HC Deb 09 March 1993 vol 220 cc811-93 4.52 pm
Mr. Robin Cook (Livingston)

I beg to move, That this House notes that, since the present Prime Minister took office manufacturing output has fallen, manufacturing investment has fallen and manufacturing employment has fallen; recalls that, in every year until Her Majesty's Government took office Britain ran a surplus in manufactured trade and that for each of the last 10 years Britain has registered a deficit in manufactured trade; records its concern that, since 1979 Britain has lost 2.75 million jobs in manufacturing, leading to the present unacceptable level of mass unemployment; condemns the policies which have resulted in over nine million citizens experiencing unemployment since the present Prime Minister took office; and calls upon Her Majesty's Government to introduce measures to stimulate investment in technology and training to produce a coherent strategy for industry, and to reduce unemployment.

Mr. Deputy Speaker (Mr. Michael Morris)

I have to announce that Madam Speaker has selected the amendment in the name of the Prime Minister, and has put a 10-minute limit on speeches between 7 pm and 9 pm.

Mr. Cook

Last week, the Prime Minister seized the attention of the nation with his declaration: I passionately believe that we need an expanding industrial base. Many of us would have regarded the need for an expanding industrial base as a self-evident proposition. What made the declaration arrest the attention of the nation was that the industrial base of Britain has been contracting ever since the Prime Minister became a Member of Parliament.

Since the Prime Minister entered the House in 1979, manufacturing's share of GDP has fallen faster in this country than it has in other nations. It has fallen three times faster than in Germany, and 12 times faster than in Japan. Manufacturing output has been virtually static over the same period, in which the right hon. Gentleman, with his passionate beliefs, supported, and even led, a Conservative Government. Manufacturing in Britain has grown more slowly since 1979 than in five of the six other members of G7, and in 18 of the 21 other members of the OECD.

Last week, when the interviewer reminded the Prime Minister that we used to be told that all this did not matter, and that, when the last engineer locked the last factory, the service sector would be there to keep us all in employment, the Prime Minister replied: I didn't agree with it. I was a minority view. I have to report to the House that I have searched for where that minority view was expressed by the Prime Minister. His view was not just a minority view: it was a persecuted and suppressed view, that was forced to stay underground for fear of being quashed. Nowhere do we find it expressed before last week.

The word "manufacturing" did not even cross the Prime Minister's lips in the two Budget speeches which he made as Chief Secretary. There were no measures for manufacturing, and no mention of manufacturing, in the Budget which he presented as Chancellor. There was no mention of it in the Queen's Speech last year, or in the Prime Minister's speech in that debate. Nor was there any mention of manufacturing as recently as last year, in the Prime Minister's speech to the Tory party conference, although he found time for a novel cadenza on the theme that the road to recovery is lined with motorway service toilets.

I have not found any expression of a minority view. It is always possible that a Nationalist Member might have, at the back of a filing cabinet, a handwritten note signed "John", telling him or her that the demands for manufacturing industry are reasonable and that he will do all he can to deliver them, but the rest of us who do not do secret deals with Tory Governments do not know about it.

We know about the views of the President of the Board of Trade. He voiced a minority view in the 1980s. He wrote whole books in which he expressed trenchant, powerful views on the importance of manufacturing, on the need for intervention and on the case for a powerful Department of Trade and Industry. When a journalist put one of those passages to him last autumn, he replied: You've been reading all those books I wrote when I was on the Back Benches. You mustn't believe what a Back Bencher says. It is a close-run thing, but I must say to the President that, if I have to choose between believing a Government Back Bencher or a Minister, I give the balance of advantage to the Back Bencher.

One can tell how far the President's views on manufacturing have declined since those books. One can tell how they have been marginalised since he joined the Government again. One can tell it in the evidence before the House in the amendment tabled in the President's name, which does not list one programme to support industry, one industry which the Government have saved or one project which they have launched in civil research.

The amendment reads as if it was drafted in the Treasury. It might as well have been, because there is not a single measure in it which has been taken by the DTI. It contains the hallmark of this Treasury of Micawbers. It contains the 57th sighting of recovery over the horizon. I am not clear why the Government now need to promise a recovery for industry. A couple of months ago, the Chancellor produced a report on manufacturing industry in which he told us that recovery had already taken place, and that what had happened to manufacturing industry was the success story of the Government. That prompted the director general of the CBI to write: If the Government really believes that all is for the best in British manufacturing while we run an alarming trade deficit in the depths of recession, we have a problem. What else might they believe? That public spending is under control? The amendment tells us that the Government have set the framework for recovery. Do they ever look at what has happened to manufacturing investment over the time that they have been in office? In not one single year since 1979 has manufacturing investment reached the level it was at in 1979 as a percentage of GNP. If manufacturing investment had stayed at that level throughout the past 13 years, we would have had £34,000 million invested in new machines, in new technology and in modern factories. That is the damage that their policies have done to the industrial base of the country.

Mr. Phillip Oppenheim (Amber Valley)


Mr. Cook

I do not know whether to believe the hon. Gentleman as a Back Bencher, but I will give way to him.

Mr. Oppenheim

I thank the hon. Gentleman for his customary courtesy in giving way. Bearing in mind the fact that he seems to think that the decline in manufacturing, as he wrongly puts it, started in 1979, is he aware that, between 1974 and 1979, Britain lost no fewer than 735,000 jobs in manufacturing—the worst record in the industrial world with the exception of Spain?

Mr. Cook

I had criticisms of the last Labour Government, and I voiced them at the time. (HON. MEMBERS: "Oh."] I did not wait until the Prime Minister departed before voicing them. That Labour Government did not have the cushion of £60,000 million of oil revenue, they maintained a surplus in manufacturing throughout their period in office, kept unemployment to below half the level that this Government have ever achieved and had an increase in manufacturing investment greater than anything that this Government, with the advantage of oil, have achieved. When I look back on that record, I realise what the economic strategy of that Labour Government achieved.

If the hon. Member for Amber Valley (Mr. Oppenheim) participates in the debate, I hope that he will refer to the fact that in his constituency unemployment has increased 91 per cent. in the past three years. If he expresses his views on the future of industry and the economy, I hope that he will do it on behalf of his constituents who have been made unemployed by this Government, because those are the people whose concerns we are voicing in the debate.

I was referring to figures on manufacturing investment. In every year of that Labour Government, there was an increase in net manufacturing investment. We have to adjust investment figures to take into account the rate at which old plant is scrapped. In only three out of the past 13 years have the Government managed to provide more manufacturing investment than the rate at which machinery has been scrapped. In every one of the other 10 years, more machines have been scrapped than new ones installed. That is why our industrial capacity is getting smaller.

Behind the abstract cash figures, there are real factory closures. In 1979, when the Conservatives took office, there were 908 factories with more than 1,000 employees. There are now only 383 such factories. Last year alone, one in four factories in London shut. [Laughter.] Conservative Members laugh, but to those who worked in those factories it was no laughing matter. That is why it is so facile for the Government amendment to say that they have put the framework for growth in place.

Those factories have closed. We cannot pull the dust sheets off the machinery and kick it back into life. The machines were put under the hammer, and the best of them went to competitor nations. The skilled work force, teams of people who knew how to work together and do their job, has gone. Putting those people back to work will be more difficult than buying machinery off the shelf.

Mr. Nigel Forman (Carshalton and Wallington)

I am listening carefully to the hon. Gentleman, whose analysis is familiar, if a little dated. Does he not realise, for example, that, in advanced countries in the modern world, the right way to measure the performance of manufacturing in this or any other OECD country is by output and productivity? There is a structural shift in all manufacturing sectors in all our partner countries, and, as a result of automation, it is away from manufacturing employment, towards services and other employment. If the hon. Gentleman uses that measurement of output, does he acknowledge that, since 1979, which is the start of the period in the motion, manufacturing output has risen by 7 per cent?

Mr. Cook

The hon. Gentleman is quite right—in Britain, it rose by 7 per cent. But in Japan it rose by 70 per cent., and in Germany it rose by 40 per cent. We have had the lowest increase in output in the OECD, and the second lowest in the G7 countries. I gave the hon. Gentleman the figures earlier, and I shall give him another figure to bring him up to date. In the hon. Gentleman's constituency, the rise in unemployment in the past three years has been 240 per cent. I shall give way to him again if he can tell me in what other OECD or G7 country there has been such an increase in unemployment in the past three years. I look forward to hearing from the hon. Gentleman.

Mr. Forman

I am grateful to the hon. Gentleman for indulging in genuine debate. It is simply the case that unemployment was satisfactorily low in my constituency throughout the 1980s. Alas, it has risen rather sharply, but I am confident that the Government's policies will put us back on track for more jobs and more activity.

Mr. Cook

I am quite sure that the hon. Gentleman's constituents are bright enough to spot that there is something odd and imbalanced about an equation showing that the Government's policies will put them back to work. Of course, the Government's policies had nothing to do with putting them out of work in the first place. There are now more than 4,000 unemployed people in the hon. Gentleman's constituency. I admit that that is not as many as in my constituency, but such unemployment is entirely novel in his constituency and in the areas which, we were told at the last election, would be the boom areas of Britain. They are now the unemployed areas of Britain.

On the border of my constituency and that of my hon. Friend the Member for Linlithgow (Mr. Dalyell), we used to have the Leyland tractor factory. When it was built it was the largest machine shop in Britain. It has gone. The machines were stripped, the cranes were scrapped and the sheds were demolished. There is no point in telling the railings that surround the wasteland of grass and concrete there that the fundamentals of the economy are coming right and that production can be resumed. That factory has gone for ever, and the communities that have seen such factories close have a simple, traditional view of the Prime Minister's economic policies. It is that we should try to understand them a little less and try to condemn them a little more. But who are we to condemn?

We are less unhappy to condemn the Prime Minister's predecessor, and we do so with some credibility, because we condemned her economic policies while she was still there. I will put in a good word for the noble Lady of Kesteven. She does not deserve all the blame that is being heaped upon her. She went two and a half years and a general election ago, and the present Prime Minister has been in office all that time. Since he took over, 750,000 manufacturing jobs have gone, exactly the figure that the hon. Member for Amber Valley quoted for the entire period of the last Labour Government, which was twice as long.

Every six weeks, British manufacturing has lost the equivalent of the entire work force of ICI. Those jobs have been lost in the companies that formed the backbone of our industrial economy. Within the past quarter alone, Ford, British Aerospace, Lucas and Marconi have announced redundancies. Last Friday, Belling, a household name since 1912, went into liquidation. On Thursday, Rolls-Royce is due to announce results, amid speculation that it will also announce 2,000 redundancies.

Those are the companies on which we depend to provide the exports we need to pay our way in the world. Their results and their difficulties must be seen against our trade figures. From the industrial revolution to 1982, we had a manufacturing surplus in every year. In every year since 1982, we have had a deficit in manufactures. We now have a deficit with western and eastern Europe and with north, central and south America. The only continent with which we have a trade surplus is Africa.

We cannot run a permanent deficit with the rest of the world. We certainly cannot run it when the oil runs out, and the Government's biggest failure is that they have wasted a whole decade in which they had the cushion of oil that could have enabled Britain to restructure and invest in its future. They could have done that if they had listened to what we urged upon them—action on investment, not just tax breaks for the big companies but grants to the small companies making no profit and unable to claim tax allowance.

Mr. Patrick Nicholls (Teignbridge)

Will the hon. Gentleman bear in mind the fact that present Labour party policy is that increasing taxation would have a bad effect on the country at a time of recession, whereas this time last year precisely the opposite was being urged? What is the position?

Mr. Cook

We await with bated breath what will happen next week. I look forward the hon. Gentleman's intervention in the Budget speech. I put the question back to the hon. Gentleman. I can well understand his concern about the recession, because unemployment in his constituency has risen 177 per cent. in the past three years. There are now in his constituency twice as many people unemployed and unable to pay any tax increases that the hon. Gentleman might think of.

We also urged the Government to end the rip-off of the business expansion scheme, to focus on industry instead of on speculation in property. We urged on the Government action to strengthen the regions, to bring in regional development agencies, to work with local industry and local communities, to build on the strengths of local economies and to fill the local gaps in investment.

We urged on the Government action to develop skills, to bring in a training levy, so that everyone would have a chance of training even if an employer wanted to duck expenditure on training. We urged on the Government action to balance the priorities between finance and industry, so that we would not have the perverse priorities of the past two years, in which dividends have risen by 20 per cent. while investment has fallen by 13 per cent.

We also urged action to protect successful industrial companies from being taken over by hostile predators, so that managers need not constantly look over their shoulders at their share price and divert into keeping up dividends the money that should go into investment, research and training.

That programme was repeatedly published and repeatedly argued. Ministers never listened. Instead, they pursued policies that have compounded the damage of their economic programme. They deregulated the bus industry, and manufacturing orders for heavy buses collapsed. In 1980, 3,000 heavy buses were registered. In 1991, 600 were registered. Try telling the people who used to make those buses in Preston and Workington that the Government support manufacturing industry.

The Government privatised British Telecom, and Britain moved from a surplus in trade in telecommunications of £250 million to a deficit of exactly as much last year.

Mr. Rod Richards (Clwyd, North-West)

What effect would raising taxation have on the manufacturing sector?

Mr. Cook

I remind the hon. Gentleman that we have proposed to cut tax on manufacturing industry by enhanced capital allowances. [Interruption.] With the greatest respect, the last Labour Government ran capital allowances for industry throughout their period. Capital allowances were abolished by this Government in a Budget that was presented on the basis that the service industries would substitute for what was being cut from capital taxation.

Mr. Jacques Arnold (Gravesham)

Will the hon. Gentleman give way?

Mr. Cook

No, I shall return to my speech.

Not only did the Government cause the collapse in the bus production industry, not only have they turned a surplus into a deficit in telecommunications: they sold British Rail Engineering Ltd. In the past three years, imports of railway rolling stock have risen by 300 per cent.

The President of the Board of Trade has made his very own contribution to the gallery of policies undermining British industry. His largest initiative since taking office has been to try to close 31 pits without once considering the impact on the mining engineering industry, where another 20,000 jobs would go in manufacturing—in a manufacturing industry that was competitive internationally but could not survive its domestic market going. It has started already. MECO, the mining equipment company, laid off 300 workers last week because it could not survive the loss of orders from the pits.

The right hon. Gentleman's problem is that he has commitments to live up to, and they do not sound as good now as when he put them in his speeches. There is the demand that he made in 1986 when he roamed the wilderness—or at any rate the High Peak business club—when he called for the Department of Trade and Industry to become the leading British ministry to spearhead industrial regeneration and to be an equal partner with the Treasury. Well, the right hon. Gentleman is there now. He is the head of that leading British Ministry. Where is the equal partnership with the Treasury?

In January, the Treasury cut interest rates. Three hours later, the President was asked by a BBC correspondent to comment on it. The head of the leading British Ministry, the equal partner with the Treasury, replied, "What interest rate cut?" The President has had to put up with some ill-natured fun from people saying that nobody had told him. But, for myself, I do not think that it is important that, having taken the decision, nobody thought to tell him afterwards. For me, what is important, what is revealing, is that nobody consulted him about the decision before it was taken; that, on this important matter of economic policy, the Department of Trade and Industry was never consulted.

There is other evidence that the Government give no priority to industry and no priority to the Department of Trade and Industry. That evidence is in the budget of the right hon. Gentleman's Department. Under the heading Measures relating to individual industries and other programmes", we find a budget that will fall from £470 million three years ago to £9 million three years from now. That is a cut of 98 per cent. Not much room for intervention before every meal there.

The Treasury has put the right hon. Gentleman on something of a slimmer's diet. The total budget for his Department three years from now falls through the £1 billion floor. He will then tie for bottom place in the spending table of Cabinet Departments; not in equal partnership with the Treasury, but in equal partnership with the Department of National Heritage. The Ministry of Agriculture, Fisheries and Food will have a budget exactly three times the entire budget of the Department of Trade and Industry.

