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I want briefly to comment on several points that have been made. The hon. Member for Mole Valley (Sir Paul Beresford) talked about the overall financial situation. There has been a total increase of £48.4 million of Government grant—23 per cent. in real terms—between
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1997 and 2009, and an increase of £32.5 million, which is 80 per cent. in real terms, between 2001 and 2009-10. There has therefore been a big increase. Even with the cap this year, Surrey will receive £5.7 million more.

To answer the hon. Member for Chesterfield (Paul Holmes), capping principles were announced to the House on 26 March. They were: a budget requirement of 4 per cent.; a council tax of 5 per cent. Although it is obviously up to Surrey police authority to decide how to spend its budget, its figures show reserves of £9.4 million, of which £5.6 million is not earmarked. As I have said, it is up to the authority to decide how it uses that money.

Sir Paul Beresford: If the right hon. Lady looks further behind those figures, she will realise that, as a percentage, they are below the level required by the Audit Commission.

Ms Winterton: I should also add that, because of the increases that the Government have put into local government and policing, police numbers in Surrey in September 2008 were 262 higher than in March 1997. On 30 September, Surrey had 1,882 police officers and 1,721 police support staff, which is 994 more than in 1997. I think that we have taken the right decision in this instance.

Sir Paul Beresford: If we extrapolate the budget that results from the capping, the designation and the anticipated grant, the reality is that Surrey will lose 373 policemen and women over the next three years, and, because of the capping, the designation and the rebilling, a further 55. So, to use the Prime Minister’s approach, this is a negative increase.

Ms Winterton: I think that I have explained fully the way in which we have changed what was a rigid system so that, last year, we were able to give Surrey a notional budget, meaning that it would not have to rebill. However, it has always been made clear that the changes that were made last year would be taken into account this year. The authority ignored the warnings that it was given. As I have said, Surrey is the only authority that, having been notified of a notional budget requirement, set an excessive increase in the subsequent year. I have to say to all the hon. Members who have spoken that, having considered the case, the Government have no doubt that firm action needs to be taken.

I think that the hon. Member for Bromley and Chislehurst (Robert Neill) raised the issue of judicial review—

Robert Neill indicated dissent.

Ms Winterton: Perhaps it was the hon. Member for Mole Valley. I understand that this morning the judicial review application was refused on the papers. Of course there is a right to appeal—a right to request an oral hearing—but the application was refused this morning.

I emphasise again that we do not take these decisions lightly. We have to balance the issues of service provision and local accountability with ensuring that council tax payers do not face excessive council tax bills. That is why we have taken this action, and I hope that the House will support the order.

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Question put.

The House divided: Ayes 239, Noes 33.
Division No. 197]
[3.18 pm


Abbott, Ms Diane
Ainger, Nick
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Banks, Gordon
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Benton, Mr. Joe
Blackman, Liz
Borrow, Mr. David S.
Bradshaw, rh Mr. Ben
Brennan, Kevin
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Butler, Ms Dawn
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Clapham, Mr. Michael
Clarke, rh Mr. Tom
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Cooper, Rosie
Cooper, rh Yvette
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Quentin
Denham, rh Mr. John
Dismore, Mr. Andrew
Dobbin, Jim
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Etherington, Bill
Farrelly, Paul
Fisher, Mark
Fitzpatrick, Jim
Flint, rh Caroline
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Gapes, Mike
Gardiner, Barry
Gerrard, Mr. Neil
Gilroy, Linda
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Patrick
Hanson, rh Mr. David
Harris, Mr. Tom
Healey, rh John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hoey, Kate
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, rh Dr. Kim
Hoyle, Mr. Lindsay
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
Jackson, Glenda
Jenkins, Mr. Brian
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeley, Barbara
Keen, Alan
Kelly, rh Ruth
Kemp, Mr. Fraser
Khan, rh Mr. Sadiq
Kilfoyle, Mr. Peter
Knight, rh Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, rh Mr. David
Lazarowicz, Mark
Lepper, David
Levitt, Tom

Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Mackinlay, Andrew
Mactaggart, Fiona
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McDonagh, Siobhain
McFadden, rh Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGuire, rh Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Miller, Andrew
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Morgan, Julie
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, rh Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pope, Mr. Greg
Pound, Stephen
Prentice, Mr. Gordon
Prosser, Gwyn
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Jamie
Reid, rh John
Robertson, John
Rooney, Mr. Terry
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Sharma, Mr. Virendra
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, rh Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stuart, Ms Gisela
Tami, Mark
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Ussher, Kitty
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Ward, Claire
Watson, Mr. Tom
Whitehead, Dr. Alan
Wicks, rh Malcolm
Williams, Mrs. Betty
Wills, rh Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Woodward, rh Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Ayes:

Lyn Brown and
Mrs. Sharon Hodgson

Alexander, Danny
Brake, Tom
Cable, Dr. Vincent
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Corbyn, Jeremy
Davey, Mr. Edward
Dodds, Mr. Nigel
Featherstone, Lynne
Foster, Mr. Don
George, Andrew
Harris, Dr. Evan
Holmes, Paul
Howarth, David
Huhne, Chris
Hunter, Mark
Keetch, Mr. Paul
Laws, Mr. David
Leech, Mr. John
McDonnell, John
Pugh, Dr. John
Rogerson, Dan
Rowen, Paul
Russell, Bob

Smith, Sir Robert
Stunell, Andrew
Swinson, Jo
Thurso, John
Williams, Mark
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Younger-Ross, Richard
Tellers for the Noes:

Mr. Alan Reid and
Mr. Roger Williams
Question accordingly agreed to.
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9 July 2009 : Column 1197


9 July 2009 : Column 1198

UK Manufacturing

Topical debate

3.30 pm

The Minister for Business, Innovation and Skills (Mr. Pat McFadden): I beg to move,

The business of making things—manufacturing—matters to every Member of this House: it has been a defining part of our economy for hundreds of years; it has contributed to our reputation across the world; and it is a significant part of our economic strength.

Kelvin Hopkins (Luton, North) (Lab): Will the Minister give way?

Mr. McFadden: Not for the moment, as I am only one sentence into my speech.

Since the time of the industrial revolution when we were dubbed “the workshop of the world”, manufacturing has helped the UK to punch above its weight, and one of my principal points today is to counter the impression that we are not still a country that excels at making things; we most certainly are, but where once we led the way as producers of iron, coal and cotton, we are now blazing a trail in new areas such as robotics, software, new technology and advanced manufacturing.

Kelvin Hopkins rose—

Mr. McFadden: I see that my hon. Friend is still anxious to get to his feet, so I shall give way to him.

Kelvin Hopkins: I thank my right hon. Friend for giving way. I want to be as supportive as possible, but I have to quibble with his suggestion that we are still a manufacturing nation. We have a gigantic trade deficit in manufactures, contributing to a very substantial balance of trade deficit which is ongoing, in contrast to Germany, for instance, which has a massive surplus as it has looked after its manufacturing better than us. I hope my right hon. Friend will accept that.

Mr. McFadden: I do not accept the assertion that we are not a manufacturing nation. We are the sixth largest manufacturer in the world, and I believe that manufacturing is a critically important part of our economy. I see the pride, passion and commitment of UK manufacturing in my own constituency week in, week out. When the Prime Minister visited Wolverhampton last Friday, my hon. Friends the Members for Wolverhampton, South-West (Rob Marris), for Wolverhampton, North-East (Mr. Purchase) and I were able to introduce him to many local manufacturers such as Goodrich in aerospace and Nuclear Engineering Services Ltd in my constituency, where people have built up excellent manufacturing industries employing hundreds of other people and making excellent products.

Manufacturing is still a critical part of our economy, employing 3 million people directly, with more in supplies and associated services, and contributing £150 billion to the UK economy.

Mr. Mike Weir (Angus) (SNP): The Minister is talking about the new industries in manufacturing, which is very good, but he seemed to dismiss the older ones. However, there is an opportunity for many such
9 July 2009 : Column 1199
industries—shipbuilding and metal beating, for example—in that their products can be used for the new green industries, particularly for offshore wind, for instance. So will the Minister not dismiss them so lightly?

Mr. McFadden: I did not dismiss the old industries; I reject that assertion. I believe that traditional manufacturing and the newer industries can combine to contribute to our manufacturing strengths, so I am certainly not dismissing any manufacturing industries.

