Previous SectionIndexHome Page

Mr. Fabricant: The hon. Gentleman will no doubt have read the report by the Institute of Directors, which comments on the relationship between sterling and the euro. It says that the two currencies are merely ships that pass in the night. Consequently, will he argue, as he is at the moment, for our entry into EMU when the euro is strong and the pound is weak and, accordingly, British manufacturing is competitive?

Dr. Cable: The hon. Gentleman might know that I co-authored a report that received considerable publicity. The group was chaired by the Liberal Democrat MEP, Christopher Huhne, and involved members of the Monetary Policy Committee. It set out what an appropriate competitive exchange rate would be for the United Kingdom. I have read the report by the Institute of Directors. I do not agree with it, but I refer the hon. Gentleman to a more authoritative and less polemical organisation, the National Institute of Economic and Social Research. It argued within the past few weeks that clear evidence exists of a high level of convergence with the British economy.

My criticism of the Government is that, although they are clearly carrying out tests on such matters in private, they will not discuss them with us, perhaps for good

24 Jan 2001 : Column 946

political reasons. However, a mature debate would certainly help to clarify the position of the British manufacturing industry. We need to discuss whether we are converging, which was the point raised by the hon. Member for Lichfield (Mr. Fabricant), and to consider the evidence, but we are not doing that; there is no public debate. The Government have been remiss in that sense.

I approach the issue by acknowledging that, in many respects in the conduct of macro-economic policy, the Government can reasonably claim--even though four years is a very short time in economic history--that the problems of boom and bust have been substantially reduced, except in respect of the boom and bust associated with the exchange rate. That problem is still with us and it is severe. That is why we are debating the substantial blows to manufacturing industry that have occurred recently.

4.45 pm

Mr. Ken Purchase (Wolverhampton, North-East): Manufacturing is doing well if not doing great, which is what we want it to do.

We are debating a Conservative party motion and my first thought was what a brass neck it was for the Tories to table a motion about manufacturing industry. That seems a contradiction in terms. After 18 years in which great damage was done to British manufacturing, Conservatives Members come to the House today to castigate the record of the Labour Government.

Let me appeal across the divide and remind Conservative Members that, during that dreadful period for British manufacturing under their governance, a Minister eventually came into office who cared about British manufacturing and exports. I refer to Richard Needham, who was the sole salvation of any semblance of a Conservative party policy for manufacturing and the important role that it plays in exports. I congratulate my right hon. Friend the Minister for Trade who has not just carried on with that work, but brought to it an enthusiasm worthy of the exporting traditions on which this country has depended and continues to depend.

The hon. Member for Twickenham (Dr. Cable) compared the United States, Japan and the United Kingdom. I remind him that the USA exports about 7 per cent. of its gross domestic product and, strangely, has done for most of the past century. Over the same period, the United Kingdom has exported about 20 per cent. of its GDP, and the overwhelming majority of our exports have been manufactured products. We cannot compare this country with the USA and Japan, because we are still very dependent on the manufacturing sector, which contributes more to our balance of payments than any other industry or service sector in this country.

British Trade International, which is now Trade Partners UK, has made a good start to boosting British exports, especially those from the manufacturing sector. I congratulate my right hon. and hon. Friends in the Foreign and Commonwealth Office and the Department of Trade and Industry on the work that they are doing to make joined-up Government a reality for the policy on exports. I know that many have tried that before, but we now take a more coherent view and take a more sensible policy approach to the issue.

I hope that, after the debate, the Conservative party will rediscover some of its former glory and recall the time when it greatly assisted British manufacturing industry.

24 Jan 2001 : Column 947

Many of the great industries established in the 19th and 20th centuries were set up by the Conservative party's friends--the people we call "the captains of industry".

We need a consensus on the vital question of industry. I unashamedly appeal to Conservative Members to join us in creating coherent and comprehensive policies for manufacturing that will assist our exporting efforts.

Mr. Nigel Evans (Ribble Valley): The hon. Gentleman suggests that we should have a consensus on what we can do to improve manufacturing industry, so will he have a word with his colleagues about the climate change levy? He must admit that it will have an enormous impact on manufacturing industry in this country.

Mr. Purchase: I accept that manufacturers in this country and others complain when any extra costs are added to their bottom line and I understand the reasons for that. I believe that my colleagues in the Department of Trade and Industry are working hard to find ways in which to take account of the understandable concerns and sentiments expressed by manufacturers, especially those that are already highly energy efficient, but I accept the hon. Gentleman's comments and recognise that more work is needed. None the less, I support the climate change levy: we have to take some action in that respect, not only for our own sake, but for the sake of our neighbours worldwide.