I have no doubt that there are important spending programmes at the Ministry of Agriculture, Fisheries and Food; that there are, no doubt, subsidies necessary to rural life welcomed by many Conservative Members present who oppose subsidies to manufacturing industry. But no one has claimed that, when recovery comes, it will be led by agriculture. We have not reached that stage of de-industrialisation, even under this Government. There is something deeply perverse about the priorities of a Government who will cheerfully cough up three times the spending on farmers that they will provide for the total industrial economy of Britain.

There is a simple test of whether the Government are now ready to change those priorities. There is a simple way of telling whether the Prime Minister means it when he tells us that he passionately believes in expanding manufacturing industry. Will they intervene, as the Governments of Holland and Belgium have intervened, to save Leyland DAF? After all, we have, or at any rate we had, more DAF workers than Holland, or Holland and Belgium put together—skilled workers, people whose skills we need if we hope to become competitive in the future. Half the output from Leyland DAF is exported.

Mr. Nicholls

No one will buy the trucks.

Mr. Cook

Half the output is exported. It is bought by people outside Britain, giving Britain £250 million. They are buying the trucks.

Nor can we afford to lose the suppliers to Leyland DAF —6,000 of them. The print-out as applied to Leyland DAF takes this huge amount of paper to record. There is one in nearly every Tory constituency. There are suppliers to DAF in the constituencies of the Secretary of State for Health, the Secretary of State for Transport and the chairman of the Tory party. If they thought that Leyland DAF was not an issue for them, they had better think again. Yet, despite that intimate link to their own constituencies, what a contrast in industrial strategy.

In Holland, the Government are taking part in rescue talks, leaning on the banks, calling together all parties, really intervening to find a solution and investing in the company because they have confidence in its future. Here, we have a Government who have left it to the receiver to salvage what he can.

At Question Time last month, the President told me that his Minister of State had been in touch with his opposite number in the Dutch Government. The President will be aware that I tabled a private notice question asking what form that in-touchness took. He replied that, on 4 February, the Minister of State spoke to the Dutch Minister on the phone. The talks about the rescue package lasted eight weeks before they collapsed. It is five weeks since the receiver was called in.

The Ministerial contact that the Government can list in a parliamentary answer is one telephone call. Is it arty surprise that more jobs are going in Britain than in Holland? Will it be any surprise if British industry has difficulty succeeding in the single European market, when the industries of every other country get the kind of partnership that Holland has shown and the industries of Britain get none?

We all pay a cost for the decline of Britain's manufacturing base, but those who pay the highest cost are those who have lost their jobs and the young people who have lost their opportunity to get jobs. In 1979, more than 7 million people were employed in Britain's manufacturing industries. The number today is 4.5 million. For every 10 jobs in manufacturing when the Government came to office, four have gone.

The final irony is that, while the Government will not intervene to save jobs before a factory closes, they have to intervene when the workers are sacked, by picking up the bill for unemployment. The cost is £9,000 a year for every unemployed person—£27 billion at the present rate of unemployment. Surely it would be better to put that money into the economy, to keep factories open, than to pick up the bill when they close.

Unemployment is a tragedy wherever it strikes. It is corrosive to men over the age of 55 who find that they may never work again. It is devastating to the lone parent who loses a part-time job that can make the difference between survival and destitution. Most of all, unemployment is a tragedy when it happens to young people, because it sours their hope and saps their energy. Unemployment among those below the age of 25 is double the national average.

As I was working on my speech on Sunday, I was interrupted by the arrival of six unemployed teenagers from my constituency who had nowhere to sleep that night. They were not dumb, feckless or aggressive. They had gone through an exhaustive list of agencies, and had applied correctly to every agency that they could that day. I have to report that I failed them. I spent an hour telephoning the same agencies, and I received the same answer—that all of them had been full for the past fortnight and had nowhere to put anybody else, because they had so many other teenagers in the same circumstances.

I was struck by how different were their opportunities from those that I and others of my generation enjoyed at the same age. Teenagers of my generation went to college, got a job, or started an apprenticeship—I cannot remember the last time that I met an apprentice. To teenagers of my generation, the idea that six of us would end up without a job and a home would have sounded like pure fantasy.

There are now 800,000 people under the age of 25 without a job—enough to populate Newcastle, Nottingham and Norwich, and leave enough over to populate half of Northampton. When we express our concern for those young unemployed, we are accused of talking Britain down. We do not raise the case of those young people to talk them down. We raise it because we know their potential, know that they have natural energy, and know their need for realistic goals and ambitions. We understand that it is the talents and energy of those young people on which we must build this nation's future. That is something it is not wise to understand less.

The nation that does not understand that is a nation without a future. That is why we will tonight condemn a Government who have failed to invest in that future.

5.23 pm
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)

I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof: 'recognises the importance of the manufacturing base to the wealth creation process in this country; congratulates Her Majesty's Government on setting in place the basic framework for economic recovery—low inflation, low interest rates, good industrial relations and a low tax regime—supported by measures in the Autumn Statement; applauds Her Majesty's Government on its success in attracting more inward investment than any of the United Kingdom's Community partners; acknowledges the widely reported signs of recovery in business confidence; recognises the unparalleled opportunities to help individuals to get back to work; and looks forward with confidence to the prospect of a return to sustained growth.'. It is not possible to overstate the trivialisation of the critical issues that the House is debating to which the hon. Member for Livingston (Mr. Cook) returns time and again. Everybody knows that the trading world—our major customers—has been experiencing a significant and prolonged recession. The political complexion of the Government of our trading partners makes no difference—whether it be America, which has gone through a very difficult period but is now recovering; Germany, which is now heading down; right-wing Governments; or France and Spain, which have considerable economic difficulties. No nation broadly the equivalent of our own has been able to stand apart from that recession process.

As the House knows full well, with a nation such as ours, which has such a high proportion of its gross domestic product exported, it is utterly naive and totally irresponsible to try to give the impression that somehow this country's economy can stand apart from the impact of that recession across the world.

It is characteristic of the systematic policy of the hon. Member for Livingston of undermining this country that he seeks to parade our problems as uniquely British and uniquely related to the late 1980s. The hon. Gentleman has become one of industry's greatest salesmen. The problem is that it is the industrial interests of France, Germany, America and Japan that he is selling—and selling at the expense of British industry, British investment, and British jobs.

In the emotional end to his speech, the hon. Gentleman drew our attention to the problems of Leyland DAF. I will apologise to no one for the concern that we share for the problems of Leyland DAF. The hon. Gentleman totally fails to understand that the Dutch and Belgian Governments had to act so quickly because under the rules of receivership in those countries, it is not possible for the receiver to use money that is the product of the business. Instead, the receiver must look for outside funds. In this country, the receiver can use the funds of the business to keep it in existence.

A British bank provided the money that enabled the receiver to continue the activities of those businesses, whereas the hon. Gentleman's contribution to the position taken by the British banks was to suggest that they had pulled the rug from under Leyland DAF. There he was again, undermining the British banks—just as he undermines British industry.

The most dispiriting aspect of today's debate is the wording of the Opposition motion. It contains not a word of praise for British companies, and no recognition of a single person out there who is selling, manufacturing, marketing or exporting to help Britain to win. Nothing at all—except the carping, whingeing criticism of the hon. Member for Livingston, whose closest experience of the entrepreneurial society was his role as campaign co-ordinator in 1985, when he tried to sell the Labour party to the British people—and laid the foundations for the second worst defeat in the party's history. The hon. Gentleman's capacity to exploit the electorate's fears in the search of profit for the Labour party is utterly staggering.

There are no credible policies left for the left. I reject absolutely the gross distortion of the 1980s that the Opposition motion parades before the House, because it is not true. It is not true to say that our manufacturing industry is collapsing. Despite the recession, output remains more than one fifth higher than at the bottom of the last recession in 1981. [HON. MEMBERS: "Oh!"] The only fair comparison is to take the bottom of a recession with the bottom of a recession, the top of the peak with the top of the peak.

Investment is more than one third higher, productivity is two thirds higher, and exports are four fifths higher.

Mr. Michael Brown (Brigg and Cleethorpes)

Does my right hon. Friend recall that, in the early 1980s, south Humberside suffered massive structural unemployment from the decline in the fishing and steel industries? Will my right hon. Friend share with the House and with the hon. Member for Livingston (Mr. Cook) his visit to my constituency just 10 days ago, when he performed the topping-out ceremony for the new Kimberly-Clark factory, which has £12 million of DTI finance, and at which 700 people will be newly employed with effect from next year, rising to 2,500? Is it not the case that unemployment in my constituency has fallen from about 6,000 in 1987 to 4,500 and that it is now below the national average? Is not that an example of the achievements of the regeneration of British industry?

Mr. Heseltine

That is what I call speaking for England. [Interruption.] I am certainly not prepared to share my experience of visiting my hon. Friend's constituency with the hon. Member for Livingston, who would be embarrassed to hear of the success that we saw there.

Much more important, the motion reveals how little the Labour party understands the achievements of the past decade—how little it understands the realities of world competition, or the degree of change that the 1990s will continue to demand. Let us remember—although it is a sickening prospect—the end of the 1970s. Then, this country had a reputation as the sick man of Europe. We had been losing our share of world trade in manufactured goods for 30 years, and probably longer; we were overtaxed, and we were over-nationalised. We had failed to regenerate our small industrial and commercial companies, we had inadequate training, we were under-educating our children and we were gripped in an inflationary spiral.

To make matters worse, we had an appalling industrial relations record. Our managers could not manage: they faced strikes in their own factories, in the factories of their suppliers and in the public services. In the starkest terms, British industry was uncompetitive. That was the inheritance that our party came to deal with in 1979.

Today, all that the hon. Member for Livingston can say, half apologetically, is, "I had my doubts about the record of the last Labour Government." At least I said what my doubts were when I was on the Back Benches; it took the hon. Gentleman a long time to work out what his were.

Dr. Keith Hampson (Leeds, North-West)

Does my right hon. Friend recall that, at the very end of the 1960s —after a long period of Labour government—Michael Shanks, the guru of the Labour party, published a Penguin book called "The Stagnant Society"? That book bore true testimony to Labour's period of office.

As my right hon. Friend may have noticed, the hon. Member for Livingston (Mr. Cook) completely ignored the underlying legacy with which British industry was faced: the appalling reforms forced on our school system during that period of Labour Government and the fact that the proportion of 18-year-olds in higher education had fallen under Labour—the only time since the war when it had done so.

Mr. Heseltine

My hon. Friend is absolutely right to point out Labour's critical failure to improve our education standards.

In 1979, the problems that we faced were deep seated and long term. In large measure, they were a deliberate consequence of the Labour party's policies. We always made it clear that the Labour party, its policies, its manifestos and its dogma were a disaster; now, even Labour itself has come to recognise that those policies are a disaster. The party leader himself has realised that change must come, simply because his party's policies have proved to be a disaster. The problem for him is that his party now thinks that he is a disaster as well.

Mr. Malcolm Chisholm (Edinburgh, Leith)

Will the Secretary of State give way?

Mr. Heseltine


How can the hon. Member for Livingston possibly have the nerve to come to the House and lecture us on industrial policy, when the whole House knows that the closest thing to an industrial policy in the Labour party is an apology for the past and a promise that it will not do the same all over again?

Let me set the 1980s in context. I shall begin wall industrial relations. Labour resisted every step of reform as it fought to preserve the privileges of the trade unions which provided its funds. What is the result? The result is that this country has the best industrial relations for 100 years.

Then there is privatisation. There was never a policy more calculated to destroy the motivation and resilience of an industry than the policy of transferring that industry's ownership to the state. In state hands, industries are subsidised by taxpayers, suffocated by political and bureaucratic control and denied the chance to compete overseas. Their investment programmes are curtailed to meet the public expenditure constraints of the national Government. That was our inheritance—and the greatest single justification for all the criticisms that we have made over the years is the fact that Labour now has not the nerve to say that it will ever introduce nationalisation again.

So unaware is the hon. Member for Livingston of the damage that nationalisation did to this country that he points to my Department's budget which has been cut. Why has it been cut? Because the losses of the nationalised industries have been turned into the profits of the privatised industries. What are those industries doing? I will tell the House what they are doing.

Mr. Chisholm

Will the Secretary of State give way?

Mr. Heseltine

In 1979—

Hon. Members

Give way.

Mrs. Alice Mahon (Halifax)

On a point of order, Mr. Deputy Speaker. Is it not customary, and polite, for Ministers to give way to Back Benchers?

Mr. Deputy Speaker

It is entirely up to the Member who has the Floor to decide who to give way to.

Mr. Heseltine

I am, as a matter of custom, always polite. I will give way to the hon. Member for Halifax (Mrs. Mahon).

Mrs. Mahon

I thank the right hon. Gentleman. He will remember Mr. Catton, from Eliot Machine Tools in Halifax, who wrote asking whether he could intervene when Customs and Excise—quite wrongly—fined the firm. It is struggling in the present climate.

That happened just after the right hon. Gentleman made his speech about intervening before breakfast, dinner, tea and so forth. Will he now tell us why he wrote back to Mr. Catton saying that he could not possibly intervene? The company has now had to be taken over.

Mr. Heseltine

As I am sure the hon. Lady knows, if Customs and Excise pursue outstanding bills, that must be a matter for them. It would be utterly wrong for Ministers to interfere with the course of their legal processes. [Interruption.] This is a novel development. The Labour party clearly believes that it is right for Ministers to intervene in the course of justice. That is a chill warning of what we might expect if it ever returned to power.

I was speaking of the transformation of the loss-making nationalised industries. In 1979, those industries cost the Exchequer £3 billion, some 1.5 per cent. of gross domestic product. Last year, the privatised industries paid £2 billion in taxes. That is why my Department's budget has changed so dramatically.

Moreover, those companies—now in the private sector—are out in the world trading place, winning contracts for Britain. In 1982, the United Kingdom produced 14 million tonnes of crude steel and exported 3 million tonnes of finished steel. Last year, we produced 16 million tonnes of crude steel and exported 8 million tonnes of finished steel. We now have a trade surplus of about 3 million tonnes, compared with a deficit in 1982. Not the least reason for that is the fact that British Steel now produces a tonne of steel in under five man hours, compared with over 13 in 1979.

Many of the privatised industries tell a similar success story. We do not hear about that from Labour.

Mr. Chisholm

Will the right hon. Gentleman give way?

Mr. Heseltine

No, I am not going to give way. I am going to tell the House how well the privatised industries are doing. British Gas, in partnership with Agip—[Interruption.]

Mr. Deputy Speaker

Order. The hon. Member for Blyth Valley (Mr. Campbell) must not half get up and shout across the Chamber. [Interruption.] Order. The hon. Gentleman has been in the House a long time.

Mr. Heseltine

That is characteristic of Opposition Members. All that I want to do is to parade before the House the success of British companies. All that the Opposition want to do is to make sure that nobody listens.

Mr. Chisholm

Will the right hon. Gentleman give way?

Mr. Heseltine

No, I am not going to give way. I am going to explain to the House the success of British companies. I do not mind how much the Opposition like or dislike it—I am going to do it.

British Gas, in partnership with Agip, is investing over £4 billion in the next 10 years on the exploration and development of a huge new gas field in Kazakhstan. British Telecom is now one of the world's foremost telecommunication companies. Last year, it won a contract worth £350 million to run a telecoms network for the New South Wales Government.

Mr. Chisholm

On a point of order, Mr. Speaker. I have been in the House for about a year, and I seek your guidance. When I was elected to this place I thought that I was coming to a debating Chamber. Can you please tell me how I can turn this House into a debating Chamber? I have never seen anything like this throughout the past year.

Mr. Deputy Speaker

The House is in order. We are having a fulsome debate.

Mr. Heseltine

The problem, Mr. Deputy Speaker, is that there have to be two sides to a debate, but the Opposition have no case to make.

