Health and Social Care Budgets

Adrian Bailey Excerpts

Tuesday 14th March 2017 Westminster Hall

[Several hon. Members rose—]

[Mr Adrian Bailey (in the Chair)]

Order. Before I call the next speaker, I will just make it clear that I am trying to shoehorn a three-hour debate into one and a half hours. I need to call the Chairs of the relevant Select Committees, and I am looking for five minutes each from them. There will be a hard and fast three-minute time limit for subsequent Back-Bench contributions. If anyone wishes to intervene, they are perfectly free to do so, but I might take it into consideration when I consider the order of speakers.

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[Mr Betts]

We will return to the proper training, long-term commitment and pay of staff in the care sector in our Committee’s further report, but we certainly had evidence to that effect.

We need another way of dealing with the funding gap for the rest of this Parliament. For the longer term, I very much welcome the announcement of the Green Paper, but I echo the comments of the two previous speakers. We need to get cross-party agreement on a sustainable, long-term settlement that will last not merely for the next Parliament, but for several Parliaments after that. There are major challenges. I agree that we should look at health and social care together, but there are fundamental differences in governance and accountability between the two systems, so how do we resolve that?

We should certainly look closely at what is happening in Manchester, to learn about the devolution deal there and how the two can work together within the same governance structure. Personally, I feel that losing the local accountability that the social care system currently has and simply centralising the whole system would be a mistake. That would take us in the wrong direction, so it is important to look at what is happening in Manchester. We have two very different funding systems. We have the health system, which is free at the point of use, but I do not think that anyone suggested in evidence that we could fund social care on exactly the same basis. We will have to consider something slightly different to fund social care, but how the two systems fit together will be a challenge.

If we are considering the future for social care funding, we should bear in mind that currently we have a mixture of funding. We have some central Government funding, local authority funding and the personal contributions that come through people paying for their care, particularly in residential homes, and what happens to their estate when they die. Will that mean a bit extra from those different elements—a bit more from central Government, local Government and personal contributions—so that the total whole grows? However, the Government have said that they will introduce the Dilnot proposals in the next Parliament—that is what the Minister said to us—which will cap and reduce the contributions that may come in from people’s private estates when they die, so does that mean more money from somewhere else?

I am sorry that the Chancellor did this, because everything should be on the table, but he ruled out a different way of taxing or receiving contributions from people’s personal estates when they die: taking a percentage of everyone’s estate. Currently, people contribute their estate if they end up with dementia and go into a care home, but if they have a heart attack, they tend to contribute nothing. Is that system fair? Is that a challenge we must look at? Even with Dilnot, the £72,000 limit would take most of the estate from a small house sold when someone in my constituency dies, but it would be only a fraction of the value of a property sold in the more expensive parts of London. Is that fair either? Do we simply scrap the whole thing and go on to a German system of social insurance?

The Communities and Local Government Committee went to Germany to have a look at its model. There are pros and cons to it, but we really need to put everything on the table and not rule out any possibilities. We need something that we can, in the end, reach cross-party agreement on, recognising that the social care system will probably be different in its funding from the health system. How they can fit together and be governed together will be absolutely crucial to the success of a long-term settlement, when we eventually reach one.

[Mr Adrian Bailey (in the Chair)]

I remind Back-Bench contributors that there is a three-minute time limit. I call Anne Marie Morris.

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[Margaret Greenwood (Wirral West) (Lab)]

I congratulate my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) on securing this important debate.

On 4 March, just over a week ago, a quarter of a million people marched through central London to call on the Government to stop the cuts and the privatisation of the national health service. I pay tribute to each and every one of those people who came to London to make that protest to the Government. When a quarter of a million people assemble directly outside this Parliament, the Government should think about what they are asking for. People value the NHS highly and are prepared to fight for it.

Many of the problems that we are facing in the health service have their roots in the Health and Social Care Act 2012. I hope that in any cross-party discussion, where we say that everything will be on the table, repeal of the 2012 Act will be on the table for consideration. One of the very many changes it introduced was the removal of the requirement to provide a comprehensive health service in England. As a result, we are seeing increasing rationing, and patients are suffering.

