Amendment of the Law

Debate between Chris Heaton-Harris and Iain Wright

Thursday 19th March 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

You said “you” again.

[Chris Heaton-Harris (Daventry) (Con)]

Will my hon. Friend give way?

Manufacturing (East Midlands)

Debate between Chris Heaton-Harris and Iain Wright

Tuesday 12th February 2013 Westminster Hall

[Mr Wright]

I certainly will. An important characteristic of a good and responsible company is that it realises that it is part of a community, not isolated from it, and contributes, not only directly by providing employment, but to social good.

The hon. Member for South Derbyshire mentioned Toyota, an important manufacturer for not only the region, but the UK. I am looking forward to visiting the Toyota plant next Tuesday—I am giving her advance notice—to see the investment recently pumped into building the new Auris model. The investment in the new plant totals £100 million, and is creating an extra 1,500 jobs, with a further £85 million spent in the local supply chain.

The shape of the region’s economy is distinctive. It is particularly strong on mid-sized businesses that are crucial to the growing specialisation and increased productivity that manufacturing requires. The Mittelstand in Germany is often cited as a reason why the German economy is so successful, and if there is an equivalent in the UK, I suggest that it is in the east midlands. Mid-sized firms employ 290,000 people in the region. I agree with the conclusion in Grant Thornton’s report on the mid-sized business sector:

“MSBs—many of the East Midlands’ and UK’s most dynamic organisations—are integral to the recovery prospects and long-term health of the British and local economy.”

Within that, Government’s role is to provide a framework in which businesses can flourish, and to provide resources—whether by sector, by region, or nationally—so that businesses can realise their potential and enhance our competitiveness.

I therefore have a number of questions for the Minister. My first is on how Government procurement can help manufacturers and their supply chains. I am pleased to see my hon. Friend the Member for Derby North here, because he has been a strong champion of Bombardier. We are all aware of it, because it is probably the most vivid example of Government procurement policy failing British manufacturing. The Department for Transport looks specifically at price, rather than thinking about wider value to the supply chain; that illustrates that the Government do not seem to be joined up. What has the Minister learned from the Bombardier example? How can procurement back British manufacturing? I do not believe in protectionism at all, but we can have patriotism in procurement policy to create, as my hon. Friend the Member for Derby North said, a level playing field for British companies. Other nations do it; we should too.

[Chris Heaton-Harris]

I point out to the hon. Gentleman that in France there is a social element to the procurement of big projects—something that we do not have. If it is legal for the French to take that approach, surely it must be legal for us to do so.

[Mr Wright]

I absolutely agree. We should use economic values. If Bombardier or any other company fails to win a contract, we should consider the wider economic consequences, in terms of lost taxes, the money that could have been pumped into the local economy and the losses in the supply chain. Those important factors should be part of procurement decisions.

The second point I want to mention relates to a particularly distinctive strength of the east midlands economy and its manufacturing firms: the supply chain. I am interested in it, because it is an important part of improving competitiveness. In November last year, the Minister announced the advanced manufacturing supply chain initiative—we are now on round 2. Despite the importance of mid-sized firms in the east midlands and their potential, will he confirm that no east midlands firm was successful in the bids? What will he do about that to help to realise the potential in the supply chain?

Thirdly, the whole House will agree on the importance of an export-led economic recovery. As we heard today, there is potential for that in the region, but the Derbyshire and Nottinghamshire chamber of commerce’s latest quarterly survey says:

“Export sales are at their lowest levels since December 2009”.

It goes on to say:

“Net manufacturing export sales balances remain significantly lower than the national averages.”

As an interested outsider, it is clear to me that the region is not reaching its potential for an export-led recovery. What can the Minister do in conjunction with UK Trade & Investment and others to ensure that that potential is realised?