Thames Water, as part of a consortium, has won a £448 million Turkish water plant construction contract. Instead of monopolistic Government ownership, in addition to the profits and the contracts, there are now some 9 million individual shareholders—three times the number there were in 1979. The privatisation programme was the second major change that was brought about in the 1980s, to the immense benefit of the national economy.

My responsibilites include one of the last of the nationalised industries. The hon. Member for Livingston referred to the coal review. I have always made it clear to the House that there are no easy solutions to this intractable set of problems.

At the end of January, the Trade and Industry Select Committee produced its report on British energy policy and the market for coal. I pay tribute to the amount of detailed work that the Committee put into its report. The Government will publish their detailed response shortly. [HON. MEMBERS: "When?"] The Select Committee has recognised that the central issue is the market for coal. It makes no sense for British Coal to continue to produce coal that no one wants to buy.

The stark facts are these. Over 30 million tonnes of coal are stocked at the generators. Over 10 million tonnes are stocked at the pithead. There is enough coal for the rest of this year without another tonne being mined. Well over £1 billion of coal is stocked in mountains that get bigger with every shift that is worked.

The Select Committee's central conclusion is that it should be possible to find a market for an additional 16 million tonnes of deep-mined coal in each of the next five years. It suggests that the Government should require the generators to contract for an additional 5 million tonnes on top of that.

The Select Committee is right to see the size of the market as the central issue. It estimated total electricity demand in England and Wales over the next five years as equivalent to 586 million tonnes of coal. Caminus, the consultants who advised my Department and whose report I have published, puts the figure at only 565 million tonnes. British Coal puts it lower still—at 563 million tonnes. These differences may seem small, but they remove one quarter of the additional market of 80 million tonnes which the Select Committee believes that it has identified.

No one can predict with accuracy the precise scale of a market five years ahead. The Select Committee's figures are at the very top of the range. The critical question that we face, therefore, is the extent to which private sector companies will contract for coal. Those companies will form their own judgment about the size of the market.

The fuel mix is equally important. I note that the Select Committee had considered carefully the extent to which the market for coal could be increased by interfering with gas or nuclear. I have noted with interest that the Select Committee has come out against that. This has no doubt been greeted with relief by many hon. Members' constituents whose jobs would be put at risk. I have said it before and I shall say it again: we cannot interfere to protect jobs in one part of the economy without losing jobs and investment elsewhere.

One of the most attractive of the Select Committee proposals to many hon. Members is to restrict electricity supplied from France via the French interconnector. I have looked into that issue extremely carefully. I myself shared with the Select Committee the concern to examine again the extent to which the scope for additional sales of coal rests upon reducing imports of electricity. I have also taken legal advice on the matter, a summary of which I intend to make public.

The position is clear. As I am sure the right hon. Member for Chesterfield (Mr. Benn) will remember, measures to restrict imports of electricity across the interconnector would be contrary to article 30 of the treaty of Rome. It would also put the Government at considerable financial risk in relation to indemnities given at the time of electricity privatisation and reported to the House.

The effect of removing Electricité de France's non-leviable status, as the Select Committee recommends, would be highly uncertain and may lead to EDF being allowed access to the same premium prices available to Nuclear Electric and financed through the levy. The regional electricity companies would in turn have to be put under an obligation to purchase electricity from EDF. Far from reducing imports from France, this would reinforce their position, and our consumers would end up paying more for their electricity.

I therefore have to tell the House that the proposal by the Select Committee to reduce the amount of electricity coming across the interconnector from the present 6.5 million tonnes of coal equivalent to zero, or anywhere near that, is not an option, but we are still looking at whether anything might be done. To this end, my hon. Friend the Minister for Energy will go to Paris tomorrow to follow up the conversations that we have been conducting with the French Government.

Dr. Michael Clark (Rochford)

Will my right hon. Friend give way?

Mr. Heseltine

No, not at the moment.

I now turn to the suggestion that the additional tonnages that the Select Committee believes that it has identified can be purchased through a subsidy at a total cost of £500 million. This is intended to reflect the difference between British and world prices. It is an interesting approach. The Select Committee suggests that this could be achieved at a cost of no more than £5 per tonne, but I regret that I cannot agree with the Select Committee's assessment of the likely costs. I am continuing to discuss these matters with the generators.

Finally, I turn to the proposal that we should legislate to require the generators to take coal at a price and in a quantity that they would judge to be against their commercial interests. I have to say, at least to my hon. Friends, that this is not an attractive proposition. I have never hidden my regard for the immense amount of work that the Select Committee undertook, but many intractable problems remain to be resolved. The Government have to weigh all the consequences. I expect to set out the Government's reply to the Select Committee and to publish the White Paper shortly.

Dr. Michael Clark


Mr. Heseltine

I give way to my hon. Friend.

Dr. Michael Clark

I am grateful to my hon. Friend for giving way. Of course, the detail of the Select Committee report will be debated at another time, but my right hon. Friend referred to the legal position on importing electricity from France—we shall consider that matter later—and I therefore invite him to consider the legal position on our using the French grid system, within the Common Market spirit of good will, to export electricity to Italy and Spain. If that does not happen, the French will have the prerogative to export electricity to us while we are denied the opportunity to export to France and Spain, because the French will wish to keep that market, too.

Mr. Heseltine

My hon. Friend is well informed on such matters. I assure him that my hon. Friend the Minister for Energy will discuss that and a range of other matters with the French Government tomorrow. I also reassure the House that there have already been consultations and discussions with the French on that matter.

Mr. Malcolm Bruce (Gordon)

To take up the point of the hon. Member for Rochford (Dr. Clark), does the President of the Board of Trade accept that nobody suggests that we should terminate the interconnector with France or reduce its use—certainly the Select Committee does not suggest that? The suggestion is that it should be operated as was intended in the first place, as a two-way exchange of electricity, which provides us with a market that would substitute up to 6 million tonnes of coal equivalent a year. Does the right hon. Gentleman accept that he is being asked simply to negotiate free and fair trade rather than allowing the French to have it all their own way?

Mr. Heseltine

I am sure that the hon. Gentleman will wish to consider the point that he is pursuing in the light of the legal advice about the exact position. The contracts are long standing and subject to the law. The hon. Gentleman will want to consider the matter further.

I will go back to what I was saying, dealing with the record of the 1980s—

Mr. Andrew Mackinlay (Thurrock)

Will the right hon. Gentleman give way?

Mr. Heseltine

Is it about coal?

Mr. Mackinlay

No, it is about the fact that the right hon. Gentleman is going backwards.

Mr. Heseltine

No, I shall not give way. I must make progress.

Mr. Derek Enright (Hemsworth)


Mr. Heseltine

I must now make progress.

A critical component of a healthy economy is the vibrancy of the small and medium-sized company. Today at last, Britain is generating small and medium-sized businesses. When the Government were elected in 1979, there were 1.75 million of them; today there are 1 million more, which grew and developed in the 1980s. Even during the recession of 1992 about 400,000 business start-ups took place.

Why did that happen? It happened because we changed the tax regime to enable it to happen. Changes in corporation tax, in inheritance tax and in income tax made it pay to invest, to hold on, to take risks and to start businesses. It left discretionary wealth in the hands of people who were prepared to invest it in the enterprise culture. It is from the small and medium-sized company sector of the economy that jobs come.

The hon. Member for Livingston made a great deal of the issue of unemployment—but let us consider the facts. Let me remind him that, over the last economic cycle, in 1979–90, the work force in employment grew by 1.5 million, twice as fast as in the rest of the EC. Even in recession, employment now is almost 1.5 million higher than it was 10 years ago. We still have a higher proportion of the adult population in work than almost any other European country.

Mr. MacKinlay


Mr. Heseltine

Let me put the heart of the matter to the hon. Member for Livingston. Has he any idea of the dilemma that our companies face? When he visits large companies, does he ever even look to see the changes that are there staring him in the face? He can walk round any company and ask any management; he can talk to the people employed there. There will be only one story, one explanation, one option. Fewer people are employed, in the drive for those companies to survive in an ever more competitive marketplace. Fewer people are employed as investment—the very investment that the hon. Gentleman keeps talking about—replaces people's jobs.

For example, we are producing 300,000 more vehicles a year than we were 10 years ago—but 100,000 fewer people are employed in the industry producing them.

Mrs. Angela Browning (Tiverton)

Although I have been in the House only for a few months, I worked in business for the previous 18 years, 15 of which—during the 1970s and 1980s—I spent selling the products of British manufacturing industry against the competition. I totally support what my right hon. Friend says about the competitiveness of British manufacturing industry. Is he aware that only last November the shadow Chancellor said in The Guardian that in Labour's view the public sector would be the engine of growth? How out of date can the Labour party get?

Mr. Heseltine

My hon. Friend makes a telling point. Let me add to it: the other day the shadow Chancellor, looking at the success of the privatised utilities, argued that there should be a windfall tax. The Labour party does not have the money to renationalise businesses, so now it wants to tax them into subjection. It is the old story—when Labour Members see success they want to tax it—before breakfast, before lunch, before tea, and before dinner. Then they get up the next day and start taxing it all over again. That is when Labour Members are really happy, destroying success at every turn, every day, all the time.

It is our duty to tell companies that they have our support in the battle to survive, even if that means telling the people the truth about the nature of change and the process of moving from job to job. Let us be clear—

Mr. Mackinlay

Will the right hon. Gentleman give way?

Mr. Heseltine

No, I shall not give way.

The Government strategy is clear.

Mr. Mackinlay

What about the south-east?

Mr. Heseltine

What about a bit of silence, for a minute?

We must set the conditions for growth and pursue competitiveness over the whole range of Government policy. That means low inflation, low interest rates, a competitive pound and support for exports, higher education, research and development and for training.

Now I come to the next great success of the 1980s. The United Kingdom received one third of all inward investment into the EC in 1991. We have 41 per cent. of Japanese inward investment and 36 per cent. of the investment from the United States. It has been estimated that inward investment in 1991–92 created 23,000 jobs and safeguarded 29,000 more. That is success on a massive scale and the Labour party would do well to remember it.

Several Hon. Members


Mr. Heseltine

The hon. Member for Livingston called for an industrial strategy—

Mr. Mackinlay

Will the right hon. Gentleman give way?

Mr. Deputy Speaker

Order. I should be most grateful if the hon. Member for Thurrock (Mr. Mackinlay) would recognise that the Secretary of State is not giving way. [HON. MEMBERS: "He is frit."] That may be hon. Members' view, but the Secretary of State is not giving way to the hon. Member for Thurrock.

Mr. Heseltine

The hon. Member for Livingston called for an industrial strategy. What is the cornerstone of that strategy? It is to impose the social chapter of British industry. Spain, under a socialist Government, has 18.3 per cent. unemployment; companies are leaving France to bring jobs here, away from a socialist Government; German industrialists are shifting manufacturing to central Europe; as a result of the Maastricht treaty, Britain has the opportunity to attract inward investment on a growing scale. We now have the chance to restore the manufacturing base that the Labour party did so much to erode over 40 years—and what is Labour's policy? It is to impose the social chapter.

Jacques Delors says that Britain can be a paradise for Japanese investment. Good. Today, not tomorrow, please. And thank you.

The Labour party says that it has changed; it will never change—because change requires courage, guts and vision. Change requires the will to stand up to vested interests and the Labour party is nothing except the representative of—

Mr. Jimmy Boyce (Rotherham)

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I am sorry to stop the President of the Board of Trade in full flow, but there is a point of order.

Mr. Boyce

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Is it for me?

Mr. Boyce

Yes, it is. I wonder whether the President of the Board of Trade could—[Interruption.] Would you be kind enough to ask the President of the Board of Trade to lower his voice a couple of octaves because we can hear his ranting through the microphones on this side of the House at the same time as his ranting from the other side of the House?

Mr. Deputy Speaker

Neither the content nor the volume are the responsibility of the Chair.

Mr. George Howarth (Knowsley, North)


Mr. Deputy Speaker

Order. The hon. Member only came into the Chamber a few minutes ago and he has been leaping up and down ever since. He must resume his seat.

Mr. Heseltine

I hope, Mr. Deputy Speaker, that I have not offended you by the scale of my voice. I tend to adjust the volume depending on the penetration of the Opposition that I must make.

I think that the House will wish me to extend a note of sympathy to the hon. Member for Livingston, because the disaster scenario to which he clings becomes less credible every day. Survey after survey shows confidence and recovery. The latest surveys by the Confederation of British Industry and the Institute of Directors show that British business knows that the recovery is coming and is under way. The surveys all have the same message—that Britain is moving ahead.

In the three months to January, retail sales were 1.5 per cent. higher than a year earlier. In February, car registrations were 16 per cent. higher than the year earlier. In the fourth quarter of 1992, manufactured exports were at record levels, excluding oil and erratics, and were up 6.5 per cent. on a year earlier, and manufacturing investment was 5.5 per cent. up on the start of the year.

The poor old hon. Member for Livingston is stuck where he was a year ago—he is the only person whose performance has not improved during the past 12 months—when he was talking about health service trusts. The Opposition—led by the hon. Member for Livingston—engaged in a scandalous campaign and exploitation of public concern about the national health service. Yet what has been the Government's record under their stewardship of the NHS? More than 1 million more patients are being treated.

The hon. Member for Livingston is now in the business of undermining British industry, but let me tell him that British industry is already making a commendable job of undermining him. I hope that the House will finish the job tonight and will support the Government.

6.2 pm

Mr. Gordon Oakes (Halton)

Opposition Members and many Conservative Members—certainly those who are interested in manufacturing industry, of whom there are many on both sides of the House—will be most disappointed by the speech of the President of the Board of Trade.

The first part of his speech and the end of it were nothing but rant, as my hon. Friend the Member for Rotherham (Mr. Boyce) said. One cannot substitute ranting for reason. The House is tired, and the country even more tired, of the right hon. Gentleman and other hon. Members, especially Ministers, blaming everyone but themselves for everything that happens.

I remind you, Mr. Deputy Speaker, that this debate is about manufacturing industry, which is rarely discussed in the House. That is a great shame, because I passionately believe that success and prosperity can only come to a nation with a viable manufacturing industry—a nation that makes goods that one can see and touch, goods that people need and want to buy—which is the basis of any sound economy.

The President of the Board of Trade talked not about manufacturing industry but about the world recession. Yes, we accept that there is a recession. He mentioned the demonology of a Labour Government 14 years ago. The Conservatives have been in power for 14 years, and surely must accept some responsibility. Indeed, I thought that the Prime Minister did so last week. I was truly delighted when he said that industry really matters and that we must consider that it matters. The following day he spoilt it all, because he feared that he would be in the bad books of his former boss if he was seen to criticise her.

However, I must admit, as my hon. Friend the Member for Livingston (Mr. Cook) said, that the Prime Minister was first Financial Secretary to the Treasury and then Chancellor of the Exchequer when all those terrible things were happening to the economy—against his wishes, when he was in a minority. If he allowed that to happen, he must have been a powerful Chancellor.

I am also disappointed because the President's speech was an abuse of the House. He injected a statement into the middle of a speech about manufacturing industry, which is what most hon. Members have come here to talk about. He should have presented that statement to the House tomorrow and allowed hon. Members on both sides, but especially those representing coal-mining constituencies, to question him. They had no idea that he was going to make that statement today, and I remind the President that coal is an extractive industry and has nothing to do with manufacturing, which is what we are here to talk about.

I am also disappointed because I was delighted when the President of the Board of Trade received his present job. He may have forgotten this, but I have not; he came to Halton when I was acting in my capacity as president of the chamber of commerce, which I still am. At the time, the President was in the wilderness and out of office. He gave a first-rate speech, and talked about manufacturing industry, saying interesting things about it and criticising the Government for not being active enough in manufacturing industry.

Last April, I thought that he was the man to be President of the Board of Trade, and that at last we would have someone who cared about industry. What has happened throughout those 12 months until today? No interest whatsoever has been shown in manufacturing industry.

