Examination of Witnesses (Questions 120-139)|
23 FEBRUARY 2009
Q120 Mr Hoyle: I think we could do
a lot more, and I think it is the part that we ought to be doing.
Lord Jones of Birmingham: I would
love to hear about that because that would be good news, but if
Lord Mandelson is sitting there saying, "Digby, that is all
very well and good, but can you please explain to me how I pick
the ones that are not going to go bust from the ones that are?"
and all that stuff, in other words, pick the winners, I think
he has got a valid point. I think it is really difficult. If you
come from the Government's heritage of the last time there was
a labour administration, when you did have the baling out of British
Leyland and all that went with it and the nationalisation of shipbuilding
and steelworks and all the rest of it, you are going to have a
heritage of this time round not wanting to be seen to be doing
it. I understand fully the obstacles to doing it, but that in
a way does not mean that it is not right to do it on occasion.
We all forget this but the biggest investor in British Leyland
was Margaret Thatcher. In intervening and picking winners and
failing, I would remind Mrs Thatcher of De Lorean. Doing this
is not just something which Labour Governments do. This is something
that Governments of both sides did. I do understand how democratically
elected politicians who want to be re-elected do not start trying
to walk into the lion's den and picking winners, but what could
we be doing more on manufacturing? Above all else, I think, we
have to invest more of private sector and public sector money
in all the means to create value-added innovation. That is what
manufacturing is about. It is adding value to raw materials and
people's time and how you put the two together and make six or
seven. That is manufacturing. If you do not put more investment
now into skilling people, getting your kids on board with the
ideas so that they start thinking of careers in it, getting local
governments understanding and politicians understanding this is
not a milch cow that you can just constantly tax and regulate
and presume it will always be here, because it is also the most
mobile of our sectors. It is very difficult for Asda to make money
from an Asda store in Birmingham and some of it in another country.
You cannot do it. You can move a factory. I know nothing about
this but I read in the newspapers that there is a big row going
on in the Government at the moment about, "Let us make sure
there is less regulation", and some parts of Government say,
"No, we will have more". I tell you: manufacturers will
just go. They will go and do it somewhere else. We really cannot
afford that to happen, so what should we be doing more? Making
the business environment more easy for manufacturers to invest
in this country and not in another country.
Q121 Mr Hoyle: It is interesting
what you stated about Leyland but it is the same people that are
coming back againJaguar, part of Leyland, LDV vans, part
Lord Jones of Birmingham: I think
that is a coincidence.
Q122 Mr Hoyle: Leyland Trucks, part
Lord Jones of Birmingham: A coincidence.
Q123 Mr Hoyle: What we are seeing
is that all the ones are suffering the same problems because they
suffer the most because of the downturn. The first thing you do
not buy is a replacement car or a replacement van or a replacement
truck. My view is that the Government can do more and it is something
that we had to remind you of when you were busy. I know you told
something different in the Daily Mail, but when you came
to this Committee you were happy riding round in a Japanese-built
Lord Jones of Birmingham: I was
not happy. You know I was not. Do not put words in my mouth, Mr
Hoyle. I was very unhappy.
Q124 Mr Hoyle: You did not even know
that you were riding
Lord Jones of Birmingham: I thought
it was made in Swindon.
Q125 Mr Hoyle: Exactly, so we corrected
Lord Jones of Birmingham: And
I went out and got a Jaguar.
Q126 Mr Hoyle: Quite rightly, but
the point I am making
Lord Jones of Birmingham: Made
Q127 Mr Hoyle: So it should be.
Lord Jones of Birmingham: I know.
Do not say I was happily driving round. I was not.
Q128 Mr Hoyle: Quite right, but what
I am saying is you were busy riding round as a minister in a Japanese
car with not one British job and not one British component.
Lord Jones of Birmingham: Spot
Q129 Mr Hoyle: Do you thinkthis
is the point I am getting tothe same with the vans in Southampton
and LDV vans in Birmingham? Do you think we can do more at the
moment through procurement? I think it is always better to buy
British manufactured cars and vans and vehicles because not only
is it good for you to be seen in a British-built vehicle but also
people recognise that it must be a good vehicle because if it
is good enough for a minister it is good enough for the rest of
us. Do you think we can do more through procurement to support
Lord Jones of Birmingham: Absolutely,
yes. What amazes me, and I say this with huge respect to the green
lobby, is when you see the contribution to CO2 emissions from
the moment a Prius starts to be built in Japan to when it is driving
a Cabinet minister around here and you see what you could do with
a two-litre diesel baby Jaguar made in Liverpool, there is less
carbon put into the environment in the whole equation by the small
car in Liverpool. A ten-year old Ford Focus or whatever pollutes
the environment far more than a modern Range Rover, but can you
get that concept into people's minds? No. What we have to have
at this time is a procurement process for the nation just supporting
quality manufacturers. I was in Birmingham driving an Austin Allegro,
so I was the one. I do understand that in the old days when a
lot of British manufacturers did not make good stuff procurement
on that basis was not only protectionist; it also was uncompetitive
and, frankly, did the taxpayer down. Today in certain sectors
we are first equal in a world of firsts at many things and we
ought to be supporting it, yes.
Q130 Mr Hoyle: Absolutely. What I
would suggest is, and I do not know whether you would agree, is
that we ought to have a minister responsible for government procurement
that would go right across departments because some departments
do not seem to understand the importance of how you can use procurement,of
course, we have to work within the European law, although we are
talking about companies which are outside Europe so it does not
existsomebody who would sit in the Cabinet office, look
across and say, "Right; we have got the procurement here".