My hon. Friend the Member for York Central (Rachael Maskell) made an excellent speech in the Adjournment debate she recently secured on the rationing of surgery. As a former physiotherapist, she is very well-placed to make those points. Earlier this year, three clinical commissioning groups in the west midlands produced proposals to reduce the number of people qualifying for hip replacements by 12% and for knee replacements by 19%. Clearly, that has nothing to do with addressing patient need; it is all about balancing the books on the part of a Government with an austerity agenda that they are wedded to. Thousands of elderly people in our country are losing their sight, due to the rationing of cataract operations. That kind of rationing has a real and painful cost to many people in our society.

We are seeing the emergence of a postcode lottery. People are being told that we cannot afford a comprehensive service any more, but that needs to be challenged. Ministers will cite the ageing population and the costs of technology. Well, technology can reduce the costs of care; treating somebody sooner for a cataract operation— a relatively cheap operation—is a much more efficient way of using money than letting somebody become blind and hence terribly dependent on social care.

The coalition cut £4.6 billion from social care. The £2 billion over three years that the Government are providing is nowhere near enough. We want an injection of £2 billion now to stabilise the social care system. The public will not stand for it, and they will not forgive or forget a Tory Government who take the national health service off them. Ministers might think that they can erode it by trimming a little bit here and a little bit there—[Interruption.] But the public know what is going on. Those who have hospitals that are going to close understand what I am talking about. People will not stand for it: they will march again, and it will not be—[Interruption.]

[Mr Adrian Bailey (in the Chair)]

Order. I ask Back Benchers in sedentary positions to allow the speaker to speak. She did not interrupt their contributions, and I wish they would offer the same courtesy to her.

[Margaret Greenwood]

When 250,000 people are so unhappy about what the Government are doing and we are seeing the closure of A&Es, hospitals and all sorts of services, and the rationing of services that people really need, the Government should listen, as should Conservative Members.

[Mr Adrian Bailey (in the Chair)]

We now come to the Opposition spokespersons’ contributions. I wish the Minister to have a minimum of 10 minutes to respond to the debate, because many points have been made. I can allow the Opposition spokespersons 10 minutes each, but it would be helpful if they kept their speeches a little shorter so that Meg Hillier may respond to the Minister’s comments.

Pharmacies and Integrated Healthcare: England

Adrian Bailey Excerpts

Wednesday 11th January 2017 Westminster Hall

[Steve Double]

I agree absolutely. This is not only about money; it is about reviewing the way we provide our healthcare services, embracing a greater role for our pharmacies, and understanding and promoting the role that they can play.

I want to pick up on the point about tourist areas made by my hon. Friend the Member for St Albans. I represent the constituency of St Austell and Newquay in mid-Cornwall, and tourism is the biggest part of our economy. Hundreds of thousands of tourists come every year, which puts a great deal of pressure on our A&E and local GPs, because if people fall ill on holiday, they try to get to see a GP.

I commend the work of one of my local pharmacists, Nick Kaye, in Newquay. The Secretary of State visited a couple of years ago and saw the excellent work that he does working closely with the local GP surgery to provide a frontline service particularly for tourists. By doing so, he takes pressure off the other parts of the health service. We could see more of that if we supported pharmacists and promoted the excellent work that they can do.

We have already touched on my final point. We cannot have a one-size-fits-all approach. The services provided in urban metropolitan areas are very different from those provided in more rural parts of the country. As we have heard, there might be multiple pharmacies in a town, all falling over one another to compete for business—so different from the many rural villages that have one local pharmacy, which is struggling to make ends meet and to provide an ongoing service to the community. Another fact I have learnt is that there is an oversupply of qualified pharmacists in many areas, whereas in Cornwall we have a shortage. We cannot get enough into Cornwall to meet demand, so we cannot have a one-size-fits-all solution. I encourage the Minister to look carefully at the specific needs of different parts of the country, particularly with regard to pharmacies, to make sure that funding streams meet need and that we can sustain the vital role that community pharmacies play in our rural towns and villages.

I am pleased to have been able to contribute to this important debate. As we continue down the path of integrating pharmacies into the health service, we must value and promote the role they play and make sure they are able to provide a service. They are part of the solution that we need to make sure our health service is fit for purpose.

[Mr Adrian Bailey (in the Chair)]

I intend to bring the Front-Bench spokesperson in at 10.30.

Coeliac Disease and Prescriptions

Adrian Bailey Excerpts

Tuesday 1st November 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Health (David Mowat)]

It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate the hon. Member for North Durham (Mr Jones) on leading the charge on this subject. There is clearly consensus in the Chamber on the direction the Government should take. I will make a few points about where we are and what I think we need to do, and leave time for him to sum up.

