Industrial Strategy

Debate between Barry Sheerman and Iain Wright

Thursday 20th October 2016 Commons Chamber

[Mr Wright]

I think that smart procurement can engineer proper prosperity, but I warn the hon. Gentleman that what I have to say next will give him spasms. It relates to the link between a proper industrial strategy and foreign takeovers, and how the state can intervene to perhaps limit the range of foreign takeovers.

In her speech launching her campaign to be Conservative party leader in July, the Prime Minister said:

“A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain.”

I welcome that approach. One of Britain’s virtues is its openness and the fact that that openness lends itself to dynamism and a willingness to consider new ideas and innovate new products. That ultimately leads to better competitiveness, yet there is a risk that this country will sell off the crown jewels, which would be detrimental to the long-term success of British business. We are at the heart of a dynamic and connected global economy, but we are at greater risk of investment in capital allocation decisions that affect British industry being made far away from these shores by parent boards headquartered overseas.

Indeed, within days of the Prime Minister entering No. 10, it was announced that SoftBank was buying Cambridge-based Arm Holdings for £24 billion. That was not an old-fashioned, obsolete, loss-making businesses, and it did not require a bail-out from the state. It was a successful British company in the growing global tech revolution. If the tests for stepping in to defend a sector that is important for Britain were not at work in that instance, it is difficult to see when they would be applied. Indeed, what would those tests be? For every instance of a welcome takeover, such as Tata’s purchase of Jaguar Land Rover, there are numerous examples of takeovers where industrial capacity was moved offshore, such as Kraft’s takeover of Cadbury. What are the criteria for stepping in and intervening?

[Mr Sheerman]

That is music to my ears. When I was a young man, I worked for Imperial Chemical Industries. These days it is called Syngenta and it has a big plant in my constituency. The leading agritech company in the world was taken over, including all its sites, not by a normal company, but by ChemChina, which is a part of the communist Government of China. That is not a normal takeover, but what are this Government doing about it? I have not heard anything.

[Mr Wright]

That is a fair point and it gets to the heart of what we mean by foreign takeovers and their link to industrial strategy.

I am conscious that colleagues want to make their own speeches, so I will finish. The Government have yet to articulate what is meant by picking winners, whether they be individual companies, sectors or technologies. There seems to be a move away from our previous sectoral approach, but there is no clarity with regard to the criteria. It is increasingly obvious that the Government are not entirely clear about what an industrial strategy looks like. Starting with a blank piece of paper gives the Select Committee a welcome opportunity to contribute meaningfully to the development of policy, but it does not provide much reassurance or certainty to the firms that are working hard to create wealth and prosperity for this country—and certainty is what they are crying out for at the moment.

BHS

Debate between Barry Sheerman and Iain Wright

Thursday 20th October 2016 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

It is a genuine pleasure to follow the hon. Member for Bedford (Richard Fuller), who played such an important part not only in the BHS inquiry but in all other inquiries carried out by the Business, Innovation and Skills Committee. I am really proud of the work carried out by the members of my Committee and the Work and Pensions Committee. We came together extremely well to work forensically and diligently on the hundreds of hours of oral evidence and to consider thousands of pages of written evidence. It is significant that the final report was agreed unanimously, without a single vote being required. Such work was made possible only because of the professionalism and hard work not only of the members of the Committees but of their Clerks. I am very proud of the report and stand by every single word.

What came out of the evidence was a story of massive contrasts and of huge inequality—of tens of thousands of low-paid workers, and those trying to get by in retirement on a small pension, losing out because of the greed of a very small number of people who enriched themselves and gorged on BHS to the tune of millions of pounds.

BHS folded this year, a year after Sir Philip Green sold it to Dominic Chappell, but its demise was on the cards a lot earlier than that. In the three-year period between 2002 and 2004, BHS Group paid dividends of £423 million, even though operating profit for that period was significantly less than that amount, at £325 million. In 2004, BHS Group had dividends of £199.5 million, which exceeded the group’s operating profit of £137 million for that year. The dividends of £199.5 million also coincided with a long-term loan of £200 million being taken out that year.

That dividend policy is revealing, and it set the scene for the eventual demise of the company. The payout to shareholders—predominantly the Green family—did not reflect a corporate turnaround and good transformation in business. BHS did not have the cash flow or the profits to fund the dividend. It denuded the company’s reserves and, in the case of that final dividend in 2004, had to be funded by a long-term loan.

