HC Deb 08 July 1992 vol 211 cc319-21
3. Mr. Roy Hughes

To ask the President of the Board of Trade when he next expects to meet representatives of the Engineering Employers Federation to discuss the effects of the recession on the engineering industry.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I met the Engineering Employers Federation last month. I have no plans for a further meeting.

Mr. Hughes

Does the President appreciate that unemployment has increased for the 26th consecutive month—an increase of more than 1 million—and that a further 70,000 jobs, again in engineering, are expected to go soon? Overall, the prospects seem very grim, so why does the right hon. Gentleman not discuss with the engineering employers the Chancellor's so-called "green shoots", because many people believe that he has been using weedkiller instead of fertiliser?

Mr. Heseltine

The most effective support that we can give to the engineering and all other industries is to maintain our current counter-inflationary stance, keep interest rates coming down and maintain the thrust to provide increased international competitiveness in this country. Nothing that we do will be influenced by the Opposition trying to get us to abandon the policies on which ultimate success depends.

Mr. Nicholas Winterton

Does my right hon. Friend accept that many members of the Engineering Employers Federation believe that he must work hard on the Treasury to make it understand the needs of engineering and manufacturing? Does he further accept that many members of the federation would be prepared to accept a modest increase in corporation tax if the Treasury would introduce 100 per cent. capital allowances?

Mr. Heseltine

My right hon. Friend the Chancellor of the Exchequer and I are at one on those matters and all others. On the basis of that happy partnership, we shall look forward to the recovery of the British economy.

Mr. Olner

When will the rhetoric finish and engineering employees get the same action from the Government as Germany and all other European countries get to assist their industries? The recession has gone on for far too long. It will never be over without investment in industry.

Mr. Heseltine

The hon. Gentleman takes a rather more pessimistic view of the Government's approach to the engineering industry than the employers themselves. I welcome the constructive response that they gave last Friday to the announcement that we would restore sectoral dialogue between the industry and my Department.

Mr. Marlow

What rate of interest is appropriate at the current stage of the recessionary cycle? Does the Chancellor of the Exchequer agree with my right hon. Friend?

Mr. Heseltine

The rate of interest is that which the markets will accept, and the markets will accept the rate that reflects the level of inflation in this country, which is still more than the levels in many competing economies. Nothing would be more counter-productive to the recovery, which all hon. Members want, than indicating that the Government were to abandon their counter-inflationary strategy.

Mr. Gordon Brown

Given the President's stark admission on Monday that this is the most difficult recession since the war and given the figures that came out today showing a 92 per cent. increase in bankruptcies in engineering and elsewhere, foreshadowing a summer and autumn of further closures, redundancies and job losses, why is he failing to implement his well-publicised ideas for export, regional and industrial policy reform? Why. at the same time, is he presiding over cuts in support for industry and jobs in those very areas? Has he changed his mind or has the Cabinet changed it for him?

Mr. Heseltine

The real dilemma from which the hon. Gentleman suffers is that he is incapable of understanding what I have been saying all these years. In no conceivable way will I abandon my support for the recovery of the British economy based on a highly competitive improvement in performance, on which our competitiveness must depend.