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House of Lords

Tuesday, 24 July 2007.

The House met at half-past two: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Sheffield.

Economy: Manufacturing

Lord Sheldon asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office & Department for Business, Enterprise and Regulatory Reform (Lord Jones of Birmingham): My Lords, the manufacturing sector remains absolutely vital to the UK economy. The Government are taking action through the manufacturing strategy to develop high-value, high-technology manufacturing that can meet the challenges of globalisation and technological advance. The prospects for companies that can take advantage of the huge opportunities available in the global economy are excellent.

Lord Sheldon: My Lords, I am grateful to my noble friend for that reply and for his assurance that manufacturing plays an important part in his working life here in Parliament, but does he accept that manufacturing is not only that but a major employer and that the failure to increase skills and productivity is the real problem before us? This is partly why our trade deficit is so high. My noble friend has agreed on previous occasions that productivity is the key and that the Government are directing their energies to improving productivity, not least in the skills sector. Will he inform the House what is actually being done in that regard?

Lord Jones of Birmingham: My Lords, it is quite right that the key to manufacturing successfully in the 21st century, in which China wants your lunch and India wants your dinner, is that we ensure that the skills level goes up all the time so that value-added, innovative manufacturing happens. To give the House an idea, I point out that 125,000 people are employed in our UK aerospace industry. You cannot get more value-added and innovative than that. That, with dependants, is probably 500,000 people. The answer is to skill the people. The Government are working on that basis in many, many ways. As the House knows, I was the UK skills envoy in my former life. That was about getting low-skilled people up into intermediate skills. We also have the second most important and successful university sector in the world. That is adding value every day.

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Baroness Wilcox: My Lords, under the new Minister’s guidance, will manufacturing prospects be improved by regulation?

Lord Jones of Birmingham: My Lords, it is no coincidence that above the door of the new department are the words “Regulatory Reform”, not “Better Regulation” or “More Regulation”. The secret is to have some regulation, but reform what we have and make it work with the grain of wealth creation, not against it.

Baroness Bonham-Carter of Yarnbury: My Lords, does the Minister accept that the creative industries are the fastest growing areas of manufacture in the British economy and the one area where the UK’s competitive advantage remains? Will he assure the House that the Government will support this advantage by maintaining investment in the creative sector, beginning with an appropriate and sustained settlement in the forthcoming Comprehensive Spending Review?

Lord Jones of Birmingham: My Lords, it is no coincidence that most of the growth of creative industries in this country is conducted by small and medium-sized enterprises. We have to ensure that the growth of start-ups is encouraged in many ways. It is also encouraging that in a world of Bollywood and Hollywood we have something like 18 per cent of the world’s GDP of creative industries in this country; that is, from designing the stadia to be shown off to the world in Beijing in the 2008 Olympics right down to last weekend’s fabular events with Harry Potter.

Lord Bilimoria: My Lords, it was not that many years ago that a consumer abroad would buy a product stamped “made in Britain” and immediately infer that it meant not only quality but also that it was one of the best products in the world. Declaring an interest, I know that in Britain we still manufacture products that are the best in the world. What plans does the Minister have to revive the respect and pride worldwide for “made in Britain”?

Lord Jones of Birmingham: My Lords, I am not at all sure that we have to revive it. We have to build on it. We have to make sure that Brand Britain is the key to selling around the world. We make in the value-added sector of automotives, pharmaceuticals and, as I said, aerospace, some of the best manufactured goods in the world. But it is all about being innovative, taking ideas to market and getting a higher-skilled economy. Then it is about making sure we put the ball in the net around the world. My job as Minister of State is to ensure that Brand Britain is sold around the world and that our businesses come in behind it with manufactured goods in the value-added sector.

Lord Peston: My Lords, is my noble friend not being a trifle optimistic? Manufacturing output in this country has been constant for the past decade, which in the difficult world circumstances we find ourselves is quite an achievement? Surely, the future of our economy does not depend on manufacturing. If it does, any economist would say that we have not got a hope in hell. The future of this economy depends on

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the rest of our economy. We have to accept the fact that in the world as it is developing, the emerging countries will dominate the manufacturing sector. We will produce some high-quality goods, but only some.

Additionally, given the weird behaviour of the Monetary Policy Committee these days, how we are expected to compete, with the value of sterling rising when what we really need is a competitive exchange rate, is also somewhat beyond me.

Lord Jones of Birmingham: My Lords, perhaps I may correct my noble friend on one point on which he is slightly erroneous. Manufacturing output in this nation is about 14 to 15 per cent of GDP. That is a little more than America, about 1 per cent less than France and about the same as Germany. This is not a British issue; it is a developed world issue. The key is to ensure that the 3 million or so people employed in manufacturing have sustainable jobs going forward as we constantly move up the innovative chain. China and India will commoditise value-added about every five years. The idea is constantly to bring more ideas and value-added and skilled people in investment into making sure that that statistic stays the same. We might get fewer people working in it as we go forward, but more money will be made for the country and we will get more sustainable jobs throughout the United Kingdom.

