Industry (Government Support)

Ian C. Lucas Excerpts

Wednesday 16th June 2010 Commons Chamber

[Ian Lucas (Wrexham) (Lab)]

It is a delight to wind up this debate with you in the Chair, Mr Deputy Speaker. As we have already heard, your interest in manufacturing and in representing your constituents has been a feature of the House for many years.

I am pleased to have had this opportunity to debate the importance of Government support for industry. Some of the least endearing aspects—among many—of the Tory-Lib Dem Government are their willingness to misrepresent the policies of the previous Government, to be less than candid about their own past policy positions, and to adopt language that threatens the developing partnership for growth in UK industry which was the legacy of the Labour Government.

First, I pay tribute to the quality of the debate today and, in particular, the maiden speeches. The hon. Member for Bracknell (Dr Lee) gave us a very good joke about “Earnest”. It is always good to have a doctor in the House—we had Dr Howard Stoate until the election—and we know where to come if there are any difficulties in the Tea Room. The north-east had a very loud voice in the Chamber today, in maiden speeches and others. My hon. Friend the Member for Wansbeck (Ian Lavery) told us about his constituency and of the excellent Newbiggin by the sea, with which I am very familiar. From my home county, my hon. Friend the Member for North West Durham (Pat Glass) told us about the beauty of her constituency, which is unparalleled in Britain and should be visited by all hon. Members.

We heard also from my hon. Friend the Member for Barnsley East (Michael Dugher), who appears to be a natural in the House. With the Grimethorpe colliery band in his constituency, he is well qualified to be the chair of the all-party brass band group, and he can put me down as a member. I welcome him to the House.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) spoke movingly about his predecessor, Ashok Kumar, whom we all miss. He was valued not only in the House, but—as I know from ministerial visits to the north-east—was greatly valued by the community there. He will be sadly missed. I am sure that his successor will establish himself quickly in the House and make many contributions.

We also heard from my hon. Friend the Member for Bolton West (Julie Hilling), who let us know that the Reebok stadium is in her constituency. Bolton Wanderers are in the premiership, and that is where my hon. Friend will be with her contributions in the future.

For the past two years, the UK has faced, first, a world banking crisis and, second, a world economic crisis. As anyone willing to approach matters with an open mind must see, this crisis has affected all the world’s major economies, including the United States, Germany, France and Japan, as well as developing economies such as China and India. Against this backcloth, the previous UK Government had a choice either to pursue deflationary policies espoused by the Conservative party or to pursue policies designed to maintain employment and protect growth espoused by every other major economy.

For those of us who witnessed first hand the consequences of Tory Government policy in the 1980s and 1990s, when UK unemployment reached 3.5 million on two separate occasions, the choice was clear, and I am proud that the Labour Government acted to maintain employment and protect the fundamentals of our productive economy. That is why Opposition Members speak so passionately about the involvement of, for example, regional development agencies, and about their communities, which were devastated by the consequences of laissez-faire Tory economic policy in the 1980s and 1990s.

One of the features of this debate, which the Minister for Universities and Science did not attend, was the fact that Conservative Members are out of the Thatcherite school. That was clear when they spoke. What we did not hear, however, were Liberal Democrat voices—the only Liberal Democrat to make a substantial contribution in the debate was the Secretary of State. He does not have any support from his Back Benches; no speeches were made by the Liberal Democrats. Were I he and looking for their support, I would look well behind me.

As Gregg and Wadsworth have pointed out in the National Institute Economic Review, as a result of Labour action and intervention in the economy in the world recession, employment rates did not shrink at the same rate as in previous recessions, despite the reduction in productive capacity. This was due to the Government pursuing a Keynesian reflationary policy and the contribution of employers and trade unions, working together to agree reduced wages and hours. As a result, more people stayed in work and their homes, and Britain moved out of recession.

The Labour Government played a key role by creating the Department for Business, Innovation and Skills, which I note has been retained in the same form by the Tory-Liberal Democrat Government, and which acted to support manufacturing. Its new industry, new jobs strategy—an active industrial strategy—set the framework for its developing relationship with industry. I, for one, will always be grateful to those senior representatives of companies and trade unions who worked with me and gave their time freely in bodies such as the manufacturing advisory group, and I would like to use this opportunity to thank them for their commitment. If there is one piece of advice I would give to my successor—I am delighted he has finally been able to join us—it would be not to jettison this well of good advice, and I would welcome his assurance that he will continue to work with that group.

Partly as a result of the Labour Government’s close contacts with industry and trade unions, we introduced a car scrappage scheme. It is striking that we are hearing a different argument from the Conservative party. In 2008 and 2009, the then Opposition were saying that the Labour Government were spending too little, too slowly on supporting the economy—for example, I received criticism from the BIS Committee that the automotive assistance programme was not paying out fast enough—but today we are hearing from Conservative Members that the programme was a flagrant waste of money.

