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2 Dec 2009 : Column 113WH—continued

To put down one little marker, I wish to remind the hon. Gentleman that it was his party's economics spokesman, the hon. Member for Twickenham (Dr. Cable), who argued against the Government having involvement in what turned out to be the Vauxhall rescue, and a very
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successful rescue it has been. That came about as a result of an extraordinary partnership, and my hon. Friend the Member for West Bromwich, East (Mr. Watson) was absolutely right: it was a classic illustration of how new trade unionism-working with the Government, the management and the regional development agency-has transformed what looked like a desperate situation into one of stunning success.

Not only do we now have a commitment to the volume of vehicles that we believe is necessary to maintain job security in the medium term, but it puts us into a very competitive position from which we can launch a bid for next generation vehicles being manufactured in the UK. That really must be a goal that all parties represented in this Chamber acknowledge as worth while. We should not shy away from the fact that action has been the result of close working.

Although some fairly sharp words have been spoken on the subject during the past year, I heard Tony Woodley, general secretary of Unite, who happens to be one of my constituents, praise the role of Lord Mandelson. I also saw the same general secretary with his arm around the Vauxhall chairman, Bill Parfitt-a great man-talking about how the strategy, working together and partnership have been crucial in recovering the situation and turning it to one of UK advantage. We must not forget that. Twenty years ago, that company was in serious trouble. Let us not kid ourselves.

The transformation from the brink of failure to the high quality and high productivity that exist on the site has come about through partnership-not top-down solutions or one-way streets, but close partnership that has involved people being committed to training to the nth degree, achieving skills that have never been known in that industry and the acceptance of technologies never thought of.

Mr. Hoyle: My hon. Friend has made absolutely the case for the car industry. Does he not feel a little embarrassed, as I do, that Ministers ride around in Japanese cars involving not one British product or British job? Is it not time to go for the new Astra and ensure a commitment to British manufacturing?

Andrew Miller: I agree totally. I would ditch the fleet of Priuses, and I would ditch the Leader of the Opposition's Lexus as well. A Vauxhall Astra with a 1.9 diesel engine is far greener than the Lexus. I am absolutely with my hon. Friend on that point.

Mr. Watson: I am grateful to my hon. Friend for allowing me to mention the fact that I am the only Minister in history to argue with the head of the Government car service for a smaller car rather than a larger one. I wanted one made in Britain. Would my hon. Friend like to hear from Members on both Front Benches a commitment that, should they ever find themselves in government, they would be driven in a British-assembled, not an overseas, car? That is an important point: procurement policies in the public sector can further help British manufacturing.

Today, the Home Secretary announced a policing White Paper. His central message was that we can make savings through procurement, but what we need is the transparency that the hon. Member for Southport (Dr. Pugh) discussed. We need to know how much
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police authorities are paying for their vehicles so that we can be certain that they are not just buying BMWs because the chief constable fancies one.

Andrew Miller: I could not agree more with my hon. Friend. One would think he would have argued for a larger car, but he took the honourable route, and I congratulate him on that. I would like to hear Members on all three Front Benches give the commitment that he seeks.

Several hon. Members rose-

Andrew Miller: Four Front Benches, even.

Mr. Nigel Dodds (Belfast, North) (DUP): I am grateful to the hon. Gentleman for giving way in this interesting and excellent debate. As Northern Ireland's Finance Minister, I was driven around recently in a Skoda, of all things. I was keen that we should move to UK-manufactured vehicles for Ministers-not only here in Westminster but in the regions.

The hon. Gentleman mentioned partnership, new trade unionism and so on. Will he join me in paying tribute to the work force of Bombardier Shorts in Belfast, the biggest manufacturer in Northern Ireland? They have a fantastic relationship with the management there and have done tremendous work to promote and benefit the company, and to make it what it is now: one of the best sections of Bombardier in the world.

Andrew Miller: I agree totally. I go back way before the hon. Gentleman to my dear old friend Harry Cavan, who, sadly, died a few years ago, and whom the hon. Gentleman might recall. He was famous for being vice-president of FIFA as well as a great trade unionist. Harry and I often talked about those issues. It is critical to a renaissance of manufacturing in our country that we carry on such partnership work.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): My current car is a Rover '75. It is aging but not quite of scrappage age yet. My wife, a councillor, drives it most of the time. Each weekend when I go home, the most effective way to get around is to hire a car. The car that I am most often given is a Vectra. It is an excellent vehicle. The point that needs underlining is that this is about not ownership of the companies, which is nearly all foreign, but the fact that the cars are made in this country. They are made in this country because we are one of the world leaders in automated technology. That point needs to be underlined far more often.

Andrew Miller: I do not want to be pedantic, but I remind the hon. Gentleman that his Vectra is almost certainly German-built if it was manufactured after 2007. However, that is neither here nor there, and I take his point. That is two Front Benchers down; perhaps the other two will come in and agree on it.

