Industrial Policy and Manufacturing

Debate between Geoffrey Robinson and Gerald Howarth

Thursday 22nd November 2012 Commons Chamber

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I congratulate my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and my parliamentary near neighbour the hon. Member for Warwick and Leamington (Chris White) on securing the debate. It was a good initiative of the all-party group on manufacturing to secure this debate about a year after we had the last one. This is a year in which we can see ever more clearly just how important manufacturing is to the country, but also how far we still have to go because of the relatively little progress we have made.

I do not want to interject any party political emphasis into anything I say. Indeed, I think that, on the whole, the debate has been remarkably clear of that. That shows one of the great advantages of having Backbench Business Committee debates. Although it is delightful to see the Minister and the shadow Minister in their places to respond to the debate—we can take advantage of that—I do not think it was ever intended that they would engage with each other in Dispatch Box altercations. On these occasions, Back Benchers can speak for their constituencies and for the whole country without the sort of pressures that inevitably arise on party political occasions.

Having said that, as far as the industrial strategy goes, I very much take to heart what my hon. Friend the Member for Luton North (Kelvin Hopkins) said in his brilliant tour d’horizon of post-war economic history, highlighting the great advantages that Germany has had. I do not think, however, that we should look wistfully or enviously at Germany’s position, as a period of prolonged devaluation or low-value exchange rate will not be available to us. Looking to the future, it might be less important to us than it was for Germany over long periods and still is within Europe. The one good thing is that we are outside the euro, but I do not think that long-term depreciation of sterling will ever be allowed, even with a floating exchange rate such as the one we have now.

From my experience both inside and outside the House, the basis for an industrial strategy comes back to the Government not only in respect of the provision of finance, but—and this is of equal importance—in respect of the intelligent and unobtrusive use of Government purchasing. Those two things go together. What the country desperately needs—this is agreed throughout the House—is a major infrastructure programme. However, it is proving extraordinarily difficult to get one under way. One of the two or three questions that I want to ask the Minister—I am sure that he will have time to deal with all of them—is this: what is the real stumbling block? Is it a lack of confidence outside, or is it a lack of Government confidence in the projects?

There is a lot of talk about a lack of confidence in the market at present—many Members have referred to it—and there is no doubt that it exists; but, as I have said many times, although the House is yet to be as seized of it as I am, the Government are showing a lack of confidence in British manufacturing, from the Treasury down through various other Departments. As was pointed out by the hon. Member for Stafford (Jeremy Lefroy), they are afraid to invest real money on a long-term basis. Unless we can get over this fear of failure, invest in the long term, and stick with projects despite the difficulties, we shall not succeed.

In that respect, the Government’s role is vital. An industrial strategy comes down to this. Government finance for infrastructure is desperately needed now, for economic and other reasons. What is holding it up? The process is stuck: the Minister knows that, and the Government know it. It would be helpful if the House could be told what we can do, or what anyone can do, to get these projects under way.

Some aspects of the second issue that I want to raise were dealt with by the hon. Member for Aldershot (Sir Gerald Howarth), who, as is recognised in the House and widely outside it, speaks with great authority about high-technology industries. Several sectors are involved, and I want to ask the Minister about one in particular. The Government took a bold initiative in becoming a partner and stakeholder in the joint strike fighter project. What I want to know is whether we are being given access to the software technology that is so vital to the process of landing on and taking off from British aircraft carriers.

I understand that the problem lies with Congress rather than with the President or the White House as such. I do not think that it is to do with the political side of things. However, I understand that there is still some reluctance in Congress. It seems that, having taken a risk and invested, I believe, $2 billion many years ago when that was real money, we are now being denied key access to points of software interface between landing and taking off involving aircraft carriers that are different from those that the Americans had. Can the Minister assure us categorically that the problems have now been solved and that we are being given access to what we vitally need?

[Sir Gerald Howarth]

Although the joint strike fighter aircraft was not part of my portfolio in the Ministry of Defence, I believe that Lockheed Martin’s argument was that it was still struggling with the technology itself. However, the hon. Gentleman has made an important point. It is imperative for the United Kingdom to be insistent in this regard. The United States is our closest ally. It has looked to us for political support, which we have given, and it needs to return that support.

[Mr Robinson]

I agree with every word that the hon. Gentleman has said. There are always problems with those crucial software interfaces, but this was not really that sort of problem. It was made clear by members of Congress, both in the Senate and in the House of Representatives, that they were unhappy about releasing the key elements that we needed, for various spurious, specious reasons. I hope that the Minister will be able to reassure us that the problem has been resolved.

As I said, public purchasing is vital, and I hope that the Minister will bring us up to date on it. We are looking for a new approach from the Government. I hope that it will not amount to an overtly “Buy British” campaign; indeed, I cannot conceive of its doing so, because that is not in the nature of the civil service. It would be counter-productive, and in any case it would not be allowed. As I said earlier, we must be intelligent and unobtrusive, which implies that we must have confidence in British companies.

One Department to which that applies particularly is the Department for Transport. There seems to be a tremendous anti-British bias within that Department, which was especially noticeable in regard to the Bombardier project. The Department said that the decision must be based strictly on price, fundability and the strength of the company. However, there are other factors, to which the Government’s new public purchasing policy should refer and which are allowed under the treaty of Rome. May we please have some indication of when we will see the policy, and some assurance that it will allow us at least as wide a margin of appreciation in assessing such projects as is taken by the French and, for that matter, the Germans? The Germans have a simple policy—German is best. So they buy German and they do not have to do any more. The French pretty much have a policy that says, “Buy French”, but nobody ever says it. We cannot find examples of that being said, even in writing, but the policy does exist. Will the Minister let us know when we will see the new public purchasing policy and what we might expect to see in it?

On the banks, what are the Government really doing to provide finance for small companies, a matter to which several hon. Members have referred? We know that the money is there, but the cost involved is huge and no real solution has yet been found by government. Why do we not do something with the Royal Bank of Scotland? We could turn it into a bank for industry and give a long time for its sale and the repayment of the money. I hope that the Minister will answer my questions when he winds up.