§ 7. David Cairns (Greenock and Inverclyde)What estimate she has made of the number of manufacturing jobs in the UK electronics sector that have been lost to eastern Europe in the last five years. [130822]
§ The Minister for Industry and the Regions (Jacqui Smith)In the face of stiff global competition, UK electronic manufacturing jobs, particularly lower value-added ones, have moved to other parts of the world including eastern Europe. That is why the Government have set up, with industry, an electronics innovation and growth team to establish a long-term strategy for the sector to compete globally, exploiting its strengths.
§ David CairnsI thank my soon-to-be right hon. Friend for her answer. May I tell her that in the last few months alone my constituency has lost several hundred jobs in the electronics sector to eastern Europe, with the prospect of more to follow? We cannot compete with the wage rates being offered in eastern Europe or China, and nor should we try, but the electronics sector has been good for my constituency and good for the UK economy over many years. What assurances can she give my constituents that this Government remain committed to a strong and vibrant UK electronics 1062 industry, and what practical steps can we take to ensure that good, high-paid, high-skilled jobs can be retained in Scotland and elsewhere?
§ Jacqui SmithMy hon. Friend has been an important champion for the electronics industry in his constituency. Rightly, however, he understands and emphasises the need to ensure that we concentrate, as the Government have said in their manufacturing strategy, on how we move those industries up the value chain to focus on higher-technology, higher value-added production and jobs. That is the task for the innovation and growth team, who are starting by assessing the global competitiveness of the electronics industry, but who will be developing a programme for the future development of the electronics industry and making specific recommendations to Government. I expect that to help with some of the encouraging signs that we are seeing in the electronics industry, which I was able to discuss yesterday with the Engineering Employers Federation. I would also expect that to impact on my hon. Friend's constituency, where, clearly, electronics, and particularly that more sophisticated work, is crucial to his constituents.
§ Mr. Robert Key (Salisbury)Only yesterday, my constituent, Kate Williams, e-mailed me to say that at the ripe old age of 21 she was concerned for her job. Are there any international treaty obligations, trade arrangements or codes of practice, in an increasingly globalised economy, whereby the Government are concerned to ensure that the impact on the countries that are taking those jobs is not to their disadvantage in the longer run? That applies not only across the electronics industry but in financial services, too.
§ Jacqui SmithThe hon. Gentleman, as we all are, is rightly concerned about the job and economic prospects for his constituents. The emphasis that we need to place, however, not only in electronics but more broadly in manufacturing—and the emphasis that this Government, in the first manufacturing strategy for 30 years, have placed—is on both the practical support and Government action necessary to ensure that we build our manufacturing industry on the basis of high-value-added jobs with high pay and high levels of skills. I assure the hon. Gentleman and his constituents that that is what we have planned and what we will do.
§ Mr. Martin O'Neill (Ochil)Can my hon. Friend tell us what she proposes to do to help secure those more highly skilled jobs? One of the difficulties of the flight of jobs eastward has been that, in the main, they have not been of the highest order and skill content. The people who are left are not yet properly equipped to take on the kind of employment for which she has ambitions. In the interim, it is essential that we do far more in those particularly vulnerable areas to get the skill levels up. Although that is not exclusively the responsibility of the DTI, it is a matter on which she could surely act and lever more resources to get these people the skills they require to become potentially attractive employees.
§ Jacqui SmithMy hon. Friend raises a crucial point. When talking about jobs moving perhaps from assembly and straightforward manufacture in the 1063 electronics industry to the configuration of systems and support for those systems, it is certainly the case that we need to focus on skills. That is why one of the key elements of the manufacturing strategy is the development of skills and why my right hon. Friends the Secretaries of State for Trade and Industry and for Education and Skills published the skills strategy just before the recess. We shall focus on how we can ensure that there will be a better response to employers' needs and the delivery of skills for precisely the sort of workers about whom my hon. Friend talks. Specifically on electronics, SEMTA, the new sector skills council that covers electronics, was licensed in April. I know that it, the Department of Trade and Industry, the Department for Education and Skills and the devolved Administrations in Scotland are working hard to ensure that we make the UK No. 1 for the supply of skills for information technology, telecommunications and electronics because that is how we shall make the electronics industry a success and provide opportunities for the constituents of my hon. Friend and others who work in the electronics industry.
§ Michael Fabricant (Lichfield)The hon. Lady is quite right to point out the difference in wage costs, but that is not the whole picture, is it? There are more reasons why companies such as Siemens up sticks and move across to Germany and why Xarr in Cambridge moves to Sweden than only differential wage costs. That happens because the growth of this country's productivity since the Labour Government got in is only half that recorded when the Conservative Government were in power. We now find out from the European Union that our monthly wage costs are the second highest in the EU—Germany and France are cheaper than us. How will she reverse that damaging trend?
§ Jacqui SmithThe first thing that I shall not do is to take lessons on job creation from Conservative Members. However, they fairly highlight the challenge that the Government have taken up to ensure that we improve productivity and competitiveness for our manufacturing industries. As I have spelled out on our manufacturing strategy, we have not only outlined the problem but put in place macro-economic stability and supply-side policies, which the Conservative Government were unwilling to do. They will make a difference to our manufacturing industry, safeguard high-quality jobs and provide the wealth for this country that the Conservative Government so sadly failed to do in relation to the manufacturing industry.
§ Andy Burnham (Leigh)May I welcome yesterday's news that unemployment is at its lowest level since 1975 but urge the ministerial team not to allow celebrations to obscure the fact that severe problems exist in manufacturing, especially in areas such as Leigh? In August, the electrical components manufacturer Electrium announced its closure in my constituency, which will result in the loss of 160 jobs. That is the seventh major redundancy in the past two years in the manufacturing sector and, in total, more than 1,400 jobs have gone. Will my right hon. Friend speak urgently to the Northwest Development Agency to examine the problems in our local manufacturing base and, 1064 especially, to find out whether more help could be given to the manufacturers that remain, such as Barlo engineering in Leigh?
§ Jacqui SmithI hope that my hon. Friend does not believe that we are complacent. I would like to characterise us as having a steely determination to ensure that UK manufacturing industry is able to come out of that situation in the face of significant global competition and challenges and be as profitable and significant for the UK economy as we know that it should. As I said, I spoke to the Engineering Employers Federation yesterday about its view on optimistic signs for the engineering industry and its strong view—with which we completely concur—that we need continued Government action on innovation, skills and investment to create the manufacturing industry that we all want.
My hon. Friend also raises an important point about the role of regional development agencies, which now have more funding, more flexibility and a more specific remit for working in the manufacturing sector. The Northwest Development Agency will play an active role in both safeguarding and creating high-quality manufacturing jobs.