Lord Roberts of Conwy: My Lords, does the noble Lord agree that there has been a decline in manufacturing and that with it has come a fall in the number of apprenticeships, which is the key route to skills? Does he further agree that the prospects for manufacturing would be much brighter if we sought to revive and improve the apprentice system?

Lord Jones of Birmingham: My Lords, apprenticeships are vital. I speak as someone who in a previous life served on the national apprenticeship task force. We have to stimulate employers to take them on—in the public as well as the private sector. To make apprenticeships work, we have to get younger people buying into the fact that manufacturing is a career that matters. Doomsayers in this House, in another place, in the media or anywhere will not help young people come into manufacturing. You will not get apprenticeships working just by saying that manufacturing is declining.

If manufacturing is declining, can anyone explain to me why in 1996 we exported half the cars we made? Today, we export three-quarters of the cars we make. The statistic—the number—has dropped by only 100,000. It is a success story. Do not do it down.

Afghanistan: Reconstruction

2.44 pm

The Earl of Sandwich asked Her Majesty’s Government:

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The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, an enlarged diplomatic presence in Kabul indicates the continued seriousness with which Britain takes the business of supporting the Government of Afghanistan in meeting both reconstruction and national security challenges as part of the comprehensive approach to the country. DfID is scaling up its programme, reflecting a long-term commitment to Afghanistan and the increasing capacity of the Afghan Government to use and absorb that funding.

The Earl of Sandwich: My Lords, I thank the Minister for that reply. I know that we all wish our diplomats and aid workers every success in that difficult country, Afghanistan. Does he agree that, given our leading role, the embassy could now focus a little more on communicating those positive things that are happening? Does he agree that, for example, some staff could have proper communication skills, which means not just website management but getting on with people who know the country and getting in touch with civil society? Would that not give much more reassurance to those of us who are supporting them at home?

Lord Malloch-Brown: My Lords, the noble Earl is right. We have taken steps both to strengthen the size of the embassy, as he is well aware, and to put in place an ambassador who is himself a great communicator. We have increased the communication staff there; three UK nationals and three others are now working on that. The fundamental point of the noble Earl’s question is that we must not just communicate the successes ourselves but ensure that Afghan officials do a much better job of claiming success for their country. The essence of success in Afghanistan is not what we do for Afghanistan but what Afghans do for themselves. That is the core communication that must be made.

Lord Tomlinson: My Lords, does my noble friend agree that an important part of what we are doing in Afghanistan is getting to grips with the problem of the poppy crop and that no change of policy is not an option? Can I perhaps live in hope that this increased diplomatic presence consists of people who are evaluating the proposals from the Senlis Council for the conversion of the poppy crop to medical use through the production of opiates?

Lord Malloch-Brown: My Lords, my noble friend is concerned, correctly, about opium production. I agree that failure is not an option. It is a terrible black mark on the international community’s performance in Afghanistan and indeed on that of the new Afghan Government that so far we have not prevailed in the efforts to defeat the growth of this pernicious crop. We must continue to examine all means for doing that. In those parts of the country where the writ of the Afghan Government runs, a combination of the rule of law, better government, the substitution of other crops and development support is bringing down the size of the crop. It is only where those conditions do not yet exist that I am afraid the trend remains in the other direction.

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Lord Wallace of Saltaire: My Lords, did the Minister by any chance see the opinion piece in the New York Times last week that warned against seeing the Afghan situation in increasingly military terms rather than in terms of social and economic development? Does he accept that there is a real danger that the press in this country and the political debate here and in the United States focus much more on the military campaign in the south and much too little on the hard but long-term social and economic rebuilding that needs to be done and is being done, by a number of countries as well as ourselves, in the north, the east and the west?

Lord Malloch-Brown: My Lords, the noble Lord makes an important point. I did not see the article that he refers to. UK media coverage is inevitably drawn to that part of the country where UK troops are deployed, but if you step back from that and look at Afghanistan as a whole, you see that large parts of the country are moving ahead with successful development. We have to understand that that is the only way forward; it must be the focus of our efforts as well as of newspaper coverage in the longer term.

Baroness D'Souza: My Lords, the most recent figures released by the much respected Minister for Education, Dr Hanif Atmar, show that something like 5,000 schools have inadequate buildings, about half the school-age population is not being educated and something like 80 per cent of teachers are untrained, yet barely 6 per cent of the non-defence budget is being spent on education. Would it be an idea to try to persuade funding partners to increase or set aside money specifically for education?

