Industry (Government Support)

Jack Dromey Excerpts

Wednesday 16th June 2010 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

First, I congratulate you, Madam Deputy Speaker, on your election and the hon. Member for Bracknell (Dr Lee) and my hon. Friends the Members for Bolton West (Julie Hilling) and for Wansbeck (Ian Lavery) on their witty and wise maiden speeches.

In 1981, I was one of the organisers of the people’s march for jobs—500 unemployed men and women from the ages of 16 to 60 who marched with dignity to London, such as the mother and her son from Whaley Bridge and the 150 people who joined the march from Birmingham and the midlands. They were the victims of a Conservative Government who stood back and said that unemployment was a price worth paying. That was an error of historic proportions, which severely weakened our manufacturing base, with catastrophic consequences still being felt to this day, including in the poorest parts of my constituency—Birmingham, Erdington.

All that stands in stark contrast to the wise decisions that were taken by a Labour Government in the depths of an unprecedented global economic crisis to embrace industrial activism. Short-term measures were taken such as the scrappage scheme on the one hand and strategic investments in Sheffield Forgemasters, Nissan, Airbus, General Motors and others on the other hand. As a consequence, the scrappage scheme alone created 400,000 jobs, with tremendous benefits for the supply chain in the automotive industry. Those strategic investments have built firm foundations in areas of growth: the nuclear industry and renewables, aviation and the car industry. Nissan is a classic example, with £20 million of public investment levering in £420 million of investment by the company, 50,000 new cars and 60,000 batteries—a good deal for Britain.

We now have the right hon. Member for Tatton (Mr Osborne). He is the Private Frazer of Downing street. “We’re doomed. Doomed,” is his daily refrain. “Labour mismanaged the economy,” is the moan that we constantly hear from Ministers. It could not be further from the truth. By 2007 we had reduced borrowing and debt to beneath the levels that we inherited from a Conservative Government. Then, in a global economic crisis, we borrowed to invest, to boost the economy and the order books of the companies in my constituency, such as those in the machine tool industry—companies such as Dana, Guhring and Micro. All those benefited from the wise and brave leadership given by our Government.

[Mr Brian Binley (Northampton South) (Con)]

Will the hon. Gentleman explain why, when Labour came to office, Northampton was 440th in the long list of areas of low unemployment. We rose to 132nd in that list under Labour. What do the people of Northampton have to thank a Labour Government for, in that respect?

[Jack Dromey]

A Labour Government in the most difficult times did not do what a Conservative Government did in the 1980s—abandon people to their fate. The Labour Government stood on the side of ordinary people and took the necessary strategic long-term decisions to rebuild our manufacturing economy.

[Christopher Pincher (Tamworth) (Con)]

I am obliged to the hon. Gentleman. We are both Members of Parliament in the west midlands, and he waxes eloquent about public investment being the only panacea for the problems that we have in the west midlands. There is an organisation that he will know about called Advantage West Midlands. I am sure the shadow Secretary of State also knows about it, because he appointed the board when he was a Minister. I have business men in Tamworth queuing up to tell me how inefficient and how ineffective that organisation is. One of them is a former Labour councillor who went to AWM, asked for investment, did not get it and lost his business—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Interventions should be short.

[Jack Dromey]

I will come to the truth about Advantage West Midlands in a moment. The truth is the opposite of what has just been said.

What we are hearing is the politics of the alibi, camouflaging an ideological objection on the part of the Con-Dem alliance to what its members call big government. It fails to understand the critical role of Government in boosting manufacturing in Britain. Of course it is true that good companies are those that help themselves. I have been involved in negotiating ground-breaking deals in the nuclear industry, the food industry, dockyards and the defence sector—ground-breaking deals that have transformed what were failing companies, working with the employers by way of a change and investment agenda.

I know from my experience in the real world of work, not the world of the trading floors, that time and again, with good employers, we have had to go to central Government, local government and the regional development agencies. Only last year I was involved in an exercise together with Scottish Enterprise and the Scottish Government with a leading food manufacturer. Had it not been for partnership, we would not have got the investment, which in turn levered in further investment from the company, securing the future of 500 jobs in an area of high unemployment.

[Gordon Birtwistle]

Can the hon. Gentleman explain to me where the 400,000 jobs came from, as a result of the car scrappage scheme? He gave a list of machine tool manufacturers. How many are based in the UK and manufacture in the UK?

[Jack Dromey]

First, the reference was to 400,000 cars. Secondly, the companies are British-based world class manufacturers of machine tools who, when I was at their exhibition last Friday and met many of them, said with one voice, “For us to succeed, we look to support from and partnership with Government.” Those are precisely the companies that were rescued from the brink by the car scrappage scheme.

The lesson from experience in the real world of work is that industry best flourishes in partnership with Government, with a framework provided by good government, and sustained and strategic investment underpinned by a determined national will. One need only look at Germany’s enduring strengths in manufacturing, which exist precisely because there is that national will. I am proud of the fact that a Labour Government embraced industrial activism. Now is absolutely not the time to pull back from that, because it would be an error of historic proportions. The decisions we make now will decide whether we grow or decline in the future—whether we condemn another generation to no hope. It is therefore essential that we invest to grow and act to rebalance our economy, which had become too heavily dependent on the finance sector.

That is why, for manufacturing, capital allowances matter because they incentivise investment in machinery and plant. That is why, for manufacturing, the patent box matters, with its 10% reduction in corporation tax to encourage innovatory companies to locate intellectual property and manufacturing here in Britain. That is why, for manufacturing, it matters that there is support for research and development. I hope that in refocusing current support, it is not so severely circumscribed as to avoid support for world-beating companies such as Jaguar Land Rover. The Jaguar plant in my constituency is at the heart of a hub of 150,000 people in the midlands who depend on the motor industry for their livelihoods. I will look to the Government to work with me, as the Member for Erdington, in respect of the Jaguar plant, and the hon. Member for Solihull (Lorely Burt), in respect of the Land Rover plant, to secure the future of those two beacons of manufacturing excellence.

That is also why regional development agencies matter. What we have heard today is ill-informed prejudice that flies in the face of the history of, in particular, the successful RDA that is Advantage West Midlands. I have seen that at first hand. After the crisis at Rover in 2000, the supply chain became less dependent on Rover, thanks to the work of Advantage West Midlands. As a consequence, when Rover collapsed in 2005, the supply chain did not collapse, as might otherwise have been the case. The manufacturing technology centre and the manufacturing advisory service are prized by manufacturing employers in the midlands, and that is because of what Advantage West Midlands has done.

Let me issue a challenge to the Secretary of State: necessary as it is to move beyond myths, will the Government now publish the independent evaluation of regional development agencies ordered by the Labour Government before the election? Will he confirm that that demonstrates that Advantage West Midlands is one of the best two RDAs; that for every pound of public money invested, £8.14 of wealth is created in the regional economy; and that it has scored the maximum possible score and has been deemed to be performing strongly? In this new era of openness, will that report now be published?

Birmingham is historically the laboratory of manufacturing and of the genius and enterprise of the British people; too often, now, it is British genius but made in China. Our single biggest task is the renaissance of manufacturing in our country. That will not happen if Government once again abandon British manufacturing.