It may be paper clips this week but it could be trucks next week
or aircraft the week after, but somebody takes responsibility
to ensure that British companies know about it, and get all the
right promotion and all the right support.
Lord Jones of Birmingham: My sympathies
are entirely with you. Whether that person would thank you for
the job is another matter.
Q131 Mr Hoyle: I thin you might come
back on that.
Lord Jones of Birmingham: I think
it would be a good idea. One of the problems you have in the European
Union at times like this is that I cannot really believe that
if I were a French businessman and you were a French MP we would
be having the same conversation.
Q132 Mr Hoyle: No, because I like
the same playing field that they use.
Lord Jones of Birmingham: They
are subject to the same procurement rules as we are.
Mr Hoyle: Yes, and somehow they
seem to get the rules right. They put the French car industry
Q133 Chairman: I think you are agreeing
with each other at some length, so I think we should move on.
Lord Jones of Birmingham: We are
having a manufacturing love-in, Chairman.
Q134 Mr Hoyle: I will just give you
another quick example where I think cross-government does not
quite work out. We have put an army unit on contract that is now
manufactured in China. It is now coming up this year and we have
got British companies tendering for it. Part of it was that it
was lost by about a million pounds over the five years on an over-£50
million contract, but what is never taken into account is the
loss of the 50 jobs that went with it last time and the amount
of national insurance and tax that they had been putting into
the economy and the profits from that company. Do you think somehow
we ought to look at that?
Lord Jones of Birmingham: Absolutely;
for sure. I think the problem you have, and my sentiment is with
you, is that you must make sure that the act of competition delivers
the best value for money for the taxpayer. What frustrates me
is when people are not comparing apples with apples and then do
Britain down. Often, if you compared apples with apples, Britain
would win. That is what worries me.
Mr Hoyle: A state-owned factory
tendering is going to win. What I would say to you is that from
the defence point of view they have saved a million pounds but
the loss to the Treasury through national insurance and tax was
never taken into the equation.
Chairman: I think you are starting
to agree with each other again.
Q135 Mr Hoyle: So do you think it
is something we can begin to look at?
Lord Jones of Birmingham: Yes,
Chairman: That will do.
Q136 Mr Hoyle: Of course, it is about
supporting British manufacturing. I am pleased that you have touched
on the energy markets as well and the hope that we can move forward.
Is there any other message that you think we ought to be putting
in our report that would support British manufacturing on something
you have not mentioned yet?
Lord Jones of Birmingham: Yes.
I would also use the procurement exercise to improve the skills
base because what is wrong with a local authority saying, "I
like your prices, I like the quality. How do you skill your people?"?
They bring into the equation, rightly, about the private sector
as employers of ethnic minorities and all of that, and I have
got no problem with it, but why are we not also saying, "I
will buy your stuff if you train your people. I want to come and
see how you train them". If the future of our manufacturing
base is on how good the skills base is we will endure this recession.
I want the big buyers of domestic manufacturing goods, which is
basically the public sector in all its forms, including central
government and the army and whatever, saying, "I want to
come and see whether you have got any illiterates in your workforce.
I want to see whether you are training well enough. How is your
supply chain about training?", and using the procurement
process as an impetus to improve the skills base of the nation.
Why not? There are a lot of politicians who are very quick to
say to the private sector, "We insist that you employ so
many of this part of society and so many of that part of society".
There is nothing wrong with that, fine, buthang about.
Let us invest in tomorrow's people to deliver the goods so we
pay our way in the world. If we do not pay our way in the world
we are finished.
Q137 Mr Hoyle: I have a final quick
question with a straightforward answer, I believe. I can see the
benefits for UK manufacturing coming from the pound being weaker
and that all those component companies that went into Europe are
now looking to come back to the UK. Do you think there are opportunities
the Government should seize there to support that?
Lord Jones of Birmingham: Yes.
I believe the currency issue is cyclical. If we had had this conversation
a year ago it would have been two dollars to the pound, so it
is cyclical. It would be a dereliction of duty if, whilst we have
the cycle in our favour in exports, we were not doing more about
Q138 Miss Kirkbride: I wanted to
pick up on a couple of things that have come up so far. We started
today by saying that we face the worst economic outlook since
the Second World War, and clearly there are a number of our big
exporting companies, one of which you are an ambassador for, who
are in a spot of bother at the moment because of the world environment.
If you were in Government now what advice would you be giving
to Peter Mandelson about their various requests? What should the
Lord Jones of Birmingham: Without
a shadow of a doubt make sure these initiatives are making a difference
on the ground in the morning more than anything else. You have
had your five minutes of initiative blitz. You have had all the
news conferences. You have produced your strategy; fine. Just
explain to me why there is a small business in Birmingham or Manchester
or Newcastle right now which frankly would not know there was
any difference. It is not getting through to the coalface. It
is not making a difference on the shop floor. It is not there
and you have got banks who are still not lending money, and until
that changes I do not really want to see another initiative other
than the one about what we were talking about, making sure that
skilled people stay in work. Other than that I do not want to
see any more. I just want to see the one thing declared actually
make a difference. Above all else, please, Government, do not
just announce it, spin it up, say, "I am doing something",
and then assume the system will deliver it, because it is not
delivering it. I tell you: I should think every single small businessor
big businesswhich perchance will watch this will sit here
saying, "Well done. That is exactly the issue". It is
just not making a difference on the ground.
Q139 Chairman: I have to say I put
this to the Prime Minister in the Liaison Committee last week
and he said no, it was, so I am grateful for your endorsement.
Lord Jones of Birmingham: I support
the initiatives. This is not an anti-Government thing. It is about