Building on the relationship that we established in our work on the car scrappage scheme, the Labour Government established the UK Automotive Council, which I am happy to see has been retained by the Tory-Liberal Dem Government, to build on past inward investment into UK industry and to make the UK a centre for low-carbon manufacturing. As a consequence, and working with Government, investors such as General Motors, Toyota, Jaguar Land Rover and Nissan all made commitments to the UK that would secure jobs in manufacturing. Very important work is being done by the UK Automotive Council relating to the development of the UK manufacturing supply chain, and it is important that continues.

The UK’s aerospace industry is the second largest manufacturer in the world, with companies such as Airbus, AgustaWestland and GKN looking to work with the Government by establishing a national composites centre in Bristol. There is a complete failure among Conservative Members to understand the importance and strength of the UK manufacturing industry.

We have a great deal to be proud of in this country, and it is quite disgraceful that the Government parties seem to talk down UK manufacturing so much. I invite them to go up to the Tyne—we have heard a lot from the north-east this afternoon—and see the Clipper site on the north bank, which is manufacturing a new generation of wind turbines, showing the Labour Government’s commitment to a low-carbon future.

If the Tory-Lib Dem Government’s rhetoric about a low-carbon economy is to mean anything, the Secretary of State must act to end the marginalisation of his Department in the Government, stop the Treasury running the show and fight for UK industry. One of the white flags of surrender that he put up today was the fact that he is going to scrap the RDAs—I think that that is where we ended up, after his tortuous exposition of coalition policy. The RDAs are extremely important. The north-east of England has a great champion in One NorthEast, which has brought investment from companies such as Nissan to the UK, when it could have gone elsewhere in Europe. Portugal fought hard for that money; One NorthEast and the Labour Government achieved it.

We must retain the competitive advantage that was built on Labour’s huge investment in science and our universities, but that cannot be done if the Government will not support UK industry, because there are European competitor countries that will support theirs, as I always witnessed at European Council meetings. Any reduction in the UK’s budget deficit must be built on three pillars: reductions in spending, tax changes and, equally importantly, economic growth. The Work Foundation’s recent paper makes some important points, not least that

“any successful deficit reduction strategy must include a strategy for encouraging growth and jobs”.

To date, the Secretary of State appears to have no understanding of that central truth, which was pointed out again by my right hon. Friend the shadow Chancellor over the weekend.

To hear the Prime Minister and the Chancellor trashing inward investment by major globalised manufacturers is quite astonishing. Do the Tory-Lib Dem Government not want Airbus, General Motors, Ford and Clipper to invest in the UK? The idea, peddled by the parties on the Government Benches, that detailed agreements with inward investors, which were worked out over many months, were not a good deal for Britain is simply not true. That accusation should be withdrawn immediately. Will the parties on the Government Benches tell us which of those partnership agreements was not good value? We are still waiting to hear that—I am prepared to wait longer, if they would like to intervene and tell us. If they cannot do that, they should stop demoralising British manufacturers and British industry.

[Guy Opperman]

I come from a family of manufacturers. I also come from the north-east, and I can assure the hon. Gentleman that tens of thousands of jobs in the north-east were lost under the previous Government. Does he actually believe that the increase in national insurance—a tax on employers—was a good thing, or was it a bad thing? Would it make us more competitive?

[Ian Lucas]

The hon. Gentleman should not lecture me about manufacturing in the north-east. My father worked for 40 years in manufacturing in the north-east, and I witnessed what the hon. Gentleman’s party did to those industries in the north-east in the 1980s and ’90s. That is why my hon. Friends are so passionate about protecting UK manufacturing and why the Conservatives will never understand why they are viewed with such distaste by the north-east of England, by manufacturing industries and by the people in manufacturing areas across the UK.

I am sad indeed that BIS has been marginalised within Government, moving from its pivotal role under my noble friend Lord Mandelson to the margins under the new Secretary of State. That must be draining for those who committed so much time to putting UK manufacturing at the heart of the UK’s recovery this year—the trade unionists, the industrialists and the small businesses, all anxious to build demand and jobs in UK manufacturing. Perhaps that is not surprising, when the Tory-Lib Dem coalition agreement said so little about manufacturing.

The reduction of £800 million in the Department’s budget is a threat to the lessening of the budget deficit, for it threatens to reduce the building of the economic infrastructure that is so necessary to sustain manufacturing. What the Department must do is fight its corner for British industry and British jobs. An active industrial strategy is an essential part of the way forward to reduce the budget deficit as the UK moves out of recession. If the Department allows itself to be neutered by the Treasury, the progress in building a manufacturing base will be lost. The cost will be high-quality jobs, innovation and a viable industrial base. That cost will be too high, and that must not be allowed to happen.