HC Deb 17 May 1989 vol 153 cc308-10
9. Mr. Pike

To ask the Chancellor of the Duchy of Lancaster what further steps his Department proposes to take to ensure that United Kingdom manufacturing industries are fully prepared for 1992.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude)

My Department is providing a comprehensive service to help business prepare for the single market that is constantly updated and expanded to take account of progress on single market-related measures. It is for firms themselves, whether they are in the manufacturing sector or in others, to take whatever steps are necessary to compete.

Mr. Pike

Does the Minister acknowledge that all the surveys show that while manufacturing output is expected to increase in the Community as a whole after 1992, it is expected to fall in the United Kingdom? That development is expected to be accompanied by falling employment in manufacturing regions such as the north-west, Scotland and midlands. What action will the Government take to ensure that the projected loss of 200,000 jobs is not allowed to occur and that workers in manufacturing industry are not again sold down the river?

Mr. Maude

What happens to jobs and to businesses will depend on the ability of businesses to produce goods that customers want to buy—at a price, time and quality that they demand. Nothing that any Government can do will override that. All the surveys that I have seen indicate that the successful completion of a single European market that is not overburdened with regulations, and which is a genuine free market, will lead to increased employment, output and wealth.

Mr. Page

Does my hon. Friend agree that one of the best ways to give British manufacturing industry opportunities in 1992 is to ensure not only a strong internal demand for its products but exceeding support to the "Better Made in Britain" campaign? Will my hon. Friend say whether any examination has been made of the correlation between manufacturing investment and production volumes, and what levels of manufacturing investment are in his opinion necessary to create the desired balance of trade?

Mr. Maude

It is clear that businesses must make their own decisions. They must estimate demand for their products and how to meet it in the most effective way. It is not for me to express the Government's views about the way that businesses should run themselves. It is for businesses to decide these things for themselves. They are doing that rather successfully, and I do not propose to try to second-guess them.

Mr. Hoyle

Does the Minister agree that the Government can help from the point of view of the economic climate? Does he further agree that interest rates can be a deterrent to business expansion and new investment? Can he estimate the loss of manufacturing jobs if some aid is not given to industry? Why are the Government not providing the infrastructure to enable industry to flourish in the regions so that it can meet the competition that will arise in the 1990s?

Mr. Maude

Investment in the infrastructure is as high as investment in manufacturing industry—[Interruption.] —and both are at extremely high levels. The hon. Gentleman is right only to the extent that the economic climate for business is extremely important. That is why business in Britain is continuing to do well. He will be reassured to know that, despite the levels of interest rates being as high as they are, the investment intentions of business remain high.

Miss Emma Nicholson

Does my hon. Friend agree that in the run-up to 1992, one of the most important areas is information technology manufacturing and that one of the best ways to encourage a stronger IT manufacturing base for Britain would be to encourage the greater use of European rules of Government procurement and to encourage major users, including the public sector, to buy either from the United Kingdom or on a reciprocal basis from our European partners? That would have the crucial and necessary effect of opening up the so far closed French and German markets, given that the Italian and Dutch markets are already open. Is he aware that at present our weakness is in hardware and software manufacturing and not in custom-built software?

Mr. Maude

I have no doubt that when the public procurement markets of Europe are properly open to free competition, businesses in this country will be able to supply that demand effectively and competitively.

Mr. Caborn

The Minister will agree that the preparations for 1992 have been assisted by the European regional development fund. Is he aware that the Commissioner, Bruce Millan, is on record as saying that any commitments that have been entered into with the regional development fund and the IDOX scheme will be honoured? Will the hon. Gentleman now give a commitment on behalf of Her Majesty's Government that they will stick by the commitments and agreements that they signed? Or are we about to see a further turnabout, with the stabbing in the back of the regions and a reduction in the regional development fund yet again?

Mr. Maude

I understand that the Parliamentary Under-Secretary of State for Industry and Consumer Affairs has written to the hon. Gentleman, and I am sure that he will find much food for thought in that letter.

Mr. Leigh

Can my hon. Friend confirm that British manufacturing industry has nothing to fear from a market-oriented single market free from exchange controls and nothing to gain from a politician-dominated Europe tied down by a central currency and a central bank? I hope I shall not be struck dead for saying that from this corner seat of the Front Bench below the Gangway.

Mr. Maude

My hon. Friend makes a good point. The single market of Europe must be a market for consumers, not one dominated by producers and, above all, not one dominated by Governments.