Manufacturing (Hansard, 16 November 1992)

§ Mr. Heseltine

[holding answer 12 November 1992]: I fully appreciate the vital role manufacturing industry plays in securing the United Kingdom's long term prosperity. The underlying theme of the Government's policy towards manufacturing industry is to help businesses to win in the increasingly international market place, both at home and abroad.

The first strand of the Government's strategy is to create the right climate for manufacturing industry to thrive. Low inflation is the key to sustainable growth. Interest rates are now at their lowest level for nearly 15 years. The cut by 8 percentage points over the past two years represents a £10 billion a year reduction in industry's costs. Industry is also now able to take advantage of a very competitive exchange rate.

Secondly, DTI and ECGD assist manufacturing industry. In order to achieve this there must be an effective dialogue with industry. I have recently reorganised the DTI to help in this by creating a clear contact point for each sector of manufacturing industry. I have also established an industrial competitiveness division, which among other functions is examining what lessons can be learnt from other leading industrial countries.

My current initiatives include strengthening our support of exporters. A further £700 million of ECGD cover is being made available, and some of the constraints on cover for individual countries eased. So as to help exporters take advantage of the current opportunities I have now invited over 100 British companies to second 100 top quality men and women to DTI to help in our export promotion work.

I am also working with the CBI, chambers of commerce, training and enterprise councils and local authorities on arrangements for one stop shops to provide support and advice for smaller businesses.

Thirdly, other Government policies are important for the health of manufacturing industry. Examples include initiatives like the TECs to help provide the training and enterprise support best suited to local needs, and those set out in the recent White Paper on education which are designed to help provide industry with the future work force it will need.

A very clear example of the importance of wider Government policies is the autumn statement. The abolition of special car tax will bring benefits not only to the automotive industry, but also to its suppliers. It will also help customers, many of whom are industrial. The measures on capital allowances should also assist British industry not only by helping each firm to invest but also by enhancing the domestic market for United Kingdom manufacturers. Similarly the new arrangements for 73W leasing, and for the private financing of capital projects, create new opportunities for British businesses. This is in 74W addition to those which will arise from the priority given by the Government to capital expenditure within the tight overall public expenditure settlement.