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19 Jan 2010 : Column 32WH—continued
Kelvin Hopkins: There is a bigger debate to be had on that, but the hon. Gentleman is right. We are not advocating that. We are advocating our retaining our own currencies at an appropriate value so that we can at least have a breathing space to compete and invest in manufacturing and so that we can stand tall in future.
Chris Ruane: To counter that Europe-bashing, may I give the example of Airbus in north Wales, which is a pan-European project involving France, Germany and Spain and 52,000 people, with 6,000 employed in north Wales alone? It is one of the most successful companies in the world and it has developed because of the co-operation within Europe.
Kelvin Hopkins: I accept that co-operation is important, but long before we were in the EU, we co-operated on Concorde. Getting the right value for our currency helps that co-operation because we can produce the components of the Airbus more cheaply here and do well. Co-operation is nothing to do with the EU; it is to do with agreement between ourselves and other countries.
Mr. Hoyle: We have been successful with Airbus because the Government put launch aid in. If that had not been done, it would not exist in the UK either.
Kelvin Hopkins: My hon. Friend is right. The point about intervention was mentioned earlier. I believe that Governments should intervene to ensure that their economies work well. In relation to General Motors in Luton, the Business Secretary was prepared to intervene and put in some £400 million to £500 million to help out. The state aid rules from the EU are complete nonsense, because when it matters countries always intervene and rightly help their industries.
Germany did so well because it was permitted for a long time to run a low value for the deutschmark and have a competitive edge. Chancellor Erhard, the author of the West German economic miracle-now the German economic miracle-made sure that that was there. I wrote a number of pieces on economics in the 1970s and '80s when I worked in the trade union movement. I once attended a meeting with the Anglo-German Foundation at which I mentioned the German trade surplus, but I was immediately shouted down by a German representative who was terrified that I would focus on the German trade surplus, because that is what it was about: even then we were running a substantial trade deficit with Germany.
The Bretton Woods agreement, which built the post-war economy-it was a good idea and it was nonsense to throw it all away in the early 1970s-worked between 1945 and 1970: we had full employment and growth like we had never had before, rising living standards, growing equality, and all that. Keynes said that he wanted an arrangement where countries that were in deficit would be permitted or encouraged to devalue, but those in surplus would be encouraged or required to revalue. Had that been in place, Germany would have been required to revalue and we would not have had the imbalance between Germany and Britain, which otherwise are similar economies.
Mr. Andrew Smith:
Does my hon. Friend not accept that another lesson to be learned from Germany is how its corporate structures, and particularly its financial structures, enable and even encourage companies to
take a long-term view on investment strategy so that they are not so vulnerable to short-term market vicissitudes as companies in this country?
Kelvin Hopkins: Absolutely. The German Government did not allow the financial sector to get away with murder, as we did in Britain. They encouraged collaboration between unions, management and Government to ensure that Germany plc worked. We have not done that; we have become true aficionados of the free market, and the free market with a strong currency has been disastrous for us. The Germans were not so silly. The west permitted Germany to do that because its great fear after the second world war was that communism would encroach from the east, and had it not ensured that Germany was a successful economy-a big showpiece for capitalism-there might have been slight problems there. Indeed, looking at the strength of the communist parties in Italy and France, people can see why the west was seriously worried and why western Europe, and Germany above all, had to be made to work. The same was true of Japan as well.
John Mason: Just before the previous intervention the hon. Gentleman made a point about requiring countries to keep their currency at a higher level. The Chinese seem to be determined not to do that. Does he have any answers on how we can put pressure on China?
Kelvin Hopkins: Keynes would have had a point. It is about time that China is required to revalue somewhat. I think that the Americans are putting pressure on the Chinese to do just that and the Chinese are saying, "No thank you very much, we've got a nice competitive edge and we're going to keep it," but we shall see what happens.
Finally, on employment for young people, not six months ago The Guardian published an article showing that rising street violence, violent crime and crime in general correlates closely with the decline in manufacturing employment. When we had full employment, young men used to leave school on a Friday-at 15 in my youth and, later, at 16-and get a job at the local factory on the Monday, staying in work for the rest of their lives, earning a decent wage. They were able to settle down, marry and have children and become citizens. In those jobs they were socialised, became trade unionists, gained an understanding of politics and became proper citizens. That opportunity is now denied to millions of young people, particularly if they are lower skilled.
Bob Spink: Will the hon. Gentleman at least join me in congratulating the Labour Government on their efforts to bring back the old-fashioned apprenticeship, which can only do manufacturing industry good?
Kelvin Hopkins: Absolutely. The hon. Gentleman has taken the words out of my mouth. The way we are going to get apprenticeships, training and skills, and citizenship back is by expanding manufacturing, recreating full employment and trying to get back some of the things we have lost in our society.