[Mr Adrian Bailey (in the Chair)]

Order. In a half-hour debate, the mover does not have the opportunity to sum up at the end, so you have a little more time than you thought, Minister.

[David Mowat]

Thank you, Mr Bailey.

As the hon. Gentleman said, one in 100 people in the UK suffer from coeliac disease. Interestingly, I was not aware of it until a year ago, when I was tested for the disease—fortunately I was negative. It is a significant disease that benefits from early diagnosis, and the points made about diagnosis were valid. Coeliac disease is an autoimmune condition: gluten damages the small bowel and the immune system feeds on it, resulting in a range of symptoms including diarrhoea, iron deficiency, tiredness and weight loss. It can exacerbate, if not cause, osteoporosis and mental health issues.

As we have heard, the only treatment is a gluten-free diet, which has two components. Meat, fish, fruit and vegetables do not contain gluten and generally do not need to be prescribed, but staple foods such as bread, pasta and flour and non-staple food such as biscuits do contain gluten. Since the 1960s, when the medical community was becoming more aware of the disease, those staple and non-staple foods have been prescribed pretty much, it is fair to say, without limit until recently. We spend something like £28 million a year on these prescriptions and in the great scheme of NHS costs that is not huge when considering the cost of cancer drugs and so on. It is true that we are now seeing a postcode lottery emerge, and I will say a little about why.

The other thing that has happened since the 1960s—I think the hon. Gentleman will concede this—is that the supermarkets and the retail trade have begun to get their act together in selling these products, although of course they are not available to everyone. Many supermarkets now have areas with gluten-free products, including bread and pasta. The products are more expensive than the equivalent non-gluten-free products, but they are certainly more available than in the past and a real alternative. Added to that, the fish and meat part of the diet, which is the same for sufferers and non-sufferers, is available to both.

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[Liz McInnes]

Is the Minister aware that the annual cost per diagnosed patient of prescribing gluten-free food is £180 per year? Weigh that up against the cost of avoiding infertility, bowel cancer and osteoporosis. What is the obvious conclusion for any NHS professional?

[Mr Adrian Bailey (in the Chair)]

Order. Before the Minister responds, can I point out that he has been very generous in taking interventions, but the debate has to finish at 4.45 pm?

[David Mowat]

I made the point earlier that one in 100 people suffer from coeliac disease, and that £28 million is not a huge amount of money in the context of the entire NHS. I am sure the hon. Lady’s arithmetic stands up to that, and those are fair points.

If I may, I will set out the postcode lottery that has emerged. So far, 11 out of around 200 CCGs have ended all gluten-free prescriptions; 27 offer only bread and flour; 20 offer only bread, flour and pizza; 92, which is still by far the majority, broadly follow the Coeliac UK guidelines and offer a full range based a little on age, gender and other restrictions; and only four CCGs now have no restrictions whatsoever. The arguments about this are clear. Many poorer people, in particular—low-income people—are affected by the need to source their gluten-free products in different areas. CCGs are under pressure—the whole of the NHS is under pressure—and choices have to be made. It is true that £28 million is not a huge amount of money, but with £28 million here and £28 million there, we are soon talking about real money. It is true that choices have to be made, but it is not clear to me that this is an area in which the right choice is always being made.

In the couple of minutes available, I want to set out the actions that I think we should take. First, the hon. Member for North Durham correctly said that the community pharmacy sector has a role in this and is not so far being utilised as much as it could be. I think that he was wrong to say that it has stopped doing this in the transition from PCTs to CCGs. Something like 200 community pharmacies—15% of the total—do stock and sell gluten-free products. We are doing a review into the community pharmacy sector, trying to get it more focused on services. This is a very clear example of the sort of thing that we should be paying it to do, and when the Murray review is complete, I will—I am sure the hon. Gentleman will hold me to account on this—endeavour to make sure that that happens.

The hon. Gentleman mentioned consultations. CCGs should not withdraw gluten-free products without a consultation. My understanding is that in all cases where that has happened, a consultation has taken place. If he can provide me with evidence of that not being so, I will follow up and take action. The information I have been given is that consultations should always have taken place.

Finally, there is the issue of the postcode lottery. It is true that we give CCGs a lot of power in our system, in terms of making clinical decisions. The idea behind that is that they look at local considerations and balance the various options that they have. However, I will see to it that a review is done, hopefully within the next six months, of prescribing policies, and we will endeavour to come together with something that is more consistent, in a way that means we can actually make progress on this. I thank the hon. Gentleman for his contribution, and I thank everybody that has made an intervention in this debate. It has been a good debate, and a useful one for us to have had.

