Examination of Witnesses (Questions 120-139)
LORD JONES
OF BIRMINGHAM
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 again—Jaguar, part of Leyland, LDV vans, part of Leyland.
LORD
JONES OF
BIRMINGHAM:
I think that is a coincidence.
Q122 MR
HOYLE: Leyland Trucks, part of
Leyland.
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
car with—
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
you and—
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 in Liverpool.
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 on.
Q129 MR
HOYLE: Do you think—this
is the point I am getting to—the 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
British manufacturing?
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
exist—somebody 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 think 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 first.
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, it is.
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,
but—hang 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 it.
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
Government do?
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 business—or
big business—which 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 the delivery.
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