HC Deb 03 December 1998 vol 321 cc1029-31
5. Mr. Nigel Griffiths (Edinburgh, South)

What steps his Department has taken to create a stable economic climate for manufacturing industry. [61296]

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche)

The Government have established new frameworks for monetary and fiscal policy to ensure a platform for long-term economic stability and growth. My right hon. Friend the Secretary of State will shortly be publishing a White Paper, which will include a series of measures to promote the competitiveness of UK industry.

Mr. Griffiths

While the whole country welcomes what the Government are doing to create economic stability, is all that not being undermined by the Conservative party questioning and challenging and talking down British business—questioning the independence of the Bank of England, challenging the new deal and the working families tax credit—and by the chaos that the Conservative party has created in the House of Lords by sacking Viscount Cranborne and the resignation of Peter Fraser?

Mrs. Roche

I agree with my hon. Friend. The previous Government were prepared to sacrifice the economy's long-term health for short-term political gain. I also agree that, despite the present difficulties in the world economy, the tough and decisive action that this Government have taken means that Britain is well placed to steer a course for stability and growth. It is about time that Conservative Members stopped talking down the British economy and started to support British business.

Mr. David Chidgey (Eastleigh)

Listening to that response from the Minister with responsibility for small business, I am sure that she will be pleased to know that a firm called Carbospar in my constituency has just been awarded millennium project status. It is its response to the Prime Minister's challenge to show that Britain is a creative powerhouse, but I hope that she will be appalled to learn that that same firm has lost 50 per cent. of its projected overseas sales as a direct result of high interest rates and the unstable value of the pound. It is clear that winning shiny plaques is no substitute for winning orders and keeping jobs, so will she take a message back to the Prime Minister that what Britain's industry needs is a clear commitment on Britain's entry to economic and monetary union, not bits of tin to stick on the office wall?

Mrs. Roche

I congratulate the company in the hon. Gentleman's constituency. I had the great privilege to be with the Prime Minister at the launch of that challenge. It is tremendous to see some of those products come forward and to see creativity.

As the hon. Gentleman knows, sterling is now at around the same level as at May 1997. The difference, of course, is that inflation is now under control, not out of control. What is absolutely clear is that the Government will make the right decisions in relation to EMU, based on the interest of the country and of our businesses.

Ms Rosie Winterton (Doncaster, Central)

In seeking to create a stable economic environment, will my hon. Friend look at the situation that is faced by companies such as Bridon International in Doncaster, which is extremely concerned about dumping, through cheap imports, of steel wire ropes from countries such as India, South Korea and Mexico? What action can her Department take to assist companies such as Bridon's in my constituency?

Mrs. Roche

I am well aware of my hon. Friend's interest in that matter and in these issues. As the House will be aware, if imports are being dumped or unfairly subsidised, the European Commission has the power to take appropriate action. It is currently investigating the import of steel wire ropes into the Community. I assure my hon. Friend that the Department is following that matter closely and we will ensure that we keep in touch with her.

Mr. John Redwood (Wokingham)

At a time of factory closures and mass redundancies in manufacturing, it is typical of the Secretary of State that he decides unilaterally to reduce Trade and Industry Question Time by 10 minutes, and then he sits there with a smug grin,

unwilling to answer anything on manufacturing on today's Order Paper, but may I ask the Minister for Small Firms, Trade and Industry, who is a bit more sympathetic to manufacturing than the Secretary of State—that is not difficult—this important question, which many manufacturers are now asking the Government?

Those manufacturers tell me that business needs lower and stable taxes, not the tax rises of this Government. Does the Minister agree that the Government's failure to stop France and Germany from pressing for higher business taxes is unsettling British business and potentially very damaging to it? Will she promise that the Government whom she supports will veto, first, the withholding tax on savings, which damages savings and the City of London, and secondly, any abolition of corporation tax breaks that are enjoyed in this country, sometimes on the advice and policies of the Government?

Thirdly, will Ministers guarantee to veto any move from the Commission—it is now planning one—to make corporation tax a centrally controlled and centrally collected tax, which will be bad news for Britain and British business? All those things mean higher taxes. They will be bad for business and bad for democracy.

Mrs. Roche

The right hon. Gentleman does try—he tries very hard. However, try as he might, there is no escape from the facts. It has been made absolutely clear—my right hon. Friend the Chancellor has made it clear—that we will not support any action at EU level that will damage business competitiveness or jobs. There is no question about that and there is no question of changes being imposed on us.

The right hon. Gentleman and his colleagues really have a cheek. Given that under the last Government Britain had to go through two major recessions when 2 million manufacturing jobs were lost and manufacturing output was devastated, it is rich to hear what the right hon. Gentleman has to say about manufacturing. The Labour party is committed to our manufacturing sector. When I go round the country talking to businesses of all sizes, the one thing they say to me is that I should stop the Conservative Opposition talking down their businesses.

Mr. Alan Simpson (Nottingham, South)

Will the Minister join me in reminding Her Majesty's Opposition that, throughout their period in office they refused to take a close look at how the dumping of products affected the British cycle industry? Will my hon. Friend have a particular look at what is happening with cycles from Taiwan? The sale of cycles from Taiwan to the UK economy has increased by 55 per cent. in the past year and there is already evidence that the Taiwanese Government pay for the research and development and provide the advertising in the United Kingdom for that to take place. Will she look at the distortion of trade that such an intervention constitutes?

Mrs. Roche

I know that my hon. Friend has taken a keen interest in this industry. He will know that this is a matter for the European Union Commission to investigate. The Commission needs hard evidence and, if that exists, I am sure that the industry will supply it. As I said earlier, the Department will continue to monitor the situation closely.