Industrial Policy and Manufacturing

Eric Ollerenshaw Excerpts

Thursday 22nd November 2012 Commons Chamber

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

It is a pleasure to follow the new hon. Member for Corby (Andrew Sawford). Clearly, my two Saturdays in Corby did not turn out too well. I remember the rain in Thrapston. I offer him many congratulations. Obviously he is a man of strong views, and he puts them across clearly. I have known him before—briefly—in his professional life. He proves that he does his homework and research, and will make a great addition to the House. Unfortunately for Government Members, it looks like he will stay the course.

I congratulate the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), as well as my hon. Friends the Members for Warwick and Leamington (Chris White) and for Burnley (Gordon Birtwistle), on getting this debate under way. I declare an interest in Stalybridge and Hyde—I spent my childhood at Hyde county grammar, and used to live in Dukinfield, which is in the constituency of the hon. Member for Stalybridge and Hyde. My sister still lives there and works at the company the hon. Gentleman mentioned. I am also grateful to the Backbench Business Committee for the debate.

We need to rebalance the economy in terms of the types of the businesses we have, but getting manufacturing and industrial policy right is critical in rebalancing the economy regionally. I am pleased the hon. Gentleman said we do not want to go back to the failed policies of the 1970s in trying to pick company winners—he agrees with Government Members on that. Surely the Government’s job will be to identify sectors where we already have a world lead, such as life sciences, higher manufacturing and aerospace, as well as sectors of high growth, such as the automotive industry.

As the hon. Member for Ogmore (Huw Irranca-Davies) pointed out, we need a strategy that resolves the country’s energy needs, which will give stability for investors on which to build an increased manufacturing base. We also need a positive climate for inward investment and business start-up.

The hon. Member for West Bromwich West (Mr Bailey) mentioned a competitive tax regime. I congratulate the Government on what they have done on corporation tax, which I believe is having an impact. We need a competitive tax regime, but we also need a regime under which tax is collected.

My hon. Friend the Member for Warwick and Leamington emphasised education policy and the reforms the Government are introducing to ensure that we have properly trained and qualified workers, which hon. Members on both sides say we need. When we meet local employers, they complain about their employees.

I agree with other hon. Members on apprenticeships. I congratulate the Government on what they have done—we have nearly half a million new apprenticeships. A couple of weeks ago, I visited a small manufacturing factory in my constituency—it is essentially small scale, as described by my hon. Friend the Member for High Peak (Andrew Bingham). A and G Precision and Sons Ltd has only 40 employees, but as my hon. Friend the Member for Aldershot (Sir Gerald Howarth) will be pleased to know, it supplies parts to BAE Systems for the Typhoon fighter. Only this year, it decided to make two work experience lads from the local school into full-time paid apprenticeships. I see the beginning of that welcome change throughout my constituency. The other part of that—my hon. Friend has just touched on it and it is one of my main points—is the encouragement of R and D, so that our companies remain at the cutting edge in their field.

My constituency benefits from having Lancaster university in it—one of the top 10 universities. The university has recently been made a centre of excellence for cyber-security, and has the potential to generate multi-billion pound business across the world. We need to build on that. In my constituency, ideas have been developed and transferred. For example, First Subsea Ltd took a design from the university and has now produced an engineering mechanism to pick up pipes and buoys from under the sea for the oil industry. It employs 45 people and has sales departments in all the major oil-producing parts of the world.

I have previously made this point, but we have missed a trick with local enterprise zones. I have never understood why we could not give every university the potential to have their own enterprise zone. The purpose of enterprise zones is to encourage start-ups. Where do start-ups start? Many of them at the high end start with universities. We also want enterprise zones where businesses, as they expand, eventually move off and pay their taxes like every other business.

[Sir Gerald Howarth]

My hon. Friend is making an important point. May I remind him that Surrey Satellite Technology, a fantastic world leader in satellite technology, was spun out of the university of Surrey? That reinforces his point about the role that universities can perform in advancing high technology.

[Eric Ollerenshaw]

I am grateful to my hon. Friend for that example.