Question put and agreed to.

NHS Spending

Adrian Bailey Excerpts

Wednesday 6th July 2016 Commons Chamber

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I beg to move,

That this House notes that the Vote Leave group during the EU referendum campaign claimed that an extra £350 million a week could be spent on the NHS in lieu of the UK’s EU membership contribution; further notes that senior figures who campaigned, including the hon. Member for South Northamptonshire, the hon. Member for Uxbridge and South Ruislip and the Rt hon. Member for Surrey Heath have subsequently distanced themselves from that claim; and calls on the Government to set out proposals for additional NHS funding, as suggested by the hon. Member for South Northamptonshire on 4 July 2016.

It is a pleasure once again to face the Secretary of State for Health.

Nobody can doubt that much of the case that was made by the Vote Leave EU campaign was based on assertions that have since crumbled. For instance, within hours of the vote to leave the European Union, the Tory MEP, Daniel Hannan, said that taking back control of immigration did not necessarily mean cutting it. That will have been news to millions of people who voted to leave.

We also heard that there was no hurry to get on with leaving the EU. Why then the urgency of the campaign? The most striking reversal of all came from Nigel Farage. Within hours of the vote, he said that it was a mistake for the Vote Leave campaign to claim that leaving the EU would mean £350 million a week more for the NHS. Some of us were surprised by that, because this was no ordinary campaign slogan; it was painted on the side of the Vote Leave battle bus, which travelled thousands of miles up and down the country. It was emblazoned on the backdrop to speeches by the luminaries of the Vote Leave campaign. The British public is entitled to ask: where is the £350 million a week and when can we expect to see the Government start pumping that new money into our NHS? We all know about the financial and other pressures already facing the NHS.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Does my hon. Friend not think the public are also entitled to ask where the serried ranks of leave campaigners are today?

[Ms Abbott]

My hon. Friend makes an important point. I do not see a single solitary leave campaigner in the Chamber this evening. It makes me wonder what the whole campaign was about. Was it about their egos? Was it some elaborate Eton wall game? Are they not concerned that the public may have been misled?

As I was saying, we know about the financial pressures already facing the NHS. A survey by the Healthcare Financial Management Association of 200 NHS finance directors in hospitals and clinical commissioning groups reveals that no fewer than one in five believe that the quality of care will worsen in 2016-17, and even more of them—one in three—fear that care will deteriorate in 2017-18 as a result of financial pressures. Waiting times, access to services and the range of services offered were seen to be among the most vulnerable areas. There is no doubt that those pressures will be made worse when we leave the European Union.

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[Mr Bailey]

I understand the point that the right hon. Gentleman is making. On the other hand, I believe the Treasury has downgraded our prospective growth rate from 2% to 0.5%. Presumably, future spending plans will be based on that revised future growth rate. Is it not reasonable, therefore, to start making the assumptions that he has been wary of making so far?

[Mr Hunt]

It is perfectly reasonable to make the assumptions that the hon. Gentleman mentions, and there are plenty of reasons why we could look at some of the early impact on the economy even in the past 12 days and be concerned about the potential impact on the tax base and public spending more broadly. My nervousness as a Minister about talking those things up is that I do not want to talk down the British economy. Even though, as I say, I campaigned against the Brexit vote, I recognise that we are now going to leave the EU, I want the economy to be successful and I want us to make the most of the opportunities that face us.

On the broader issue of NHS funding, this debate indicates that there is some consensus—the Prime Minister mentioned this earlier today at Prime Minister’s questions—on the umbilical link between the health of the economy and the amount we are able to spend on the NHS. We are proud of the fact that we were able to protect spending in the last Parliament and to increase it by £10 billion in this Parliament on the back of a growing economy. Given that Health is the second biggest spending Department, we must recognise that it is vital to the NHS that we maintain that growth, despite the choppy period we are possibly about to go through.

North East Ambulance Service

Adrian Bailey Excerpts

Wednesday 4th May 2016 Westminster Hall

[Mrs Hodgson]

My hon. Friend makes a valid point, which I will touch on, although he made the case well. We have to look at the slippage, to where in the rest of the health service the paramedics are haemorrhaging, and why. I will say more about that in a moment.

