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House of Commons

Thursday 18 January 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Trade and Industry

The Secretary of State was asked—

Oil and Gas Licences

1. Mark Williams (Ceredigion) (LD): When he expects to announce the award of licences under the 24th licensing round for oil and gas exploration; and if he will make a statement. [116319]

The Secretary of State for Trade and Industry (Mr. Alistair Darling): I hope to announce the great majority of the awards soon, but in light of concerns we are deferring our decision on a small number of awards to allow for further consideration of the impact that oil and gas could have on the environment.

Mark Williams: I thank the Secretary of State for that answer and I am glad that he and his officials are taking time to consider the valid environmental concerns expressed by the Countryside Council for Wales and the delegation of constituents whom I brought to meet his colleague, the Minister for Science and Innovation, in the autumn. Given that concerns have been expressed, and given that Cardigan bay is protected by the precautionary principle in the European Union habitats directive, will he use the opportunity of the coming days and weeks to exclude the Cardigan bay special area of conservation from the 24th licensing round?

Mr. Darling: I agree with the hon. Gentleman that the environmental considerations are important and I am aware of the concerns about dolphins, not just in Cardigan bay but in the Moray firth. It may help the House if I say that we will go ahead with the award of licences in about 239 blocks. There are four blocks—three in Cardigan bay and one in the Moray firth—for which we are carrying out an appropriate assessment of the risks. I hope that that assessment can be carried out expeditiously so that we can reach a decision one way or another, but I understand the hon. Gentleman’s concern. Under the law, we have to carry out an assessment and I hope that we can do so fairly quickly.

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Manufacturing Sector

2. Tony Lloyd (Manchester, Central) (Lab): What recent assessment he has made of prospects for the manufacturing sector; and if he will make a statement. [116320]

The Minister for Science and Innovation (Malcolm Wicks): Manufacturing output experienced a welcome revival in 2006 as the sector began to transform in response to the challenges from globalisation and technological change. The Office for National Statistics data show that manufacturing output grew by 2 per cent. between the end of 2005 and November 2006.

Tony Lloyd: I thank my hon. Friend for those remarks, but I put it to him that one of the problems for manufacturing in this country is that it has been shrinking in relative terms. That may be perfectly natural, but the sector feels that its voice is not heard as strongly as it ought to be heard. In particular, is he satisfied that when it comes to issues such as the setting of interest rates, the voice of manufacturing is properly taken into consideration by the Bank of England?

Malcolm Wicks: Of course, that is a matter for the Bank of England committee, and it will have heard what my hon. Friend has said on the subject. We take the manufacturing industry very seriously, and we are all aware of the restructuring that has taken place and the challenge of globalisation. Indeed, my right hon. Friends the Secretary of State for Trade and Industry and the Chancellor have just returned from a trip to India to explore some of those issues. The industry is now about value-added manufacturing. It remains important, as it accounts for some 14 per cent. of gross domestic product—the figure is rather higher, I think, in my hon. Friend’s region of England. Through a range of measures such as financial aid, skills, science and research and development, we are supporting manufacturing industry.

Richard Ottaway (Croydon, South) (Con): What assessment has the Minister made of the rising price of energy and its impact on manufacturing? Does he agree that the illiberal energy markets inside Europe will have an impact on the costs of energy and on manufacturing?

Malcolm Wicks: On the second issue, the UK, not least during our recent presidency of the European Union, has led the charge on liberalisation in the EU. We are very pleased with the way in which Commissioners now produce strong reports. There have been dawn raids on some of the offices of the major bodies in the energy sector, and the hon. Gentleman will have noted the recent statements from the European Commission. The battle is not over, but we are moving in the right direction. Of course, we are concerned about the recent increases—by “recent”, I mean those affecting us over the past year or so—and their impact on businesses. We are in constant discussion with industry, and the Secretary of State and the director general of the Confederation of British Industry chair a committee to explore those issues. However, the hon. Gentleman will have noted that in recent months energy prices have been coming
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down, and it is the task of Ofgem to keep a careful eye on that to make sure that those decreases are reflected in future prices. I am sure that Ofgem will do its duty.

