HC Deb 11 May 2000 vol 349 cc992-4
2. Mr. Mike Gapes (Ilford, South)

If he will make a statement on the future of motor vehicle manufacturing in the United Kingdom. [120505]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

The year 1999 saw the highest number of cars produced since 1972. Although we recognise that there will be changes in the sector, we are confident that it will remain as a major employer in the UK.

Mr. Gapes

If Ford announces the ending, after 70 years, of car assembly at Dagenham, a devastating blow will be dealt to the economy of east London and to many of my constituents who work there, and there will be serious knock-on consequences throughout the region. Will my right hon. Friend hold urgent discussions with the company, trade unions, local authorities and the Thames gateway partnership, to see what can be done either to continue some form of car assembly at the plant, or, if that is not possible, to ensure that there is massive investment and training to regenerate the economies of east London?

Mr. Byers

I assure my hon. Friend that discussions have already taken place with the company, trade unions and those involved in local regeneration projects, such as the Thames gateway partnership. If, as expected, Ford announces tomorrow the ending of car production at Dagenham, we hope to delay implementation of that for as long as possible so that people can be taken through the process of change and be equipped to deal with their altered circumstances.

In the light of tomorrow's expected announcement by Ford, we shall announce a plan for the regeneration of Dagenham and the local area. The plan will be based on training to provide skills to those who do not currently have them and to improve the level of existing skills, supporting the setting up of small businesses, modernising manufacturing in the locality, introducing new manufacturing and attracting inward investment. Our objective is to provide new jobs for the future to replace those that might well be lost as a result of the announcement that Ford will make tomorrow.

Mr. John M. Taylor (Solihull)

The Gaydon research centre in south Warwickshire is not in my constituency, but some of my constituents go there. It is rumoured that Ford is likely to acquire the centre. Is Ford likely to sustain the current activities that take place there?

Mr. Byers

It is not yet clear whether Ford will say anything specifically about the acquisition of Gaydon from BMW in its announcement tomorrow. We know that as a result of the acquisition of Land Rover in Solihull, in the hon. Gentleman's constituency, Ford is carefully considering the acquisition of Gaydon because much of the work that goes on there is linked directly to Land Rover. Ford is going through due diligence with BMW in relation to the acquisition of Land Rover and the negotiations are not yet completed, and will not be until June or July, but I can reassure the hon. Gentleman that we are still talking to Ford, and indeed BMW, about those outstanding matters.

Mr. Martin O'Neill (Ochil)

The interest that Ford continues to take in the United Kingdom economy and in automotive production—be it vans, Jaguar or Land Rover—shows that it is still committed to Britain. There is gross overcapacity across the motor industry because we are producing far more cars than we can sell. Will my right hon. Friend ask the manufacturers to adopt a more realistic approach and not lurch into crises, given that people have known for years that too many cars are being produced and that there are not enough people to buy them? That is the problem that we have in the car industry, and it is the fault not of the workers but of the marketing people who look at the world through rose-coloured glasses.

Mr. Byers

My hon. Friend makes a most important point. The review of its European operations that Ford is now conducting has been motivated not by the strength of sterling or by the employment laws in the United Kingdom but by the fact that there is overproduction in the European market, running to about 20 or 25 per cent. Tomorrow's announcement will be a mixture of good and bad news, but it will be clear from it that Ford will remain committed to the United Kingdom and that we will still have Ford as a major employer in this country.

Mrs. Angela Browning (Tiverton and Honiton)

Under this Government, the UK has slipped from fourth to eighth in the world competitiveness league. There is more that the Secretary of State could do to help our manufacturing industry, and the motor industry in particular. When will he start reducing the extra £30 billion of taxes that the Government have imposed on business? When will the Government start cutting the extra £10 billion of regulatory costs that business now has to bear? Is not it about time that he rolled up his sleeves and started to do a bit of cutting back himself?

Mr. Byers

I regret the fact that the hon. Lady has clearly not seen the latest manufacturing output figures which were published this morning. If she had, she would have seen that between February and March manufacturing output grew by 0.4 per cent. Indeed, in the first quarter of this year, it rose by 1.6 per cent. compared with the first quarter of last year. Manufacturing in the United Kingdom is not in crisis, as the hon. Lady would like to claim. It is strong, where there has been investment, and productivity has improved. That is the reality of the situation. It is about time that the hon. Lady put facts before prejudice.

Mr. Mark Todd (South Derbyshire)

May I first relate the concern of Toyota in my constituency at the continuing high value of sterling and its effect on its competitiveness? What representations has my right hon. Friend made to the Monetary Policy Committee and the Chancellor on the subject? May I also draw his attention to the continued opportunity for inward investment in this country through the retention of the Rolls-Royce car brand, which is currently owned by BMW?

Mr. Byers

I hope that, in the not-too-distant future, BMW will be able to say something about its intentions regarding the Rolls-Royce brand. I know that it is giving detailed consideration to the issue. My hon. Friend raises an important point about the value of sterling, particularly in relation to the single European currency. The current euro-sterling exchange rate cannot be justified by any view of the long-term economic fundamentals, and I would hope that, when people consider the position and look at those long-term fundamentals, they will realise that.

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