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2 Dec 2009 : Column 125WH—continued
It is clear, however, that we must not now believe that we can return to the period before the recession and simply rely on financial services alone. I think that we have all learnt that lesson. For my party, that means putting manufacturing back at the heart of the economy. It is time we made more, and it is time we exported more. I also want us to be willing to be more challenging to make this country more competitive. For some time, Germany has been the leading European exporter of high-tech goods and services. It is time that that changed. That is why we took a decision at our conference-we had been mulling it over for a period-to set ourselves the goal, should we be elected to office, of setting a target for this country to overtake Germany and become Europe's leading exporter of high-tech products. Rather than being third or second under whichever party has been in office in the past, we should now aim to be first.
To fulfil that goal, we need a clear, long-term strategy based on increased investment, technological innovation and raising our skills base. Those changes are going to be vital if we are to ensure that manufacturing can turn from recession to a sustained recovery.
Let me begin by talking about finance. Several hon. Members have mentioned the importance of access to finance. Despite the claims of the leading banks, I think that there remains a gap between their rhetoric and the reality for many firms, especially smaller businesses in industrial supply chains. As the hon. Member for Southport rightly pointed out, the current Government's response with a number of schemes has failed to overcome the problem for many of those firms. We have argued that the schemes are too complex, too many and too narrow. Time and again, businesses tell me that they are too small for one and too large for another. The £1 billion portion of the automotive assistance programme, for example, was announced on 27 January 2009 and, as we head towards Christmas, only one company has been offered any money to date. Indeed, there are now reports that that company, Jaguar Land Rover, may have actually decided to decline that money, because it can get better terms elsewhere. Perhaps the Minister will confirm whether that is true in his response.
Mr. Watson: I am grateful to the hon. Gentleman for giving way, but does he not think that a company's being able to secure finance external to the state is a good thing and that we should congratulate Jaguar Land Rover on being in a position to do that? It means that the Government's limited resources can be invested in other strategically important sectors.
Mr. Prisk: I am always delighted to see businesses secure finance, but why have the French and German Governments been able to deliver that money while our own Government have failed to deliver to even one company? That is my point. During a recession, it would have been far better to have a single national loan guarantee scheme-we and others have argued for that-worth £50 billion, which would provide the opportunity to underpin bank lending, for whatever size of viable firm in whatever sector. As we move towards recovery, other problems with the schemes emerge. We have learnt that the top-up credit insurance scheme has failed. The capital for enterprise fund has so far-11 months on-helped seven companies, and I gather from business that there is a concern that the future of the enterprise finance guarantee scheme is uncertain. We know that the scheme is due to finish in March, but what happens then? Perhaps the Minister can tell us what exactly is planned for the scheme after March. Industry needs to know.
As the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) rightly pointed out, long-term debt finance is not the only issue; equity is crucial. That is why I happily welcomed the principles that underscore the national innovation investment fund, with which the Government are now moving forward, and why we have worked with the stock exchange and others to establish a new environmental opportunities index so that we can make London the global centre for green technology, which in turn helps manufacturers as well.
That leads me to the broader question of how we encourage technological innovation. We can all see that manufacturing is changing, and a critical issue is how the globalisation of production-especially of components
-changes the nature of what is and what is not British, and changes how we ensure that industrial policy is effective. For small manufacturers, the challenge of accessing global value chains in emerging high value markets is a problem, and I think that the Government can help in that area. Conservative Members agree with the emphasis on strengthening the supply chains in the automotive sector, which has recently been proposed by the new automotive innovation and growth team. That is a good idea, and we want to collaborate to ensure that it happens.
Skills have been mentioned already, and they are important because they concern the longer term. The Government have taken many initiatives, but, despite the flurry of activity, we have seen the decline of real apprenticeships based in the workplace. That is why the Conservatives, if elected, intend to provide £775 million to expand workplace apprenticeships significantly. They would apply to all ages and assist companies in helping their staff adapt and change for the future. In practice, we would be able to create an extra 100,000 apprenticeships in any one year. As part of that, and crucial to the supply chain we mentioned earlier, we want to ensure that we can help small companies, and will therefore provide a £2,000 bonus for every workplace apprenticeship that a small business creates. To help clusters of such firms, which often say to me, "How do we then manage those apprenticeships?", we will provide an additional £5 million so that they can create their own group training associations. All those steps are practical and will make a real difference.
Andrew Miller: A number of apprenticeships were established as part of the contract for building my further education college, but unfortunately local Conservatives argued against that because they regarded it as an interference in the market. The hon. Gentleman must stop local Conservatives doing that.
Mr. Prisk: I am not going to get into a debate with the hon. Gentleman about what does or does not happen locally. I do not have the background. I have set out clearly where we intend to go nationally, and that is the direction we will follow.
