Industry (Government Support)

Richard Graham Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mr McFadden]

My hon. Friend makes a good point. A lot of industrial support is in the form of loans or loan guarantees. The depiction that the new Government have attempted to create of the indiscriminate giving of grants that were not in the public interest is absolutely not true.

[Richard Graham (Gloucester) (Con)]

Is the right hon. Gentleman aware of last week’s Centre for Cities report, which highlighted the growth, or lack of growth, in the private and public sectors over the past 10 years? Some 69% of the 1.2 million jobs added to city economies over the past 10 years were public sector positions. In my constituency, the growth rate in the private sector fell by 10% over that period, which meant the loss of 4,600 jobs from the private sector while the public sector grew by 7,600 jobs. My city was the fourth worst in the country; the city of Stoke, represented by the hon. Member for Stoke-on-Trent South (Robert Flello), was the worst. May I put it to the right hon. Gentleman that if that is the result of 10 years of massive spending in the public sector, it is simply unsustainable to carry on losing that number of private sector jobs, and that our job is to re-stimulate the economy and the framework for growth in the business sector?

[Mr McFadden]

The answer will be shorter than the question. I am aware of that report. However, my point is that if we want to stimulate private sector investment through some of the companies that I have mentioned, Government have a role to play. Simply walking away will lead to fewer, not more, private sector jobs.

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[Andrew Miller (Ellesmere Port and Neston) (Lab)]

May I join others in congratulating you, sitting there in your smart attire, Mr Deputy Speaker, and also the many hon. Members who have made their maiden speeches this afternoon? Clearly standards have gone up since you and I entered the House in 1992. Congratulations are due to those from all parts of the House who have made such interesting contributions.

I want first to encourage people to think about what has been happening in manufacturing. There has been massive technological change impacting on manufacturing, along with a continual process of globalisation in the manufacturing process, which has put all developed countries under huge pressures to maintain their positions. Because of the changes that have occurred, we have to work at the leading edge—something referred to by hon. Friends who spoke about Nissan and similar projects—if we are to sustain our position. However, one thing is for certain: we will not sustain the number of jobs in manufacturing. There will continue to be pressure on those jobs, as there has been over a long period, because of technology.

I would like to cite two examples from my constituency by way of illustration. Vauxhall Motors used to employ nearly 11,000 people, but now produces a much higher quality product with 2,200 people, with much higher numbers of vehicles coming out of the factory. The Shell oil refinery used to employ 10,000 people, but now the control room looks like something out of NASA and a handful of people can control the whole refinery, because of sophisticated IT technologies, which have made such a massive change to the way such operations work.

[Richard Graham]

Will the hon. Gentleman give way?

[Andrew Miller]

No, I will not for the moment.

The Secretary of State and I had a short exchange about Vauxhall Motors earlier, and there have been developments during the course of the afternoon. The Government eventually agreed that the loan guarantee approved by Lord Mandelson had been approved correctly and was in order—contrary to earlier suggestions—but despite that and because of what has happened in Germany and the UK, the company finds itself having to drive things forward itself. In a statement issued this afternoon, the company says:

“We cannot afford to have uncertain funding plans and new time-consuming complex negotiations at this time when we need to keep investing in new products and technologies. With these new products and the impact of restructuring, we expect to return to profitability shortly”.

The parent company is going to support the necessary changes. It is a pity that the Government were not part of the solution, but I welcome the fact that the mischief that had been created over the inappropriateness of the grant has at last been dealt with.

--- Later in debate ---

[Richard Graham]

Will the hon. Gentleman give way?

[Andrew Miller]

May I please finish?

I could not agree more with my right hon. Friend the Member for Wolverhampton South East (Mr McFadden). There is a lesson for us all here. There has to be proper due diligence, and I respect the fact that Lord Mandelson took a long time to reach the agreement, working with my right hon. Friend. It was done correctly and, what is more, the then Opposition party was notified of that during the process.

[Richard Graham]

I am grateful to the hon. Gentleman for giving way. Does he agree that one of the main reasons for the decline in manufacturing in this country has been the slowness of decision making by the previous Government? To bring that point alive, I shall give one particular illustration. British Energy, which is headquartered in my constituency of Gloucester, was eventually taken over by the French company, EDF, simply because the previous Government failed to make any future provision for the nuclear power that this country so badly needs.

[Andrew Miller]

That is a bit rich, coming from the hon. Gentleman. He really is rewriting history. He must acknowledge how slow his party has been to wake up to the calls from people like me who were demanding a move towards nuclear power. I find it ironic that the amendment to our motion starts with the words “leave out from ‘power’”. I just wonder how much of a row there was in the coalition about that, given the fact that the two words before “power” are “civil nuclear”. I am pleased to see that the Government’s amendment would allow those words to stay in the motion, but I bet there is going to be trouble in the coalition when it comes to agreeing on some of the decisions that the hon. Gentleman is quite right to suggest are mission critical to the success of the UK economy.

This Government’s delays in decision making have also had a dramatic impact on the supply chain and, as a consequence, on many of the apprenticeships in the supply chain. We have heard all the stories about the creation of 50,000 new apprenticeships, but, goodness me, those delays have slowed down the creation of apprenticeships in my constituency and in the travel-to-work area around it. That includes the constituency of my hon. Friend the Member for Wrexham (Ian Lucas) and others, all of which are affected by the decisions at Vauxhall and the other big manufacturing operations around us.