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Judy Mallaber (Amber Valley): Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory: Will the hon. Lady forgive me? This is a short debate and I still have two points that I wish to make. I hope that the hon. Lady will have an opportunity to speak later; hon. Members on both sides of the House wish to do something for manufacturing and want clear answers from those on the Government Front Bench on the subject.

The climate change levy is bad, damaging and environmentally unnecessary. We will abolish it: that is a clear pledge. However that is not enough. We require from the Government a package of measures to help manufacturing industry. There is the issue of the pound-euro exchange rate, which the House should not ignore. Exporters to Europe have real problems, which are made worse by the fact that the Chancellor has made a commitment to increase public spending way above the economy's growth rate over the next three years. That, in turn, tends to keep interest rates, as set by the Bank of England, higher than they otherwise would be.

We will ensure that manufacturing industry is represented, not on the Monetary Policy Committee, which would not be right, but as a member of the committee of economic advisers which we will set up to ensure that the fiscal stance--the borrowing, taxing and expenditure profile of the Government--is consistent with keeping inflation under control and having interest rates no higher than they need to be for that purpose. That gives manufacturing a place at the top table, which it has been denied under the Government.

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Then there is the question of the regulatory burden. The Government have vaguely woken up to the fact that there is a regulatory problem in this country and have even promised a Bill for this Session, although we have not seen it yet. There are great doubts about whether we will; it will certainly not be enacted by the date of the election. We shall ensure that every Department has a deregulation budget to reduce business's regulatory costs year by year. We shall ensure that that is independently audited and reported to the House.

What we really want from the Government is equivalent action. Instead of blaming every past Government for mistakes, why does the Secretary of State not take some responsibility himself and use his Department to stand up for manufacturing industry? He should listen to those who manage and work in those threatened industries and hear what they say about the burden of red tape, rising energy prices and extra taxation. Above all, will the Secretary of State and the Government stop wringing their hands about those job losses and actually do something so that those industries can regain their lost competitiveness and their vigour in world markets?

3.58 pm

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:


Manufacturing matters to the Government, and I want to use this opportunity to outline success stories in the manufacturing sector in the United Kingdom at the beginning of the 21st century. I then want to go on to tell the House how we intend to assist those industries that are going through the painful process of restructuring at present.

Manufacturing matters because it accounts for about one fifth of our national income, with almost £150 billion a year of output. Manufacturing employs about 4 million people directly, and indirectly employs 2.5 million people in service sector jobs. A strong manufacturing sector is therefore a vital part of our economic base, and it includes some of the businesses that have invested most heavily in innovation.

Manufacturing clearly faces challenges, but equally it includes some of the United Kingdom's most successful companies. We have much to be proud of in our manufacturing sector. However, people too often talk down manufacturing, as the right hon. Member for Wells (Mr. Heathcoat-Amory) did in his 20-minute speech--[Interruption.]

Mr. Fabricant: No, he did not.

Mr. Byers: Some Opposition Members were clearly not listening to the points that the right hon. Gentleman made; but the Official Report will contain his speech.

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I want to examine some success stories in manufacturing, particularly in the sectors that have blossomed because of the Government's initiatives. In aerospace, employment has increased by one fifth. There are almost 14,000 extra jobs in the aerospace industry since 1998.

Mr. Jack: Will the Secretary of State give way on that industry?

Mr. Byers: Yes, of course.

Mr. Jack: BAE Systems in my constituency is facing uncertainty about possible large job losses. The Secretary of State recently visited India. What assurances and guarantees can he give to my aerospace workers that everything possible is being done to enable the United Kingdom and BAE Systems to win an order from the Indian Government for the Hawk aircraft?

Mr. Byers: The right hon. Gentleman makes a very important point, and I am conscious of the importance of the Hawk order for his constituents and for those who work for BAE Systems. He is right to say that when I was in India a couple of weeks ago I met a number of Indian Government Ministers, including the Minister for Defence, George Fernandes. One of the issues that I specifically raised was BAE Systems's desire to provide the Hawk aircraft to the Indian air force.

The right hon. Gentleman will be aware that the negotiations have been going on for an inordinate time. However, I am clear that they are now very close to a successful conclusion. I hope that the two or three relatively minor outstanding issues can be resolved in the near future. It is a significant order if it can be secured. I also know that, if that can be achieved, it will bring a degree of confidence to his constituents about their future employment prospects.

We shall certainly continue to do all that we can, on a Government to Government level and a Government to industry level, to try to secure that contract. I am sure that it will be secured, but I am also conscious that it needs to be done sooner rather than later. We shall use our best endeavours to that effect, and I shall keep the right hon. Gentleman informed on that important matter. However, there is success in the aerospace industry. I recognise, too, that it is going through structural changes.

In other sectors, such as fibre optics, which underpins the internet, DTI support in programmes such as LINK has helped to establish the United Kingdom as the European leader. In the past 12 months alone, more than 7,000 new research and development and manufacturing jobs have been announced in the United Kingdom fibre-optic sector.

Contrary to some perceptions, we have strengths also in the car industry. Since 1997, £3 billion of new investment has been announced and more than 10,000 new jobs created in United Kingdom car manufacturing.

Mr. Fabricant: The Secretary of State will know that the Toyota plant is not far from my Lichfield constituency. What can he say about the strategic talks currently being held between Toyota and Ford?

Mr. Byers: That is a matter for Toyota and Ford, which are commercial organisations, and the hon. Gentleman

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and the right hon. Member for Wells would be the first to criticise me and the Government if we were to interfere in those discussions. I should have hoped that the hon. Gentleman would mention the positive announcement, just a couple of weeks ago, that Toyota is switching production of the Corolla from Japan to Derbyshire, increasing its United Kingdom production by almost one third--to 220,000 vehicles by the end of this year--and creating 300 new jobs as a result. But there is no comment from the hon. Gentleman.

Mr. Fabricant: It is good.

Mr. Byers: The hon. Gentleman's constituents will benefit from that investment, and I am pleased that he now recognises its importance. Jaguar is investing £300 million at Halewood to build the new X-type model. Volkswagen is investing £500 million over five years to increase Bentley production at its site in Crewe.

There are success stories, then, and the reason is that we are delivering what manufacturing wants: economic stability. If we turn the clock back just 10 years, inflation was in double figures and interest rates were at 15 per cent. The Government will not return to those days, because we saw the damage that was done to manufacturing in our country. That was ignored by the right hon. Member for Wells.

Mr. Llew Smith (Blaenau Gwent): Would my right hon. Friend care to turn the clock back two years, to when the steel company Corus was formed? I noticed that the right hon. Member for Wells (Mr. Heathcoat-Amory) seemed to imply that the problems facing Corus arose because of the £8 million of the climate change levy. Will my right hon. Friend confirm that the fact that workers in Ebbw Vale are facing redundancy has nothing to do with the climate change levy, and that £8 million is peanuts compared with the £700 million that Corus has handed out as sweeteners to its shareholders; the £900 million that it has appropriated from the workers' pension fund; the £135 that it has wasted in buying up companies abroad, only investing £3 million in this country; the millions of pounds handed out to the sacked chief executive; and the huge payments to former Dutch managers?

Does my right hon. Friend agree that the real issues facing the steel industry have nothing to do with the climate change levy and everything to do with a company that is determined to destroy an industry that generations of people in my community in Ebbw Vale have built up?


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