The past year has been traumatic for many manufacturers. We have seen thousands of jobs and hundreds of good firms lost, but British industry can pull through. I started my business at the bottom of the previous recession, and I have learned that firms that come through this period will emerge-the phrase was used earlier-leaner and stronger. The Conservatives want to help. We want to improve industry's ability to access the finance it needs, to create the best environment for turning bright ideas into profitable ventures, and to provide industry with the skilled work force it requires to adapt and grow. Those are the Conservative plans for the future; let us now hear from the Government how they intend to unpick the mess that they have created.
3.49 pm
The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan):
As usual, we have had a partisan contribution from the hon. Member for Hertford and Stortford (Mr. Prisk). However, I will
reply to the hon. Member for Southport (Dr. Pugh), who secured this debate, rather than dance to the tune of the hon. Member for Hertford and Stortford.
Mr. Watson: We have heard a characteristically partisan contribution from the hon. Member for Hertford and Stortford (Mr. Prisk) in what has been a great debate. One thing that he did not commit himself to-in the unlikely event of becoming a Minister-was being driven in a British-assembled car. There are British-assembled Minis in the fleet. Would he like to commit to that now?
Kevin Brennan: I am happy to give way.
Mr. Prisk: I am glad that the hon. Member for West Bromwich, East (Mr. Watson) is keen for me to take office when in government, and I certainly look forward to the day when I do. I am visiting Aston Martin, Mini and Jaguar Land Rover in the next couple of days-[Interruption.] The hon. Gentleman is tempting me. All I will say-if I can keep in order-is that the broader and serious point about Government procurement is right. If I am elected-I welcome the hon. Gentleman's support for such an event-and if I have a Front-Bench role on such issues, I will talk to the Government car service to see whether we can change the approach in future.
Kevin Brennan: We now know that the hon. Gentleman has an image of himself in an Aston Martin. Perhaps he is thinking of a position in the security services, rather than a position as Minister. I had better move on before you stop me, Ms Walley.
I congratulate the hon. Member for Southport on securing the debate and on his thoughtful-might I say Socratic?-contribution. He laid out his arguments in a dialogue, rather than in the standard partisan fashion that we have heard in other parts of the debate. It was a very thoughtful contribution.
The hon. Gentleman admitted, very honestly, that he had had to do research to acquaint himself more deeply with the particular subject. The only thing that I would say to him is that he might have missed some of the more recent developments in Government to do with the industrial activism that he called for in his contribution. We have to find a happy medium between the free marketeers on the one hand-we are not all marketeers now-given the damage that going too far in that direction has done to our manufacturing economy, and, on the other hand, the kind of command economy that we do not want, which would simply produce all left shoes from the same factory. If he looks at the "New Industry, New Jobs" White Paper and the skills strategy, which the Government recently issued, he will see that the philosophical approach to manufacturing industry that he advocated is quite central to Government thinking.
My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) made an extremely informed contribution to the debate, as ever. He displayed his deep understanding of industry, particularly the motor industry, and also called on the Government to maintain pressure on the banking sector. The Government are still doing a lot to ensure that that sector comes up to the mark. He said that it is not all doom and gloom, and I think that he is right. Confidence is important at this point in the economic cycle. We should have confidence;
there are signs that we are moving in the right direction and there is certainly a bright future for British manufacturing.
When we last debated the subject, my hon. Friend the Member for Chorley (Mr. Hoyle) slapped a preservation notice on me because I was in a British car. Thanks to his efforts, I am still here. I thank him for that. He was right to point out the renaissance in Government of the idea of industrial activism and of a positive manufacturing strategy. He made some powerful points about Rolls-Royce, the obligations of companies and the need to take the longer view. We are learning that lesson in Government. The rush to divest ourselves of assets in the '80s and '90s may have left the Government without the levers that they need to be able to pursue the industrial activism that we have been discussing. We rue that selling of the family silver, as a former Conservative Prime Minister once put it. I note my hon. Friend's call for a national jobs summit, and his call for a jobs subsidy; he made such a call last time, too. I cannot currently guarantee that, but I heard his observations.
The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made an extremely perceptive and thoughtful contribution. He has a great deal of business experience. He made perceptive observations about world-leading British manufacturing, the importance of the green economy and the importance of the sort of proactive decisions that have to be taken-the sort that we have taken through our skills strategy. If he looks at the skills strategy, he will find that he is able to support the development of the new technician class, which the Government seek to develop through that strategy.
I should like to refer to the other hon. Members who contributed to the debate, including my hon. Friend the Member for Falkirk (Mr. Joyce). My hon. Friend the Member for West Bromwich, East (Mr. Watson), informed us of some of the reasons why, statistically, we should not be so pessimistic about jobs in manufacturing. Some of the jobs that have been outsourced might previously have been counted as manufacturing jobs, but although they were important, they were, in fact, ancillary to the direct activity of manufacturing.