Training, as I have said, has been a critical part of the Government support that put us into a position to bid for the new Astra, which is just coming on-stream. I think that £8.7 million came into that package in the partnership between central Government and the RDA. The RDA has played a crucial role in keeping the mood music right, not only in the relationship with the company and central Government, but in keeping the network of
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suppliers supported in the way that was necessary during what was a critical time. I question whether we would have achieved the success we have had without the RDA's involvement.

Some serious issues are involved, and the hon. Member for Southport referred to the example of his piano. One thing we must realise is just how cheap it is to ship things around the world. A container ship full of cars is now moved around the world for the cost of six Filipino salaries and the bunker fuel necessary to move the ship. It is very cheap to move cars around. They are now global commodities and if we are to succeed in the world that is facing us, we must get a leading edge. For example, we must pitch in for the next generation vehicles, working towards electric vehicles and vehicles powered by fuel cells. I know that my hon. Friend the Minister understands that. Unless we mark out a clear pathway towards those goals, in 20 years we will not have a vehicle industry.

The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan): Of course my hon. Friend is completely right, and that work is exactly what the Government are doing with the low-carbon region in the north-east and what has been done with Nissan. For the benefit of the debate, let me say that the last time we had a debate on this subject my hon. Friend the Member for Chorley (Mr. Hoyle) intervened on me and I explained that my ministerial car was a Vauxhall Vectra. I have now changed my car, and following my hon. Friend's words of just a moment ago, it is perhaps a good thing that it is now a Toyota Avensis, which was assembled, of course, in the UK.

Andrew Miller: A Toyota Avensis is perfectly acceptable, but we must remember how complex the global car market is and how, in the last 15 years, the pressure on UK manufacturers has been intense because of the globalisation of the industry.

The hon. Member for Southport is right to talk about short-termism; that has been an endemic failure of the British economy. The Prime Minister, when he was Chancellor, set in train events that have started to deal with short-termism, but it is still an underlying problem and I will refer to it briefly in a moment in the context of the banking industry.

I want to make a final comment about Vauxhall. I agree with the hon. Member for Southport about infrastructure; we need to work hard to put ourselves in a competitive situation by getting the infrastructure right. The General Motors plants in mainland Europe make inter-plant transfers entirely by railway. We cannot do that in the UK. Sadly, when the previous Government privatised the railway system, no pressure was put on the rail freight system to create the type of rolling stock necessary to keep the pressure off the motorways. As a consequence, all the inter-plant transfers made in the UK and between the UK and Germany, Belgium and so on are all made by road. That is absurd in this day and age. We ought to have that freight back on the railways.

If my hon. Friend the Minister could lean on his colleagues in the Department for Transport, my plea would be for them to look carefully at the rail lines that go from south of the Mersey and link with the west coast main line, and to examine the freight opportunities
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that could alleviate the pressure on the northern end of the M6. That is not the subject of the debate, Ms Whalley, but I am sure that you will appreciate from your constituency standpoint the importance of those remarks.

Things have changed dramatically in other industries, too. Massive global enterprises-for example, Shell-are up for sale. Royal Dutch Shell, an Anglo-Dutch company, is up for sale. The preferred bidder is a company called Essar, an Indian conglomerate, which believes that it can transform the manufacturing capacity of the Stanlow refinery and make it a profit centre. That remains to be seen. There are also enormous pressures on the downstream sector.

One result of the recession was that the first companies in the petrochemical sector to take a hit were closely allied to the motor industry. For example, Cabot Carbon went because the demand for tyres fell-carbon black is an essential component in the manufacture of tyres. We will not recover such industries. To replace them, we will have to go for the high-added-value, high-tech end of the market, rather than those basic downstream chemical companies.

Mr. Eric Joyce (Falkirk) (Lab): A large automotive company in my constituency builds vehicles. It largely Scottish-owned and its Scottish chief executive is Mr. Robertson. ADL, formerly Alexander Dennis Ltd, builds buses. We heard earlier of hybrid vehicles, many of which are built abroad, but ADL's primary product for the future is the hybrid bus. It could replace buses of the sort that run in London, which are made by the same company.

Does my hon. Friend agree that the Government could do a great deal to encourage buyers? Councils and local authorities throughout the country use buses and might seriously consider investing in hybrid vehicles. Although in the first instance they will be more expensive and may appear an unattractive proposition, they will be much more attractive in the long run.

Andrew Miller: My hon. Friend is absolutely right. We have seen examples of work being done on hybrid vehicles and alternative transport in the north and in Scotland, down south in Ricardo's, and in the M25 ring where the Formula 1 market is so strong. Work is continuing with KERS-the kinetic energy recovery system-which worked so well for McLaren, but we need to transfer that technology to vehicles such as London buses. There are huge UK successes, and we must ensure that the Government support them through development and into manufacture.

My final comments will be about small and medium-sized enterprises. The real pressure in my constituency has been on SMEs. There have been problems with the banks, and some of them have promised that they will try to do better. My hon. Friend the Minister needs to use his influence and put pressure on the banking industry-Regional Ministers should do so at regional level-to ensure that small supply chain companies do not lose out. This is a critical part of the equation.

