HC Deb 17 April 1996 vol 275 cc698-700
4. Mr. Nicholas Winterton

To ask the President of the Board of Trade if he will make a statement on engineering (a) investment, (b) exports and (c) profitability. [23919]

Mr. Lang

Information on the profitability of the engineering industry is not collected centrally, but engineering industry exports were £75 billion in 1995—an increase of 18 per cent over 1994. As for investment, the business trends survey of the Engineering Employers Federation shows that it continues to be buoyant.

Mr. Winterton

Does my right hon. Friend, who was at school with me, accept the views expressed by the Manufacturing and Construction Industries Alliance—and shared by the Engineering Employers Federation—that quality of training is vital to the manufacturing industry and contributes directly to investment, exports and profitability? Does he agree that a skilled and a motivated work force is one of the United Kingdom's greatest assets? Will he and his Department help to drive forward the recommendations in Sir Ronald Dearing's review of qualifications for 16 to 19-year-olds in order to ensure that quality of training is a priority?

Mr. Lang

My hon. Friend and I were indeed at school together, although he looks far too young, and I agree absolutely that training is important. I warmly welcome Sir Ronald Dearing's proposals, which are not very different from those that I introduced in Scotland some years ago. I recognise the importance of improved training, and the improvements in the engineering industry are reflected by the fact that productivity in that industry rose by 21 per cent. between 1990 and 1995.

Mr. Sheldon

Is it not clear that the Government have shamefully neglected the importance of the manufacturing industry? Thankfully, that has now changed, but the Government still do not appreciate the importance of manufacturing investment. Capital allowances are only 25 per cent., which is less than depreciation in the first year. That is equivalent to a tax on investment in the first year. Should not the President of the Board of Trade be doing something about that?

Mr. Lang

The right hon. Gentleman seems to be a little out of touch with the manufacturing industry investment figures, which for plant and machinery rose by almost 10 per cent. last year and by some 15 per cent. in the past two years. He may be interested to know that unemployment in the manufacturing sector fell by 3,000 last month. Clearly, the success of the United Kingdom manufacturing industry is a reflection of the Government's successful management of the economy.

Mr. Dunn

Given the increase in manufacturing exports of some 90 per cent. since 1979, does my right hon. Friend agree that the introduction of the minimum wage and the social chapter would create an absolute nightmare for British success overseas?

Mr. Lang

My hon. Friend is absolutely right. Looking at the social chapter alone, non-wage labour costs in the United Kingdom are some 18 per cent. while in Germany they are 32 per cent. and in Italy and France they are more than 40 per cent. It is because we have become more competitive and avoided such additional costs that United Kingdom manufacturing industry is now so successful.

Mr. Kaufman

Will the right hon. Gentleman condemn the decision by GEC to close its electrical engineering subsidiary, Long and Crawford at Gorton road, Manchester, with the destruction of 135 jobs, many of them held by men with a lifetime of skilled and dedicated service? The company is offering meagre redundancy payments and 100 workers who are being transferred to another site are having their pay reduced by £60 per week. Exports to the middle east, the Gulf and south America are being thrown away and the site is being asset stripped at a profit to GEC. Is that not a disgraceful way to approach manufacturing industry?

Mr. Lang

I regret the loss of any job in any factory in any constituency, but I simply do not recognise the picture that the right hon. Gentleman paints of GEC, which is one of our most efficient, competitive, aggressive and successful companies in export and domestic markets all over the world. GEC has made a substantial contribution to the rise in British manufacturing exports of 90 per cent. since 1979 because the Government have allowed it to manage its own affairs in the way it thinks best.

Mr. Fabricant

Is my right hon. Friend aware that, unlike the motley crew opposite, who are made up of ex-journalists, ex-trade union officials and ex-failed polytechnic lecturers, I worked in the engineering industry? Does he realise that the social chapter would not only produce the additional on-costs to which he has already referred, but that if we were to sign up to that terrible document, we would be signing a blank cheque with heaven knows what result for British industry, particularly engineering?

Mr. Lang

My hon. Friend is absolutely right. As British industry, particularly our engineering industry, has become so efficient, it has been able to achieve the figures that I have given the House. That is why the prospect of growth for next year also looks most promising.

Mr. Ingram

Will the President of the Board of Trade confirm the shocking figures that his ministerial colleague gave the House on 20 March when he said: In the United Kingdom … only 12 per cent. of science and engineering graduates are in engineering. In Germany, the figure is 18 per cent.; in France it is 21 per cent. Germany produces a third more engineering and technology PhDs per head of population than we do and five times as many people are qualified to MSc standard."—[Official Report, 20 March 1996; Vol. 274, c. 326.]

Who is to blame for that shocking state of affairs? Is it our competitors, because they are so much better than us, or is it the Government, who systematically destroyed our manufacturing and engineering base during the 1980s?

Mr. Lang

There has been a substantial increase in the number of engineering graduates in recent years. Next year, the Government will be sponsoring the Year of Engineering Success, which I am sure will be as successful as the recent Science, Engineering and Technology Week. The successful management of the economy and the encouragement of better skills has meant that engineering has contributed to British exports, which since 1981 have grown faster than those of Germany, France or Japan.