When I make inquiries, I am told that the problem in defining and facilitating university enterprise zones lies apparently with the Treasury. The Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), is an expert in these areas and I am not. However, I am told that the Treasury rules are that it has to make a calculation about the taxes it would have received from companies that have not yet been set up in order to make a decision about whether to allow an enterprise zone to be created. How civil servants can calculate the tax of non-existent companies—or new companies that have not even been dreamed up—I am not quite clear, but to me there is something wrong with the system.

Our universities have pushed forward the science park idea—Cambridge is a notable example—and it is being pursued by Lancaster university to enable graduates with skills and ideas to stay in the local area. To underline my theme, we have to use this policy to rebalance the contribution to growth that the regions make. The council, under general powers of competence, has the power to vary business rates. The concept suggested by the university, the council and myself was to have an enterprise zone-lite. The local council could define the area of the science park and lower business rates. The problem then—going back to the Treasury rules—is that the local council would then have to calculate the difference between the full business rate and an estimate of what those companies, some of which might not have even been set up, might have to pay. That seems to defeat the whole object, but watch this space. We are still trying to pursue where we can go with this. It is key that policy is not only about what Government can do—I will say a little bit more about that—but about what local councils and local authorities can do, on their own volition, with the new powers that the Government are giving them. That policy, based around universities, is the key to top-level manufacturing and to growing the economy of the north and, in particular, my constituency.

Hon. Members have mentioned exports. Lots of companies in my constituency export. I have mentioned before a company in Fleetwood that exports 50 tonnes of whelks to Korea. Only the other week, I was called by someone from another company in Fleetwood. I do not know if this counts as manufacturing, but the gentleman there reconditions and patches up end-of-life heavy trucks. He has found that the market in developing countries is either for brand-new Chinese trucks or British Bedford ex-defence vehicles—probably the kind that my hon. Friend the Member for Aldershot secured the contract for many years ago. He says that the Chinese trucks do not last five minutes. I have no comment to make—I am not a truck expert—but he says that although they are glittering they do not survive very long.

The gentleman in question, then, has found a market in the developing world for reconditioned heavy vehicles, so why did he approach me? He wanted to know whether I had contacts with other countries that might want to get involved. Having been a member of the all-party group on Kurdistan, I mentioned Kurdistan. That taught me a lesson, because he came back and said, “We’re looking at Kurdistan”. Where was UK Trade & Investment? Through contacts in the all-party group, he contacted the consular staff, who were extremely helpful, and now he is on his way to selling reconditioned trucks to Kurdistan. Where was UKTI? Its role is pivotal. A small business that wants to be in the export market needs a simple lead.

[Jeremy Lefroy]

I welcome my hon. Friend’s comments about reconditioned British vehicles, which are much-sought-after all around the world, but does he agree that there is another problem, as experienced by a company in my constituency? Reconditioned UK Army vehicles, which cannot be described anymore as military vehicles, are banned from export to certain countries, yet similar German army vehicles are available in those places, because German companies face no such obstacles.

[Eric Ollerenshaw]

My hon. Friend clearly demonstrates his point about reconditioned vehicles. I do not want to prolong this debate, but clearly there is a market. Small businesses at—I would say “the coal face”, but we do not have one anymore—the end of manufacturing do not have time to make the phone calls and make the contacts. They need support. For that reason, I welcome some of the changes to UKTI. In particular, I welcome its approach to Members about getting these meetings going in their particular areas. That will, I hope, provide the contacts, so that no longer do I have to be called in to make the contacts myself. As I learnt, we should not assume that these small businesses are not looking at what is available on the global market. All they want is the assistance to get into that global market, and obviously we should do everything we can to address our concerns about manufacturing.

I supported the abolition of regional development agencies, although I should declare an interest, as a past member of the London Development Agency—why London needed an RDA I never understood, even though I sat on the board. I have, however, been a great supporter of local enterprise partnerships, and I take Lord Heseltine’s point about giving them greater support. I support LEPs because areas such as Lancaster and Fleetwood—at the north end of Lancashire—and surrounding constituencies, are dominated by Manchester and Liverpool. So despite serious concerns about the proposal for city regions and the dominance of those areas, which in my constituency resulted in little help from the RDA, I hope that we will get some help from the LEP.

[Several hon. Members]

rose—