We have developed an impressive toolkit with which to assist the regeneration of manufacturing. Much of the selective assistance that has been made available is doing good work. My right hon. Friend the Secretary of State mentioned that in recent years £60 million has been made available via that route. That is welcome. I am not one of those who believes that industry can be left to its own devices. We live in an increasingly competitive world in which every other country values its manufacturing industry and does all it can to develop it. Woe betide Britain if we do not take similar--indeed, better--action to support our own manufacturing industry.

In this country we have a significant problem regarding investment. We have a system of stock markets, shareholding and company profits that defies the logic that is applied by many overseas companies within their own countries, whereby they retain profits for long-term investment. The pressure on our managers is to deliver dividends. There has to be a change of mind to ensure fairer distribution between distributed and retained profits--and, I say to my Treasury Ministers, to ensure the best possible treatment of those retained profits. Only in that way will we get self-generated investment in our industries.

That has not happened in Britain in the past. Often, hon. Members who visit old manufacturing companies in their constituencies see machinery that must have been fetched up from the sea bed after the first world war--it is pretty dreadful. On the other hand, we have good companies that have modernised and invested because they recognise that only investment in the manufacturing process can bring the competitive edge that they need to compete successfully on world markets.

In British industry--perhaps throughout the whole of Britain--management is not really our strong point. More needs to be done in terms of management education and training. Not that long ago, a management guru who used

24 Jan 2001 : Column 948

to control ICI was asked whether his managers were on MBA programmes and taking other opportunities to improve their management skills. He replied, "MBA programmes? I'd be pleased if any of them could read a balance sheet!" Such a comment from a director of a major company about middle and upper management in British industry is damning indeed. We have not made the progress that we need in our universities and colleges in terms of developing MBA courses and related management skills courses.

Mr. Laurence Robertson: The hon. Gentleman has touched on an important subject in talking about youngsters taking MBAs and so on, but does he agree that perhaps too many people take that route and not enough take up industrial training, given that many companies are finding it extremely difficult to recruit either trainees or trained people?

Mr. Purchase: The hon. Gentleman hits on a very good point, to which I was about to turn. If proper leadership and management are lacking, the potential of employees--even of those who have the best technical skills--is never realised. That is part of the sad story of the failure of British manufacturing: leadership has been lacking. We have been responsible for some of the finest inventions that the world has ever seen, but we have failed to bring them to the marketplace. That has usually happened because of lack of money for innovation, lack of vision among those who should be leading and damned poor management at plant level. We must attend to management and marketing skills. When one talks about marketing to some managers, one might as well be speaking Esperanto. Above-the-line and below-the-line campaigns mean nothing. It is pathetic that we often have good products, workers and even investment, but still do not go to the marketplace with all our guns blazing. We must take those matters very seriously.

We need managers with technical and financial skills. Too often, our best engineers are promoted on to boards where they find themselves completely outmanoeuvred by accountants who do not know anything about the fundamentals of engineering. Such people might know an awful lot about the bottom line of the company without understanding the need to modernise and to build up skills and capital investment.

In the three or four minutes that remain, I should like to turn to two pressing matters in my constituency. I shall not apologise for speaking about them, as they illustrate the difficulties about which I have been speaking: lack of leadership, poor investment and other such problems. There have been massive redundancies in the Goodyear tyre factory in Wolverhampton. I waive towards the hon. Member for Tewkesbury (Mr. Robertson) at this point. People who were made redundant and do not have transferable skills will not get jobs, but those with high skills that are transferable will do so. There are massive skills shortages that we have not properly or fully addressed.

Workers at the Chubb safe company met yesterday to complain about the fact that the company has been taken over yet again, for the third time in just a few years, and that the manufacture of safes is now to cease. Chubb safes have the greatest reputation in the world for quality. Indeed, the company still makes the finest safes in the world, but it is being closed down. Perhaps the safe

24 Jan 2001 : Column 949

making will be transferred to Indonesia, after which it might be brought back to Wolverhampton, so that the safes can be rebadged with the words "Chubb Wolverhampton" to suit the insurance markets. It is an absolute disgrace.

My right hon. Friend the Secretary of State is not now in his place; I know that he has to take a rest from time to time. However, I plead with him to recognise that this country needs a different takeover and competition law regime. We also need a regime within the plants and the factories to ensure that it is not easy come, easy go. Those who take over and buy companies must give a commitment to the workers and ensure that their rights are properly protected. I know that we have made considerable moves on the reform of trade union law. We are going in the right direction, but we have to do more and do it more quickly.

The biggest grouse from Chubb workers in Wolverhampton last night concerned the reason why Chubb--or Gunnebo, as it is now called--could move out of Britain just like that, when companies that try to close down in Sweden or any other European Community country must adhere to specific processes and consult in good time with their workers and staff. We need such laws here. If it is right to ensure a level playing field in finance and so on, we should also ensure one for workers' rights, so that our workers can compete fairly and properly with the rest of the world. If they are given that opportunity, they will not fail us.

Next Section

IndexHome Page