Sir Philip could say, quite reasonably, as he did to the Committee, that he received dividends for only a short period of time early on in his period of ownership. It was a long time ago, that is true, but the dividend policy is crucial to understanding the whole sorry business of BHS and the wider lessons that we need to learn.

Green was to enrich himself, his family and his friends at the expense of long-term and sustainable growth for the company. Certainly profits were made, but they were more akin to a short-term sugar boost than a nutritious diet that aided the long-term health and strength of the business. Upon taking over the company, he was able to cut costs—an achievement that should not be easily dismissed—but he was never able to boost turnover throughout his ownership of BHS. So much for the king of retail.

It is true that Sir Philip Green owned the company for a total of nearly 15 years, and that he retained ownership a full decade after taking the last dividends. In that regard, he cannot be described as a short-term corporate raider. But raid the company he did, and his ability to do so meant that he was then in a financial position to obtain the debt to acquire Arcadia and, through the same modus operandi that he operated at BHS, pay his family the biggest corporate dividend in British history. He took the rings from BHS’s fingers, beat it black and blue, starved it of food and water and put it on life support, and then he wanted credit for keeping it alive.

BHS’s balance sheet was made considerably weaker during Sir Philip Green’s tenure of the company. His extraction of value early on in his ownership made the company less able to innovate, to retain a market share or to have a competitive place in the retail market that would allow the firm to generate profits and be in a better position to survive the growing pension deficit. That drip-drip decline provided the backdrop to Sir Philip’s wish to sell the business.

It would be difficult to come up with a more unlikely or incredible knight in shining armour than Dominic Chappell. He was a former bankrupt, with no experience either in retail or in running a company of any sort of comparable size to BHS. He was introduced to the deal by a convicted fraudster for whom he was carrying out driving duties. He boasted that he had senior retail figures on board for key roles in the new business, when that was not the case. He stated that he would be investing his own money in the deal and that he had £120 million of working capital available, when that was not true. His own investment bankers walked away when they discovered that he had lied about the nature of the deal.

Yet the due diligence carried out by the myriad advisers on the transaction did nothing to stop or even pause the deal. There was a remarkable amount of group-think among the supposedly independent advisers. Grant Thornton received four times the fee that it normally receives from similar transactions. Retail Acquisitions Ltd did not have the means to pay advisers for their services unless the deal with BHS went through. The fact that RAL did not have the cash to pay the invoices, let alone to provide the working capital for a loss-making £600 million business with a half-a-billion-pound pension deficit, should have rung alarm bells up and down the City as to whether the engagement should have been taken on. The fact that it did not clearly gives rise to questions about whether impartial advice was provided, or whether blind eyes were turned to ensure that the fees would be paid through a successful transaction, regardless of whether the company toppled over soon after that.

Goldman Sachs provided Sir Philip with “preliminary observations” and was not paid. The lack of any clear letter of engagement showed appalling levels of informality, given that tens of thousands of jobs were at stake. As the hon. Member for Bedford said, the fact that Dominic Chappell was able to say that Goldman Sachs was on board gave his bid credibility. There is a certain irony in the fact that the firm that was not paid, that had an ambiguous role in the transaction and that claimed that it was merely providing preliminary observations was the only one that really expressed concern about the transaction, noting that

“there were risks attached to the proposal in light of the lack of retail experience, the bankruptcy and the highly preliminary nature of the proposals and so on and so forth”.

Goldman Sachs’ attitude to document management seemed to be on a par with that of a dodgy and ramshackle cowboy operation, rather than that of supposedly the world’s premier consulting firm. If that approach was deliberate, in the belief that an informal approach to the transaction would exonerate it of any involvement, it was wrong. Although it was ultimately not responsible for the decisions taken—that was the responsibility of Sir Philip Green—its involvement mattered. It was up to its neck in it, even to the extent of offering a £40 million credit facility.

The risk to their reputation should have made those advisers think again. Much store is placed on the high-quality advice given by such advisers—certainly, in the case of BHS, the use of such prestigious names gave parties credibility and legitimacy when they should have had none.

