HC Deb 09 May 2002 vol 385 cc268-70
7. Mrs. Annette L. Brooke (Mid-Dorset and North Poole)

What assessment he has made of trends in manufacturing output in the south-west since January 2001. [53549]

The Financial Secretary to the Treasury (Mr. Paul Boateng)

The Government's latest assessment of developments in the manufacturing sector, based on all relevant factors, was published on 17 April in Budget 2002. Manufacturing in the south-west, as in the rest of the United Kingdom, was clearly influenced by the synchronised global slowdown in the aftermath of 11 September. Manufacturing output fell back in March, but is expected to accelerate during the second half of 2002 and well into 2003 as stronger global demand feeds through.

Mrs. Brooke

In light of the CBI's great pessimism for the south-west, how significantly will the Budget measures this year contribute to at least reversing the current trend in manufacturing, jobs and optimism? How will the measures redress the balance between the housing boom and the failing manufacturing sector?

Mr. Boateng

The hon. Lady will appreciate that the cuts in corporation tax, the R and D tax credit, the simplified package of VAT for businesses, and the action that we have taken across the piece to create, through the regional development agencies, a climate of enterprise in the south-west and elsewhere will all contribute to the improvement in manufacturing in the south-west. She is wrong to suggest that the CBI is pessimistic about the south-west. Only today, Mr. Doug Godden of the CBI stated: There are signs that the worst is over. Manufacturing is expecting to increase production in the months ahead. I do not call that pessimism.

Mr. Adrian Sanders (Torbay)

The Government take great credit for the fact that unemployment has fallen month by month over the past 12 months, but in my constituency it has risen month by month in the past 12 months. More than 5,000 manufacturing jobs have gone in Opto Electronics. How does putting a tax on national insurance help in an area that suffers from high unemployment and wants more jobs, when a tax on income may well have helped my area?

Mr. Boateng

Both business and the country as a whole are agreed that it is important that we invest in our public services. There is a direct feed-across between public health and business. Business gains when health is delivered in ways that reduce absenteeism, business gains when the health of the nation is improved, and business is prepared to make its contribution to what we are seeking to achieve in the national health service—a major contribution from that service to the health and well-being of the entire nation.

Mr. James Gray (North Wiltshire)

It is only three years since the Chancellor of the Exchequer came to my constituency with a great fanfare of new Labour trumpets to open the expanded Dyson bagless vacuum cleaner factory in Malmesbury, a town of 4,000 people. Mr. Dyson announced recently that he would lay off 1,000 people, not as a result of what is described by the Minister as a synchronised global slowdown, whatever that may be, but because he cannot continue to manufacture vacuum cleaners in the United Kingdom. What is the Minister's explanation to the people of Malmesbury as to why his right hon. Friend's mate Mr. Dyson has laid off 1,000 people in my constituency?

Mr. Boateng

The hon. Gentleman must get real and appreciate what is happening across the globe in manufacturing and the global economy. That is what is synchronised—it is happening in all continents post-11 September. He also needs to understand, in relation to his specific example, that Dyson's is upping its R and D investment in our economy. That is what we are seeking to achieve: high value and high skills. That is good for the economy and good for Britain, and it will be good for the hon. Gentleman's constituents.