Paramedics are there to treat people and give them emergency—perhaps life-saving—healthcare, but before they can even start to treat them, they might first have to calm the patient and relatives down, because of something that was completely out of their hands. It is therefore no surprise that, nationally, there is a shortage of qualified paramedics, and all trusts are struggling to fill vacancies so that they can operate at full capacity. The North East Ambulance Service has a 15% shortage, and is plugging the gap with private and voluntary organisations, as my hon. Friend the Member for North Tyneside mentioned. The service has said, however, that it will be up to full establishment in a year, but how many more people will wait for hours and hours before we get to that stage?

Something therefore needs to be done about the recruitment and retention of paramedics, especially since evidence has shown that more staff are leaving the profession than ever. Also, mental health charity Mind reported that 62% of blue-light emergency service workers have experienced a mental health problem and, worryingly, one in four has considered ending their own life. It is shocking to think about the stress that those people are working under.

It is no surprise that research conducted jointly by Unite, Unison and the GMB revealed at the end of last year that more than 1,500 paramedics had left the service in 2014-15, compared with 845 in 2010-11—still a high number, but a little more than half the later figure. Of paramedics surveyed as part of other research by the three unions, 75% had considered leaving the profession due to stress and pay.

Action therefore needs to be taken on recruitment, which is why I welcome the work of my local university, the University of Sunderland, which in partnership with the North East Ambulance Service has launched a diploma programme in paramedic practice. It will pair theoretical study with practical training over two years, and it will help to address the shortages faced by not only our regional trust, but other trusts around the country. That innovative work by my local university, alongside that of the outstanding paramedic practice degree at Teesside University, which is seen as a beacon of best practice in our region, if not the country, is important and will help.

It is, however, unsustainable not to address strategically the staffing shortages and the increasing demoralisation of a workforce who are haemorrhaging away, because that is clearly having an impact on waiting and call-out times for emergencies. That is why I hope that the Minister will address those concerns, and outline what the Government are doing to deal with recruitment and retention. How will she work with my local ambulance service trust to ensure that it reaches the target of being fully operational by this time next year? How will the ambulance trust ensure that those who are recruited into the field are retained and do not slip off to work for other parts of the health service, so that we do not see further shortages down the line?

It is important that our emergency ambulance services are up to the standard that we all expect. That means working collaboratively among ourselves, as the local Members of Parliament who represent our constituents and their concerns, and with the Department of Health, NHS England and the North East Ambulance Service Trust. Our constituents deserve the best standards in our NHS, and it is up to the Government seriously to address pressures on our NHS services, especially the case of the workforce in the ambulance service.

I hope that the Minister has listened carefully to my concerns, and will listen to those that my colleagues from the north-east who have attended the debate today express. I look forward to hearing what she has to say at the end of the debate.

[Mr Adrian Bailey (in the Chair)]

I will call the Front-Bench spokespersons at 3.40 pm. Simple arithmetic will demonstrate that if I am to get everyone who wants to speak to speak—I want you to speak as well—you need to confine your remarks to about six or seven minutes. I will be grateful if you follow that guidance.

Manufacturing

Adrian Bailey Excerpts

Thursday 24th November 2011 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

I congratulate my hon. Friend the Member for Hexham (Guy Opperman) on securing the debate. Apart from a brief spell stacking shelves in my local Co-op in Poynton, I have worked in the manufacturing industry for my entire career. Interestingly, my first manufacturing job as a young man was working for BAE Systems on the mark 3 airborne early warning Nimrods. After a lot of taxpayers’ money, that was rightly cancelled because it was over budget and out of date and did not work.

When Britain was described as the workshop of the world nearly a century and a half ago in 1870, the UK accounted for almost half—46%—of the world’s manufacturing output. Today, that title has been bestowed on China, which produced a fifth of the world’s manufactured trade in 2007. The term seems to have lost some of its meaning over time, as has the notion of Britain as an industrial nation.

Everyone appears to believe that the UK is doing fine when it comes to manufacturing, citing the fact that we are the fifth largest manufacturer in the world in terms of value of output. That attitude has bred complacency and allowed successive Governments to believe that they are doing enough to maintain that position. However, that belies the truth. If we measure manufacturing in terms of per capita value added, we realise that Britain is only around 12th in the international league tables, and suddenly the picture changes dramatically.