This was all made possible by weak and incompetent corporate governance. We on the Committee saw opaque structures, overlapping board membership of a complex web of companies and ineffective leadership at board level. Lord Grabiner, chairman of the ultimate selling company, played no effective part. He was not present at, or even invited to, a meeting of the Taveta board that took the ultimate decision to approve the sale of BHS to Chappell. Lord Grabiner showed no curiosity in the deal. He was docile and demonstrated no effective scrutiny, challenge or leadership. That was indicative of a culture, common in corporate governance scandals, in which a domineering, overbearing and bullying individual was able to get away with things with little, if any, challenge.

That is a key reason for the Select Committee’s decision to undertake an inquiry into corporate governance. Given our experience with BHS, we want to look at whether company law is sufficiently clear on the role of executive and non-executive directors and whether their duties are the right ones. We are examining how the interests of shareholders and other stakeholders are balanced, and how decisions of boards could be better scrutinised and open to challenge. Given BHS’s status as a private, non-listed company, how should we align the corporate governance arrangements and requirements between listed and private companies more clearly, so that it is not in the interests of chief executives or directors to take firms private to hide them from effective scrutiny and transparency?

It may be argued that the Green family, as ultimate shareholders, could do whatever they wanted with BHS, and they did. But a company with tens of thousands of workers and former employees dependent on its long-term viability cannot be run as a personal fiefdom or a massive piggybank—even though BHS was run in that way—and corporate governance rules and regulations should, no doubt, be adapted to reflect that.

The duties of directors are somewhat vaguely defined. Section 172 of the Companies Act 2006 states that a director of a company must promote the success of that company in such a way as to have regard for

“the likely consequences of any decision in the long term…the interests of the company’s employees…the need to foster the company’s business relationships with suppliers, customers and others”

and

“the desirability of the company maintaining a reputation for high standards of business conduct”.

[Mr Sheerman]

The BHS employees who lost their jobs in towns such as Huddersfield say to me, “Why is it that the advisers, consultants and auditors who did not do their job in the banking crisis are, all this time later, still not doing their job as auditors and professional people?”

[Mr Wright]

As the hon. Member for Bedford mentioned, we need to look at more than just reputational risk. A lot of deals go through simply because such advisers are involved. Is that good enough?

To return to my point about directors, can anybody look at BHS and say that the spirit and the intention of section 172 of the 2006 Act were being enforced? In companies legislation, directors are equal in status, but in the corporate governance code, chairs and leadership are given much more priority. Given the shocking absence of leadership or challenge from Lord Grabiner, who was truly hopeless, and the weak and impotent corporate governance operating here, there is a strong case for enshrining the requirements of the code in legislation.

As the hon. Member for Bedford said, Sir Philip received his knighthood for services to retail. During our inquiry, however, it became increasingly evident that he was not particularly good at retail at all. True, he was able, in the early days, to sniff out a corporate bargain and cut costs to boost profit. There is nothing wrong with that; that is not a criticism. But during his ownership, he did not boost BHS’s turnover, he lost market share to more nimble and even to not-so-nimble competitors and he failed to anticipate the online retail revolution. By failing to innovate and invest in the brand, he made BHS—an important anchor in the high street—look like a remnant of the 1970s and 1980s in a cut-throat, competitive sector, where grabbing the customer’s attention and retaining their loyalty are paramount.

Sir Philip lacked the success, the ingenuity and the business acumen of the likes of Charlie Mayfield, whose John Lewis group responded well to the internet and whose employee ownership model genuinely motivates staff. He could not match the virtues of Zara, which has increased market share through its superfast turnaround from design to manufacture and shop, which is based on the use of customer data and local suppliers, the rapid turnover of stock and an innovative online platform. Based on company performance, people such as Charlie Mayfield and the founder of Zara, Amancio Ortega, should, it seems to me, be classed as the true kings of modern retail—not Sir Philip Green.

BHS is one of the biggest corporate scandals of modern times. I am sure that the whole House has sympathy for the thousands of workers and pensioners who have lost their jobs and seen their pension benefits reduced as a result of greed, incompetence and hubris. The reputation of business has been tarnished as a result of that greed. The vast majority of businesses are not run and managed in such a way. It would be wrong to tar all businesses with the same brush, but it is vital that this mess is sorted.

UK Steel Industry

Debate between Barry Sheerman and Iain Wright

Monday 29th February 2016 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

The UK steel industry should be identified as a significant strategic sector of the British economy to help to secure our manufacturing strength and to retain the capability and capacity within the supply chain for our vital and productive industrial sectors such as aerospace, automotives and construction.

