Economy: Growth

Baroness Wilcox Excerpts

Thursday 9th December 2010 Lords Chamber

[Lord Roberts of Conwy]

To ask Her Majesty’s Government what steps they are taking to encourage economic growth.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government are taking steps to encourage economic growth by providing stability for business through firm action to tackle the deficit, to make markets more dynamic through reform of the competition regime and corporate governance, and to focus the Government’s activities on providing the conditions for private sector growth. We will ensure that strong, sustainable growth is fairly shared through local enterprise partnerships and through our new strategy for skills.

[Lord Roberts of Conwy]

I am grateful to my noble friend for that reply. Can she confirm that manufacturing industry is currently expanding at the fastest rate for 16 years and that employment in manufacturing is increasing at the fastest rate for 18 years? Are there other sectors in which the Government anticipate stronger growth?

[Baroness Wilcox]

My noble friend Lord Roberts makes a very fine point and, yes, of course, I can support the facts that he has read out. Last week’s report that the purchasing managers index for manufacturing rose to 58 in November is absolutely right. The most recent Office for National Statistics data show that manufacturing output in the three months to October 2010 was more than 1 per cent higher than in the previous three months and 5 per cent higher than in the same period a year ago. That growth is evident in the innovative SME Brompton Bicycles, for example, which has grown in recent years from producing 5,000 bikes a year to 30,000 this year.

[Lord Soley]

Bearing in mind that there is already growth in the economy from the actions of the previous Government following the international recession, and as I have pointed out many times before, that Britain is the sixth largest manufacturing country in the world and we are at the cutting edge of aerospace, sub-sea platforms and other areas, how can the Minister guarantee that the defence cuts affecting the aerospace industry and the 80 per cent cut in the university grant will not put our manufacturing sector at severe risk in the future?

[Baroness Wilcox]

We are looking across the whole of the manufacturing sector and, in the next few days, we shall bring out a manufacturing strategy to ensure that we are taking our country forward in all areas and at all levels. Of course, the previous Government had some great successes—they should have done; they were in power long enough.

[Lord Broers]

My Lords, when does the Minister think that we will stop our slide down the manufacturing table? I know our output is up but, if she checks the numbers, I think she will find that we are not in fact in sixth position, but in seventh position. I checked that again this morning. The OECD numbers show that we are some 9 per cent behind France, which is in sixth position, and we are 20 per cent behind Italy, which is in fifth position. I am encouraged by what is happening, but I ask the Minister to assure us that this slide will be stopped. Brazil and Korea are snapping at our heels and we will soon be in ninth position unless we do something about it.

[Baroness Wilcox]

My Lords, obviously, we are delighted with any signs of growth and of going forward. The figures read out by the noble Lord are not encouraging, but that does not mean to say that we do not have to try to do the best we can. We know, for example, that advanced manufacturing growth is very important for us, and a review will be out very soon. We are reviewing all the areas in which we can find any growth at all, and I am sure that the noble Lord, fine engineer that he is, will help us in any way he can to encourage us in areas from which he thinks growth will come.

[Lord Razzall]

My Lords, in her Answer to her noble friend Lord Roberts of Conwy, the Minister indicated that the establishment of local enterprise partnerships was a key driver for economic growth. Is she satisfied with the progress in the establishment of those local enterprise partnerships, which, as she will know, is a subject that is dear to the heart of the Liberal Democrat party?

[Baroness Wilcox]

The formation of 24 local enterprise partnerships is a landmark move that will see business and civic leaders work together to create the conditions for growth in their communities. This is, as we know, a real power shift away from central government and quangos towards local communities and the businesses that really understand the local barriers to growth. We have 24 partnerships already and we are working very hard to ensure that the others will come online as quickly as possible. We are quite confident that this will take things forward in a way that the RDAs never did.

[Lord Barnett]

My Lords, does the noble Baroness know why the Chancellor withdrew his proposed White Paper on the Government’s policy on growth?

[Baroness Wilcox]

The Secretary of State in July spoke of developing our strategy in the autumn with a view to publishing a White Paper—or a paper. As we know, the status of a paper is determined by its content. The proposals in the paper did not require legislation. Therefore it was not a White Paper.

[Lord Jenkin of Roding]

Does my noble friend not accept that improving the nation’s skills is absolutely crucial to the Government’s growth targets? Will she accept that the paper that was published last week, the strategy document Skills for Sustainable Growth, with its emphasis on part-time training, distance learning and adult training, points an extremely valuable way forward and should be supported?

[Baroness Wilcox]

My noble friend is quite right; it does point us in the right direction for the new skills that we will require. We will encourage skills right across the piece and I think today of all days is one when we can talk about all sorts of ways of educating and bringing our people forward. Skills will be a great part of that.