HC Deb 06 December 1995 vol 268 cc364-7
15. Mr. Nicholas Winterton

To ask the President of the Board of Trade if he will make a statement on manufacturing industry. [2613]

Mr. Oppenheim

While manufacturing output fell between 1974 and 1979, it has risen by 12 per cent. since 1979 and grew by more than 4 per cent. last year. The reputation of British manufacturing industry with regard to quality and delivery has improved beyond recognition over the past 16 years.

Mr. Winterton

May I, as chairman of the Manufacturing and Construction Industries Alliance Ltd., tell my hon. Friend that, in the absence of any progress in further capital allowances for industry, and in the absence of pegging business rates, if our manufacturing industry—which is the only source of on-going, sustainable, non-inflationary economic growth—is to survive, reductions in interest rates are vital so that we can invest in new technology and equipment? That is essential if we are to remain competitive. If the Governor of the Bank of England is in any way obstructing the Chancellor of the Exchequer and preventing him from reducing interest rates, will the Department of Trade and Industry recommend that he receives his P45 and gets his marching orders?

Mr. Oppenheim

Although I agree with parts of what my hon. Friend just said, I would not dream of second-guessing my right hon. and learned Friend the Chancellor. Investment has risen six times as fast under the Conservative Government as under Labour, and there is one big difference with the investment now. Investment in Britain goes into high-quality, sustainable businesses, in contrast to the heroic days of Labour's industrial strategy, when huge chunks of Britain's investment were directed into dossed-out, low-grade, poor-quality industries, at the whim of politicians and bureaucrats.

Mr. Purchase

Does the Minister recognise that the words of the hon. Member for Macclesfield (Mr. Winterton) found great sympathy with Opposition Members, as many people earned their livings for most of their lives in the manufacturing industry? Was it not a revelation to hear the voice of the old Tories when the hon. Member for Wolverhampton, South-West (Mr. Budgen) rose earlier and advocated firmly the hands-off, laissez-faire, devil-take-the-hindmost approach to that industry—the very attitude that the Engineering Employers Federation called unhelpful, and went on to ask the then President of the Board of Trade to be the champion for manufacturing? Is it not time that we had a manufacturing champion in the current President of the Board of Trade?

Mr. Oppenheim

I do not disagree with much of what the hon. Gentleman says, because it is indicative of the rightward lurch of Labour that we had a Labour Member urging free markets in steel. That would not have happened 10 years ago, but Opposition Members have seen the success of Government policies in manufacturing. Since 1980, Britain's manufacturing productivity growth has been the fastest of all the industrial nations. In the 1970s, under Labour, it was the slowest, and those were the proud days of Labour's industrial strategy, when British Steel was the world's largest loss maker and British Leyland was the butt of international jokes.

Mrs. Peacock

Is my hon. Friend aware of the massive investment in our manufacturing industry in Yorkshire in the past 10 years? In fact, in my constituency of Batley and Spen, some £200 million has gone into new technology, jobs and factories. Will he take the opportunity to congratulate all those who have had the entrepreneurial spirit to put that money into manufacturing and into the future of this country?

Mr. Oppenheim

I endorse all that my hon. Friend has said. I also applaud her role in encouraging industry in her part of the world. It is becoming increasingly clear that—in contrast to the position in the 1970s—British manufacturing industry is a success story. We in Britain are now known for producing quality goods, delivered reliably and on time. That contrasts starkly with what happened when the lot opposite were in power.

Mr. Fisher

Does the Minister appreciate that, in saying that my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) advocates a free market in steel, he misunderstands the true position? What is proposed in return for a huge European subsidy is an increased capacity on the part of the new owners of the plant, ISPAT. It proposes almost a doubling of capacity.

We are being asked to give a subsidy not in return for closure or a reduction in capacity but in return for an increase in capacity that will damage British Steel and jobs in Britain, particularly in my constituency. Does the Minister understand that, and will he guarantee—as his Secretary of State seems to be doing—that he will use his veto to protect our industry and provide a level playing field?

Mr. Oppenheim

I agree with most of what the hon. Gentleman has said. It is marvellous to hear a Labour Member speak so cogently in favour of free and open markets, and against subsidies. It is notable that, in the old days, when subsidies were poured into British Steel, the company was a massive loss maker. Since then, its position in the world has improved enormously: it is now the world's fourth largest steel maker. It is highly successful, exporting 40 per cent. of its production. That is due to the less hands-on, more free market policies implemented by the Government.

Mr. David Nicholson

I was born in Macclesfield, and I am sure that my hon. Friend the Minister will want to join me in congratulating our hon. Friend the Member for Macclesfield (Mr. Winterton) on his work and advocacy. He is right to contrast the recent growth of exports and investment with what happened in the 1960s and 1970s, and—if I may say so—in the first half of the 1980s. But will my hon. Friend and his colleagues concentrate on enabling smaller manufacturing businesses—I have corresponded with his Department on this matter twice recently—to be fully aware of the sources of advice and assistance that the Department and other agencies provide? Many are not aware of those sources.

Mr. Oppenheim

My hon. Friend's points are entirely fair, but it is also fair to say that the growing business links network will play an important part in that.

Dr. Howells

The Minister will recognise the enormously valuable role in investment and export earnings that is played by our pharmaceutical and manufacturing industries, but is he aware that those industries are in danger of losing markets as a result of the hawking of cheap copies of their medicines around Europe by companies based in Spain, where there is a complete lack of patent protection law?

Given that the process of developing a new medicine typically takes between eight and 10 years and costs £300 million, does the Minister accept the urgency of exerting pressure on the European Commission to ensure fair competition and to protect the patent rights of our pharmaceutical and manufacturing industries?

Mr. Oppenheim

The hon. Gentleman is right to highlight the success of the United Kingdom's chemical and pharmaceutical industry. I believe that it is now the world's biggest exporter, which is a great tribute to the work done by management and all who work in the industry, at every level. I accept much of what the hon. Gentleman says. As he knows, negotiations are currently proceeding in Europe. The Government will take account of the interests of what is a fine example of British manufacturing, as well as the interests of consumers.

Mr. Clifton-Brown

Does my hon. Friend agree that the economic fundamentals that we have pursued—low taxation, low inflation and low interest rates—have enabled British manufacturing industry to increase its investment by 11 per cent. over the past year? That is a huge figure. Indeed, the figure for plant and equipment was 14.5 per cent. Does my hon. Friend accept that, if Labour were ever to have a chance of gaining power, those fundamental rates would have to be increased to finance its spending plans? Would that not cause tremendous damage to the prospects of manufacturing investment?

Mr. Oppenheim

My hon. Friend is right. In the third quarter, manufacturing investment was up by over 12 per cent., and investment in plant and machinery was up by 18 per cent. British industry has undergone a productivity revolution over the past 16 years. We have closed three quarters of the productivity and competitiveness gap with Germany. That, not the minimum wage, is the best way in which to ensure good-quality, well-paid, secure jobs for our people in the future.