Many hon. Members firmly believe, as I do, that manufacturing industry matters. My father, both my grandfathers, my uncles, my father-in-law and most of my classmates all worked in manufacturing industry. My constituency of Halton comprises two towns—Runcorn and Widnes—which are both industrial and manufacturing towns, and the chemical industry or chemical-associated industries predominate. In the old days, we also had machine tools, foundries and engineering, all of which have disappeared, and the chemical industry can wither on the vine for lack of attention from the Government.

I see a fellow Cheshire Member, the hon. Member for Macclesfield (Mr. Winterton), in his place. I was delighted when he took the initiative last week of founding an advisory committee in the House, on an all-party basis, to advise manufacturing industry, because no one seems to care about it.

Hon. Members of all parties, including the Liberals and Conservatives, are genuinely worried about what is happening to manufacturing industry. That is why I found the President's speech so disappointing, because he did not describe any initiative, show any concern or look to the future. His speech was just dispair, attack and rant, and contained nothing about what the Government will do to assist manufacturing industry.

At the last count, unemployment was 14.9 per cent. in my constituency. The President of the Board of Trade mentioned the strikes that we suffered under Labour Governments, but he did not consider how many days are lost to industry because of unemployment. That figure is many tens of times more than the days lost through strikes under any Labour Government, but he did not say a word about that.

I intend to be brief, but I want specifically to mention two means by which the Government—very often inadvertently, not wilfully—cause unemployment. The first concerns the chemical industry, which the President of the Board of Trade probably knew I would mention.

In my constituency, ICI manufactures chlorine, which consists of salt and electricity. Since privatisation took place, there has been a 66 per cent. increase in the cost of electricity. It is no coincidence that this year, for the first time since the war, ICI, that great industrial giant, announced a loss. Before electricity was privatised, ICI could buy its supply at a cheap rate because of market forces. There was no subsidy. The principle was that, if a supplier had a commodity that nobody else wanted at a particular time, it could be bought in large quantities at a lower-than-normal rate. ICI was able to secure its entire supply at a competitive rate.

I am not sure that the present suppliers of electricity, knowing how fearful would be the results of the cessation of chlorine manufacture, would not be willing to take part in a similar arrangement today, but that is forbidden by legislation.

My hon. Friend the Member for Warrington, South (Mr. Hall) put a question about this matter to the Prime Minister, but he received a very dusty answer. He then used an Adjournment debate to raise the subject, as he too has constituents who work in this industry. In another place, the right reverend prelate the Bishop of Chester raised the matter, as it affects his flock too. Their Lordships had a debate, in which peers from all parties spoke about this subject. The subject is intensely important, because cessation of the production of chlorine would affect 7,000 jobs directly and another 5,000 that are associated with that production.

A group of hon. Members from all parties—mostly Cheshire Members—requested a meeting with the Secretary of State to talk about this matter. I wrote to the right hon. Gentleman, and three weeks later I received a reply saying that he was too busy to see us, but offering an appointment with the Minister for Energy. But it was not just energy that we wanted to discuss; we wanted to talk about the chemical industry, one of whose basic ingredients is chlorine.

The loss of this industry would affect more than jobs in my constituency. This is a national problem. Other manufacturers of chemicals, steel manufacturers and other high-energy users would be involved. The President's current difficulties over the coal review might have been solved with the right approach in this area. I see that the right hon. Gentleman has gone. I make this point as the Member for a constituency that would be drastically affected if the event to which I refer were to take place, as is likely unless something is done. ICI will not be able to continue to produce chlorine at a loss. No firm could.

Mr. Mike Hall (Warrington, South)

Does my right hon. Friend agree that the Government could provide a solution to this problem almost immediately? The Government own 40 per cent. of the shares of PowerGen and National Power. As the major shareholder, they could intervene on behalf of the chemical industry in my right hon. Friend's constituency, save jobs in my constituency and support the industry in the north-west.

Mr. Oakes

Of course they could. They could deal with the regulations that are holding the whole process up. The industry would willingly co-operate, without any move by shareholders, in order to retain the market.

I should like to refer briefly to the pharmaceutical industry, which has been a money-spinner for this country. It is one of the most successful industries we have, yet the Government have proposed a limited list. I realise that the Secretary of State for Health has to make economies—I do not for one moment dispute that—but I am concerned about the way in which she has acted.

In 1985, the Government introduced a limited list. What happened to pharmaceuticals then? I am concerned not just with job losses but also with the inventiveness of the industry. In the categories prescribed in the limited list, not a single new drug has been brought forward. Indeed, research in respect of those categories has ceased.

On the other hand, 20 new drugs in categories not covered by the limited list have emerged. There are thousands of jobs in that field, too. It is a market in which we are leaders. We are going to lose not just the car, lorry and bus industries but also the chemical and pharmaceutical industries—largely as a result of neglect, largely because it seems that no Minister takes account of the employment implications of his decisions.

Under successive Governments, the climate of opinion about manufacturing has changed. The status of and respect for manufacturing could not be lower. I want to see that status and that respect raised. People ought to be proud to work in an industry that makes things. They ought to be proud of their role in the creation of objects that other people in the world need. Such an attitude used to exist.

Let the Government take the lead. Last week, the Prime Minister made a statement about his so-called review of the honours list. Why should not our inventors be honoured? It is even more important that we honour the people who put inventions into production. We invent things, but then we let them flow away to other nations to be developed. Why should there not be a specific honour in this field? It would cost nothing. Surely such people are more deserving of honours than sportsmen, actors, explorers and other people who find their names on the list.

Why do not schools put more emphasis on great British inventions, as happened when I was at school? The media, schools and universities should have their respect for manufacturing industries rekindled.

I repeat: manufacturing industry is the foundation of our prosperity. We have been asked whether we can expect prosperity to be led by agriculture. Of course not. Nor will it be led by the service industries or tourism. It goes without saying that we want those industries to prosper, but without manufacturing industry the future of this country is doomed.

Mr. Deputy Speaker

Mr. Sebastian Coe. [Interruption.]

6.17 pm
Mr. Sebastian Coe (Falmouth and Camborne)

I am sorry that I was a little slow, Mr. Deputy Speaker. [Laughter.]

Any debate that takes as its theme the decline, or even the relative decline, of our manufacturing base has to lift the lid off a sad economic history, however ghoulish or depressing that might be. The decline of our manufacturing industries has unfortunately been a feature of most elections since the turn of the century and a key and prominent subject for debate in the nine that have taken place since 1964.

Let there be no confusion. Let us not delude ourselves. This is all familiar stuff. We have been here before. Economic historians will belabour us with myriad excuses and reasons. We know what they are: empire preference, the destruction of British industry after the second world war, the determination to run a reserve currency, sometimes Treasury fixation with the value of currency, to the neglect of manufacturing considerations. We know the arguments about trade union beligerency, and we certainly know the arguments about some of our management shortcomings in terms of the manufacturing base.

One of the issues to which we should be addressing ourselves is the fact that really only in the last few years have we started the inevitable task of rebuilding, or beginning to build for the very first time, a modern industrial state.

It is fair to say that the Governments of other European countries and north America have responded differently to the construction of the modern industrial society and that those countries have been more effective than the United Kingdom in meeting educational needs. Some will even claim that there is something specific or peculiar about our response to manufacturing. Perhaps we display an anti-industrial ethos. To appreciate that, one need only consider where the forefathers of our industrial heritage chose to send their children to school—Harrow, Eton and the other great public schools that, for so many years, offered a classics, science-free education. I do not absolve the echelons of higher education from these shortcomings.

The issue of education is still alive and features prominently in current discussions. Far too often, we encourage youngsters to seek employment in the service sector, the City or at the Bar. They are told that it is more acceptable if one pursues such professions instead of opting for a manufacturing career on the factory floor.

I was brought up in Sheffield—one of this country's historically most productive cities. It was a jewel in our manufacturing crown, yet throughout the 1970s, when I was getting careers advice from schoolteachers and people who should have known better, I was encouraged, in common with the rest of my classmates, to take up employment in one of the non-productive sectors. It was more acceptable to work for the council than in any capacity on the factory floor. That attitude has been hugely damaging to our manufacturing industry and is responsible for the ethos that has surrounded most of the thinking about manufacturing for far too long.

As we trudge through the debates on education, amid the battle cries, squabbles and platitudes about the indispensability of a good education and meaningful training, let us not further delude ourselves. We have been here before, too. Even after the establishment of state education in 1870 there was little bias towards technical education. The reforms of 1902 dealt mainly with religious issues and little consideration was paid to our scientific base and training. The teaching provided by the grammar schools was based upon the classics-based education offered by the public schools rather than that offered by the technical high schools of Germany and France.

I beg the patience of the House while I read a quote from a royal commission report of 1868 on endowed schools: Our evidence appears to show that our industrial classes have not even that basis of sound general education on which alone technical education can rest—unless we remedy that want, we shall gradually but surely find that undeniable superiority in wealth, and perhaps in energy, will not save us from decline. That quote could have come from any Select Committee report of the past 15 years.

I do not absolve the upper echelons of higher education from guilt. In 1945, the Percy Committee recommended that the war-time output of engineers—around 3,000—should be maintained for at least 10 years. The universities could produce only 1,200, with the rest made up from technical colleges. Very few of those engineers were university graduates; the majority came from technical schools. Sir Lawrence Bragg, Cavendish professor at Cambridge, displayed breathtaking arrogance when he said that universities were designed to train the mind while technical schools were designed specifically to train people for jobs. Twenty-five years later, a study of 90 machine tool companies in the west midlands, employing 30,000 people, revealed that only 25 of them were engineering graduates.

The fact that only half of British youngsters between the ages of 16 and 18 participate in full-time education compared with 70 per cent. in Germany, Japan, France or the United States of America also has a bearing on the future of manufacturing. Equally, in 1990 some 40 per cent. of youngsters left school without any graded qualifications or with GCSE passes at no higher than grade D. Those factors place a huge burden on anyone who seeks to plan our manufacturing base for the next few years.

It is welcome that the core skills of those aged between 16 and 19 have been identified and are now being stressed. They are a strong factor in improving technical education, but we must still remove more of the barriers that exist between standard academic education and so-called "vocational training".

We have paid a high price not so much for the reckless radicalism of our educational establishments, but because of the institutional sclerosis that has led to comprehensive schools being modelled on grammar schools and polytechnics on universities when in the latter case the reverse should have been the case. What has happened as a result of that practice? By the end of the 1970s, we hardly had a technical school left. We have been left with an academic model that is irrelevant to, or at best frustrating for, a large proportion of our school population.

Ever since 1840, our inability to deliver the right kind of technical education has been our industrial dead weight—our industrial albatross. From the 1868 royal commission to which I have referred, the 1902 reforms, the Education Act 1944—the Butler Act, the Eccles White Paper on technical education of 1955 through to the core curriculum and the training and enterprise councils of today, the necessary words have been mouthed, but little has been done.

Are we sure that the messages that have emanated from this place in the past 40 years have been as supportive as they could have been to our manufacturing base? A quick glance down the list of previous Secretaries of State for Trade and Industry does not necessarily make the best reading, nor did they always offer the best message to our manufacturing industry. We went from the damaging interventionist meddling years of the 1960s and 1970s through to the equally damaging detachment displayed in the early 1980s

What of our civil service? What top-class advice has been offered by it? In the past, most civil servants were Euro-reluctants, imbued with the philosophy of nationalised industries. They had no hands-on experience of running an industry. Throughout the 1950s and 1960s they could not see what was obvious to everyone else about our future development within Europe.

There is nothing inevitable about relative or real-terms decline. We tend to use the word culture when we cannot explain something and I risk using it in this context. We have a culture—an industrial heritage. We are a manufacturing nation and every instinct in me tells me that that is so. By inclination we are not a series of motorways, mapping out non-productive distribution centres only.

If we are to recover from our manufacturing problems, we need a basic framework for economic recovery and I welcome the fact that the Government have set that in place. We need low inflation, low interest rates, good industrial relations and a low tax regime. Combined with that, however, we must build on the cultural ethos that we in Great Britain make things.

6.28 pm
Mr. Malcolm Bruce (Gordon)

The hon. Member for Falmouth and Camborne (Mr. Coe) has addressed some of the gut issues that the President of the Board of Trade would have done well to address. Unfortunately, the right hon. Gentleman made his traditional, almost predictable, rant that was totally lacking substance.

It is interesting that in his peroration, the right hon. Gentleman suggested that everything in the garden was lovely, that the country was enjoying resounding success. He said that any suggestions to the contrary were either untrue, a socialist plot or put about by someone out of touch with reality. The hon. Member for Falmouth and Camborne, however, has thoughtfully pointed out that a long-term problem has persisted under different Governments, and that a cultural change is needed if we are to get to grips with it.

May I first address the issue that the Prime Minister sought to address before he rather quickly backed out of it last week? He began to acknowledge the point that the right hon. Member for Halton (Mr. Oakes) also made—that the British economy will not be competitive unless it has a larger manufacturing base. It is as simple as that. The economic blizzard of 1979 to 1981, whatever else it did, even by the pretensions of the Government of the day, made our industry apparently leaner and fitter. Let us acknowledge that it may have done that, but unfortunately it also made it much smaller, and we have not, over the past 12 or 14 years, been able to break out of that problem. We have to address that very positively and constructively.

We would have liked to think that the President of the Board of Trade had some grasp of the urgency of the problem and of the need to look outside the narrow confines of party political rhetoric, and would start to get to grips with a problem that will require the minds and the application of politicians of all persuasions, including people outside this House—in industry, trade unions, the City and every other institution engaged in productive economic activity in this country.

It is time that the Government got out of the trenches and started to show a little constructive leadership in this matter. In that context, the President of the Board of Trade's speech was deeply depressing and extremely disappointing.

The Engineering Employers Federation, before Christmas, launched its idea of an industrial strategy. Two facts came out of that which hit me between the eyes, and which sum up, it seems to me, the situation we face and the need to take some positive action. It pointed out that the British economy had an apparently permanent propensity to consume 105 per cent. of its output. I suggest to all hon. Members that that is not a sustainable situation. It is likely to lead to permanent pressure on our exchange rates and to consequential effects on our internal economy.

Another more interesting point that it made was that an historical analysis of the past 60 years shows that the rate of return on investment in manufacturing industry was about 7.5 per cent., but, in the 1980s alone, the rate of return was about 18 per cent. We have now reaped the consequences of that candy-floss era. We all have to recognise that that is not a sustainable rate of return, that the financial institutions cannot look for it and must not expect it, and that industry has some right to expect a more realistic framework within which to raise money at a rate of return that makes sense, is sustainable, and takes account of the need for long-term strategy and thinking, and for investment to bear fruit.

Let me entertain the House with two or three fundamental statistics which put the situation over the past two or three years in context. The gross domestic fixed capital formation for manufacturing for 1992 was £10,285,000,000. That was 6.4 per cent. less than the figure for 1979. Even allowing for the fact that the President of the Board of Trade wanted to make comparisons with a different base rate, and even if one takes the best year of the past 14, which is 1985, we have just got back to slightly above that level. That is nothing to be proud of.

It is also true that, at the beginning of the last decade, we had a surplus in manufactured trade goods of £1 billion. In 1992, we had a £10 billion deficit. That was in the middle of a recession.

This debate is about unemployment, and I shall come back to that in a minute. It is worth recording that, in 1979, manufacturing industry employed 7.1 million people. Last year, it was down to 4.5 million, a reduction of 2.6 million people, with an unemployed level of 3 million. That is a reduction overall of 37 per cent. If we make comparisons between our manufacturing output and that of our major competitors—

Mr. Richards

The hon. Member has given some statistics of numbers of people employed in the manufacturing sector and how their number has fallen in this country. Can he identify any other modern industrial western country where the number of people employed in the manufacturing sector has not fallen during the 1980s?

