Industry (Government Support)

Baroness Burt of Solihull Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mr McFadden]

The previous Government set out many proposals, including some £900 million over the next few years in the expenditure of the Department in which I was a Minister. We also said that we would save billions more than that on public sector pay and pensions, and we set out many other proposals. I do not stand here as someone who says that there should never be cuts. My point today is that cuts must be made in a way that supports a strategy for growth, not in a way that militates against it. That is why I raised the issue of industrial support and regional development.

Apart from the Budget, what about the future of the RDAs themselves? Government policy on this is in a total mess. We have had statements that they will be abolished, that they will be replaced, and that their replacements will both be different and look the same. Can the Secretary of State tell the House today exactly what the position is and how he is going to make a judgment on this? He talks of business and local authorities deciding in particular regions. How will that be done? Will it be one vote per council or one vote per business? Will it need a 55% majority? If it will be up to the region, how will he make the judgment on this important issue?

[Lorely Burt (Solihull) (LD)]

RDAs are important, but does the right hon. Gentleman concede that the performance of some RDAs has been patchy—to put it kindly? Does he agree that we can still deliver support for business in a cost-effective way, but more flexibly using local enterprise partnerships? One size does not fit all in all areas of the UK.

[Mr McFadden]

I know that the hon. Lady cares about these issues, but I have to disagree with that point. Until the situation is clarified, businesses in various regions do not know with whom they will be working, and a damaging lack of confidence is emerging about how projects that cross local authority boundaries are to be managed in the future.

--- Later in debate ---

[Vince Cable]

I have taken an enormous number of interventions; I will take one from the hon. Gentleman later.

Before I leave the car industry, I must point out that these projects were part of an assistance scheme for the industry, and I think that the Opposition Front-Bench spokesman would acknowledge that they were time limited. Other projects have already made applications, which are being properly considered, but we cannot have a situation in which the car industry, or any other, assumes that it can come to the Government for money, just because it has an interesting project.

It is worth underlining the point that, in large parts of the British car industry, brilliant companies have got through the recession without Government support. My first visit as a Minister was to the Bentley factory in Crewe—[Laughter.] Hon. Members might laugh, but that factory provides thousands of highly skilled jobs and a high-quality product. It is a subsidiary of BMW. It was very badly hit by the recession—it lost half its output—but it kept going. The management took a big pay cut, and the workers joined them, accepting that they had joint responsibility for the company. The company survived; it is now flourishing—it has some of the most sophisticated technology in Britain—and it did all that without a Government guarantee.

[Lorely Burt]

Land Rover, in my constituency, is another brilliant example of a company that has weathered the economic storm. It is now surging forward, and it is investing in research and development. I welcome the decision on GM and Ford, and we should all be concerned about having a level playing field in relation to the UK economy and those in other parts of the world. Can we use R and D investment and capital investment in advanced manufacturing plants such as these to provide at least a level playing field in relation to other countries, and to secure investment for the United Kingdom?

[Vince Cable]

I know that my colleague takes a close interest in these matters. She has represented the interests of Solihull and the factory extremely well over the past few years. I am very happy to talk about her proposal, but I want to emphasise the fact that the automotive assistance scheme does not have a permanently open door. Applications have been made, and they will be dealt with on their merits.

I was giving examples of car companies that have flourished and coped with the recession without coming for Government support. Before I went to visit Bentley, I went to another factory, Cosworth—one of several Formula 1 manufacturers in this country, using very high technology. It was flourishing, providing highly skilled manufacturing employment and was not dependent on Government support, like many others. It is not just the specialist producers either, as mass producers—Honda, for example—are also relevant. Honda took a big hit during the recession and the work force accepted part-time working and cuts in pay in order to keep the company together. They did so, and the company did not come forward asking for specific Government assistance. That will now be the pattern.

We have made it very clear—I made it clear in a speech—that we are willing to do what we can to support growth in the British economy, and we will do it by helping build up competences, skills, research and development and so forth, but we are not in the business of handing out money to individual companies. Quite apart from the merits of the proposal, there is an issue of affordability in the financial climate in which we now operate.

Let me start to conclude by clarifying some things that we want to do. We believe, like the right hon. Member for Wolverhampton South East, that the Government have a role. I do not believe in laissez-faire. The Government have a role; there are many market failures; there is, of course, an important role for Government in this field. It has to be cost-effective, however, and it has to be affordable. Let me summarise some of the things we are starting to do, having been in office for only a month.

The first element is skills. One of the first decisions made by the Government when they came into power was to fund 50,000 apprenticeships. That compares with the 200,000 built up under the last Government over 10 years.