11.46 am
Tony Lloyd (Manchester, Central) (Lab):
I, too, congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on securing the debate, which is
not just timely-in fairness, it is one that my hon. Friend has been forcing on those who would listen over many years. He is right, however. One of the realities of the UK economy-progressively over recent decades-has been the substitution of our traditional manufacturing strength with undoubted strength in the service industries. Although that is not unwelcome, it has certain consequences for an economy such as ours, particularly since the geographical concentration of financial services has tended to be in one part of our island and because that sector does not have the reach of manufacturing. There are spatial as well as economic reasons why we need to look at the importance of manufacturing.
I am aware that others wish to speak, so I will try to make some concentrated remarks. On the point about the importance of training that was made by my hon. Friend the Member for Luton, North (Kelvin Hopkins) in his exchange with the hon. Member for Castle Point (Bob Spink), we still have one thing to do. We have come an awful long way in the years of this Labour Government with respect to how important intermediate skills training is-in other words, away from the concept that unless we get everybody through higher education, we are somehow failing our nation. In fact, it is rather the opposite: we need people who have high skills at different levels. That is why the reinvention of the apprenticeship, which was effectively dead in 1997, is so important.
We are now reinvesting in a generation of people in respect of the kind of skills that manufacturing will need for the future, but I emphasise that we have a long way to go. Although we have taken those first steps, industry-the private sector-has a long way to go if it is to learn the lessons that it ought to absorb. There was an exchange earlier about the success of German manufacturing, one reality of which has been the commitment of German industry, particularly medium-sized and small firms, to training and their direct responsibility for it. We still have not properly established that in this country and we need to continue to get that message across.
Although I do not expect that my hon. Friend the Minister will agree with me on this-publicly, at least-I still think that training levies need to be considered. There is a need to say to say to those who freeload in the training system that they can do that only if they are prepared to make a financial contribution to support those who are prepared to do the training. Good companies do train, but they often do so at their own expense and see others getting the benefits of that. We need to establish mechanisms whereby that process is more socially and economically efficient.
On access to capital-this relates to a point made by my hon. Friend the Member for Great Grimsby-the failure rate of start-up companies and new firms in low-tech or high-tech industries is high, particularly in manufacturing, because those firms often start off under-capitalised and struggle because of the difficulties of obtaining capital from our financial services industry. The financial services industry has not been efficient, and has not looked at the economy's needs, so I want to talk about the financial needs of high-tech companies.
High-tech companies in the Manchester area have identified to me the significant capital gap, which arises partly because the financial system simply does not
understand high technology, and does not know how to assess or take on board such risk. The Government should investigate intensively and quickly the sort of support that the financial system needs to assess risk in high-tech industry, or even take the more radical step of creating a publicly owned investor in high-tech companies, because there is a gap.
A significant number of hon. Members in the Chamber do not come not from the golden triangle of Oxford, Cambridge and London. A high-tech company in my constituency told me anecdotally that a London-based banker with which it was engaged said that it would not obtain finance if it operated in Manchester, and asked why it did not move to Cambridge, Oxford or London. It is ridiculous to suggest that companies should move. It is socially divisive, and not acceptable to those in Manchester. I want the financial system to support the link between Manchester's good universities-this also applies elsewhere in the country-and the companies that they spawn so that the incubation process leads to successful commercial development. I urge the Minister to consider that.
[Miss Anne Begg in the Chair]
I also urge the Government and the Opposition parties-the Government probably do not need urging-to recognise the importance of the comments by Dominique Strauss-Kahn, the head of the International Monetary Fund, who said the other day that early withdrawal of Government intervention in our economy could be disastrous. If allowing that to happen could be disastrous generally, it could be specifically criminally insane for our manufacturing industry. I trust that, for the good of manufacturing, our economic policy recognises that intervention must continue until we are out of the recession.
My final point almost replicates that made by my hon. Friend the Member for Great Grimsby. In a modern economy, we must consider how to help our manufacturers to export-and not just large companies. Many small and medium-sized companies will never be more than that, but they play an important role in our economy and still need help in accessing export markets. That has always been the case with our traditional export base in the EU and north America, but it is even more the case for those who want to export to China, Brazil and so on when there is lack of experience and confidence. I urge the Minister to examine what we should be doing to help those would-be exporters to obtain access to those markets, and to begin the process by recognising that growth in the world economy will be in China, Russia and Brazil, not in Germany and north America.
Miss Anne Begg (in the Chair): Order. I hope to call the two hon. Members who are standing before 12 o'clock.
11.54 am
Mr. Lindsay Hoyle (Chorley) (Lab):
I am the only member of the Select Committee on Business, Innovation and Skills in the Chamber. The Department for Business, Innovation and Skills has a great role to play in the future of manufacturing, which is why this debate is so important, and I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on setting out his case. We should be backing a buy British campaign.
People in France buy nothing but French goods, and the same applies in Germany and other countries. Their procurement policies back their own manufacturing, and the sooner our Government engage in support through procurement, the better.