Mr. Bruce

Not a large manufacturing country. As I said, I was coming back to that, but I drew the allusion nevertheless.

We have lost jobs, and they have to be replaced. I wholly accept that they cannot all be replaced by manufacturing, but manufacturing has to create the growth and the wealth and the recovery to pay for the jobs to be created elsewhere. That is the fundamental point.

Comparative figures show that manufacturing output has increased in the United Kingdom between 1980 and 1990 by 2.1 per cent., as opposed to the OECD average of 2.9 per cent., so we have not been performing well by comparison with our competitors.

The President of the Board of Trade made considerable play, reinforced by some interventions from his Back Benchers, with the improvement in productivity. I wholly accept that. There has been an improvement in productivity, but there had to be, because of course we are operating from a much smaller base. For us to reap the full benefits of those improvements in productivity, we need to expand the manufacturing base, so that we can create more wealth to pay our way in the world.

I spent a couple of hours this morning in the City, visiting Lloyds. It was brought home to me there that many of our City institutions that still maintain substantial expertise and ability to turn around very substantial sums of money, to add value and make profit, nevertheless grew up at a time when we were an imperial power and had a captive market. We can only hold those markets if we maintain a competitive edge and the ability to provide added value and productivity that beats our competitors.

Our ability to sustain that and to provide full employment in that sector, the Secretary of State for Employment would have to acknowledge, is somewhat under question. The banks are shedding thousands of jobs. Employment fall-out in Lloyds itself is coming down the track. We see, right across the service sector, that it can neither sustain continued expansion in employment nor hold the jobs that have been created in recent years. So the conventional wisdom, which I think the Prime Minister was beginning to address, has to be challenged. The service sector will not be able to provide enough of the employment of the future or to provide the necessary wealth to create jobs.

It is worth pointing out in this context, taking up the point that I was returning to when the hon. Member for Clwyd, North-West (Mr. Richards) intervened, that it is clear that an expansion in manufacturing will not, of itself, create a huge increase in direct employment. I think it will, however, first provide quality employment, because it requires the application of considerable skills for which we have to improve our training, and it will provide the spin-off for the service sector which manufacturing industry itself employs. I argue that the indirect effect will be quite significant.

In the period when we came out of the last recession of the mid-1980s, during the years 1985 to 1987, companies employing fewer than 20 people accounted for 500,000 new jobs, while companies employing more than 20 people produced only 20,000 new jobs. When we are talking about manufacturing industry, we should be thinking not just about huge industrial complexes but about small manufacturing companies creating added value, applying skills, transferring technology and creating the means of expansion in both employment and wealth.

It is worth making comparisons with the two countries against which it is most important for us to mark our performance—Germany and Japan. We often make comparisons with America, which I think are completely wrong, because America is a big economy operating in a completely different framework. While it is culturally similar, the nature of the American economy is very dissimilar from ours. Germany and Japan are trading nations which have to generate external wealth to sustain their population with the kind of standard of living to which they aspire.

Contrary to popular belief, Japan is not a big business economy: it is a small business economy. One of its great strengths is the link between huge trading corporations and a massive network of small suppliers. The difference is that big business in Japan is the friend of small business, whereas too often in Britain it sees itself as in competition with small business, or is careless about the latter's interests, or does not pay its bills on time. It fails to co-operate in helping small businesses to advance. We should therefore look at ways of creating more positive relations between the two.

Similarly, in Germany, there is a relationship between the financial sector, manufacturers and investors which takes account of long-term needs. Hostile takeovers, a feature of British economic life, are almost unknown in Germany. Conservative Members are fond of saying that it is a good discipline for management to know that they can be taken over; but it also encourages short-termisrn. Long-term investment encourages hostile takeovers to raid the cash funds for short-term benefit.

We must find a way of getting around that, to enable companies to make long-term investments without putting themselves at risk. The City, the Government and industry should all explore this. For instance, the City should provide funds for specific needs at attractive rates for long-term investment. That should not be beyond the wit of the City. Nor should it be beyond the wit of the Treasury and the Chancellor if necessary to underpin such loans with tax incentives, which will accrue to long-term investments and which can accrue only if they remain long-term. They will be penalised if anyone tries to capitalise on them in the short term.

The antics displayed by the President of the Board of Trade are confusing. He is fond, when it suits him, of talking about intervention and telling us why he cannot, must not or should not intervene when it does not suit him to. There is no logic or consistency or strategy—no shred of forethought at all. The general impression is that the right hon. Gentleman is happy to get through another day without another catastrophe landing on his plate. We are entitled to something better.

After all, the right hon. Gentleman resigned from the Government because he wanted to intervene over Westland. Before he came to prominence, there were several conspicuous occasions when Tory Governments intervened to the benefit of our long-term manufacturing and industrial base. Had it not been for such interventions, there would be no Rolls-Royce and no Ferranti today. I do not see why we cannot have an honest assessment of the terms and conditions on which Tory Ministers might intervene.

The President of the Board of Trade, perhaps foreshadowing his White Paper on the pits inquiry, seemed to be preparing the ground for his escape from the recommendations of the Select Committee report. He started by saying that the market was the prime determinant. The Select Committee did not specifically deal with that, but I should like to ask the right hon. Gentleman how he thinks the nuclear power industry managed to secure 25 per cent. of the electricity generation market on free market principles. He well knows that the market has been distorted; there is no point in pretending otherwise.

Where do we go from here? The part of the President's speech dealing with the French interconnector was interesting, and we shall study it and return to it. I had understood that the interconnector was designed from the beginning to provide the opportunity for a flow of electricity to and from the continent, not just between the United Kingdom and France but to the European Community. All most of us want is the ability to make it a two-way process. If it were, it would release resources that could be provided for by coal. Whatever contractual terms the President of the Board of Trade is locked into, this country is buying subsidised French coal-fired electricity at the expense of our own. The British people find that hard to understand.

I attended the launch of the Manufacturing and Construction Industries Alliance, of which the hon. Member for Macclesfield (Mr. Winterton) is chairman. I am happy to be associated with it. What we need now is a recognition cutting across party politics that we must have positive, strong and imaginative ideas to build a stronger manufacturing base. We need to leave behind sterile arguments about whether manufacturing creates more jobs than do the service industries, tourism or invisibles. We need all those things if this country is to survive. This debate is timely, in that at the moment our manufacturing sector is too small for Britain's fundamental economic needs. If we can all agree on that, we can start to do something about it.

If the Secretary of State for Employment is to answer this debate, I urge her to respond to it more constructively than the President of the Board of Trade did. We have the skills; we can make things; we can add value. If we do not do so, we will have no chance of conquering unemployment or of giving our people the standard of living which they have a right to expect and which we are still a long way from achieving.

6.45 pm
Mr. Nicholas Winterton (Macclesfield)

It is nearly 22 years since I first spoke in the House. I hope that all hon. Members will agree that, during that time, I have solidly, continuously and forcefully expressed my concern for manufacturing industry—a concern to identify and deal with its problems and to enable it to realise its potential both as a major employer and as the only sustainable source of non-inflationary economic growth.

Today I speak with a still greater mandate, because, as several hon. Members have already said, last week saw the launch of the Manufacturing and Construction Industries Alliance, on which I have the honour to serve as chairman. I pay tribute to the hon. Member for Gordon (Mr. Bruce), the trade and industry spokesman for the Liberal Democrat party, for speaking from the platform on that occasion on behalf of his party.

I am also delighted to see in their places the hon. Members for Rochdale (Ms. Lynne) and for Stockport (Ms. Coffey), who serve on the advisory panel of the alliance. The right hon. Member for Halton (Mr. Oakes) is also a member of the advisory panel. I agree with every word he uttered in support of the chemical industry and the pharmaceutical industry. If only Governments had used their influence, not necessarily to interfere with, but to involve themselves in, industry and to guide and help it, perhaps the severe erosion of our manufacturing base over the past 40 to 50 years would not have occurred.

The launch of the alliance, with messages of support from my right hon. Friend the Prime Minister, the leader of the Liberal Democrat party and the Leader of the Opposition, is as unprecedented in its cross-party support as it is timely in its arrival. The alliance, which draws together Members from all political parties, leading figures from the City and key players from the manufacturing and construction industries—employers and employees—has already begun to make its presence felt.

I do not want to claim undue credit for the actions and statements of others, but I welcome today's debate, even if I have some reservations about the tone of the motion. I welcome even more the commitment to manufacturing that the Prime Minister showed in his highly publicised interview last week. Coincidentally, he gave that interview the day after the alliance was launched and he had received all the papers about the launch.

Throughout the time I have served in the House, successive Governments of all political hues have failed to appreciate the true importance of our manufacturing industry. Too few hon. Members have real experience of those industries, and too great a concentration of effort and attention has been placed on the service sector to the detriment of our manufacturing base.

I have some regret about the way in which the debate has gone so far. The two Front-Bench speeches appeared to be entirely party political point scoring, with few positive proposals about how our manufacturing base might be expanded and strengthened. However, after those opening speeches, we had a positive and useful contribution from the right hon. Member for Halton.

I pay tribute also to my hon. Friend the Member for Falmouth and Camborne (Mr. Coe). I was surprised—I do not say that in a patronising way—at his thoughtful and considered speech. It is to be hoped that the Secretary of State for Employment takes back to all the Ministers concerned—not just at the Departments of Employment and of Trade and Industry but at the Treasury, the Department for Education and the Chancellor of the Duchy of Lancaster's Department—the pertinent views of my hon. Friend.

I hope that party political polemics will be put aside for the remainder of the debate and that Conservative and Opposition Members will concentrate on seeking to find common ground which can be exploited to establish and implement new policies that will give constructive benefits to our most important industries. Our economic and employment opportunities could be sustained, but the belief that they could be sustained without a manufacturing base has been exposed, and widely accepted, as the absurdity it always was.

Unemployment is likely to remain at around the 3 million mark for some time, the balance of payments deficit continues to grow and we are an uncompetitive nation in an increasingly tough and competitive world. As our manufacturing base has contracted, our balance of trade deficit has increased proportionately. The issue must be grasped by Government.

I do not, however, want to fall into the trap of pointing the finger at the present Government for all the evils of our economy now. That would be as unfair as it would be unhelpful. As has been pointed out, we are in a world recession. Successive Governments of both parties have failed to deal effectively with the forces that led to the steady erosion of our manufacturing base.

Let us hope that this debate begins to see the turning of the tide and that what is said by hon. Members in all parts of the House will be studied carefully by the Prime Minister, the Chancellor of the Exchequer, the President of the Board of Trade, the Secretary of State for Employment, who is in her place, and by Foreign Office Ministers. Between them, they have a combined responsibility for identifying the problems that our industries are facing and for bringing forward constructive and positive solutions to help manufacturers to make better goods more efficiently and to sell them abroad to earn the revenue that Britain needs.

With the Budget looming and the constraint that I should not stray too widely from the subject of the motion, the House will find it helpful if I take the opportunity to put on the record the measures that the Manufacturing and Construction Industries Alliance believes should be considered for incorporation in the Budget statement on which the Chancellor is undoubtedly working.

The measures that I put to the House are as simple as they are essential. First, we wish to see the introduction of 100 per cent. capital allowances to ensure that the investment decisions of industry are not distorted by the tax regime. Secondly, we wish to see a commitment to reducing still further, and to holding down, interest rates, which have placed intolerable burdens on industry and home owners alike. Thirdly, we wish to see the abolition of stamp duty on the sale of houses. That archaic tax is a dampener on the housing market and should be excised immediately from the list of what I describe as acceptable tax measures.

Fourthly, we wish to see the creation of a task force to identify and tackle areas that offer considerable potential for import substitution. I have discussed the matter with the Prime Minister, who is extremely sympathetic to that sort of exercise being undertaken. Fifthly, we want a more favourable tax treatment of the fees that individuals pay to improve their qualifications and skills through part-time education. Sixthly, we want a firm and explicit political commitment to promote British exports through all the means at the disposal of the Government.

It is no good the Government saying that they are doing a lot in that area when—my right hon. Friend the former Minister for Trade, who is now the Minister for Industry, and who I am glad to see on the Front Bench, knows this well—the rates given in this country by the Export Credits Guarantee Department are nowhere near as competitive as those available in France or Germany. Our exporters are operating at a disadvantage. Those are all measures within the short-term gift of the Government. They are needed and would receive a welcome from industry, the City and from most, if not all, hon. Members.

In a message at the launch of the alliance, the Prime Minister said: I am sure that the Alliance will argue the case for manufacturing industry with vigour in the years ahead. I look forward to its dialogue with Government in this important cause. My comments today represent the first contribution of the alliance to the dialogue for which the Prime Minister called.

Mr. Dennis Turner (Wolverhampton, South-East)

I intervene on behalf of the west midlands. Is the hon. Gentleman aware that my constituents and I would rest easier if tomorrow he were given the opportunity to implement the proposals he has put to the House by being appointed President of the Board of Trade? We in the west midlands have had a third of our manufacturing base eroded. In my constituency, over 20 per cent. of the working population—good, able-bodied men and women—are available to make a contribution to society. My area was built up on manufacturing. The policies that the hon. Gentleman outlined should be implemented. I hope that the Prime Minister will see the wisdom of giving him the opportunity to implement them—

Madam Deputy Speaker (Dame Janet Fookes)

Order. The hon. Member knows my views on interventions. His is becoming a speech.

Mr. Winterton

It may have been long, but from my point of view it was most welcome, and I am grateful to the hon. Gentleman. As he knows, I have supported from the Conservative Benches some of the points that he has made at Question Time and on other occasions. When his suggestions deserve merit, as they often do, I shall continue to support them.

As the hon. Member for Gordon said, it is important for hon. Members in all parts of the House to try to find common ground on which to take forward the cause of manufacturing industry. Having worked for many years in the Birmingham area, in the west midlands, the black country, Wolverhampton, Walsall, Stourbridge—1 could go on naming the places—in the construction industry, I appreciate how important manufacturing industry is to that part of the world. There are the skills—the willing and trained people in that area—to form an important part of the renaissance of manufacturing industry in this country.

I hope that our proposals will be given careful and sympathetic consideration, because they are constructive and positive, and that they will be taken to all the Ministries concerned.

I have one other suggestion for consideration. It is that Ministers should look again at the provisions for dealing with the affairs of businesses that run into financial difficulties. Our current provisions seem to propel far too many businesses with short-term problems towards and beyond the brink of liquidation, when a more constructive approach might have averted such a result. We need the administrative equivalent, not of the undertaker, which too often the liquidator is, but of a paramedic task force, which, when a business hits troubled waters, can provide immediate advice and help in finding a way to keep that business trading and so avoid unnecessary liquidations, loss of jobs and knock-on effects on creditors.

Nobody, except perhaps the liquidator, benefits from the current situation. Many hon. Members have expressed their understandable concern that our system appears to be biased against survival, and would welcome a commitment by the Government to consider introducing arrangements perhaps not dissimilar to those available in the United States, where companies can file for chapter 11 status and be subject to a task force type investigation to keep them on their feet. Too many companies have the rug pulled for the wrong reason, when a little advice and slightly longer-term support would keep them going and maintain the jobs.

Mr. John Marshall (Hendon, South)

Does my hon. Friend accept that the British system of receivership allows many businesses to survive and prosper despite having short-term financial problems?

Mr. Winterton

There is some truth in what my hon. Friend has said, but I must tell the House from my contacts with many sectors of industry that people do not believe that the present system helps the company to survive, particularly if it is a private company, because the proprietors are immediately excluded from any management situation and on-going contact with the company.

I wish to put it on the record that last week I was joined at the launch of the alliance by the Lord Mayor of London, Sir Francis McWilliams, Mr. John Edmonds, the general secretary of the GMB, one of the largest unions in the country, the hon. Member for Livingston (Mr. Cook), who speaks for the Opposition on trade and industry matters, the hon. Member for Gordon, who speaks for the Liberal Democratic party, and many leading figures from British industry.