Given the industry’s importance and the crisis in recent months, with one in six jobs lost since the autumn, the Business, Innovation and Skills Committee made this issue the topic of our first report of the Parliament. We found that the Government were not sufficiently alert to the warning bells being sounded by the UK steel industry. Although the Government had identified the sector as vital, Whitehall did not have effective warning systems in place. The loss of job, skills and capacity in this vital industry is nothing short of a national tragedy. That has spanned more than 40 years, but on their watch, this Government should have been much more proactive in considering the retention of the existing steel capability and employment levels, rather than redeploying hard-working and skilled people to alternative jobs that are often less productive and lower earning, and losing forever these key industrial assets.

The Select Committee also found that UK Governments needed to do more at an EU level to prevent the dumping of Chinese steel—an issue that has rightly been mentioned throughout the debate and that is explicitly mentioned in the motion. It is of central importance and I shall return to it later.

At the steel summit in October, industry made five reasonable policy requests on matters such as energy costs, business rates, procurement, anti-dumping measures, and the industrial emissions directive. In the letter to me that accompanied the Government’s response to the Select Committee’s report, the Minister for Small Business, Industry and Enterprise stated:

“We have delivered on four of the five asks of UK steel and on Business rates we await the conclusions of the Chancellor’s review”.

In his opening remarks, the Secretary of State said virtually the same thing. In the body of the Government response to our report, the Government said that it has been

“unceasing in its efforts to deliver”

on those five asks, and pledged to

“continue to do all it can in the coming weeks and months to ensure a healthy and sustainable future for UK steel.”

Those are powerful words and phrases, yet I regret that they are untrue, and it is wrong—disingenuous, even—to say that the Government have delivered on four out of the five asks.

For example, on procurement it is true and very welcome that the Government have changed the guidelines to allow for more local content. However—unless the Minister can correct me—no orders have yet been received in steel plants on the back of that change to the guidelines, and they also fail to include so-called publicly enabled procurement projects. That means that Hinkley Point, one of the largest construction projects that this country has ever seen, which requires more than 200,000 tonnes of steel, more than 600,000 embedment plates, and large quantities of structural steelwork, is not subject to the guidelines; and nor is the massive rolling stock programme. Will the Minister outline any new orders won on the back of those changes? Will she commit to looking at whether publicly enabled procurement projects can be considered within those guidelines?

The biggest issue regarding not only the viability of the UK steel industry but the survival of the entire global steel industry is that of cheap Chinese steel being unleashed on the rest of the world. The Committee’s report acknowledged that the scale of the problem should not be underestimated. We fully accept that even if the Government were able to deliver immediately and in full on all the other asks, the future of the UK steel industry would remain in doubt unless effective action could be taken at an international level to withstand the onslaught of cheap Chinese steel.

China has far too much supply in the face of sharply shrinking domestic demand. Total Chinese steel production is 1.17 billion tonnes, which is more than double that of the four next largest producers—Japan, India, the US and Russia—combined. Chinese surplus capacity in steelmaking is bigger than the entire steel production of the United States, Germany and Japan combined. Despite the rhetoric of Chinese leaders about reducing surplus capacity, Chinese steel production increased last year.

Why would China want to reduce steel output? The closure of local steel mills would throw something like 400,000 steelmakers out of work, putting at risk social order and the ability of the Chinese party apparatus to control matters. Steel mills in China are concerned that they will lose market share and have to spend increased capital to start production again. It is far easier to keep operations going now. Chinese banks are urging mills to keep going so that they do not have to make provision for bad loans. Therefore, when considered in terms of the geopolitical situation and the domestic environment, the risk to the Chinese political, social and banking systems as a result of reducing steel capacity means that it is naive of policymakers in the west to believe that the Chinese will allow it to happen willingly. It is therefore imperative that policymakers in the west undertake a concerted and co-ordinated effort to withstand this illegal Chinese dumping. This is not protectionism. The steel market does not have effective competition, and it is being distorted to the point of destruction by a powerful monopolistic power that is immune to the normal pressures of market forces.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Some of us want a proper relationship with the Chinese economy and concede that partnership in some things is very valuable. However, this is about the power of the Chinese economy, and even though my constituency does not depend on British steel, our leading agricultural chemical companies in the world, such as Syngenta, are being taken over—overnight it seems—by a Chinese conglomerate that is really the Chinese Government strategically plotting a course worldwide.

