HC Deb 18 June 1998 vol 314 cc501-3
11. Mr. Bob Russell (Colchester)

What steps she is taking to safeguard jobs in manufacturing industry to take account of the current strength of sterling. [45062]

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

The Government recognise the difficulties that are created for exporters and manufacturers by a strong pound. The Bank of England has taken those into account in deciding the level of interest rates, and the whole purpose of the Government's strategy is to deliver a stable macro-economic framework in which business will be better able to plan and to secure competitiveness for the long term. Ultimately, however, our ability to compete in world markets depends on Britain producing high-quality goods and services. We are working in partnership with business to develop measures that promote the competitiveness of British firms and we shall publish a White Paper in the autumn.

Mr. Russell

In the real world, there will be a feeling that that was a somewhat complacent response, as was the right hon. Lady's response to the hon. Member for Stafford (Mr. Kidney). Would the President of the Board of Trade care to comment on the fact that, this month in my constituency, Paxman Diesels had to make 10 per cent. of its work force redundant? We all know what happened under the previous Government, but many of us were hoping that a change of Government would lead to better things. Discussions with her colleagues in the Ministry of Defence in relation to the placing of orders would benefit Paxman Diesels, as would discussions with the privatised railway industry, where orders for locomotives seem to be lacking. Discussions between the President of the Board of Trade and other members of the Government might help my constituents.

Mrs. Beckett

I am well aware, as I expect that the hon. Gentleman is, that the diesel industry has been undergoing difficulties for some years. I share his view that part of the aftermath of the long-drawn-out privatisation of rail was a dearth of orders of a variety of kinds in the manufacturing industry, which affected my constituency as well as his. I assure him that I am in continual contact with colleagues who deal with other policy areas that impinge on those matters. We are all anxious to see British manufacturing succeed and we do work with such companies to try to achieve that.

Mr. Dale Campbell-Savours (Workington)

Is not the simple truth that, if we had not tightened the fiscal stance—if we had followed the policies of Conservative Members—we would have had a higher exchange rate and higher interest rates?

Mrs. Beckett

My hon. Friend is, as so often, entirely right.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale)

Earlier this week in my constituency, one of the most modern and efficient saw mills in the country made an entire shift redundant due to difficulties that had been caused by the level of sterling. In reply to an earlier question, the President of the Board of Trade said that what was necessary was stability in exchange rates. Would she be happy with exchange rates being stable at their current level? Is that what she seeks?

Mrs. Beckett

No. If the hon. Gentleman will recall, what I said was that the Government would like stable and competitive exchange rates but, of course, difficulties do arise from time to time and no one is more concerned than Labour Members when, as a result, people lose the opportunity of employment. However, it is our determination and wish to make this economy more competitive. That, in the long run, is to the benefit of all.

Mr. John Redwood (Wokingham)

Will the President accept that, when manufacturing industry is struggling with the higher taxes, higher sterling and higher wage inflation that she will do nothing about, it should at least be able to expect stability from the DTI on regulations and competition law? Is she aware that her original Competition Bill produced much fear and diversion of effort in industry? While the Opposition welcome the four fundamental concessions that Ministers have made to improve the legislation, it is still wrong. Will she look again at this muddled and meddlesome Bill to help give industry more certainty? Above all, will she consider the absence of teeth against monopolies and public sector activity that is another extraordinary feature of the Bill and that will not help business to become more competitive against this miserable background for industry?

Mrs. Beckett

I am sorry—I almost interrupted the right hon. Gentleman's speech. He accused me of being responsible for higher wage inflation that I would do nothing about. Wage settlements are very much a matter for employers in manufacturing and outside. I am interested that he thinks that the Government should be doing something about them. I look forward to hearing more. On the Competition Bill, I am never sure whether he is mischievous or just incompetent. If he paid attention to the debates on Second Reading, in Committee and in another place, he must know that the amendments to which he referred were flagged up by the Government and that we had said that they would need to be made from the beginning. Indeed, he has been complaining about the absence of some of them for weeks.