We came together with common cause because we believe that the complacency of previous years towards our industries has done real and lasting harm; because we are convinced that urgent remedial action is necessary; and because we believe in making things happen rather than sitting idly by and fiddling while Rome burns.

Taking up one matter raised by my hon. Friend the Member for Falmouth and Camborne, I should mention that another of the people on the platform at the launch of the alliance was Mr. Bob Worcester, the chairman of MORI polls. He had undertaken a survey for the alliance of 1,000 university students and I wonder whether hon. Members know the favoured career for which they opted. [HON. MEMBERS: "Lawyer? Engineer?"] No, not a lawyer and not an engineer. We should not be having these sedentary interventions, Madam Deputy Speaker, and that was not really a rhetorical question. I will give the answer to the House: journalism and broadcasting was the favoured career for people in higher education. I think that that is shocking.

Let us hope that in this debate the spokesmen for all political parties and all the Back-Bench Members will seek to lay the foundation for a new cultural and political consensus which places the needs, the problems and the potential of these critical manufacturing and construction industries firmly on the parliamentary agenda of our country, and that we begin to act with one heart and one mind in our determination to prevent the further erosion of our manufacturing base.

Several Hon. Members


Madam Deputy Speaker

Order. Before I call the next hon. Member, I remind the House that between now and 9 pm there will be a limit of 10 minutes on speeches, and that it will be strictly observed.

7.4 pm

Mr. William McKelvey (Kilmarnock and Loudoun)

Even in a 10-minute spell, it is worth taking a few seconds to congratulate the hon. Member for Macclesfield (Mr. Winterton) on the launch of his alliance. I will attempt to join that alliance, as I have several other alliances in which he has played a part.

I agree with the hon. Member for Macclesfield that the speech by the hon. Member for Falmouth and Camborne (Mr. Coe) was very able. It was one with which I heartily agreed. My only embarrassment was that I had not made a similar speech some years ago, because I owed it to the engineering industry. He must come from an engineering background; I suspect that perhaps his father was an engineer and spoon-fed him.

I take note of what the hon. Member for Macclesfield said about trying to get an alliance, particularly from the Back Benches. We should not, in the space of 10 minutes, start referring to the frailties of the present Government.

I want to speak mainly about my constituency, which is, or at least used to be, a manufacturing constituency. We need look no further than Kilmarnock and Loudoun, which is in Ayrshire, to see the disastrous effects of the Government's economic policies.

Kilmarnock has had the dubious problem of a heavy dependency on manufacturing industry and more than one third of the district's employed people still work in that industry. I say "dubious" because I believe that we are all agreed that a really healthy economy that produces wealth is one with a solid manufacturing base. It is ironic that we are seeing the vestiges of Kilmarnock's once-healthy manufacturing base being eroded yet again. There is no sign of the economy improving in Scotland and in Kilmarnock in particular. In fact, for whatever reason, we are now seeing the ravages of a new form of economic decline and are losing jobs.

I say that we have a manufacturing base which is now a problem, because manufacturing is so threatened as to make Kilmarnock a highly insecure place with regard to employment. It is threatened in a number of ways.

Many of our industries are threatened, first, because of the direct, unfair competition from cheap imports. That is something which the Government must look at very closely. One of the traditional manufacturing industries in Kilmarnock is shoes. We have the Kilmarnock Shoe Company, which used to be Saxones; it used to employ over 800 people, but that has now reduced to something like 226 and will drop to about 187 because the company is having to shed workers. The main cause is the cheap imports coming into the country from China, where poverty wages are paid to adults and children are exploited in the most appalling conditions. That appears to be one of the direct causes of the loss of jobs in the shoe industry and it is something which Government Departments should be examining and stopping.

There is also the carpet-making industry, in which there are famous names in Kilmarnock. There is BMK, which is now only a shadow of its former self, but nevertheless, having modernised, is able to compete with the carpet manufacturing industry in Europe. But even in this field there are imports, from Belgium in particular. Their wages are comparable with ours and their productivity records are no better than ours, yet somehow the carpets can be brought into this country and sold more cheaply. I suspect that somewhere there are hidden Government subsidies and we either have to do the same for our carpet manufacturers or see that Belgium stops applying subsidies.

One of our best employers in Kilmarnock, of which I have often spoken in the House, is Johnny Walker, with the biggest and most modern bottling shed in the world. The company employs up to 800 people. I ask Conservative Back Benchers to have a word in the Chancellor's ear, because tax of £5.60 on a bottle of whisky is a disgrace. It is not a case of not increasing the tax in the Budget: the tax should be decreased substantially, so that Scotch whisky can compete favourably in European markets with other spirits.

We have a new trade with people taking wagons to Europe to fill with cheap booze. The axles on the cars cannot take the weight of the spirits that are being brought from the continent because of the low tax on alcohol, and particularly on whisky. We should not accept conditions in which a bottle of whisky in France, or in Italy is £2.50 cheaper than where it is made. I want to see whisky being sold at the same price in Kilmarnock as it is in France, so that all of us may benefit from the spirit of life.

Because of problems in the service sector, I am increasingly being contacted by small companies threatened by cash flow problems when creditors cannot pay on time or are themselves faced with bankruptcy. The example I quote is the collapse of the biggest building company in Scotland, Lilley plc. It is an extraordinary affair. The four departments of Lilley collapsed on a Friday and reopened under a different name on Monday, with all its debts being left with the smaller companies.

One company in my constituency which was owed £38,000 by Lilley went under because the banks foreclosed on it. Because Lilley went into receivership, 60 jobs in my constituency were lost. Lilley was able to reopen on the Monday but the 60 jobs were lost because the cash which should have come from Lilley was not there. That should not be possible in a modern society.

The Government Departments which I contacted, Customs and Excise and PAYE, were most helpful in extending the time for payment. After I had negotiated an additional year for the firm to pay its VAT, the bank suggested that it should push for even more time. I told the firm to go back and ask the bank to honour its agreement and, instead of cutting the overdraft, to give the firm more financial assistance so that the VAT could be paid.

Banks in Scotland are not playing the game with small businesses. They are foreclosing on them far too soon or are restricting their cash flow, with the result that many small companies are being squeezed out of business. Perhaps Ministers could have a word with bankers who are doing that, particularly in Scotland.

Farming has faced many difficulties over the years. The hill livestock compensatory allowance was designed to compensate farmers in areas like my constituency. Recent cuts in the allowance have severely weakened the competitive position of farmers in the market for lamb. In conjunction with the report of the Monopolies and Mergers Commission, backed by the Government, which proposes the break-up of the Scottish Milk Marketing Board and the Potato Marketing Board, both of which operated efficiently, the picture which emerges is of a Government with few ideas and even less ability. I hope that my comments will be noted by the Minister and acted upon.

7.13 pm
Mr. John Sykes (Scarborough)

I am glad to have been called to take part in the debate because my family firm, established in 1845, supplied coal and then oil to the great woollen mills in the west riding. My grandfather was also called John Sykes. He joined the firm in 1914, taking it on to greater things. None of his friends could understand why he always travelled second class on the train from Slaithwaite to Huddersfield, until he told them that it was because there was not a third class.

We have survived, despite Labour Governments. These days we manufacture in Filey, near my constituency in Scarborough. I recommend the area to any prospective employer, at home or abroad, who may be listening. Let us make no mistake, many will be looking in on the debate. What will they make of the Labour party? Will they come to the conclusion that of all countries, ours is the one to be avoided at all costs? That is the message, for political reasons alone, which the little Jeremiahs on the Opposition Benches are peddling.

That is hardly surprising, coming as it does from a party many of whose members would sooner take from the church poor box than stand up for their country. This is the Labour party which crippled manufacturing industry with inflation rates which would have made even a south American banker reach for his pacemaker. .This is the Labour party which hated manufacturers with such venom that it wanted to make the pips squeak.

While on the subject of pipsqueaks, I am old enough to remember the last Labour Government. Opposition Members have the gall to complain about manufacturing today. I recall several leading and distinguished members of the Labour party, including even members of the Labour Cabinet, parading on picket lines during the 1970s, in the full glare of the international press, telling the world what they thought of their country and of manufacturing industry.

I recall that this was the Labour party which brought us the winter of discontent. As long as I draw breath, I shall never forget that winter, having to go before a strike committee in Barnsley in 1979 to beg it on bended knee to allow oil deliveries through to Redfearns National Glass because, without fuel, its kilns would have cooled and cracked and thousands in Barnsley would have been thrown out of work.

Yet the motion talks of a coherent strategy and measures to reduce unemployment. As long as I draw breath, I shall never forget the tanker driver who came to me in tears because his wife and family had received threats because he had driven through a secondary picket line. [Interruption.] I am in no mood to take lessons from the little Castros on the Opposition Benches, most of whom would not know a business if it jumped up and slapped them in the face. Most of them are teachers or lecturers and most of whom are sponsored by unions.

Let us take, for example, the Opposition spokesman on manufacturing, the hon. Member for Leeds, Central (Mr. Fatchett). That city expanded out of recognition during the 1980s as a result of Conservative policies. The hon. Gentleman was busy lecturing on the subject of industrial relations at Leeds university between 1971 and 1983. Is he aware of the tremendous trouble to which my company had to go, because of secondary picketing, to supply Leeds university with heating oil? If he is not, perhaps it is the first recorded case in history of the left hand not knowing what the left hand was doing.

This is the Labour party which is dying to bring in the 48-hour week. Labour Members know, or should know, that it would cost thousands of jobs. They should know that manufacturers need to work when the work is there, not when some Greek Commissioner says that it is there. This is the Labour party that pines for the social chapter, when its members know that even Jacques Delors says that it will make Great Britain a paradise for investment. Even the Fred Flintstones on the Opposition Benches acknowledge that investment equals jobs.

This is the Labour party that yearns to squeeze jobs out of industry with a minimum wage, a policy which has destroyed whole industries in France. The Labour party strains at the leash to cast away all our trade union reforms and longs for the return of flying pickets. This is the Labour party of closed shops and closed minds. Above all, this is a Labour party not even up to the task of the debate, a party for whom Opposition Supply day debates are the only certainty in its twilight days.

7.18 pm
Mr. Eric Insley (Barnsley, Central)

If I had been a member of the strike committee before which the hon. Member for Scarborough (Mr. Sykes) appeared to ask for a dispensation to run his wagons through to Barnsley, he probably would not have got it after a speech like that.

I shall concentrate on unemployment in my constituency. The Government's figure for unemployment, based on those who are claiming benefit, exceeds 3 million. If we add trainees and people who do not claim benefit, the true figure is about 4.5 million. That is one in 10 of the work force. That unemployment costs £9,000 per person, or about £27 billion a year—money that should be used by the Government to create jobs and produce the tax revenue that the country needs.

About 800,000 unemployed people are under the age of 25, and most of those young people have never had a job. They have been shunted from one training scheme to another with no prospect of permanent employment. The Government have told us again that low inflation, low interest rates and other factors are now in place for recovery. Where is the recovery that the President of the Board of Trade and the Prime Minister have promised for so many years? I agree that inflation and interest rates are low, but unemployment is still extremely high.

Nobody has any confidence in the Government's ability to get people back to work. Unfortunately, my constituency fares worse than the national average. Unemployment there has risen by 1,000 since the President of the Board of Trade opened his mouth in October about colliery closures. In my constituency, 12,500 people are registered as unemployed. That is 12.6 per cent., but the 1991 census gives a more accurate figure and shows that 15,000 or 15 per cent. of people are out of work.

I visited my jobcentres on Friday and discovered that one office, which deals with 8,000 claimants out of the total of 12,500, has only 90 vacancies at any one time. For the whole of Barnsley, there are 185 vacancies at any one time. That is one job for every 67 people who are out of work, compared with the national ratio of one job for every 29 people. In that office, I looked at the most recent vacancy on computer to discover the wages on offer. The clothing industry is a major employer in my constituency, after the demise of coal, and offers part-time female employment. According to the computer, an experienced garment presser was being offered £105 for a 37-hour week. That amount was not being offered to a kid on the dole, a school leaver or a part-time worker: it was for an experienced garment presser. A wage of £105 a week is a disgrace.

In January, 111 industrial vacancies were advertised in the press, while for the standard occupational sector 115 vacancies were advertised. Last month people, who had been unemployed for a long time lobbied Parliament. One of my constituents on that lobby has written more than 1,000 letters in an attempt to get a job. He has been writing since April last year, but has had no success because no jobs are available.

What are the immediate prospects? I am told by my economic development association that things could be looking up. A company called Michigan Clothing has 30 vacancies, Haywood and Padgett has 12 and ITC (UK) Ltd. has five. Hill Meyer Alan Design has won a contract for £150,000-worth of work and may offer 50 to 60 jobs in the near future. However, pit closures will mean that in October we shall lose 6,000 jobs at the two collieries in my area. That should be set against the 50 to 60 jobs that will be offered by the companies that I have mentioned. I am grateful for those jobs and wish that there were more on the way.

I congratulate my local chamber of commerce, whose members I met here last week, on organising Interprise 1993. Employers from all over Europe have been invited to that conference in Barnsley and the chamber has said that it will introduce producers in my constituency to similar companies in Europe to try to make something of the single market.

I listened with interest to the statement within the speech of the President of the Board of Trade about British Coal. In it, he again decried every suggestion by the Select Committee on Energy and other informed bodies on a way out of the coal crisis. Because of revenue support grant capping, my local authority has to cut £11 million from its budget. So far, that has meant 350 redundancies, closures of residential homes and the prospect of further redundancies. The economic development unit has to make a 38 per cent. cut, although that unit is doing much to attract the jobs to which I have referred. That massive cut is also due to problems with the revenue support grant.

My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) spoke about carpet manufacturing in his area. A carpet company in my constituency announced 65 redundancies in January out of a work force of about 300, because there is no demand in the economy for the company's products. One of the companies for which I used to work, Quilter Hall and Company, an engineering company which has been established for over 100 years and which manufactures mining equipment and rolling stock, tried to win a contract in India as part of a consortium with NEI and an Indian company. The contract was to build parts of power stations in India, a country that the Prime Minister recently visited. Quilter Hall tells me that it cannot win the contract because of unfair competition.

A company called ABB, which is competing with the consortium, was allowed to re-tender after the Quilter Hall consortium beat ABB on not only price but quality and specifications. Quilter Hall offered better specifications and price, but the Indians clearly want ABB to win the contract. Even the second re-tender price is higher than that offered by the Quilter Hall/NEI consortium.

Quilter Hall has lost £40,000 tendering for that contract. It is struggling for survival, but last year it completely retooled its fitting shop, boiler shop and fabrication shop, and ceased production of mining equipment, for which there is no demand, to build locomotives for the channel tunnel. It beat every manufacturer in the country on specifications and is now building those locomotives for the channel tunnel project —if that project ever comes to fruition. What is the President of the Board of Trade doing about that tender?

Where is the intervention that we hear so much about? Who is helping the Quilter Hall/NEI consortium to win the Indian contract? That consortium can win it fairly and does not want any underhand assistance, but when its tender is the best it should be chosen.

About 18 months ago, the Barnsley Canister company, a premier manufacturer of tinplate canisters, went bust when a company called CMB Packaging bought its order book and closed the factory. It was asset-stripped simply for the order book. When are we to have the intervention that will create jobs in areas such as mine?

7.29 pm
Mr. Anthony Coombs (Wyre Forest)

I support the Government's amendment and take cognisance of the greatly improved confidence within industry, as highlighted by the Institute of Directors and the CBI—representing as I do a constituency with a higher proportion of manufacturing jobs than in the country as a whole and having myself worked in manufacturing industry.

