§ 6. Dr. Vincent Cable (Twickenham)What criteria he uses in deciding which sectors receive selective industrial assistance. [120510]
§ The Secretary of State for Trade and Industry (Mr. Stephen Byers)All sectors are eligible to apply for assistance, subject to European Union restrictions. Aid to firms operating in certain sectors, such as coal, steel, shipbuilding and motor vehicles, is governed by other European codes.
§ Dr. CableSo that business can be reassured that assistance is provided on a genuinely objective, nondiscriminatory basis free of political interference, will the right hon. Gentleman explain the logic that has led the Government to find help, as he says, for the coal, steel, car, ship and other industries, but not for the chemical, textiles, paper-making and other sectors that have faced the same competitive pressures and difficulties in the job market? Can he give examples from his period as Secretary of State of when he has declined industrial assistance for applicants from particular sectors?
§ Mr. ByersWe look at three broad matters when considering assistance. First, we need to support investment—either inward investment to attract a mobile project that could go anywhere in the world or projects such as the airbus initiative, where investment is made in the form of launch aid, which is repaid to the Government. Secondly, we need to ensure that competition is not unfair. For example, we must ensure that our shipbuilding industry is not at a disadvantage, given that the industry in other parts of Europe receives Government support.
1000 Thirdly, we need to assist industry through the process of change. That was one reason why we provided £100 million to the coal industry, where the process of change occurred because of the lifting of the stricter gas consents policy. There is therefore a rational approach to those matters that does not discriminate against particular sectors. We are considering how we might be able to support the textiles industry in a way that falls within those three principles.
§ Judy Mallaber (Amber Valley)Will my right hon. Friend note the observation in the consultation document from the national textiles and clothing strategy group, which the Department is considering, that take-up of regional selective assistance by textiles and clothing companies is remarkably low? Will he undertake to ensure that the officials who administer regional selective assistance and the enterprise grants take a positive attitude to investment in our eighth largest manufacturing industry and, specifically, that they encourage textiles and clothing companies to make applications for assistance and help so that take-up is increased?
§ Mr. ByersMy hon. Friend raises an important point. We are looking at the responses that we have received through the consultation process on the textiles strategy and we shall announce our conclusions in a few weeks' time. I will ensure that my hon. Friend's comments are taken on board as we arrive at our conclusions. She also raises an important point about employment in manufacturing. While recognising that there have been difficulties in recent times for certain sectors of manufacturing, it is important to set them in the historical context.
Since we took office, between May 1997 and February of this year 160,000 jobs have been lost in manufacturing. I regret that 160,000 jobs have been lost in manufacturing in almost three years, but it is worth comparing that with the average fall in employment for each year under the Conservative Government from 1979 to 1997: for each of those 18 years, 140,000 manufacturing jobs were lost. That is the Tory record on manufacturing—one of neglect. This Government's record is one of continued modernising investment.
§ Mr. Nick Gibb (Bognor Regis and Littlehampton)Can the Secretary of State confirm that there is deep unease in the ranks of senior civil servants in his Department over the shambles of his industrial policy and that, as a result, he has taken the unprecedented step of moving a number of senior policy advisers to other parts of the Department? In particular, can he confirm that Michael Atkinson has been removed as the director of the coal unit and sent to the resources and business competitiveness group, and that Alan Wright has been removed as director of the coal health claims unit and sent to the finance department? If that is correct, can he tell the House the reasons for those moves?
§ Mr. ByersI gave the hon. Gentleman a parliamentary reply a few days ago that put all that on the record, so he should just read the official record and find out. These issues are decided by the permanent secretary; I have had no involvement in them. It is wholly appropriate that that should be the case.
§ Mr. Dennis Skinner (Bolsover)If any of those civil servants were around when the Tories shut the 31 pits in the early '90s, then good riddance to them. I hope that my right hon. Friend played a part in moving them.
The reason why it is necessary to refer to selective assistance is that I, as a firm believer in intervention in the labour market, believe that, if it is correct to pay out large subsidies to farming interests, it cannot be wrong to assist where it is necessary in the industrial market generally, so it would not worry me at all. In fact, I would be pleased to know that, from now until the next general election, my right hon. Friend and others will make statements here to say that they are intervening before breakfast, dinner and tea to ensure that British workers keep their jobs. One thing is absolutely certain: unemployment has fallen for a good number of years. We want to ensure that it does not start rising before that next election is called.
§ Mr. ByersThe issue of intervention is important. I disagree with my hon. Friend on these matters, and he knows it because we have debated them at length. My view, and that of the Government, is that there should be a presumption against intervention. We need to look at the three areas where we are prepared to intervene very much as exceptions. The reason is that history shows that, in the long run, intervention and state subsidies do not build strong, profitable companies. It is only by having strong, profitable companies that we will have long-term employment.