Richard Burden (Birmingham, Northfield) (Lab): While manufacturing certainly faces substantial challenges, does my hon. Friend agree that it is important that we play to our strengths in areas such as performance engineering and environmental technologies? Places such as the former MG Rover site in Longbridge offer great potential for those activities. Will he encourage Advantage West Midlands and all other partners to do everything that they can to bring those projects to fruition?

Malcolm Wicks: The short answer is yes. Two things are true of manufacturing. First, as I have noted, for reasons that we all understand, the manufacturing sector has declined not just in the UK but in all advanced societies. Secondly, we remain very good at aspects of manufacturing. We are still producing 1.6 million vehicles in this country, which is close to the peak of the early 1970s. Our aerospace industry is important and we are well placed in emerging environmental and energy technologies. It is about adding value, as well as what we are good at. In my judgment, we are good at many things.

Stewart Hosie (Dundee, East) (SNP): The Minister may be aware—I know that the Secretary of State is—of the recently announced loss of 650 manufacturing jobs at NCR in Dundee, West. He may be aware, too, of the loss of 100 jobs in the Michelin tyre factory in my constituency and 50 more proposed losses at the Wood group. In addition, there are non-manufacturing job losses in distribution and food processing, so will the Minister share with us his early reflections on the prospects for rebuilding manufacturing in Dundee, and give the House and the people of the city and, indeed, the wider Tayside area an assurance that the Department will do everything possible to turn that dire situation around?

Malcolm Wicks: Of course we regret the loss of those jobs. Much of that, as the hon. Gentleman will know, is for the Scottish Executive, but the Government and the Department will work closely with them. As for finding future work for those people, the Jobcentre Plus network is extremely important. We regret the job losses, but I emphasise that overall the Government are doing a great deal to support the manufacturing sector, with a great deal of success.

David Wright (Telford) (Lab): The manufacturing sector in the west midlands will be disappointed by yesterday’s defence training review announcement—[Hon. Members: “Yes.”] Will my hon. Friend reassure us that there will be investment in the proposed national skills academy for manufacturing in the west midlands, which is particularly important for RAF Cosford and Telford?

Malcolm Wicks: My impression is that some colleagues were pleased by yesterday’s news and some were disappointed. I understand my hon. Friend’s disappointment, but we must see things against the background of a successful United Kingdom economy
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in which skills have increased and employment is at a record level. My colleagues would be happy to pursue the opportunity to discuss those matters with him.

Mr. Mark Prisk (Hertford and Stortford) (Con): With more than 1 million jobs lost, including NCR jobs in Dundee, all hon. Members are naturally concerned about the prospects for manufacturing. The key is increased investment. To be fair, the Chancellor has been positively frenetic in this area, as every year he introduces a raft of new initiatives, and every year he and other Ministers spend hundreds of millions of pounds. Can the Minister of State explain why, instead of rising, investment in manufacturing has fallen by 28 per cent.? Where does he think the Chancellor has gone wrong?

Malcolm Wicks: The Chancellor has gone right in so many areas, which, for all sorts of reasons, Mr. Speaker, I would like to discuss at length, but your disapproval is the main reason why that is inappropriate. I said that there was a revival in manufacturing in 2006, and we are spending a great deal in selective grants. The skills agenda and science and innovation, for which I am responsible, are crucial. The hon. Gentleman will understand that global factors affect the structure of the economy, but of course I share his concern about job losses. As I told the hon. Member for Dundee, East (Stewart Hosie), job losses are not good news, but there was even poorer news in 1981, when 673,000 jobs were lost in the manufacturing industry.

