HC Deb 19 February 1997 vol 290 cc905-7
2. Mr. Connarty

To ask the President of the Board of Trade when he last met the Engineering Employers Federation to discuss manufacturing investment. [15022]

The Minister for Small Business, Industry and Energy (Mr. Richard Page)

Ministers at the DTI have frequent contact with the EEF to discuss a wide range of issues, including investment.

Mr. Connarty

Does the Minister accept that the figures for the last quarter of 1996 published by the EEF show that investment in manufacturing industries was 16 per cent. lower than for the same quarter of 1995? Does he accept that we have still not returned to the investment figures for 1989 and 1990? Does he agree that the Government have failed manufacturing and left it weak, undernourished and starved of adequate incentives for investment?

Mr. Page

I wish that the hon. Gentleman would give a fuller picture. Why does he not say that the EEF expects record sales in 1997? Why does he not say that fixed investment, which is the key source of demand for engineering products, will rise by some 5 per cent? Why does he not quote the Confederation of British Industry, which says that manufacturing investment will rise by 8 per cent. this year and next? That is good news.

Mr. Sykes

What does my hon. Friend think will happen to manufacturing investment if the right hon. Member for Sedgefield (Mr. Blair) ever has the reins of power? What does he think will happen to unemployment? Does he agree that we shall endure the agonising unemployment levels that are now splitting Germany apart? The right hon. Gentleman says that he will never be isolated in Europe; the German Chancellor will have him for breakfast.

Mr. Page

My hon. Friend is right. We have only to consider the fact that manufacturing employment in this country has increased by 130,000 since the end of 1993, whereas unemployment in Germany now stands at 4.6 million. It is obvious which Government have the right policies.

Dr. Howells

Does the Minister concede the fact that the skills shortages currently afflicting manufacturing industry in many areas of the country are a great restraint on investment in the future, and on any confidence that the manufacturing sector may have? When will he do something about that? Is it not a crime, given that so many young people who now languish on the dole could do with those skills and the appropriate education to staff up our manufacturing sector? When will the Minister do something to sort out that bunch of under-performers in the TECs and training centres in our colleges, who swap acronyms, jargon and conferences instead of getting on with the job of pumping some energy and motivation into job training and creation?

Mr. Page

Far be it from me partially to agree with the hon. Gentleman—but I do. He happens to have omitted the fact that our manufacturing productivity has risen by 80 per cent. since 1979, and is going very much in the right direction. I agree, however, that we need engineering skills if we are to drive the country forward more effectively, which is why I am glad that in 1994 we launched the Action for Engineering initiative, which has several facets, one of which is to encourage the development of engineers and the spread of best practice. Add to that our encouragement of modern apprenticeships, and I think that we are doing the right things to reduce the skills gap that the hon. Gentleman correctly identified.

Mr. Quentin Davies

How can placing a new discriminatory tax on any firm or sector have any consequence other than to depress investment in that firm or sector? Would not a windfall tax inevitably, as night follows day, reduce investment in the successful British utilities that it would attack, thereby reducing those companies' growth prospects and capacity for wealth creation and employment generation in the future?

Mr. Page

My hon. Friend is right. Since privatisation, BT has invested £29 billion. A windfall tax would not help that investment programme, but it would have an impact on shareholders, and eventually on prices and on the country's competitiveness.