers and return our economy to a position of even greater strength. I hope that we can expand on the measures that we have taken, and that they can grow. However, it is not all doom and gloom—there is good news. I have a company called Porter Lancastrian in my area. People might ask who they are: they produce bar products, but the brewing industry is suffering and pub closures are coming. However, Porter Lancastrian diversified, and now produces waterproof television screens for the fanciest hotels around the world, so that when people sit in the bath or have a shower, they can watch television. Waterproof televisions are going a bomb and they came out of Chorley. That is fantastic news—I do not think that MPs have claimed them on their expenses yet.
It is important to have initiatives to deal with these issues. Such initiatives should be about diversifying and creating new jobs. That is what we are good at in the UK. Providing a bit of help and support and bringing people together can make a real difference. I am pleased that we have been allowed to have today’s debate. It will help to inform policy development and implementation, and the vision set out in the “New Industry, New Jobs” document. That document is important and manufacturing is important. Thank you, Mr. Fraser, for your patience. I also thank other hon. Members for turning up.
Christopher Fraser (in the Chair): I remind hon. Members that I intend to commence the wind-ups at 10.30 am and that there are at least two Members who would like to speak.
10.10 am
Mr. David Drew (Stroud) (Lab/Co-op): I note the desire of my hon. Friend the Member for Manchester, Central (Tony Lloyd) to speak and congratulate my hon. Friend the Member for Chorley (Mr. Hoyle), who put the case admirably. I am delighted to speak under your chairmanship, Mr. Fraser.
I shall concentrate on the key issue of the wage contribution, subsidy or whatever we want to call it. It might surprise people to know that Stroud is a manufacturing centre. Many people think that it is an area of agriculture, green hills and tourism. In fact, a disproportionate number of people—more than the national average and certainly the highest number in Gloucestershire—work in manufacturing, particularly engineering.
Our firms are mainly automotive or in the automotive chain—although some are aerospace—and they are experiencing some difficulties at the moment. The aerospace sector has, of course, lagged behind other sectors in terms of the recession, but, nevertheless, it faces some difficulties. I have been to all my major firms—Renishaws, Delphi, SKF, Lister-Petters and a smaller company called Deutz. In addition, I am in Cologne next week to try to fight to retain 30 jobs, which I think we can do if the parent company allows its subsidiary in Dursley to go it alone and work with Lister-Petters, which was the original company. That would provide an answer, and it is my duty to work towards such a solution. It is not all bad news: an ABB plant in my constituency is doing very well, because it is based in the water and power industries. The way in which ABB locks into those industries means that it is doing relatively well.
On wage subsidy and wage contribution, I must compliment the Government. Two of the firms that I have mentioned—Delphi and Renishaws—have laid off a large number of people. For Renishaws, that is unheralded. That company is a state-of-the-art probe manufacturer under the chairmanship of Sir David McMurtry, who is one of the stars of Britain and British industry. However, between December and January, Renishaws hit a wall because of what happened to demand for machine tools, of which probes are a key element. As well as the lay-offs, people have “volunteered” to go on short-time working to keep their jobs. However, accordingly, they will take the pain of the loss of money and the sacrifice that comes with that.
I went to see both Dephi and Renishaws early in the new year when they hit these problems. We agreed collectively that when people are on short-time working, their time can be used meaningfully to boost their skill level and that we should ensure that people can do the training that they would love to do but that they are normally too busy to contemplate. I pay due regard to a number of Government agencies that have been key to those discussions, such as the South West of England Development Agency, the Learning and Skills Council, Jobcentre Plus, Gloucestershire First—our local development agency—and Gloucestershire Training Group Limited, which will undertake the training provision. As my hon. Friend the Member for Chorley has said, the trade union, Unite, has also been crucial in encouraging its members to go along with the training.
Using Train to Gain, we have put training packages in place so that slack time can be taken up and that people can be usefully employed. There are two reasons why we have done that. First, as I have said, it is important for people to build up their skill level. Secondly, when we get out of recession, we have to be absolutely tooled-up, skilled-up and personed-up, because otherwise our competitors in Europe will take the work. The two firms that I am talking about are Renishaws and Delphi. Delphi has a huge order book going forward, but, of course, no one is taking up those orders at the moment. Renishaws is much more of a just-in-time business, but, again, it will be back because it is the world’s leading manufacturer of highly skilled probes. We have a future; those firms have a future; however, we have got to get to that future.
As my hon. Friend the Member for Chorley has said, I commend the paper produced jointly by the Federation of Small Businesses and the TUC. I shall not discuss that document in detail, because I know that my hon. Friend the Member for Manchester, Central wants to speak. However, it is a very pertinent paper, which also has the benefit of being short, and it makes the point that such training schemes mean that firms are keeping people on their books. Of course, firms have the means to do so, because employment schemes involve a levy on companies, so that money is available to allow companies to keep people on the books while the state pays them in times of downturn. I am not suggesting that we go along all the way with that, because it is rather quaint to pay people to lie on the beach for three months at a time. I would much rather people were working and being trained when they are not working, so that they are appropriately skilled for when they come back.
As my hon. Friend the Member for Chorley has said, if we consider Wales, such schemes are not unique in our country. The Minister might have an interesting point of view on this because, under the ProAct strategy, such schemes are taking place in Wales, where people are being paid wage contributions to undertake training. Wales has led the way on that and the rest of the United Kingdom must follow.
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