Mr. Nigel Evans (Ribble Valley) (Con): We are now going to have more nuclear power stations, which I greatly welcome. Does the Minister agree, however, that we have waited too long to make that decision, and that a lot of the skills we need to manufacture our own nuclear plants— [Interruption.] No, I will accept part of the responsibility, but this Government have been in power for a long time—since 1997. Does the Minister agree that if we had been more diligent and made the decision earlier, we would not have to import as much as we will have to simply to be able to construct our new nuclear build?

Mr. McFadden: I am prepared to be open-minded and to accept criticism of Government policy from many quarters, but I will not accept criticism from the Conservative party about being late to the game on the new generation of nuclear power stations. The hon. Gentleman’s party has changed its position on that issue more times than a Highland dancer in the middle of the most active reel. I hope that the Conservatives now accept the need to move forward in that regard.

I was explaining the importance of manufacturing to the UK economy; as I said, it contributes some £150 billion to the economy, accounts for half of Britain’s exports and is responsible for 75 per cent. of our business research and development.

Mr. Fraser Kemp (Houghton and Washington, East) (Lab): Does the Minister think that an excellent example of how traditional industries can modernise for the future can be found in the motor industry and the investment in low-carbon cars that has been considered. Nissan, in my constituency, is one organisation that is looking closely at producing the next generation of low-carbon cars, and a decision is expected on that shortly. Does he think that that is another way of developing our manufacturing base? May I also quickly correct something he said? He said that 3 million people are employed in manufacturing, but I suspect that the real figure is 200 more than that, because 200 extra staff have been taken on by Nissan as a result of the success of this Government’s scrappage scheme.

Mr. McFadden: I am happy to be corrected by my hon. Friend, who anticipates what I am coming on to say about the importance of the low-carbon economy in our manufacturing future. He rightly stresses that, and the Government are actively working with Nissan and other manufacturers on that agenda.

This country has excellence and world leadership in some manufacturing sectors—for example, aerospace. We have the second biggest aerospace industry in the world, with more than 100,000 people directly employed in the manufacture of aircraft systems, engines and
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equipment. We are fortunate to have world-class companies, such as Rolls-Royce, based here in the UK. It is a world leader in the production of aero engines and provides a prime example of the kind of innovative and forward-looking manufacturing that is certainly part of our economic future.

Several hon. Members rose

Mr. McFadden: Many colleagues wish to intervene today. I will try to be generous, but I am keen to make progress.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): While praising excellent industries, I hope that the Minister also recognises just what a world leader this country is in subsea engineering—that has come on the back of the oil and gas industry in the North sea. To that end, now that energy is the responsibility of a separate Department, does his Department still have an interest in promoting the business side of the oil and gas industry and all the service industries that go with it?

Mr. McFadden: My Department works very closely with the Department of Energy and Climate Change on these issues, and we will jointly be publishing a low-carbon manufacturing strategy in the not-too-distant future. We have worked on that co-operatively.

It is important to remember that our manufacturing base also helps us to attract significant inward investment. The UK is the world’s second most popular destination for foreign inward investment. Investment projects in advanced manufacturing have increased this year by 18 per cent, so even in the midst of a downturn inward investment in manufacturing is a UK success story, and we must not forget it.

Rob Marris (Wolverhampton, South-West) (Lab): A golden thread running through manufacturing is the importance of investment in capital equipment, and capital allowances are one of the tax regimes to encourage that. Is my right hon. Friend as astounded as I am that the policy of those on the Conservative Front Bench, as announced by the hon. Member for Fareham (Mr. Hoban) on 12 May, is to cut capital allowances by £3.7 billion a year?

Mr. McFadden: That kind of policy is the last thing that our manufacturing industries need, particularly in the midst of a downturn when we hope that hard-pressed industries are able to take investment decisions in order to prepare for the upturn when it comes. The Conservative party has come up with a policy that would strike at the heart of those investment decisions, and that is the very opposite of the support that manufacturing industry needs.

Kelvin Hopkins: I agree entirely with my right hon. Friend about the importance of manufacturing and preparing for the upturn when it comes. Will he and the Secretary of State do everything possible to sustain the General Motors van plant in Luton—the best van plant in Europe, which produces the best vans in Europe and, I would argue, has the best work force in Europe? It is vital for our future.

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