It is clear that if we are to rebalance our economy, much more must be done to push us up the rankings. That means providing support for all forms of manufacturing, rather than just the high-tech sectors that seem to be so fashionable at the moment. It has been calculated that those sectors make up only 14% of British manufacturing and it has been argued that the support for manufacturing should be based on value, not the complexity of the product. For example, the UK still produces basic metal turbine blades, but they are cut by some of the most precise machines on the planet. The product is simple but very high value, thanks to the advanced production process.

There is no question but that such a shift must take place. The financial crisis made most people aware that the UK cannot rely on the financial services trade surplus to prop up the industrial trade deficit. However, it is less well known that, according to the Office for National Statistics, even the financial sector’s maximum export volume of £55 billion in 2008 was eclipsed by manufacturing’s £195 billion of exports.

The problem is twofold. First, our manufacturing ability is only rivalled by our insatiable appetite for other people’s goods. That has led to the latest trade in goods deficit of almost £100 billion—a new record. Secondly, Britain has grown complacent. Our manufacturing output has remained constant for the past 13 years under Labour, which is a reduction of £3.5 billion per annum in real terms.

Where did it all go wrong for UK industry? Contrary to popular assumptions, although some deindustrialisation did occur under Margaret Thatcher, the bulk of the factory closures came later. Indeed, when Labour took office in 1997, manufacturing comprised exactly a fifth of the UK economy. By 2007, it had declined to an eighth. In comparison, under the whole of the Thatcher Administration, the decline was 3.3%. The loss of our manufacturing capabilities is a very recent concern, which should fill us with a certain level of optimism.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

So far, the debate has been conducted on a reasonable cross-party basis. However, given the fact that the hon. Gentleman has made a political assertion, can I point out that in the black country, at least four huge manufacturing employers—Round Oak steelworks, Patent Shaft steelworks, Bean Cars and Cannon—were closed during the Thatcher era? That had a devastating impact on the level of employment in the black country.

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[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

My constituency borders that of my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), so if my remarks echo his it is because of our shared experience of black country manufacturing and the challenges that it faces. My constituency, consisting of Oldbury, Tipton and Wednesbury, was at the heart of British metal-bashing for centuries. When Britain was the workshop of the world, the black country was the centre of that. It has a proud manufacturing tradition, and I am equally proud to say that, even given the hard times that the industry has gone through, there are still more foundries in my constituency than in any other in the country. The number of people employed in traditional manufacturing, while nothing like what it was, is still higher than in most areas of the country. My constituency is thus second to none in having an interest in the particular theme of this debate.

I know that many people, particularly within the black country business community, welcome the Government’s rhetoric on boosting manufacturing, rebalancing the economy and securing export-led growth. I certainly share both the Government’s and the local business community’s enthusiasm for all of those. I think, however, that we need to measure this with a touch of realism.

My right hon. Friend the Member for Wolverhampton South East made it clear that although we might want to extol the virtues of manufacturing, we must not do that to the detriment of the contribution made by other sectors of the economy, particularly our creative industries, which are world leaders and provide a significant proportion of our national output and a large number of employees. This applies to our service industries as well. Although manufacturing might have declined relatively, that is partly because we have an expertise in the service industries that is recognised throughout the world and provides potentially exportable market opportunities.

Manufacturing has a crucially strategic role. Although it provides something in the region of only 11% of national output, it provides nearly 50% of our exports. If we are to export our way out of recession, the service industries might play a significant part, but we cannot overlook the potential of manufacturing industry. It contributes something like 74% of research and development. The more R and D there is, the more competitive we become: the two are crucially linked.

We must recognise that without having more R and D and without providing a higher value-added manufacturing base, we might not be able to generate the levels of employment that we have had historically in manufacturing. We might well pursue policies to help businesses expand manufacturing as a proportion of our national output, but that might not necessarily result in a huge increase in the number of people employed because as we become more competitive and productive, we might be using fewer and fewer people to achieve it. That can sometimes blur the distinction between manufacturing employment and service employment—hence the reference made by my right hon. Friend the Member for Wolverhampton South East to “manu-services”. Increasingly, as our high value-added manufacturers export abroad, they follow it up with service contracts, which provide a lot of employment for people who are technically in a half-way house between servicing and manufacturing.

[Mr Sheerman]

I know that my hon. Friend, as Chairman of the Select Committee, has a great deal of knowledge on this subject. I wonder, however, whether we are avoiding the fact that Germany is also good at services and at design and many other things, yet it still has a manufacturing base that is twice as big as ours. That is why I keep coming back to “It’s Germany, isn’t it?” that we need to copy.

