HC Deb 15 July 1999 vol 335 cc562-4
12. Mr. Michael Fabricant (Lichfield)

When he plans to meet representatives of the engineering manufacturing industry to discuss the levels of business activity. [90020]

The Minister for Small Firms, Trade and Industry (Mr. Michael Wills)

DTI Ministers are in regular contact with firms and representative organisations in the engineering manufacturing industry to discuss their industry's affairs, including activity levels.

Mr. Fabricant

The Minister heard the comments of my hon. Friend the Member for Buckingham (Mr. Bercow) with regard to the Engineering Employers Federation. Does the Minister accept that the success of engineering depends to some extent on the success of retail trade in Britain? He will have heard the news this morning that Marks and Spencer's sales are down 10 per cent., although some of the company's problems are not related to the sort of frocks that it sells. Is he aware that the John Lewis Partnership is reporting a 3.2 per cent. drop in sales, in cash terms, compared to the same period last year? The Secretary of State said earlier that we should be celebrating the success of our economy. In any other place, would we not describe the economy now as being in recession?

Mr. Wills

I shall revert briefly to engineering, which was the subject of the hon. Gentleman's original question. Of course I recognise the importance of that sector, and I am delighted to see that it is growing at 2.2 per cent. at an annualised rate, compared to the equivalent quarter last year. All hon. Members will welcome that evidence of growth in engineering.

Mr. Barry Jones (Alyn and Deeside)

Does my hon. Friend accept that a prime example of successful engineering manufacturing is the aerospace industry? With that in mind. may I persuade him to make available only £550 million investment launch aid for the Airbus 3XX project? That will create thousands of new jobs. By scheduling my constituency as an assisted area, our right hon. Friend is giving a tremendous boost to engineering manufacturing in my constituency for the next century, and my people thank him for that.

Mr. Wills

I am grateful to my right hon. Friend for those remarks. I know that the application for launch aid is now in, and I can assure him that it will be considered carefully and in great detail as he would expect.

Mr. Peter Brooke (Cities of London and Westminster)

What is the reaction of the Government, who made a lot of noise about competitiveness when they were in opposition, to the sharp fall in the United Kingdom's place in the world competitiveness league announced in Switzerland this week?

Mr. Wills

Of course we are doing everything we can to make sure that this country improves its competitive position. We inherited from the Conservative party not a golden legacy, but a situation that was severely threatening to all our manufacturing industry and businesses. We are taking every step to ensure that that is put right. Having put an end to the boom and bust that characterised the years that the Conservative party spent in government, we have created a new climate of stability, which is the core foundation for economic success. We have cut corporation tax to the lowest levels ever and we are creating a properly competitive environment in which business can flourish and prosper.

Mr. Hilton Dawson (Lancaster and Wyre)

Is my hon. Friend aware that he has brought real hope to the manufacturing industry of Lancaster with the announcement that he has made today about levels 2 and 3 assisted area status for the city? Is he further aware that there is singing and celebration throughout the streets of that glorious city because of the coupling of that announcement with the fine announcement on single regeneration budget funding for the Luneside regeneration project? Is he looking forward to his visit to Lancaster on 5 October? Not only will he be celebrated throughout the entire city for putting the benighted Tory years behind us, but he will hear evidence and information about how we intend to use the money well to bring Lancaster back to full employment and prosperity.

Mr. Wills

I have listened to my hon. Friend's eulogies about Lancaster for many months and I am delighted that I am to visit that great city. I am looking forward to that and I welcome his words of thanks about the work that we have put in on the assisted areas map. We have tried to address real need throughout the United Kingdom and I am delighted to hear that we have succeeded.

Mr. Roy Beggs (East Antrim)

The policies being pursued by the Government have safeguarded existing jobs in Northern Ireland, and indeed have helped it to attract new investment, but will the Minister and his Department be very conscious of the fact that electricity costs in Northern Ireland are the highest of any region of the United Kingdom? We in Northern Ireland have reached our emissions target through the introduction and use of gas, but will he consider seriously the adverse impact—and the damage to stability, prosperity and peace that could be caused if jobs were to be lost—of increased costs for manufacturing industry caused by the climate change levy?

Mr. Wills

I recognise the hon. Gentleman's concerns. I understand that there is now connection through an interconnector, which ought to bring costs down in the future. Let me say three things in relation to the climate change levy. First, there will be no overall increase in taxation. Secondly, of course we need to promote competitiveness, but we also need to balance that goal with the need to promote sustainable development. Thirdly, we recognise that the energy-intensive sectors have a special case and we intend to set significantly lower rates for them.