The other day, I visited a company in my constituency that is suffering as a result of the banking crisis; dozens of SMEs that have not approached me are likely to be in a similar situation. However, it is not all doom and gloom, and there are some very successful SMEs. I visited a pharmaceutical business in Neston a couple of
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weeks ago. Pro-Lab Diagnostics is extraordinarily successful and produces infection testing kits for virtually every NHS trust in the country. Such companies need nurturing, because they are the future of the SME sector, which consists of small specialist companies that have grown from brilliant ideas and been turned into manufacturing operations. It is critical that the Minister's Department is seen to be supporting such companies, but so should the banking sector.

It is not all doom and gloom. There are some great success stories and we should be proud of them. All of us-Government and Opposition Members-must give our maximum support to manufacturing to ensure that it is around for our children's benefit.

3.14 pm

Mr. Lindsay Hoyle (Chorley) (Lab): It is good to see you in the Chair, Ms Walley. It is a pleasure to speak in such an important debate, and I congratulate the hon. Member for Southport (Dr. Pugh) on securing it.

The debate could not have been better timed, as we see that manufacturing continues to struggle. There seems to be a renaissance in government, as the Government now realise that manufacturing is important. If nothing else, the recession should have told us one thing: service industries and finance are important, but in the end it is manufacturing that keeps our head above water.

The reason why we have not come out of the recession as quickly as other countries is that we do not have the manufacturing base. France, Germany and Italy have invested in manufacturing, and so have other countries around the world, because everybody else has recognised the importance of manufacturing. I hope that we have recognised that failure, although I say that not only about this Government, but even more about the previous Government, who dismantled manufacturing-indeed, they made an art of closing manufacturing. All of us here can agree that manufacturing is important, that it is back on the agenda and that it is something that we will build for the future.

In Chorley-great constituency that it is-we are lucky to have Alan Jones as chairman of the local strategic partnership. He is a manufacturer; he owns a company called Porter Lancastrian. He bought a huge site for his company, but he did not say, "This is mine and nobody else's." He has encouraged small businesses to come on to the site to develop manufacturing. It is important that we have an entrepreneur who is willing to help others through difficult times and to share problems. I am pleased that we have somebody who is committed to manufacturing in the way in which we have seen in Chorley.

My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) rightly mentioned the importance of the car industry, but this is about more than the car industry-it is about vehicle manufacturing. The coach, bus, truck and car industries are all important. Britain's last big truck manufacturer is Leyland Trucks-that brand name is known all around the world-and we cannot afford to turn our backs on it in its hour of need. It has been a successful company, and it is part of the American company PACCAR, but it is important that we make sure that truck manufacturing continues in this country. Leyland has developed a hybrid truck. It has also developed the idea that when someone buys a truck, the company will put on the body and complete
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the truck to the customer's requirements, so that the customer does not have to take the truck from A to B to have the bits put on. Leyland is forward thinking. It recognises that the environment and global warming are significant, which is why the hybrid truck that it is developing is so important for the future and for global needs.

It was right for the Government to invest in the car scrappage scheme, which has made a real difference to manufacturing. Although the scheme has helped a lot of overseas manufacturers-that is the price-it is keeping people in jobs in servicing, in sales and in the showrooms. However, we are nearing the end of the scheme. At the Labour party conference, we said that we were committed to putting further money into the scheme, and I am pleased to see that that has happened. However, we are on a countdown, and it is worth putting in more money to make sure that we do not leave a void and undermine the success that we have seen by ensuring that production continues. It is important for UK production that the scheme stays in place, and I hope that the Minister will reflect on that plea.

Cars, trucks and buses rely on components, so we have to invest in that sector, too. The odd thing in relation to Leyland Trucks is that we build the trucks, but we do not build the cabs, which come all the way across from France to go on a truck at Leyland-that is silly. We should be telling the Minister that now is the time to put in the investment to attract component manufacturers back. If those cabs were built in the UK, that would make a real difference. We should be attracting these things back from France because the time is right. People moved away when the pound was strong and the euro was weak, but things have now reversed, so it is time for the UK to take advantage of that. This is about making sure that manufacturing is in all parts of the UK. We should be working even harder than we have done so far.

We talk about research and development, and it is important. We talk about its role in the success of Dyson, but that company does not manufacture in the UK-Malaysia was the answer. Dyson might have been the darling of the Conservative conference, but the bottom line is that I do not want darlings who take manufacturing abroad-I want people to manufacture in the UK. We have given tax breaks and supported R and D, but we want the manufacturing to be carried out in this country. It is important that that happens, and we have to strengthen the manufacturing base using R and D.

Dr. Pugh: I note the importance of the scrappage scheme, but the hon. Gentleman must see that that was only ever really a temporary expedient. None the less, it opens up a new avenue for British industry that the Government need to take very seriously-the remanufacturing industry. The more scrappage there is, the more metal there is that can be used for other purposes and reprocessing. Surely there is a case for making the UK a leader in remanufacturing as well as manufacturing.

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