HL Deb 27 March 2001 vol 624 cc93-5

2.45 p.m.

Lord Islwyn asked Her Majesty's Government:

What steps they are taking to stimulate manufacturing industry.

Lord McIntosh of Haringey

My Lords, we are helping manufacturing industry by creating a stable macro-economic climate and by pursuing policies that help firms to innovate, to develop the skills of their workforce and to grow.

Lord Islwyn

My Lords, has the steel-maker Corus turned down the imaginative plan drawn up by the Iron and Steel Trades Confederation to save 6,000 jobs in the steel industry? The plan calls for part-time shifts, with the rest of employees' time being spent on training. It would be funded by the Government and by Corus. Does the Minister appreciate that according to an eminent QC—namely, Cherie Booth—the plan would pass European state aid rules? Finally, does he agree that no stone should be left unturned to save those jobs, which are in areas that can ill afford to lose them?

Lord McIntosh of Haringey

My Lords, I certainly agree with my noble friend that the loss of jobs from the steel industry in South Wales—and on Teesside—would be tragic and that everything possible should be done to preserve them. I understand that Corus and the steel trade union had a meeting this morning. We have not heard the outcome of that meeting. Among other things, they were due to consider the proposal for an application under Article 95 of the European Coal and Steel Community treaty for an aid programme containing a significant training aid component. The Government would be willing to support such an application, but I should not disguise the fact that it would be very difficult and would need the active collaboration of Corus and the trade unions.

Lord Campbell of Croy

My Lords, might not one helpful measure be to make further adjustments to the climate change levy for energy-saving industries? Incidentally, that would also help agriculture, which needs all the help that it can get now.

Lord McIntosh of Haringey

My Lords, the climate change levy is revenue-neutral as a whole, but it is bound to affect high energy-use industries. There are derogations from it for parts of the steel industry, as the noble Lord knows. Our view is that we have struck a proper balance between our Kyoto obligations and our obligations to our manufacturing industry.

Lord Ezra

My Lords, is the Minister aware that our deficit in traded goods last year, excluding oil, exceeded £34 billion? That is the highest figure on record, and the trend is still rising. Is not that a serious situation? Do the Government have a strategy to deal with it?

Lord McIntosh of Haringey

My Lords, this country's balance of trade in manufactured goods—if that is what the noble Lord is referring to—has been adverse for nearly every year since about 1862. I would rather look at the growth in manufacturing industry and in our manufacturing exports. In the fourth quarter of last year our manufacturing exports increased by 10 per cent over the comparable period the previous year. Even exports to the European Union, with which we acknowledge that we have an exchange rate problem, grew by 5 per cent.

Baroness Gardner of Parkes

My Lords, the future of the Cammell Laird shipyard could have been made much safer with the new luxury cruisers that were to be built there. The American firm Luxus was willing to do that if the Government were prepared to underwrite the project. Why have the Government refused to underwrite more than 50 per cent? The cruise liner business is expanding fast. We are not experts at it and the proposal would have been an opportunity for our manufacturing industry in a part of the country with high unemployment that needs such opportunities.

Lord McIntosh of Haringey

My Lords, I am unable to give an answer to the precise question about Cammell Laird put by the noble Baroness, Lady Gardner. Of course, she will be aware that, in turn, the Government must be conscious of the state aid restrictions of the European Union, which very largely are to our advantage.

Lord Stoddart of Swindon

My Lords, will my noble friend confirm that manufacturing industry as a percentage of GDP has fallen since 1973 from 32 to 19 per cent? In addition, does he agree that there is a point beyond which one cannot go if one wants to sustain a reasonably balanced economy in which manufacturing industry can perform? Therefore, will he consider an idea which has been put forward previously by the noble Lord, Lord Ezra, and, indeed, by myself that a Select Committee, similar to that set up in 1985, should be formed to consider the position of manufacturing industry and overseas trade?

Lord McIntosh of Haringey

My Lords, of course I acknowledge that in recent years the manufacturing share of GDP has gone down in this country, as it has in all developed countries. However, I can give some hope to my noble friend. We forecast that manufacturing industry will grow by 1.75 to 2 per cent this year and by 1.5 to 2 per cent in each of the two following years. Those forecasts have been in place for some time and have recently been confirmed.

As to the issue of a Select Committee of this House, that is, of course, a matter for the House authorities and the usual channels.