3. Mr. Robert HughesTo ask the Secretary of State for Trade and Industry when he next expects to meet the president of the CBI to discuss manufacturing industry.
§ The Minister for Corporate Affairs (Mr. John Redwood)Ministers and officials from the Department of Trade and Industry regularly meet representatives of the Confederation of British Industry. Last week I met CBI representatives on two occasions, once to discuss wider ownership and once to hear their views on pay and productivity.
Mr. HughesWith high interest rates costing industry £30 billion a year, with investment falling, with output down for each of the past seven months and with manufacturing redundancies running at 1,500 a week, is not it now time for the Government to take up the call of the right hon. Member for Henley (Mr. Heseltine) in his 306 leadership election manifesto for a more interventionist policy by the Government to save manufacturing industry from extinction?
§ Mr. RedwoodThe adjustment to get down inflation has some costs. The CBI itself asked for membership of the exchange rate mechanism and the Government have adopted that discipline. It is very important, as the CBI is now telling its membership, for higher productivity that the adjustments should take place. There are many market opportunities and big export opportunities. Manufacturing exports are at record levels and there are many opportunities for import substitution. Many good companies in British industry are now addressing those matters to offer jobs and prosperity.
§ Mr. Nicholas WintertonDoes my hon. Friend accept that the decline in our manufacturing industry has directly led to our economy becoming extremely vulnerable? Does he further accept that the level of interest rates and the level at which we entered the exchange rate mechanism continue to contribute to the undermining of our manufacturing industry? Will he accept from me the sad news that several leading United Kingdom manufacturers in high technology are considering locating manufacturing plants in other countries in the European Community where the economic climate is much more advantageous?
§ Mr. RedwoodThere are many fine companies and industries in our manufacturing sector. They are doing much better than they did under Labour in the 1970s and they will continue to do so. The aerospace, pharmaceutical and motor car industries are finding many new opportunities. I welcome the great expansion in the motor car industry where output is running at about 1.3 million cars per annum compared with a low point of only 900,000 cars less than 10 years ago. That is welcome progress. Of course, the Government want the adjustment to a low-inflation, high-productivity economy to occur rapidly. The sooner that that adjustment takes place, the greater the success will be.
§ Mr. Alex CarlileDoes the Minister share the concern felt by many that manufacturing output and investment are collapsing much more quickly than the Government predicted? Does he agree that that is partly due to the corporation tax system and its non-neutrality with regard to inflation? Will he and his colleagues urge the Chancellor of the Exchequer to reform the corporation tax system, for example, by increasing investment allowances to 40 per cent?
§ Mr. RedwoodCorporation tax policy is a matter for the Treasury, not the Department of Trade and Industry. However, the hon. and learned Gentleman should know that corporation tax in Britain is one of the lowest in the free enterprise world. It is welcome that the tax burden is proportionately lower here. That may be a contributory factor to the large amount of inward investment which Britain has attracted in recent years. Many overseas countries and companies recognise that Britain is the place in which to invest and we intend to encourage such investment further.
§ Mr. DevlinDoes my hon. Friend agree that today's refusal by the Monopolies and Mergers Commission to allow the takeover of ICI Agricultural Chemicals by Kemira has come much too late? Does he agree that if it 307 had turned down Kemira's earlier bid for Fisons and if his Department had prevented that nationalised company from undercutting and wrecking the market in agricultural chemicals, many of my constituents would not face the prospect of unemployment as a result of today's announcement?
§ Mr. RedwoodI hope that ICI finds some other solution for its agrochemical business, if there is a commercial and industrial way of doing so, because I want those jobs to be preserved. The MMC findings illustrate the wisdom of my right hon. Friend the Secretary of State when, as a matter of policy, he drew the attention of the MMC to the possibility that bids from nationalised industries could be more damaging and less fair than other bids. In its two reports published today, the MMC illustrated that that can be the case. In the case that my hon. Friend mentioned it found against the deal partly because of anxieties about the conduct of nationalised companies. The Government are determined to see fair play in markets. Part of that fair play must be to make sure that nationalised companies do not abuse their position in capital, product or service markets to the detriment of British jobs and industry.
§ Mr. Gordon BrownBut with manufacturing output down by £2 billion, manufacturing investment down 4 per cent., 100 companies going bankrupt every day and unemployment rising faster than anywhere else in western Europe, are not the Government, who began by provoking a manufacturing recession, causing yet another such recession far more severe than Ministers are prepared to admit? Is not it time that the Secretary of State for Trade and Industry, not just a junior Minister, spoke up for the needs of industry, ended the self-satisfied complacency and argued the case in Government, first, for a cut in interest rates and, secondly, for a budget for investment in industry?
§ Mr. RedwoodMy right hon. Friend speaks up well for British industry and is a great ally and friend of it. British industry is flourishing considerably more under this Government than it ever did under the Labour Government. Output in manufacturing is up, whereas it used to fall under the Labour Government, and our unemployment is considerably below the European average. Whenever something is adverse in comparison with Europe we hear about it all the time from Opposition Members, but that is not the case on unemployment because they know that we have a much better record than do some of our European partners.
Last year, more new companies were created than fell on hard times. There was an extremely satisfactory rate of new company formation last year and we welcomed it as a sign of a flourishing enterprise economy.
§ Mrs. Maureen HicksIs not it a credit to the increased efficiency of the British motor manufacturing industry—I pay particular credit to Rover in the west midlands—that, despite a decline in United Kingdom car sales, the export of British cars has been tremendous? That is largely due to the fact that we have achieved increased efficiency. As a result of the 44.7 per cent. increase in car exports those companies are now working to full capacity.
§ Mr. RedwoodMy hon. Friend makes her point extremely well. The British Government are extremely proud of the British motor industry and are proud of all those companies investing and located here. They have 308 made great strides in improving the quality and performance of their products. They now have a number of world-beating products that will continue to go from strength to strength on world markets.
The latest figures for the export of motor cars are heartening. They show that the British economy can flourish based upon more exports to overseas markets where there are good opportunities for growth and based upon import substitution as, once again, British people back British products because they are well made and good.