I should give the hon. Member for Hertford and Stortford credit for recognising the importance of apprenticeships, which his party left to wither on the vine, so that they were almost at the point of extinction by 1997. Rather than apprenticeships declining, as he suggested, they have been rescued by the Government. Only 75,000 apprenticeships were in place in 1997, and two thirds of them were not even completed. The completion rate for apprenticeships was a third. There are now three times that many apprenticeships, and there is a two-thirds completion rate. On top of that, we have also invested very heavily in skills training in the
workplace through policies such as unionlearn, which the hon. Gentleman's party vigorously opposed, and Train to Gain. I think that he wants to abolish Train to Gain to fund his party's policies, so he is not talking about any new investment in skills.
Mr. Prisk: On the automotive assistance programme and the £1 billion, how come only one company, at most, has received any money?
Kevin Brennan: The automotive assistance programme has been in contact with more than two thirds of the eligible companies, and there is still a potential pipeline of projects worth £2 billion. The hon. Gentleman should not rush to judge us on that matter. He also asked about the enterprise finance guarantee scheme. There is a £1.3 billion facility in place. As of 20 November, more than 1,100 businesses from the manufacturing sector have been offered loans totalling nearly £144 million. Much as he tempts me, I will not oblige him by making up any policy on the hoof.
In recent times, manufacturing has been hit by the global recession. We all know from our constituencies-many constituency examples were given during the debate-of the impact that that has had. The Government are acutely aware of the difficulties that the sector has faced and have taken a very activist approach in this recession, as hon. Members have said. That is why the level of unemployment in the UK is much lower in this recession, which has been lengthy, than it was in the recessions in the 1990s and 1980s. That is not a coincidence. The Government's attitude is in marked contrast to the Conservative Government's philosophy in previous recessions. There is also a marked contrast with our competitors; they are now beginning to come out of recession, as we will, but unemployment is much lower in our economy than in competitor countries.
Our job in Government is not just to look at the short term, but to think of the long term, and that is what we have been doing. There are huge opportunities for the manufacturing sector in this second industrial revolution. There are opportunities in the new technologies, including carbon technologies, nuclear, wind and wave technologies, and carbon capture and storage, all of which will have a profound impact on how we generate our energy in the future.
As I mentioned earlier, our industrial policy, which covers those new industry jobs, is exactly the kind of activist policy that the hon. Member for Southport called for. Our key industries need a national capability, and support from Government, so that they can take advantage of those opportunities. We need to look ahead at the opportunities that will be presented by the new economy.
HM Prison Bullingdon
4 pm
Tony Baldry (Banbury) (Con): I am grateful for the opportunity to raise this issue, which is really about what we think prisons are for. In an answer to a recent parliamentary question, the Minister of State, Ministry of Justice, the hon. Member for Liverpool, Garston (Maria Eagle), said:
"The National Offender Management Service is undertaking a budget review process... to determine the budget for prisons in 2010-11."
"prisons are using indicative guidelines of a 5 per cent. budget reduction but their final budgets will not be determined until the review process is complete, later this year."-[Official Report, 30 November 2009; Vol. 501, c. 448W.]
Let me make it clear to the House that I readily acknowledge that, given both main parties have said that they will ring-fence spending on health and international development, consequential spending reductions in other Departments are inevitable whoever wins the general election next year. We all have to be sufficiently grown up to acknowledge that. We certainly need to acknowledge it in the presence of my colleague, the right hon. Member for Oxford, East (Mr. Smith), who is a former Chief Secretary to the Treasury.
The thrust of what I want to get across to the House this afternoon is that cutting prison budgets per se is the wrong approach. We send people to prison because society believes it an appropriate punishment and to deter others from committing similar offences. However, the punishment is the deprivation of liberty for a period of time. We should be using prison and the time that people spend there to ensure that when they leave they have the skills, competences and qualifications to ensure that they do not reoffend.
There are two truly depressing things in this. First, when I visit HM prison Bullingdon, which is a local prison for Oxfordshire and the Thames valley, I meet a large number of men-a huge proportion-who are involved in some form of substance abuse, which means alcohol, drugs or both, as well as a huge number who are functionally illiterate. That is fundamentally depressing. The second depressing thing is the number of people in prison who have reoffended. Reducing reoffending rates would not only be beneficial for society, because there would be fewer victims of crime, but cost-effective, as there would be fewer people in prison.
The official parliamentary answer is that the 5 per cent. cut is just for this coming year and one does not know what will happen in future, but it presents governors with the prospect of 5 per cent. year-on-year reductions in prison budgets. I understand that most governors are working on the basis that they will have rolling cuts of 5 per cent. a year for the next three years. Where in a prison does one make those cuts? There seem to be only two areas: one cuts either opportunities for training, education or access to substance and drug abuse programmes, or the number of prison officers.
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