Wind Energy

3. Mr. Bob Blizzard (Waveney) (Lab): What steps he is taking to support the establishment of wind energy industries in England. [116321]

The Secretary of State for Trade and Industry (Mr. Alistair Darling): The renewables obligation encourages renewable generation and its associated industry. It is supported by about £500 million of spending between 2002 and 2008 in the form of research and development, and capital grants on emerging low-carbon and renewable technologies, including wind energy.

Mr. Blizzard: I thank my right hon. Friend for that answer. Yesterday, the East of England Development Agency approved funding for a £9 million offshore renewable business centre in Lowestoft, which will accommodate a cluster of wind energy industries and create new jobs. It is the catalyst that will make Lowestoft the offshore wind energy capital of the UK, as the town is ideally situated in the middle of the East Anglian coastal areas that the Department has designated as suitable for most of the country’s offshore wind energy development. Will he join me in congratulating the EEDA board, and come to Lowestoft to dig the first sod?

Mr. Darling: The investment is very welcome. I am glad that the East of England Development Agency was able to make that money available, and I look forward to visiting Lowestoft. I know that my hon. Friend played a significant part in getting that decision,
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and I hope we can build on it. There has been a great deal of offshore development recently. Just before Christmas I announced the go-ahead for the Government’s interest in a very large wind farm, the London Array project. It is a pity that that has been blocked by a Conservative council.

Mr. Edward Leigh (Gainsborough) (Con): I support the comments of the hon. Member for Waveney (Mr. Blizzard). In theory, we are all in favour of green energy—some more than others. In practice, nobody wants a wind farm with concrete pillars as tall as Lincoln cathedral next door to them. We have all encountered that in our constituencies. Will the Secretary of State use this opportunity to give a forthright commitment on behalf of his Government that we will shift the whole subsidy, the whole ethos and the whole burden on to offshore from onshore? That would be a welcome statement.

Mr. Darling: The hon. Gentleman has put his finger on the problem. We need to increase the amount of wind energy because that will make a major contribution to cutting the amount of carbon emissions going into the atmosphere. He is right that, in principle, we will get agreement—for example, in the House—that we ought to be building more wind farms, and that there ought to be more offshore wind farms. I tell the hon. Gentleman, in the most non-partisan way possible, that the problem is that up and down the country Conservative, Liberal and nationalist councils are blocking applications for onshore and offshore projects. If we are serious about getting more wind energy, we must realise that at some point we need to build more wind farms, or we will not meet the objectives that we have all set ourselves. It is all very well talking green, but we must also will the means of being green.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): My right hon. Friend knows that much microgeneration is focused on wind power, and we are told that the network can deal with distributed electricity, provided it knows how much will be coming on in the future. Does my right hon. Gentleman intend to provide incentives for more microgeneration, and if so, will he share his views with the House?

Mr. Darling: Last year, when we published the energy review, we said that that area had been neglected in the past and that we could do a lot more for distributed generation, as it is known, whereby people generate electricity for their own use and sell back to the grid any that they do not need. There are technical difficulties, for obvious reasons, and I have always said that there are some limitations. We could not, for example, end up being substantially dependent on the actions of millions of individuals in order to get enough electricity to heat and light our houses and factories. However, small scale generation of electricity is extremely important. We want to encourage it and I hope to have more to say when I publish the White Paper in March.

Charles Hendry (Wealden) (Con): Is the Secretary of State aware that the amount of wind energy capacity that is tied up in planning is equivalent to 5 per cent. of
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our national electricity supply? Does he accept that even when planning permission is granted, new capacity is delayed for up to 10 years by the rules on connection to the national grid, which require connections to be made in the order in which they were applied for, regardless of whether or not they have planning permission? In the case of Drummuir in Scotland, its planning consent will have lapsed well before its connectivity date of 2015, so it may never even be built. Will the right hon. Gentleman ensure that these issues are addressed in the White Paper when that comes out in March, and will he consider making it a primary responsibility of Ofgem to encourage renewable sources of energy so that the anomalies can be removed and green energy supply can reach its maximum potential?

