HC Deb 16 July 1998 vol 316 cc559-61
5. Mr. Ross Cranston (Dudley, North)

If she will make a statement about her Department's policy on increasing the productivity of British industry. [49376]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett)

Improving productivity is at the heart of the Government's drive to improve the competitiveness of UK companies. The responsibility for that lies largely with business itself, but the Government have a key role to play, which is why I set up six business-led working parties last year to make recommendations about how the Government and business could work together in partnership to promote competitiveness.

I am also co-hosting, with my right hon. Friend the Chancellor of the Exchequer, a series of seminars on the UK's productivity gap. That work will contribute to a White Paper on competitiveness, to be published in the autumn, which, for the first time, will have been prepared in partnership with the business community.

Mr. Cranston

I congratulate my right hon. Friend on her partnership approach and on bringing industry to the heart of government. Do not the productivity figures produced by Professor Siebert of the Kiel institute in Germany, demonstrating that labour productivity in Britain is only 70 per cent. of that in Germany, give the lie to the Tory Government's claim that they left us a golden economic legacy? Does she further agree that British industry must lift its game, for example by improving research and development to the levels that obtain in, say, the pharmaceutical industry?

Mrs. Beckett

I am grateful to my hon. Friend. I share his view, which is shared widely throughout British business and industry. It is necessary to raise our game and for British companies to become more productive and competitive. My hon. Friend is also entirely right to point out that the legacy of the productivity gap gives the lie to the propaganda put out before the election by the Conservative party. I fear that there will be more than one stark difference between our competitiveness White Paper and those produced by the previous Government. Not only will ours have been prepared in partnership with business, it will look at the whole picture—both sides of the balance sheet—instead of being simply a leaflet that says what a wonderful job the Government are doing.

Mr. John Wilkinson (Ruislip-Northwood)

Would not it have been more helpful in terms of increasing British industry's productivity if, instead of hitting the boards with the Chancellor, the President of the Board of Trade had persuaded him to introduce a package of expenditure measures that were appropriate to the increase in industrial productivity, rather than the contrary? Will not the spending splurge that he announced to the House, particularly the vast increase in social security spending and the likelihood that interest rates will have to go up from their present high levels as a consequence, gravely damage British industrial productivity, rather than the contrary?

Mrs. Beckett

That is a load of rubbish. My right hon. Friend made it absolutely plain that modernisation and reform in the public services and beyond are the basis of his programme. Competitiveness and productivity are matters for companies, although the Government have a role in ensuring that the legislative framework does not impede them. The Chancellor's announcements, particularly on science and engineering investment, will help British business. The pharmaceutical industry had urged such steps before my right hon. Friend published his proposals, and it has welcomed them since.

Mr. Bill O'Brien (Normanton)

I congratulate my right hon. Friend on helping to increase United Kingdom productivity. Yorkshire was devastated by pit closures caused by the previous Government, and that has left pockets of pain. When my right hon. Friend creates partnerships, will she have regard for west Yorkshire in particular and for Yorkshire in general as the region requires the encouragement of partnerships with engineering and manufacturing industry to regenerate jobs?

Mrs. Beckett

I have the highest regard for west Yorkshire and for its people. I am mindful of its glorious history and of the need for the Government to do all we can in partnership with business to ensure that it has a glorious future. A great deal of our work is focused on the need for investment, for innovation, for the spread of best practice and for British industry to be encouraged to raise its game to create greater opportunities for employment that would help to relieve the difficulties to which my hon. Friend drew attention.

Mr. John Redwood (Wokingham)

May I wish the President of the Board of Trade a happy holiday during the summer recess? Before she goes, however, does she agree that she needs to raise her productivity for the sake of British business? With her in tray stretching to the ceiling, British business does not know the answers to fundamental questions about Government policy, which it needs to know if it is to raise productivity and investment. Will she promise us an energy policy? Will she promise us a competition policy that can work in detail? Will she promise us a policy that will allow the Post Office to expand? Will she promise us a water competition policy that will allow new entrants to the markets? Will she promise statements on all those things before she goes away? After a year of her dithering, industry needs the answers.

Mrs. Beckett

In the spirit of cross-party co-operation, I wish the right hon. Gentleman a happy holiday—unless he is going to waste his time giving more misleading information to the press. I shall not be taking a two-month holiday, as he alleged I did last year. I have never had a two-month holiday in my life. Perhaps I might look forward to such a thing when I retire.

As for the litany of nonsense that the right hon. Gentleman churned out for the 55th time, I do not know where he has been for the past year. My Department has had a hand in or produced eight pieces of legislation in the past 15 months. During the previous three years, under the Conservative Government, there may have been one. Certainly there was none in the previous two years. We have made statements on energy policy. We have changed competition law. Discussions are under way with the Post Office about how it can exploit its competitiveness. We are addressing all those issues. We inherited nothing from the Conservatives—no energy policy, no Post Office policy likely to succeed and a competition policy that they had been discussing for 10 years before a Labour Government brought in a Bill. We need no lecture from the right hon. Gentleman.