HC Deb 06 May 1999 vol 330 cc1077-9
9. Mr. John Cryer (Hornchurch)

What plans he has to promote an increase in the level of investment in manufacturing industry. [82366]

The Minister for Energy and Industry (Mr. John Battle)

One of the main factors holding back investment was the UK's record of macro-economic instability. Our Government have now put economic management on to a more stable footing and the recent competitiveness White Paper and the Budget introduced measures to encourage investment, especially in manufacturing.

Mr. Cryer

I thank my hon. Friend for that answer; he is correct. However, does he agree that the multilateral agreement on investment constituted a menace to British manufacturing and to investment in manufacturing, given the unstable nature of the world's financial markets and the number of multinational cowboys roving the planet?

Does the Minister agree that the proposals dreamt up by the European Commission in December, which basically amount to MAI mark 2, serve no purpose other than to act as an attack on living standards and on investment in manufacturing—not only in this country, but in other countries in the European Union? Does he agree that we should tell the EC to stick its proposals and to get on with what it knows best—maintaining the biggest gravy train in western Europe?

Mr. Battle

Like my hon. Friend, I am not into gravy trains. However, I understand that the MAI was dropped; our Government regarded it as flawed. As my right hon. Friend the Secretary of State has pointed out, it is fair to say that, in general, we are in favour of open markets, but we are determined to blend and hold together economic efficiency and social justice—nationally and internationally. We shall campaign and fight for that not only here, but in international forums.

Mr. John Wilkinson (Ruislip-Northwood)

If Her Majesty's Government's policies for manufacturing are so admirable, why have those who earn their livelihood from manufacturing been suffering so much? There is a squeeze on profit margins and, above all, a squeeze on employment. Is the Minister aware that the Trades Union Congress expects that no fewer than 250,000 jobs in manufacturing industry will be lost during this year and that the Confederation of British Industry records that, in recent months, the rate of job losses in manufacturing under this Government has been the fastest for six years?

Mr. Battle

As someone who comes from a city built on manufacturing throughout the 20th century, I saw that manufacturing base in my city sink from 52 to 22 per cent. of the economy under the previous Administration. There were 1.5 million jobs lost during the recession of the 1980s; under the Conservative Government, a million jobs were lost during the recession of the 1990s. Under the Labour Government, there are 400,000 new jobs; we have set about salvaging manufacturing from the wreckage of the previous Government's savage economic policies.

Mr. David Chidgey (Eastleigh)

Notwithstanding the comments that the Minister has just made, is he aware that the number of firms going into receivership has increased by one quarter during the first three months of this year, and that one third of them are manufacturing firms? It is indeed correct that jobs in manufacturing are now being lost faster rate than at any time during the past six years. Given the continuing high interest rates in this country and the continuing high value of sterling, does he accept that hundreds of firms are being driven out of business, and that that will not stop until the Government make a firm commitment on a programme for the UK to enter the euro?

Mr. Battle

In response to that general ragbag of proposals, I point out to the hon. Gentleman that our economy is not immune to international forces. I absolutely accept the pressure on manufacturing that now exists; I realise that—it is evident. However, we are putting in place the fundamentals to ensure that manufacturing has a chance in the future. All the measures that we have implemented—whether on corporation tax, or those introduced as a result of the competitiveness White Paper—will bolster and support manufacturing, when other people prematurely wrote it off. The hon. Gentleman should check his facts; he will find that long-term interest rates are currently the lowest for 30 years.

Mr. John Redwood (Wokingham)

With regard to modern industry, the Minister is living in a dream world. We all know that forecasters are saying that investment by many companies will fall or be slashed, and that jobs are being lost day by day.

Will the Minister explain what he and his colleagues are up to in relation to regional assistance? Is he planning big cuts in the map? Why has he delayed making the necessary announcement? Have Ministers met recently to decide to delay the timetable of publication of the new map not only until after today's elections, but until after the European elections?

Do not manufacturers need to know whether they will be eligible for grant support, at a time when investment is under so much pressure because of the bungled economic policies of this Government? Do not voters need to know today and on 10 June what the Government's plans are for the worst-affected industrial areas?

Mr. Battle

It is vital to get regional selective assistance right, but more than half the European countries have not yet submitted their plans. It is important to get it right; we shall get it right; and we shall publish the report in due course, at the appropriate time. I am tempted to point out that the right hon. Gentleman would have been first to jump up and accuse us of using the report for political ends had we published it during the election campaign. We are doing exactly the opposite.

On the subject of jobs, I repeat what my right hon. Friend the Secretary of State said: 3,000 new jobs have been created in Scotland and 6,500 in south Wales; more than 400,000 new jobs have been created under this Government; and a job has been created every two minutes for the past two years—that is different from what happened under the previous Government. We are working on that agenda and clawing back an economy that was sinking under the previous Administration.

On a personal note, in the privacy of the Chamber, may I ask the right hon. Gentleman whether he is really on the shortlist for the Institute of Directors job? Given the Tory prospects today, I think that we should be told.