Mr. Darling: The hon. Gentleman is right that there are two obstacles to wind energy. One relates to access to the grid. As we stated in the energy review that we published last year, we need to look into that. We are working with Ofgem to try and sort out the problem. It is nonsense that in dealing with applications, Ofgem has to treat a real prospect behind an application that might be speculative, simply because the speculative one came first. That needs to be addressed.

The second obstacle concerns planning. There is undoubtedly a problem in relation to a number of energy projects, especially in relation to wind energy—not just the farms, but the transmission. In Scotland, transmission lines between the area north of Inverness and the central belt have been blocked. Councils are blocking such applications throughout the country. We need to consider how we can change those procedures. I have always said that our planning system is completely out of date in this regard. We need to streamline the planning process, especially in relation to major projects, and I wait to see whether we will get cross-party support on doing that. The hon. Member for Wealden (Charles Hendry) said that it is all very well to go around the world saying that we are in favour of green energy, but here at home we have councils—the majority of which, I am sorry to say, are Conservative—whose actions mean that we will not get the green energy that we all say that we want.

Goods and Services

4. Mr. Mark Todd (South Derbyshire) (Lab): What steps he is taking to ensure that suppliers of goods and services provide sufficient information to enable customers to trace them. [116322]

The Minister for Trade (Mr. Ian McCartney): The vast majority of consumer products are already required to carry the name and address of the producer or importer in the European Community. There are specific requirements for e-commerce and distance selling and for traders who use names other than their own. When the unfair commercial practices directive is implemented later this year, it will require that consumers are always provided with certain information, including identity and geographical address, where there is an invitation to purchase a good or a service.

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Mr. Todd: I thank my right hon. Friend for his answer. It is not unusual nowadays to see fliers distributed through the door with merely a mobile phone number on them. Those who purchase by that route and are dissatisfied with the service offered often find that it is a pay-as-you-go number or one that cannot be traced later. Will the steps that he has outlined address that problem?

Mr. McCartney: My hon. Friend asks a good question. That is exactly what the unfair commercial practices directive will do. If he has a case or cases that have prompted that question, I am happy to meet him with my officials and with his local trading standards officer to see whether there is any evidence in the marketplace in relation to a specific trading area that we can deal with immediately.

Mr. Richard Spring (West Suffolk) (Con): Despite the right hon. Gentleman’s reassurances, if he went into a supermarket he might find a product called Suffolk Choice bacon, which comes from nowhere near Suffolk. Dealing specifically with pork and pigmeat products, is he aware that products can be imported into this country that are completely unacceptable on welfare grounds when selling to consumers? What will he do to help to inform consumers about the abuse of labelling that is taking place, particularly as regards such products?

Mr. McCartney: I can assure the hon. Gentleman that I have that matter under active consideration, although I have no specific knowledge of Suffolk bacon. In the past year I have lost 5 stone in weight, so I have eaten no form of bacon whatsoever—not even Scottish bacon from Ayrshire—but if he can convince me that Suffolk bacon is one of the best I may well break that taboo and start eating it again. It is a complex issue, but I will write to him with a substantive answer.

Mr. Jim Devine (Livingston) (Lab): On the subject of things lost, can my right hon. Friend give us an update on where his Department stands as regards the Farepak inquiry and when it expects the report to be published?

Mr. McCartney: I thank my hon. Friend. Arrangements are being made to close the fund that was set up and to audit the accounts. I repeat my commitment to place those accounts in the Library when they have been audited. The administrator is carrying on with his or her report and will be going back to the court to seek additional powers in respect of those investigations. The companies investigation branch is continuing its investigations and receiving co-operation. The Office of Fair Trading has sent Ministers a scoping paper, which we are considering. Next week, there will be a meeting with officials to consider the next steps forward. I reiterate the commitment that I gave to hon. Members on both sides of the House—when I have more substantive information I will bring it into the public domain. In addition, I will consult those Members with the closest interest in the matter, including Opposition spokespersons.

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