Inward Investment (Hansard, 9 March 2000)

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, there is strong competition from other countries for internationally mobile projects. Projects which do not come to the United Kingdom still generate competition for UK companies. It is sensible to secure the benefits of such projects for the UK where we can. Benefits include supply chain opportunities for existing companies, the creation of new jobs and the introduction of new products and new processes.

§ Lord Wallace of Saltaire
My Lords, I must declare an interest. This is a question about Saltaire. Is the Minister aware that both Pace Micro and Filtronic, companies that have their headquarters in Saltaire, have strongly emphasised their efforts to train electronic engineers and technicians in West Yorkshire? Is he also aware of the attempts of the regional development agency to attract in competing foreign investment without making any comparable plans to provide additional training and thus to alleviate the sharp shortage of qualified staff? Is the Minister aware that the shortage of qualified staff in West Yorkshire is due to the happy growth of those companies? Is he also conscious that encouraging Korean, Taiwanese and other companies into the area may lead to inflation and damage British companies?

§ Lord Sainsbury of Turville
My Lords, it is open to any region that does not want to receive prospective investors (because it believes that they will pinch skilled labour) to inform the Invest in Britain Bureau so that that region is not included in any visits from foreign investors. However, I believe that that would be an extraordinarily short-sighted view to take. I agree that it is better to focus on, and to take action to rectify, the identified skill shortages in the region. The regional development agency is in a good position to do that. A further weapon will be the learning and skills councils when they are setup. I believe that the problem should be faced on the skills level and not by trying to keep high technology jobs out of the region.

§ Lord Roberts of Conwy
My Lords, is it not a fact that as inward investors in receipt of grants from the 1154 Government have to source a high proportion of their materials in the United Kingdom, the growth of inward investment is therefore a great advantage to UK companies?

§ Lord Sainsbury of Turville
My Lords, I took that as read. Clearly, we want to attract companies to this country. If such companies do not come here, they will go to other countries and compete against businesses here, which will be of no advantage to them, and competition will be increased. If companies come to this country, all sorts of advantages ensue, not only in terms of bringing in high-skilled jobs, but, as the noble Lord rightly pointed out, in terms of the supply chain.

§ Lord Marsh
My Lords, does the Minister believe that there is possibly something wrong with the management of a company that is incapable of planning its labour resources and of attracting labour if it experiences any competition?

§ Lord Sainsbury of Turville
My Lords, I can understand the position of a company that has taken a lot of trouble to build up a skilled staff; but there will always be competition and if that does not come from foreign companies, it is likely to come from expanding companies within the region. One has to assume that the way to deal with that is through building up skills rather than trying to keep out competition.

§ Lord Barnett
My Lords, can my noble friend make it clear whether he is in favour of inward investment? I do not believe noble Lords on either side of the House are opposed to the single market, it having been introduced by the noble Baroness, Lady Thatcher. Do the Government agree that inward investment is not something that we should oppose?

§ Lord Sainsbury of Turville
My Lords, a major task of the DTI is to attract investment into this country. That is done on the basis that it is good for the economy. I assumed that that was understood in the House and that it was not in dispute.

§ Baroness Buscombe
My Lords, does the Minister agree that it is particularly surprising to see such a Question on the Order Paper in view of the enormous benefit that this country derives, in terms of employment and prosperity, from inward investment, and that it is particularly surprising coming from a party which, given half a chance, would sell us out to a federal united states of Europe and a single currency?

§ Lord Sainsbury of Turville
My Lords, one should never be surprised by Questions on the Order Paper. I thought it was in the same category as the third Question on the Order Paper, on beavers!

§ Lord Peston
My Lords, I believe that the noble Baroness speaking from the Opposition Front Bench has missed a trick. What is really surprising is the fact that the Liberals used to believe in free trade. One wonders when they abandoned that position. Does the 1155 Minister believe that inward investment is the most positive and heartening sign of the world's faith in the success of the British economy? Is not that why we should be in favour of it rather than against it?

§ Lord Sainsbury of Turville
My Lords, of course, inward investment has huge benefits. Equally absurd would be a policy that actually tried to encourage companies to come to this country that were low skilled and did not require highly skilled labour. That is exactly the sort of policy of the past from which we are trying to get away.

§ Lord Tebbit
My Lords, does the Minister agree that this is not a new issue? It is a very old question with which the Liberals have now caught up. Nissan came to this country when I was Secretary of State for Trade and Industry. There was some criticism then (for all sorts of xenophobic reasons that Liberals put forward), but that company has contributed not only to the motor industry, but also to the improvement of management skills of all kinds, which have been transferred into the economy at large.

§ Lord Sainsbury of Turville
My Lords, I am absolutely amazed that I agree with the noble Lord on an issue on industrial policy.

§ Lord Stoddart of Swindon
My Lords, can the Minister confirm that inward investment is good, particularly for those of us who believe in free trade? Can he also confirm that this country and its firms invest far more abroad than people from abroad invest here?

§ Lord Sainsbury of Turville
My Lords, we have high ratios in terms of both attracting inward investment and our companies investing abroad. Therefore, we are particularly dependent on free trade and the free movement of capital in such areas, which is greatly to be encouraged.

§ Lord Wallace of Saltaire
My Lords, can the Minister confirm that Pace Micro and Filtronic have invested a great deal in training staff, including a new MSc course at Leeds University, subsidies for maths teachers at nine schools in Bradford, and subsidies for people to take further maths and physics at A-level? That has all been carried out at their own expense and has not yet been fully supported by regional authorities. Did I understand the Minister to say that in future RDAs will co-ordinate with regional training requirements when considering inward investment to ensure that those skills are provided and that our home-grown companies are not left to train their staff without any assistance from the Government?

§ Lord Sainsbury of Turville
My Lords, the RDAs should look carefully at the skill requirements which follow from inward investment and seek within their powers to take account of that. I confirm that Filtronic received a grant of £5 million to create 500 high quality 1156 jobs at the old Fujitsu plant at Newton Aycliffe, County Durham. I have no doubt that that also had an effect on the local supply of labour.