§ 3. Mr. John MacDougall (Central Fife) (Lab)
What measures she is taking to ensure that UK industry is competitive; and if she will make a statement.␣
§ The Minister for Industry and the Regions (Jacqui Smith)
Since the implementation of the Government's manufacturing strategy in 2002, a range of measures has been taken to improve business performance and competitiveness. For example, the manufacturing advisory service has become a huge success as a source of practical help for manufacturers throughout England and Wales, generating more than £67 million of added value since 2002—around £100,000 for each company with which it has worked. We have also doubled our support for science and innovation. In June 2004, we announced a 10-year science and innovation investment framework, giving a sustained long-term boost to science funding.
§ Mr. MacDougall
I am grateful for that response. However, does my right hon. Friend agree that we must continually examine areas in which we compete in view of developments in countries such as China, where £50 a week is considered a good wage? Should we not consider the impact of that on our ability to compete in whichever markets seem to be in the best interests of the country's development, and must not our response to that challenge be based on our educational and training abilities and, indeed, our inventiveness?
§ Jacqui Smith
My hon. Friend has identified the key challenge for manufacturers—the global competition 1438 that they face. He is absolutely right: we cannot compete in the world today on the basis of low wages, nor should we want to. As he says, we must compete on the basis of innovation and high skills, building on our inventiveness. That was the key point in the progress report on the Government's manufacturing strategy, which we published in July. Also, through the manufacturing forum that we are to establish we will chase progress on our action plan.
§ Mr. Mark Field (Cities of London and Westminster) (Con)
As the Minister will recognise, since 1997 Britain has fallen rapidly down the world competitiveness league table in comparison with other leading industrial nations. Why does she think that has happened?
§ Jacqui Smith
What I recognise is that many independent assessors acknowledge that the United Kingdom is actually one of the most competitive and best places in the world in which to do business. They also recognise that under the hon. Gentleman's party we saw the decimation of our manufacturing industry and a failure to invest in the things that make a difference—skills and innovation. I am afraid that the Conservatives have not learned their lesson. Their proposals for cuts in the Department of Trade and Industry—
§ Mr. John McFall (Dumbarton) (Lab/Co-op)
The Minister will be aware that for the UK to be competitive, good corporate governance is essential. Auditing is a central part of that. My right hon. Friend will also know of the campaign by the big four accountancy firms to cap auditor liability. Will she cast a wary eye over it before the Government give in to this case of special pleading?
§ Jacqui Smith
My right hon. Friend will know from the discussions last week, from the discussions this week in Committee on the Companies (Audit, Investigations and Community Enterprise) Bill and from the consultation last December, that we have set out clearly what our objectives for audit need to be. Those are a competitive audit market, the ability for businesses to get audits and ensuring that quality is raised. We will judge any proposals for changes to auditor liability against those objectives. We set out the details of what we will and will not accept in the written ministerial statement last week. We are prepared to look at further measures that would pursue those objectives. We are clear that that is what we need in terms of any reform.
§ Mr. Stephen O'Brien (Eddisbury) (Con)
It is the vast gulf between what the Government say and what they do that is undermining UK competitiveness. To be precise and to give the answer that the Minister should have given my hon. Friend the Member for Cities of London and Westminster (Mr. Field), we know from the World Economic Forum's global competitiveness ranking that the UK has slipped from fourth to 15th place since Labour came to office, not least through the over-regulation of British business under this Government.
Let us consider the use of sunset clauses, which put time limits on business regulations, for example. The 2001 Labour party manifesto, to which all Labour 1439 Members signed up, pledged to use sunset clauses. The Cabinet Office has issued guidelines to civil servants telling them that theymust always consider whether sunsetting…is appropriate".Why, then, did the Minister for Small Business and Enterprise describe sunset clauses in June 2004 as "the quack cure"—
§ Jacqui Smith
I must draw the hon. Gentleman's attention to the World Bank study of 145 countries, entitled "Doing Business in 2005", which placed the UK top in the EU with the best business conditions. It said thatall the top countries regulate but they"—the UK—do so in less costly and burdensome ways.We will not make any apology for regulating to ensure decent working conditions in this country. The hon. Gentleman, through his sunset clauses, wants to take those opportunities away from our work force.
§ Mr. O'Brien
Well, that is another broken promise from the 2001 Labour party manifesto. There is not a single example of a sunset clause being used, and on average there have been 4,000-odd regulations a year under Labour.
Let us take one other example of the threat to the UK's competitiveness. Does the Minister agree that if she scraps Britain's opt-out from the EU working time directive preventing people from working more than 48 hours a week, our constituents will be justified in concluding that she will be abolishing the chance for hard-working men and women in this country to do overtime?
§ Jacqui Smith
On top of the decent working conditions that we put in place, we recognise the importance of flexibility in the labour market and the ability for workers to choose with respect to the opt-out. That is the position that we have taken in our negotiations in Europe. It is a bit rich for Conservative Members to lecture us on employment when it is under this Government that there are 1.9 million more people in work, and it was under the hon. Gentleman's Government that people were thrown on the scrap heap.
§ Jonathan Shaw (Chatham and Aylesford) (Lab)
In order to continue to be competitive, many intensive energy industries, especially the paper industry, are keen to move to combined heat and power, but at present it is not cost-effective for them to do that. The Government published their CHP framework in April. Is my right hon. Friend able to shed any light on whether any progress has been made on that framework?
§ Jacqui Smith
Perhaps I can provide my hon. Friend subsequently with some more detail about the progress on that, but the important point is that we must, in our energy policy, both deliver the environmental objectives that we have set out—we are working across Government, including with the Department for 1440 Environment, Food and Rural Affairs on that—and provide the security of supply and the energy options necessary to ensure that our industry is successful.