Lord Malloch-Brown: My Lords, the noble Baroness is correct that, generally, the Afghan economy still spends a disproportionate amount on defence, but for a very good reason: the country is under internal attack. However, if we cannot increase spending on both education and health, we will never break out of this cycle. The Afghan Government have almost no revenue base of their own; they are almost totally dependent on development assistance. It is vital that sufficient funds are provided for education and health. Many more girls and children are now in school than was the case a few years ago, but I agree with the noble Baroness that that is not enough.

Lord Howell of Guildford: My Lords—

Lord Judd: My Lords—

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, it is time to hear from the Conservatives.

Lord Howell of Guildford: My Lords, we all agree that our embassy in Kabul is doing an extremely good job in horrifically difficult circumstances. Rather unusually, I agree with the noble Lord, Lord Tomlinson, and the implication of his question about the poppy crop. This was specifically a British mission, but somehow it has all gone badly wrong. The poppy crop is bigger than ever and the hostility against our troops who try to eradicate it is enormous and greatly increases the

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support for the Taliban and other rebel groups. Will the Minister define a little more clearly what our policy now is? Are we going to give up eradication, as many recommend, or will we press ahead, even though the policy seems to be achieving very little?

Lord Malloch-Brown: My Lords, I have assured the noble Lord behind me that we will look at his proposals for creating a market for the crop on a limited basis. Government policy relies on the coercive use of removing the crops where that is resisted combined with working with farmers to ensure their voluntary agreement to substitute alternative crops. I repeat that in parts of the country the policy is succeeding but, in Helmand and the areas where there is still violence and insurrection, regrettably it is not yet succeeding.

Health: InterAct Reading Service

2.52 pm

Baroness Rendell of Babergh asked Her Majesty’s Government:

Baroness Royall of Blaisdon: My Lords, I know that the InterAct Reading Service is well regarded by healthcare professionals and has become an example of good practice in its field. I understand that St Thomas's trust in London has undertaken a qualitative evaluation of the service which showed that stroke patients were positive about it. I recently heard Max Stafford-Clark speak about the huge benefits that the service brought him and fellow stroke patients in terms of reading and conversational interaction when he was recovering from a stroke in hospital.

Baroness Rendell of Babergh: My Lords, I thank my noble friend for that Answer. Does she agree that the service could be extended into people's homes? A friend of mine has suffered a stroke and she has her children to read to her, but that cannot be so for everyone. Does my noble friend also agree that this service could be extended to patients recovering from eye surgery and allied problems?

Baroness Royall of Blaisdon: My Lords, my noble friend is clearly right that this service could be extended into people's homes and to people who suffer from other conditions. However, I understand that the InterAct Reading Service is a charity. Therefore, it is up to the charity itself to decide the scope of its service.

Baroness Gardner of Parkes: My Lords, my husband benefited greatly from this service and I therefore commend it. However, does the Minister agree that the best thing to do with strokes is to prevent them? If they are unpreventable, there should at least be early recognition. She can rely on me to

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remind noble Lords about the FAST formula—the face, arm and speech test. Early recognition would do such a lot to help these patients. However, I support the views of the noble Baroness, Lady Rendell.

Baroness Royall of Blaisdon: My Lords, I entirely agree with the noble Baroness. On the promotion of recognition and awareness, I pay tribute to the work of the Stroke Association, which does such a magnificent job in this area.

Lord Addington: My Lords, does the Minister agree that, if a charitable service is a success, the Government have a duty at least to encourage it to expand its activity to all parts of the country, as we have actors or people with acting experience in all parts of the country?

Baroness Royall of Blaisdon: My Lords, I think that the Government will be very helpful in supporting the charity. I am not saying that we will do so in financial terms, but I am sure that we wish to support its expansion throughout the country. I know that it strives to work in hospitals up and down the country.

Lord Patel: My Lords, as the Minister recognises that this is a beneficial service, will she do everything possible to encourage all hospitals and hospices to make this service available for patients with stroke? I declare an interest as a council member of the Stroke Association.

Baroness Royall of Blaisdon: My Lords, as noble Lords may be aware, the Government are conducting a consultation about stroke strategy. We have published a document called A New Ambition for Stroke, which is being discussed up and down the country. Perhaps people could include that document in their discussions with the Government in the context of the new stroke strategy.

Lord Harrison: My Lords, given the Government’s renewed interest in volunteering, might some of the proposals made by my noble friend Lady Rendell find an appropriate place in their considerations?

Baroness Royall of Blaisdon: My Lords, that is a very interesting and useful thought, which we should mention to the noble Baroness, Lady Neuberger, whom I understand will be advising the Government on volunteering strategy.

Lord Foulkes of Cumnock: My Lords, will my noble friend tell me whether it is only professional actors that they seek?

Baroness Royall of Blaisdon: My Lords, I fear that it is, because professional actors are best able to expand on the readings that they give. So I am afraid that in this instance the talents displayed by my noble friend will be wasted.

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