The Minister rides around in a British-built car, but most Ministers ride around in Japanese-built cars with not one British component and involving not one British job-nothing is worse. Procurement is the first step, so let us start backing Britain and UK manufacturing. The car and truck industries are important, and the Government have done a lot to support car manufacturing. The car scrappage scheme was so successful that it should be extended-the sooner the better-because nothing would be lost by doing so. We have a great truck manufacturing industry in Leyland Trucks, which is part of DAF and PACCAR, an American company, but it is the last major truck manufacturer in the UK. I want more support for truck manufacturing because it is so important.
We have talked about apprentices, but those people need real jobs. We do not want to fall into Thatcher's folly of YOP schemes-the youth opportunities programme-which were not the answer. If we are serious about apprenticeships, as I believe that the Government are, we must ensure that there is real manufacturing, as well as real jobs to back up those apprenticeships.
British Aerospace has been touched on, as has Airbus, which is important in the north-west and Lancashire. We are the centre of cutting-edge technology for building aircraft. That is an important subject, and if the Opposition Front-Bench spokesmen were to give Back Benchers an extra couple of minutes to speak, it would help the debate. I look for support from the Opposition spokesmen and from the Minister because some key points need to be made.
British Aerospace in Lancashire is important, and more jobs could be created through the maintenance of heavy-lift aircraft for the RAF. That deep maintenance should be carried out in the north-west, which would protect jobs and extend our skills in British Aerospace.
Any manufacturing base needs the ability to produce steel, and it is folly that we are considering the closure of plant on Teesside when we know that we are going ahead with the carriers and more ships for the Royal Navy. We will not have the ability to produce enough steel if we allow plants to close, and the Government must learn some lessons.
Green technology is also important. We talk a lot and use fine words, but the proof is the delivery of jobs. There has been failure in the production of wind turbines by Vestas on the Isle of Wight, and we no longer produce anything for the future of green technology.
We should not put UK companies up for sale-Cadbury has been mentioned-because that leads only to closures. Why are we not having a summit on UK jobs and manufacturing, or a conference to bring all the manufacturers and unions together to stand up for Britain, to create more jobs, and to give the UK a future? The regional development agencies are important in backing that up, and no one is more important than Steve Broomhead of the Northwest Regional Development Agency, which creates the jobs. I look to the Minister to provide even more support and to hold that business manufacturing conference here in the UK.
11.58 am
Chris Ruane (Vale of Clwyd) (Lab): In the two short minutes remaining, I hope to raise a few points from a north Wales perspective about how manufacturing has developed since the advent of this Labour Government, and to comment on some of the dividing lines between us and the previous Conservative Government. I have touched on European co-operation, which has enabled Airbus to flourish in north Wales.
In 1981, we had the biggest lay-off in British industrial history. In Shotton, 7,000 workers were laid off overnight by the Conservative Government. From those ashes, employment rose through Airbus and, as my hon. Friend the Member for Chorley (Mr. Hoyle) rightly said, it arose through an interventionist policy by the Labour Government, because we believe in key intervention at key times. Launch aid of £450 million was lent to Airbus-it has since been repaid-and that shows our belief in intervention. The public and private sectors co-operated to create 6,000 jobs at Airbus with 600 apprenticeships, some of them at degree and post-degree standard. That shows our belief in our young people, and why we have a target of getting 50 per cent. of young people into universities. That is not supported by the Conservative party, and it is another key dividing line.
Another issue is European funding, which the Labour Government have claimed, but the previous Conservative Government did not. In my constituency, that funding has helped to fill the St. Asaph business park. It was built by the previous Conservative Government at a cost of £11 million, but lay empty for 10 years. Under this Labour Government, however, it has been filled with 3,500 jobs. Such a thing has not happened only in that business park. According to an answer to a parliamentary question, we have seen such measures across north Wales, not just in my constituency. In the constituency of Caernarfon, the number of jobs has increased by 38 per cent. from 24,000 to 33,000. In Delyn, the increase since 1997 has been from 26,000 to 33,000, while in Ynys Môn it has been from 23,000 to 30,000. The increase in Clwyd, West was from 26,000 to 34,000, and in my constituency there has been a 27 per cent. increase from 23,000 to 29,000 jobs over the past 10 years. That is living proof that interventionism, co-operation with Europe, and co-operation between the public and private sectors has helped manufacturing jobs in north Wales.
12 noon
John Thurso (Caithness, Sutherland and Easter Ross) (LD): I congratulate the hon. Member for Great Grimsby (Mr. Mitchell) on securing the debate. Before I respond to him, however, I shall pick up on a point made by the hon. Member for Chorley (Mr. Hoyle) about green industries, on which he was absolutely right. There is amazing potential in my part of the world for offshore wind and marine tidal energy, but there is a big danger that all the platforms will be made in Rotterdam, instead of in Nigg and all our constituencies, using the steel that we want in this country. If there is one thing that I have urged the Government to do-both the Department of Energy and Climate Change and BIS-it is to look at supply chain issues and ensure that we are capable of fulfilling what is needed.
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