[Mr Wright]

My hon. Friend is right, and that point was mentioned earlier in the debate. This is about commodities in general, not just steel, and the enormous surplus capacity in other things such as phosphates is incredibly important. It is therefore vital that we have tougher EU action to ensure a level playing field, support scrapping the lesser duty rule, and carefully consider China’s market economic status. Given the Government’s rhetoric that they will be “unceasing” in their efforts and will

“continue to do all it can”

to safeguard UK steel, those steps are the very least one could expect.

The Committee’s report acknowledged the Minister’s success in changing the UK’s stance to vote in favour of the extension on wire rod, but lifting the lesser duty rule has been ruled out by the Government. In Committee earlier this month, the Secretary of State will recall that I asked whether he would change the UK Government’s position within the Commission on the lesser duty rule, to safeguard the British steel industry as much as possible. He replied that he would not, and he has repeated that tonight, stating that he needs to consider the “impact overall” on British industry and British jobs, particularly in terms of duties imposed.

Nobody would want a protectionist arms race to escalate throughout the economy, but the Minister and the Secretary of State must surely realise that the British steel industry—alongside many other European steel producers—faces an existential threat that is based on a grossly distorted and failing market. This is not about imposing additional duties or tariffs elsewhere on British manufacturing; it is a request, a plea, for a co-ordinated response. The UK steel industry is on its knees. This proud sector, which should be powering the future of British manufacturing, is pleading with the Government to help and to make sure that we have a sustainable future for the steel industry in this country.

Manufacturing

Debate between Barry Sheerman and Iain Wright

Thursday 24th November 2011 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

I agree with the Minister that this has been a good and important debate. Manufacturing is not discussed in the House as much as it should be, which is perhaps a reflection of the perception of manufacturing more widely in the country. People could be forgiven for believing that Britain used to make things but does not any more. I therefore congratulate the hon. Members for Hexham (Guy Opperman), for Warwick and Leamington (Chris White) and for Burnley (Gordon Birtwistle), and my hon. Friend the Member for Huddersfield (Mr Sheerman), on securing this interesting and vital debate.

I agree with the Minister that the debate has been relatively consensual—the House should not worry; I will break that. The debate has been split not by party, but between optimists and pessimists. I am a bit of both. I am proud of the fact that our nation engineered the first industrial revolution. We became the workshop of the world. By the eve of the first world war, we produced one quarter of the world’s total manufacturing output.

To go back to my earlier comments, there seems to be a consensus out there, put forward by the media, that this country has somehow lost its grip on manufacturing and closed its factories one by one or sent them over to China. Today’s debate has made a good start in dismissing such myths, because we still make things. Indeed, as the Minister rightly points out, there is much to be optimistic about. Output from British manufacturing reached an all-time high, even adjusting for inflation, not in 1867 or 1907, but in 2007. In the decade 1997 to 2007, UK manufacturing achieved a 50% increase in labour productivity, which is the best rate of progress we have seen in our country’s history. Despite that perception out there, we remain the world’s seventh largest manufacturing nation. Our manufacturing is based predominantly on high value-added activity, including the production and manufacture of toilet rolls—in that high value-added activity, we are world leaders.

In high-technology manufacturing, the UK is second only to the US in the developed world. In some industrial sectors, our companies are some of the best anywhere on the planet, including in aerospace, which several hon. Members mentioned, and in automotives, oil and gas, chemicals, pharmaceuticals and bioscience.

As the hon. Member for Hexham will know, the north-east region has a world-class, efficient plant in Nissan, with all the supply chain opportunities that that provides. As the Minister rightly pointed out, today’s announcement that Toyota will build its new car plant in Burnaston is particularly pleasing, especially after the disappointments in that city for Bombardier, on which my hon. Friend the Member for Derby North (Chris Williamson) has been an absolute champion.

We in the north-east have always valued manufacturing. My constituency of Hartlepool has been particularly strong from the start of the industrial revolution in the 1840s and 1850s right through to the post-war era. We have huge potential now in some world-class sectors such as offshore wind, nuclear and biotechnology, but we need to grasp the opportunities. Global trends mean that British manufacturing should have considerable opportunity in the next few years. Rising incomes for households in many developing economies will create billions of extra customers to whom British firms can sell their goods—a point that was made by my hon. Friend. The need to manage global resources more efficiently and the move to a low-carbon economy will provide new markets for new and innovative products designed by ambitious firms in environments conducive to stable and certain R and D and capital investment. New technologies such as life sciences will revolutionise health care and the way in which drugs are developed, patented and brought to market. Despite the difficulties and issues that I have with the Minister about the science budget, I know that he is a champion of science, and Britain, with its strong science base, should be a leading global player in such fields.