[Mr Bailey]

My hon. Friend is quite right—for a whole range of reasons that, unfortunately, time constraints prevent me from developing. Germany has a far stronger manufacturing base than we do, and a much stronger manufacturing culture throughout the country. I would like to discourse at length on that, but time constraints prevent me from doing so.

Notwithstanding the German experience, it is generally recognised that our expertise in some of the service industries may well give us greater export opportunities to countries such as China. Because of Germany’s expertise in manufacturing, it has done very well in what we might term the first wave of exports to China, but we may do better now because of our superiority in some service industries.

[David Morris (Morecambe and Lunesdale) (Con)]

I serve on the Science and Technology Committee and we recently examined how the Germans fund their new technology infrastructure. They have the Fraunhofer institutes, which have been running for more than 100 years. We are now trying to emulate that through the Turing centres. German manufacturing is good, but ours could be equally good, if not better.

[Mr Bailey]

That issue was recognised by the previous Government, and measures were being put in place to replicate that approach in the context of the British industrial scene. The current Government are, to their credit, taking that up.

Bank lending is a hugely significant issue for small and medium-sized enterprises in my constituency and nationally. The Merlin targets are not being met. That, combined with low consumer confidence and low business expansion expectations on the basis of the domestic market, means that companies are not applying for loans because they do not feel positive about future market opportunities and because they are wary of the banks making their credit lines even more difficult than they already are. That is having a stultifying effect on the ability of small businesses to expand.

Quantitative easing in order to address that issue may, indeed, keep interest rates low, but I have yet to meet a bank that knows how that will help SMEs directly, and I have yet to meet a business that knows how it would make any difference to its relationship with its local bank. Although lower interest rates may be welcome in general, that will not necessarily feed through to more investment in small businesses. I am concerned that the effect low interest rates are having on pension fund incomes could lead to some manufacturing businesses having to pay more into their pension funds, thereby diverting money from other areas in order to sustain their pension levels. This could be a counter-productive step, therefore.

There is now a lack of provision in the crucial area of small grants and loans for small businesses that want to expand to take the market opportunities that will be available to them. The regional development agencies will not be reintroduced—that is a debate for another day—but they did provide small loans to businesses that wanted to expand. Those loans are gone now, and they are not being replaced by the banks. The regional growth fund is not yet delivering for small businesses. If we are to expand the capacity of manufacturing SMEs in the time that they have available to make an impact on employment, that vacuum needs to be filled. Either local enterprise partnerships must be given more powers or the RGF needs quicker and more localised means of distributing money.

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Bailey]

No; I am sorry, but I am running out of time.

I reiterate the points made about research and development tax credits and capital allowances—they might go some way to dealing with that problem. As they have been mentioned, I will not repeat the discussion of the issue.

The second issue to address is skills. As has been said, Tata has invested £300 million in Jaguar Land Rover in a site to the north of Wolverhampton, with enormous employment potential locally. The concern within the industry is that the extended supply chains of small and medium-sized enterprises that could service JLR may have a shortage of skilled apprentices, and I have already mentioned the potential need for capital investment to improve the capacity to meet the demand from JLR. I have no doubt that JLR will attract all the people it needs, because it is a high-paying iconic company that is very attractive to everybody. It will be the SMEs in the area that will need to recruit, and we need to expand our vocational skills base to ensure that that happens.

The Government have rightly concentrated on apprenticeships. However, there is emerging a picture of apprenticeship provision that will not necessarily address that need. First, a high proportion of the new apprentices are over 24, and there is considerable concern that these are just Train to Gain people rebadged. There is nothing wrong with Train to Gain, because it has an important role to play, but it will not necessarily meet the skills need that it is directed at. Secondly, there is increasing evidence of private providers coming in with short-term courses, which do not meet the historically longer-term need for training in a particular industry to meet capacity. I believe that the black country local enterprise partnership is examining the issue to try to scope out the skills provision that will be needed and ensure that it is provided. That LEP will be able to its job far more effectively if the Government were prepared to back their localism agenda by providing it with the resources to assess the skills need and to deliver on it locally.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Wright]

I heartily agree with my hon. Friend. My questions for BIS Ministers relate to having an active industrial policy. Where is the assessment of the sectors in which Britain has unique competitive advantages and of where we can sell our unique products to the rest of the world rather than lamely following the rest of the pack? Where are the clear milestones along the way that would allow investment and business decisions to be taken with some degree of certainty and stability?