I am quietly confident that there are opportunities for manufacturing industry now which have not been available for the past 10 years. I say that, first, because there is evidence that British manufacturing industry is competitive. Exports are up to record levels compared with last year, running even now at £9 billion per month. There has been an improvement in retail sales, and even an improvement during the past eight weeks in house sales, which show an increase of some 20 per cent. over last year. I am cautiously optimistic that, provided that we have the right kind of Budget, that will improve.

I believe that British manufacturing industry stands on the threshold of significant improvements in competitiveness while other countries are losing competitiveness, first, because inward investment is dramatic and at its highest ever levels. The Japanese do not put 41 per cent. of their investment in Europe just because they like the look of us. They do it because they believe that Britain can be more competitive than elsewhere in the EC.

The OECD, in its latest report, talked about the resilence of investment, and of spending on research and development in Britain during the recession. Productivity in manufacturing has continued, almost uniquely in the recession, to increase. In October and November, it increased on average by about 6.3 per cent., which is the best since the best years in the 1980s.

Possibly most important of all, attitudes among people involved in business, the work force, as it used to be called, and management—thank heavens the distinction is now reducing—have become much more flexible and cooperative. A recent survey by Birmingham business school found that only 15 per cent. of manual male workers in Europe worked more than 45 hours a week, while in Britain it was 38 per cent. Therefore, the idea of a British disease and problems with industrial relations is now well and truly buried.

Also significant was the fact, discovered by the CBI, that the value added by British workers when a foreign investor came here was no less than 46 per cent. greater than it was for indigenous British companies. That shows the flexibility that British workers can show when good management comes in from overseas. Rover has recently been able to show the benefits of changing the role of shop floor workers between sales and manufacturing functions. Former shop floor workers have sold no fewer than 3,000 vehicles in a new range in six weeks—an average of 500 cars a week.

Lemmerz, the biggest German wheelmaker, has decided to move its wheel-making capacity from just outside Bonn to my constituency because it recognises that British costs, competitiveness and workers can produce the goods better than the Germans. It told me that, as a result of the social costs with which the Germans have burdened themselves, 80 per cent. has to be added to the average wage cost, compared with only 35 per cent. in Britain—hence the large movement in investment from Europe to Britain.

Those improvements in productivity will translate into more sales and more jobs only in the medium term. Germany lost 3.3 per cent. of its output last year and Japan lost 8.5 per cent., while the United Kingdom lost just under 1 per cent. Similarly, the proportion in manufacturing industry has dropped, too. In Britain during the past 10 years, it dropped from 26 to 20 per cent. of the work force, in Germany from 41 to 28 per cent. and in Japan from 36 to 29 per cent.

It is estimated that, as manufacturing output has fallen, half of manufacturing workers today are in service jobs. General Motors receives about one fifth of its revenue from the service industry. The Engineering Employers Federation recognises that, between 1982 and 1991, the increase in demand for goods in Britain was about 16 per cent.—that was from the general public, the consumer whom we all serve—while the increase in demand for services was no less than 55 per cent. That is one reason why the number of people employed in services is increasing compared with those in manufacturing.

Nevertheless, despite the improvements in manufacturing productivity during the past few years, we still face a challenge. That was recognised by the CBI in the document that it sent round only today, in which it talks about the United Kingdom still not being internationally competitive. Whatever measure one takes, we are significantly less competitive than the United States and slightly less competitive than the Germans.

How are we to respond to that challenge? It will not be by imbibing the inflexibilities that are connected with the social chapter or the minimum wage, or with an alien attitude towards inward investment—all attitudes shared by the Opposition. Nor will it be an obsession that manufacturing efficiency and competitiveness in the long term can be assured by bunging subsidies into individual companies. We did that when, as taxpayers, we wrote off £750 million in DAF. Sadly, that investment did not do it much good in the long term.

What the Government can do—what I should like to see done—is to make greater use of straight line investment allowances in order to allow industry to write off its capital investment much more quickly than at present. I am not a believer in 100 per cent. capital investment allowances on a permanent basis, because that distorts investment decisions and anyway is an inefficient use of taxpayers' money. However, on a straight line basis, it could be a good thing.

I am delighted that my hon. Friend the Under-Secretary of State for Corporate Affairs is in charge of reducing regulations. One of the first things he could consider is VAT inspectors who somehow consider that they have a role as private amateur detectives. I was in a company yesterday which said that it had had forcibly to remove one VAT inspector from its premises because he was so objectionable.

I should like a big increase in one-stop shops. I do not see why they should be run by the training and enterprise councils. Most important of all for the carpet industry is more rigorous monitoring of international standards to ensure that we compete on a level playing field. After five years, despite the ruling of the European Court, the Belgian Government have not been repaid £5 million of illegal subsidies by their biggest carpet manufacturer. There is now evidence that the Walloon regional government has slipped its second largest carpet manufacturer—my constituency has a large number of carpet manufacturers—no less than £6 million in illegal subsidies. If Maastricht is to mean anything at all, it should mean better monitoring in order to take action against such nonsense.

The best way in which the Government could improve the lot of manufacturing industry is by getting out of its way, reducing regulations, reducing taxation and ensuring that inflation is as low as possible, thus allowing industry to become competitive and the British people, with their entrepreneurial spirit, to make their way and thereby retake world markets.

It is no coincidence at all that, during the past 10 years and irrespective of the recession, our present share of world trade has at last started to increase again. It is the result of those policies during the past 10 years.

7.38 pm
Mr. Barry Jones (Alyn and Deeside)

There has been universal praise for the speech by the hon. Member for Macclesfield (Mr. Winterton), but the speech by the Secretary of State was one of the most outrageous cynicism. It was full of devices and diversions, but it contained no policy, no hope and no relevance. It was massive in its cheek and tawdry in its vision.

The Prime Minister should adopt a national strategy for economic recovery, and the right hon. Gentleman should encourage the core industry of steel and the highly skilled aerospace industry. I want Britain's 3 million unemployed to be placed at the very top of the political agenda. There is no national future without a strong manufacturing base—manufacturing industry is wealth.

Tens of thousands of jobs are being lost in the aerospace industry. The airbus is a case in point. A factory in my constituency makes the wings for the airbus, but I regret to tell the House that it announced 470 job losses only this week. Apprentices are not to be retained, notwithstanding the wonderful training they were given, and no more apprenticeships are on offer. White collar and blue collar suffer alike. That is a wounding blow, and the whole economy is shocked.

Last week, I attended a roll-out ceremony in Hamburg of the new A321 airbus. In one of the largest hangars that I know, 3,000 people—some of them my constituents—acclaimed that triumph of aeronautical engineering. However, those of my constituents who work at the local factory returned home to Wales to be informed of the job losses. Those jobs are among the finest and most important in world manufacturing.

The recession apart, President Clinton is threatening the future of the airbus. At the headquarters of the Boeing corporation in Seattle, he told a cheering work force that he meant business against the Europeans. In effect, he played to the Boeing gallery. He should have made a speech along these lines: "Gentlemen of Boeing, the airbus project is not only your most vigorous competitor but technically superior to the aircraft you make. Airbus is knocking lumps out of Boeing."

The Prime Minister should remind President Clinton that Boeing and McDonnell Douglas have received up to $41 million of indirect subsidies since 1976, first from the Defence Department, then from NASA. The Prime Minister should remind him also that British Aerospace has received only £700 million of launch aid, and has already repaid a large amount of that from sales.

I want the Prime Minister, with Britain's manufacturing future in mind, to insist that the United States keeps to the letter of the airbus agreement, and tell President Clinton that he should back off making threats about the airbus, which represents the best of futures for Britain's manufacturing industry. It is the privilege of the Prime Minister to fight for and to defend the airbus.

Also made in my constituency is BAe's world-famous 125 corporate jet, but the work force for that wonderful aircraft are perplexed. The corporate jet headquarters is now registered in Little Rock, Arkansas—the home of the President of the United States. The British work force are proud of their work in making a world-beating aircraft at the Broughton factory, but they are anxious about the 125's long-term future.

I can do no better than quote the works convener, Mike Nesbitt: Indications are that, in the near future, a large part of the business will transfer to the new 125 Jet headquarters in President Clinton's Arkansas, with resulting loss of British jobs. I should like a Minister to comment on that. My constituents are helping Britain to make magnificent goods, and is generating earnings from abroad by the making of them. My constituents would like to have their anxieties dispelled.

If we allow the country's manufacturing industry to whither away, we shall be in dire national trouble. We will be unable to fund the welfare state. We know that already £100 billion of North sea revenues have been squandered by successive Conservative Administrations since 1979. In the early 1980s, some 20 per cent. of the nation's manufacturing capacity went to the wall. Officially—although this total is disputed—the number unemployed stands at 3 million. In Wales since 1979, 220,000 manufacturing jobs have been lost. In Wales, the construction industry also is reeling.

Britain, Wales and my constituency need a Government who have a national strategy to save what is left of the country's manufacturing industry.

7.46 pm
Mr. John Marshall (Hendon, South)

The hon. Member for Livingston (Mr. Cook) has never been a good forecaster. When he addressed the House on national health reforms in the late 1980s, he forecast mayhem, yet those reforms proved to be a great success—[interruption] Opposition Members laugh. They forget that many more patients are treated now than five years ago and that doctors have achieved the targets that the hon. Member for Livingston said could not be achieved.

In a more light-hearted vein, I am told that the only people to benefit from the hon. Gentleman's racing forecasts in the Glasgow ?Herald are the bookmakers, because he nearly always gets them wrong. He certainly got it wrong this evening. The hon. Gentleman turns out to be an old-fashioned protectionist who believes that the industries of the 1940s and the 1950s will ensure prosperity in the 21st century.

The hon. Member for Barnsley, Central (Mr. Illsley) complained about unemployment in his constituency. That was particularly rum, coming from a member of a party which at the last general election wanted to legislate 2 million people into unemployment by introducing a national minimum wage, and would deter inward investment by imposing the social chapter and frustrating the passage of the European Communities (Amendment) Bill.

Labour Members are suffering from collective amnesia. They forget the situation that existed in 1979. Britain's most important manufacturing sector is the automobile industry. In 1979, it was overmanned and over-subsidised, and its industrial relations were so bad that Red Robbo, rather than management, ruled British Leyland. It suffered also from the special car tax. Today, British Leyland's industrial relations have been transformed, special car tax has been abolished, and the British car industry looks forward to being a net exporter again. In February, there was a 16 per cent. increase in new car sales in this country. That is the measure of the transformation, which Labour should support rather than condemn.

Steel is another vital part of our manufacturing base. In 1979, it was nationalised, overmanned and over-subsidised, and among the lame ducks of the European steel industries. Today, it is in the private sector and is regarded as the most efficient steel industry in western Europe. Labour does not understand industry, the process of economic change, and the fact that a market economy is the main engine of economic and social growth. Indeed, Labour Members do not support or understand the market economy. When talking about the market, they seem to imply that it is like a second-hand car boot sale: they simply do not understand that it represents the only way in which to secure growth. Socialism is not the way in which to secure growth.

Let us look at what has happened to our country since 1979. Let us examine all the great industrial changes that have taken place since then, generating greater prosperity for our people. All those changes have been opposed by the Labour party. What has Labour done about industrial relations? When Bills have been presented to improve industrial relations, what have Labour Members said? Have they said that such Bills will create more jobs, or encourage inward investment? Of course not: they are in hock to their paymasters, and they do what their paymasters say, not what the country needs. They have voted against those Bills, seeking to frustrate the Government; they are not concerned about industrial relations in this country.

Hon. Members

Who pays you?

Madam Deputy Speaker (Dame Janet Fookes)

Order. I cannot allow general conversations across the Floor.

Mr. Marshall

I am told that not enough people pay my party. Perhaps the hon. Member for Blyth Valley (Mr. Campbell) would like to give us some names. Then we can ask the organisations concerned whether they will give us some money: I suspect that we need it.

One of the greatest developments since 1979 has been the process of privatisation, which took place in the face of Labour opposition. That great concept has now been copied throughout the western world, in the former communist countries and in Australia, where even the Labour party supports it. The only party in the world that opposes it is the British Labour party, which cannot understand the huge surge in prosperity and investment in formerly socialist industries.

What does Labour want to do to the successful privatised industries to encourage them to become more efficient and successful, and to generate more jobs? It wants to impose a special levy on their profits. Would that do anything for investment in British Steel, British Telecom or Cable and Wireless? Of course it would not. Labour would cut off investment in BT, Cable and Wireless and the water industry, all in the name of socialism—and that is what it calls part of a job-creating package. It is not a job-creating package; it is a job-destroying package.

The record of the privatised companies is first rate. In 1979 British Airways was losing hundreds of millions of pounds, and could not care less about the consumer. No wonder that today, in the private sector, it is the world's favourite airline. Since becoming part of the private sector, British Telecom has increased investment by over 50 per cent., and has also increased productivity: now it is one of the most efficient telecommunications companies, whereas in 1979 it was not. In 1979, the quality of BT's service was second-rate everywhere; today it is first-rate, because BT is in the private sector, and faces competition that it would never have faced without privatisation.

Privatisation transformed whole swathes of British industry: every time an industry was privatised, however, it was privatised in the face of opposition from Labour.

Another great movement over the past 10 years has been investment by Japan and the United States, which has transformed large sectors of our economy. We are now net exporters of television sets, and are becoming net exporters of motor cars, simply because of our success in encouraging new industries to come to Britain. Labour does not understand what encourages such investment. First, we have a low-tax economy; secondly, we are part of the European community. If we had listened to Labour in 1983; we would have walked out of the Community.

Those companies come to Britain for another reason: they know that the social chapter will not be imposed on them here for as long as we have a Conservative Government. They know that they will enjoy the benefit of the single market without the obligations that are imposed on industries in France, Germany, Italy and Spain. That is why Hoover went from Dijon to Cambuslang, and Digital went from Galway to Ayr. Hon. Members should recognise and welcome that, and condemn a political party that seeks to destroy the United Kingdom's attractiveness to inward investors. Every Japanese and American company that comes here creates jobs, and helps the balance of payments.

Mr. Ronnie Campbell (Blyth Valley)

The hon. Gentleman has mentioned the balance of payments. Our balance of payments is £20 billion in the red. What has happened?

Mr. Marshall

I think that that figure contains an element of exaggeration. Let me remind the hon. Gentleman that inward investment has enabled this country to become a net exporter of television sets, and to become a net exporter of motor cars once more. I am proud of the fact that Nissan cars, manufactured in Britain, sell in Tokyo; the hon. Gentleman should be proud of it, too. It represents the rejuvenation of British manufacturing industry that the present Government have brought about.

7.55 pm
Mr. Ronnie Campbell (Blyth Valley)

I want to talk about the north-east. The hon. Member for Hendon, South (Mr. Marshall) cited successful companies such as Nissan; it should be pointed out that Nissan was given tens of millions of pounds to build a factory in the north-east. That was nothing more than a subsidy for a private company—albeit Japanese—to come to the area.

I do not decry Nissan; it has been a success and is producing cars very cheaply. One of my worries relates to unemployment in the north and in my constituency in particular. The unemployment rate in the north is one of the highest in the United Kingdom and I am concerned about the current trend. I have examined the figures carefully. After the closure of the colliery where I had worked for 27 years, I was unemployed for 12 months, so I have some experience of unemployment. I can tell the House that it is not very nice: it is not pretty, signing on for the dole every week and trying to find work when there is none to be had.

The increase in unemployment is worrying. In the north-east, there has been an 81 per cent. increase since 1979; since 1990, there has been an increase of 32 per cent. Although the area has experienced some success since 1979, there has been a steady increase in unemployment. With the start of the recession of the 1990s, the position has worsened.

Since 1990, there has been a 30 per cent. increase in unemployment among the under-25s in the north-east. In the long term, the position is even worse: unemployment has risen by 49 per cent. since 1990. Manufacturing output has fallen by only 38 per cent. since 1979, but there has still been a great increase in unemployment. Why has there been such a large increase in unemployment, when manufacturing has not suffered to such a great extent?