Today’s debate has allowed the argument to be somewhat more sophisticated than is normally the case. We often see the argument in very blunt terms: we used to do manufacturing, but now we only do services, and we need to go back to making things. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, there has been a tendency in the structure of such debates to look in the rear-view mirror. In the past 60 years, this country has often chosen the stark model of economic sectors, selecting a service-based economy over manufacturing. That has meant that, despite our remaining a strong manufacturing nation, the sector constitutes only 11% of our economy, compared with 20% for Germany. As my hon. Friend the Member for Huddersfield said correctly, we have lurched too far away from manufacturing over the last 30 to 40 years. Manufacturing should constitute a much bigger share of our economy, but it should not be an either/or situation; nor should it be at the expense of our service sector. There should not be an artificial distinction, because services growth boosts manufacturing, and vice versa.

I can think of no finer example than Rolls-Royce, whose Derby plant I visited last month, as did the hon. Member for Erewash (Jessica Lee). The company is synonymous with British excellence—indeed global excellence—in engineering and manufacturing, but as we found out on our visit, it now derives half of its revenues from services, in providing long-term customer service contracts. The long-term revenues to be derived from such services are reinvested in manufacturing capability.

[Mr Sheerman]

I just want to correct a possible misapprehension. The members of the all-party manufacturing group are not rear-view mirror people: we actually believe that our manufacturing sector is superb in many aspects. It is just that we want to grow it and invest in it, as well as to encourage more entrepreneurs to lead it. That is the purpose of this debate. We are not negative: we are positive, and I congratulate my hon. Friend on choosing a product made by Britain, and I hope that every hon. Member will join the Made by Britain campaign.

[Mr Wright]

I absolutely agree, and my hon. Friend and I share the view of my right hon. Friend the Member for Wolverhampton South East that we should be bold and ambitious about manufacturing. We do not hark back to the past, but we want to engender that spirit of enterprise, innovation and ambition to ensure that we are the best engineering nation anywhere on the planet, that people can go into a career in manufacturing engineering secure in the knowledge that it is rewarding and produces products that we can sell to the rest of the world, and that Britain leads the world in that area.

--- Later in debate ---

[Mr Wright]

I do not know whether the hon. Gentleman has been following my comments but, over a 40 or 50-year period, we have lurched too far away from manufacturing to the service sector. In the past 10 or 15 years, though, productivity in manufacturing has risen faster than ever in this country. My right hon. Friend the Member for Wolverhampton South East touched on these matters. Given the rise of China and other players, globalisation and the fact that we were the first country to industrialise, it was almost inevitable that there would be a relative decline. However, our manufacturing industry has declined too far, too fast, and we need to do something about that on a cross-party basis. Nevertheless, there has been great cause for optimism over the past 10 to 15 years.

[Mr Sheerman]

This has been a refreshingly all-party discussion but I want to come back to feed-in tariffs. The industry in green technology and green innovation is growing dynamically and people in my constituency in the business know that the feed-in tariff had to be modified, but for God’s sake why not give them six months to adjust, rather than allowing companies to go out of business and lose all that growth?

[Mr Wright]

My hon. Friend is correct, and to conclude this part of my speech, I shall quote the director-general of the CBI with specific regard to that decision on feed-in tariffs, which was taken without notice to the industry. In keeping with our football metaphor, the director-general said:

“Moving the goalposts doesn’t just destroy projects. It creates a mood of uncertainty that puts off investors. They wonder what’s coming next…Industry trust and confidence in the government has evaporated. This bodes poorly for investment in future initiatives…A new industrial policy needs to recognise the real-term costs of bad decisions and should set out a clear path that investors understand and can believe in.”

We certainly agree with that, as the country has not got the clear strategic direction we need from this Department. We sometimes get warm words; we often get welcome, albeit ad hoc, announcements. Industry, however, is uncertain of the strategic direction in which the Government and this Parliament want to take the country in manufacturing.