A recurring theme of today’s debate has been the role of research and development and associated capital allowances. Again, I want this country to be the best place for any investor in manufacturing to invest in research and development, but R and D tax credits, the industry tells me, are not working. What can we do on capital allowances and R and D spend? When can we expect some clear vision from the Government about the road map that is needed as part of an effective and active industrial policy? We have had welcome announcements about funding for technology and innovation centres—I think the Minister mentioned them in his remarks—but the ad hoc decision is a diluted version of what was set up and planned under the Labour Government, with businesses now unclear about how they fit into the bigger picture. The Department promised us its manufacturing framework document over a year ago, but it has still not been published. Where is it?

Another common theme has been the concern—expressed by the hon. Members for Hexham and for Burnley (Gordon Birtwistle)—about the inability of manufacturers to secure access to finance for growth. The Secretary of State’s initiatives have not worked. Project Merlin has not secured its aims and the regional growth fund is not delivering on the ground. In the space of 55 seconds—I timed it—in yesterday’s debate, the Secretary of State went from claiming that as a result of the RGF,

“factories have been built and the jobs are being created”—[Official Report, 23 November 2011; Vol. 536, c. 333.]

to acknowledging, in response to the Chair of the Select Committee on Business, Innovation and Skills, that he could not provide a figure on the number of jobs created by that fund at all. Will the Government look again at this crucial issue of access to funding?

Many companies are sitting on a pile of cash on their balance sheets, largely because they have little confidence in economic prospects, but is anything being done by this Minister and the Department to free up some of that cash to provide much needed finance to manufacturers? I hope that the Minister will intervene to provide a degree of clarity on that; otherwise, I am happy to wait for the Chancellor’s autumn statement on Tuesday.

Several hon. Members mentioned the huge opportunity for export markets. We have been behind the curve in emerging markets for some time. The CBI and Ernst and Young have just published a report, which demonstrated that UK businesses tend to rely on the US and continental Europe for their main export markets. The report quotes the chairman of a Mexican automotive parts manufacturer, stating:

“Overall I think the UK and its companies should pick the right battles and the right countries, and focus on specific sectors within those markets. There’s a lot of goodwill out there that’s not been exploited.”

Will the Minister respond to that and set out what has been done—he touched on it in his opening remarks—to strengthen our export capability? Time and again, firms say that they cannot exploit their potential by gaining access to export finance, that the range of such finance is limited and that things such as the export credit guarantee do not specifically address business needs. How can the Government address that?

Industry states that the supply chain to UK manufacturing needs to be improved. That is crucial in ensuring that British manufacturing is competitive in global markets throughout the world. The Secretary of State acknowledges that. In his speech to the Policy Exchange last month, he talked about how

“Government can support UK supply chains across a number of sectors critical for future growth.”

Since then, however, we have had no information or detail, or even an announcement as to when we might be given any. Industry is crying out for that as a means of boosting its competitiveness, so it would be helpful if the Minister could provide further detail.

[Mr Bailey]

Will my hon. Friend give way?

[Mr Wright]

Yes. I would very much like to hear from the Chair of the Business, Innovation and Skills Committee, as he has great expertise in this area.

[Mr Bailey]

Given the potential to expand the supply chain in the west midlands through the Jaguar Land Rover development and the possible repatriation of the supply chain for many of the Japanese manufacturers because of the problems in Japan, does my hon. Friend agree that the Government must come up with measures to bridge the capital funding gap, so that small businesses can exploit these opportunities?

[Mr Wright]

I entirely agree. One of the central themes of my remarks is that we have a huge opportunity, and that in the long term we can thrive as a leading manufacturing nation, but first we must overcome some very serious short-term difficulties involving finance and both domestic and international demand. Despite the warm words and fine rhetoric from the Government, I am not convinced that we are addressing the issues that industry wants us to address.

Manufacturing can play a leading part in Britain’s 21st-century economy, but in order to succeed in the modern era we need an active industrial strategy of partnership, where the join between industry and Government is not visible. Instead, we have a Department and a Government who lurch from one ad hoc announcement to another, via a series of wrong industrial policies. We need something better and more ambitious, so that we can tap into this country’s enormous potential and ambition in manufacturing, including in innovation. I want Britain to be the best place anywhere in the world in which to carry out manufacturing, but in order to secure that for the long term we need Government to act now.