Industrial Policy and Manufacturing

Debate between Eric Ollerenshaw and Jeremy Lefroy

Thursday 22nd November 2012 Commons Chamber

[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.