In my constituency, 33 per cent. of the unemployed population have been unemployed for a year or more. I asked the local employment office whether that was the highest figure that it had ever had. The manager said that since he had been there, there the figure had never been as high. A trend is developing, so I was surprised that the President of the Board of Trade did not even mention unemployment in his speech. He was just one bag of wind, talking about nothing but himself.

Engineering manufacturing has dropped by 11 per cent. in the north-east. We have heard tonight that the outlook for the miners is not very rosy, especially in the north-east. Many engineering companies in the north-east depend upon the mines, so if the pits in the north-east have to close, unemployment will double.

We have heard about privatisation in the debate, but I remember what happened under nationalisation before privatisation. I remember that when, under nationalisation, the boards wanted to raise the price of electricity and coal, Governments, including Tory Governments, did not allow them to raise their prices. The Government laid a dead hand on nationalised industries, but as soon as these industries were privatised, the bills doubled, then trebled and then quadrupled. Before we knew where we were, the bills were enormous. That has been proved; the figures are there for all to see. Privatisation is not efficient. All that has happened is that prices have increased. I ask the Minister to look at the price increases that these so-called wonderful privatised industries have introduced.

Mr. John Marshall

Can the hon. Gentleman confirm that, in industries such as telecommunications, the regulator has imposed a formula that ensures that prices go up by very much less than any increase in the cost of living, and that in 1993 they will go down?

Mr. Campbell

I will give a little bit there because, of all the privatised industries, British Telecom is the best, but that has not happened to electricity and gas prices. There has been an enormous increase in those bills since privatisation. I challenge the Minister to bring those figures to the Dispatch Box.

The former Prime Minister referred to rolling back the carpet of socialism, so I look at what rolling back the carpet of socialism has done to this country. I see that manufacturing is disappearing. I also see unemployed people, particularly unemployed young people. One of my sons is out of work and struggling to find some sort of job somewhere in my constituency.

Last weekend we read in our local Newcastle newspaper, the Sunday Sun, that the Department of Social Security in Long Benton, which deals with unemployment claims, is to have its work put out to contract. An American company that uses child labour in the Philippines, at 38p an hour, is to be asked to do the work. Over 1,000 jobs in the Long Benton DSS office will disappear. They will be done by deaf mutes in the Philippines. Those are the sort of people who are used by American companies to do computer work. It is a disgrace that the Government are allowing that contract to go ahead, with the loss of over 1,000 jobs.

Unemployment is the greatest evil of our time. It was an evil in the 1930s and it is an evil now. I never like trying to connect unemployment with crime, but when young people have idle hands and nothing to do they create trouble. When we see kids on the street stealing cars and doing all these other things, we have to ask ourselves why they are not working. When I left school—25 of us left school at the same time—half of us went to work at the local colliery, while the other half went to build ships. Now they are going to close the collieries. The Swan Hunter shipyard might also close. Where will these kids find jobs? Of course they are on the streets. Of course they are causing trouble. They have no hope. They have no vision. They have nothing, because the Government have given them nothing. YTS is not the answer for these young kids.

I ask the Minister to look at providing decent apprenticeship schemes. Nowadays, I never hear of kids who are apprentices. My local authority has had to cut out apprenticeships because it does not have the money for them. Like most other authorities, it has been capped.

The young are the most important people in this country. Crime is increasing because unemployment is increasing. I believe that the two go together and that they should be dealt with very quickly.

8.5 pm

Dr. Liam Fox (Woodspring)

One of the constant threads through the debate has been the so-called long-term decline of British manufacturing. That ought to worry any hon. Member. It was a worry at one time. Throughout the 20 years until 1982, the United Kingdom's share of world manufacturing exports fell from 15 to 8 per cent., almost halving our share of manufacturing exports. That was a worry for the Conservative Government who were in power for part of that time. It does not come well from the Opposition to lecture us about manufacturing decline when the greatest part of our decline in manufacturing exports since the second world war came during the period when they were in power for the longest period.

When we came to power in 1979, we were faced with many problems in the British economy that had become almost intractable, not the least of which was nationalisation. Under nationalisation, our economy was never given a chance to work. The hon. Member for Blyth Valley (Mr. Campbell) put his finger on the point when he said that it was a dead hand. That is exactly what nationalisation was. No economic decisions were made under nationalisation. Only political decisions were made. They plagued the economy. It was never allowed to function in the market-oriented way that business needs if it is to survive. There was no market discipline whatsoever under nationalisation. Politicians made decisions that suited their constituencies, not the country's economy.

When we came to power, we inherited subsidy, protection, import restriction, inefficiency, overmanning, restrictive practices, frequent strikes and, as a legacy of the last Labour Government because of their Industrial Relations Act 1976, the strikers' charter. We had to deal with those problems through our supply-side reforms. We introduced five employment Acts, all of which were opposed by the Labour party and by the trade union movement, whose greatest wish, from 1979 onwards, seemed to be to see Britain's vitals displayed on a bed of lettuce internationally. We decided that the problem had to be tackled head on.

Last year, 500,000 working days were lost due to industrial disputes. In 1979, when we came to power, 29 million working days were lsot due to industrial disputes. It has fallen to the lot of the Conservative Government to come to the rescue of the British work force against the trade union barons and the wishes of the Labour party.

There has been another spin-off. There are now better management practices. We have removed the dead hand of Government interference at every level of management practice. Therefore, better management has developed. I believe that we shall see the development of even better management. Further supply-side reform is still required. There needs to be further deregulation. Under the previous Labour Government, there were 27,000 different kinds of regulation, all of which have been abolished.

The most important factor has been privatisation. Forty-six major businesses have been privatised; two thirds of the state sector has returned to where it belongs, in the private sector. Since then we have seen massive increases in productivity. Someone mentioned British Steel earlier—in 1979, because of the ridiculous overmanning that existed in the industry, it took 13.2 man hours to produce a tonne of steel; now it takes 4.8 man hours. Under nationalised British Leyland, we produced six cars per employee in 1979; under privatised Rover, we produce 25 cars per employee.

There was more. We decided that we needed a low-tax, low-inflation regime if business was to thrive. Our corporation tax is now lower than that in any other European Community or G7 country. Our small company rate has come down from 42 to 25 per cent., and our inflation, which averaged 15.5 per cent. between 1974 and 1979, peaking at 26.9 per cent.—[interruption.] The hon. Member for Holborn and St. Pancras (Mr. Dobson) may laugh at that, but it is nothing to laugh at; it is rather a matter for shame.

Mr. Enright

Will the hon. Gentleman care to explain the part that the Barber boom Budget played in inflation before we started to get it under control?

Dr. Fox

Yes, indeed. Any Government who fail to control monetary policy will certainly get a bout of inflation. We are perfectly willing to accept that mistakes were made in 1987–88—but for the Labour party to pretend that for its entire period of office it was stuck with the legacies of a Conservative Government is nonsense, considering that the Labour Government refused to impose any discipline whatever except that imposed by the International Monetary Fund—when they absolutely had to accept it, because the country was broke.

Between 1982 and 1989 manufacturing output grew by an average of 3.7 per cent. a year, and manufacturing exports by an average of 6 per cent. per year. Manufacturing investment—which the Labour party claims does not exist—grew by 7.5 per cent. per year. All three reached all-time records.

I do not expect the Labour party to understand that. Labour Members do not understand market economics, and believe that everything is measured by the number of people employed in an industry. They do not believe that health is measured by the number of patients treated; they believe that it is measured by the amount of money spent and the number of people employed. We have given up trying to educate Labour Members. Perhaps we should simply stick to the facts. We do not expect them to understand that, in 1990, profitability was 50 per cent. higher than its previous peak in 1979. They do not understand profits or dividends.

Since 1981, United Kingdom manufacturing exports have grown by 66 per cent. more than those of any other G7 country. As my hon. Friend the Member for Hendon, South (Mr. Marshall) said, we are now a net exporter of television sets, with a trade surplus of £440 million last year. Scotland supplies 40 per cent. of the desktop computers used in Europe—and those exports now earn twice as much as whisky exports. Those are all great achievements. It is beyond me why the Labour party always refuses to accept anything good that happens in this country.

We have hit specific problems with the recession, but the 7.5 per cent. fall in output that has taken place during the recession is only half the fall that occurred during the 1981 recession—[Interruption.] The hon. Member for Holborn and St. Pancras laughs while I am making this important point. He probably fails to understand that the current recession is caused by a lack of demand, and not by a structural incapacity to supply. The Opposition's great weakness—if the hon. Gentleman wishes to intervene, I shall be happy to listen to him—is that, according to their logic, we cannot recover from a 7.5 per cent. fall in output. Yet from a fall in output twice as big in 1981, we recovered to reach record levels of output, exports and investment, as I have already said. I do not see the hon. Member for Holborn and St. Pancras jumping up now to defend the logic of this case.

Mr. Frank Dobson (Holborn and St. Pancras)

Can the hon. Gentleman tell us why demand has fallen?

Dr. Fox

Demand has fallen because there is a fall in consumer confidence, because the money supply in this country was out of kilter, and because there is an international recession. I should have thought that even the economic simpletons on the Opposition Front Bench might have managed to understand that.

I want to say one or two things about our manufacturing companies. Despite Labour attempts to rewrite history, our success in the 1980s did not extend only to the service sector. Between 1979 and 1990 about 4,300 manufacturing companies were created per year, compared with 1,200 per year between 1963 and 1979, when we came to office. That is a proud record. The number of VAT-registered businesses in manufacturing has increased from 144,000 in 1980 to 171,000 now. That is another record of which I am proud.

There are problems with our manufacturing base in that it forms a smaller proportion of our GDP than it once did, but the fastest fall took place between 1960 and 1983. If we measure GDP at constant 1985 prices, our proportion of GDP from manufacturing industry has risen from 20.4 to 20.9 per cent.—[Interruption.] Labour Members are jeering, because that is the only intellectual level that they can achieve. They cannot understand that the United Kingdom now has specific advantages.

We have a stable democracy with a stable Government who have already been in office for a long time—although nothing like as long as they will be in office. We have a free-market Government admired by our competitors, we have English as the natural trading language, we have a competitive tax regime, low interest rates, good industrial relations—the Labour party never managed to give us those—and now we have a competitive exchange rate free from the strictures of the exchange rate mechanism, good international transport links—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Time is up.

8.15 pm
Ms Estelle Morris (Birmingham, Yardley)

I was disappointed by the opening speech of the President of the Board of Trade and Secretary of State for Trade and Industry. The right hon. Gentleman must realise that industry is now looking for a new approach and wants him to signal that he is prepared to listen and to work with it. The fact that he did not do so will be regretted by the people who are in industry trying to make it work.

I represent an area whose history reads like a history of manufacturing industry in this country. Birmingham and the west midlands have been central to our country's development. Our region has been the home for steel and iron, coal and cloth, cars and aeroplanes. It has helped to create the wealth of this nation. Its people have been inventors, designers, entrepreneurs and engineers. But because our prosperity depends on the manufacturing industry, under the Conservative Government it, and our future, are in jeopardy.

Mr. Richard Spring (Bury St. Edmunds)

Will the hon. Lady give way?

Ms Morris

No, I am sorry—because of the time limit I shall not give way.

The west midlands now has the third worst unemployment record in Britain. It has the largest number of long-term unemployed people. Unemployment among the under-25s has almost doubled over the past three years alone. The west midlands has seen the largest reduction in the number of people in work anywhere in the country.

When we consider the statistics surrounding manufacturing industry, it is not hard to see why that is. We have experienced the biggest loss of manufacturing jobs anywhere in the country. One fifth of all jobs lost in the nation's manufacturing sector have been lost in the west midlands. The effect on Birmingham and the other cities in the region has been devastating. Fifty people are chasing every job vacancy; £2.6 billion is being spent every year on keeping people out of work. Month after month, the list of household name companies that are making workers redundant grows—Alvis and Tarmac, Lucas and GKN, Cadbury and Rover.

Which constituency in Birmingham has had the highest increase in unemployment over the past three years? It is not Sparkbrook, Small Heath or Yardley—my constituency—but the leafy, affluent suburb represented by the chairman of the Conservative party, the right hon. Member for Sutton Coldfield (Sir N. Fowler). The right hon. Gentleman has seen unemployment in his constituency increase by 127 per cent. over the past three years. That is how widespread unemployment is in the city of Birmingham. That is the depth of the recession in the west midlands.

The Government cannot escape their share of responsibility, as they seek to do time and time again. Opposition Members and some people outside the House are saying that we have a do-nothing Government—a Government with a hands-off approach, who do not intervene—and I share that view. Although that may be true, what is more worrying is that, when they do intervene, they get it wrong. They intervened to raise interest rates and factories closed; they intervened to reduce local council spending and redundancies increased; and they intervened to increase VAT and consumer demand dropped. I am not sure whether we are better off when the Government intervene or when they do not. Whichever approach they take, they get the formula wrong again and again.

The most common message that I get from industrialists and workers in my constituency, in Birmingham and in the west midlands is that, because the Government do not understand them, they cannot help them. They say so because they have looked at the evidence. They tell me that a Government who understood industry would not have had a tax regime which deterred investment, and that a Government who understood industry would not cut money for training and would regulate bank lending policy.

What the Government do not realise—and why industrialists feel that they do not understand them—is that if they are going to support manufacturing industry, they must take into account the consequences upon it of their actions. If one cuts spending on education, has no energy policy, and has no programme for re-skilling people, one damages industry.

As the Engineering Employers Federation said, when launching its "Manifesto for Jobs and Growth" last year: The United Kingdom is an industrial nation with al., anti-industrial culture. Nowhere can that be seen better than in Birmingham during the past six months.

When the President of the Board of Trade announced his pit closure programme last September, he seemed not to have given any thought to its effect on the rest of manufacturing industry. When he gave his reasons for the decision, I never heard him say how much he had taken that into account, but £100 million of British manufacturing money is tied up in the mining industry, and half as much again in exports. If, because of pit closures, the home market for that sector of manufacturing industry falls, their export market could go as well.

Latch and Bachelor, in my constituency, is not a mining firm and does not dig coal but manufactures the finest winding gear in the world. It is a small family firm, with a history going back 270 years in Birmingham, and it has orders for 30 of our mines and an export order book worth £1 million. Last September, that firm's survival was put at risk because the President of the Board of Trade did not appear to have considered the effects of his coal plan on the rest of manufacturing industry.

The plan affects not only Latch and Bachelor but firms throughout the west midlands, such as John Butlin, which provides transport, J. J. Gallagher, which does construction work, and Lyndhurst engineering, the millwrights. The future of all those manufacturing companies is tied up with that of British Coal.

Last September, the President of the Board of Trade turned his back not only on the mining industry and mining communities but on manufacturing industries and their communities. Within six months, having not learned his lesson, he did exactly the same again. He failed to deliver when Leyland DAF needed short-term help to ensure a secure and profitable long-term future. Again, it was as though he was blinkered to the effects of any decline or closure of Leyland DAF on the whole manufacturing sector.

Leyland DAF is not all that is at risk. There are also the firms that tool their equipment, those that sell them parts and those that manufacture materials. They are all victims of a Government who will not put manufacturing industry at the heart of their industrial policy, and that is what the EEF meant when it talked about an industrial nation that is trying to operate in "an anti-industrial culture".

Government manufacturing policy lacks a strategy, vision and cohesion. Unless someone in the Government begins to draw the threads together and to put manufacturing industry at the centre of Government considerations, we shall not climb out of the recession and we shall not bring jobs back.

Yet, even in these difficult times, there is great optimism in the west midlands and in Birmingham, where we have great reason for feeling that we can succeed. We have a highly skilled work force and people who are willing to learn skills and new skills. We have women and men with ideas, inventions and initiative, industrialists with ambition and local authorities that wish to support them. That is what the west midlands manufacturing sector has to offer this nation. Quite honestly, it is an offer that the Government cannot afford to turn down.

However, in accepting what the west midlands has to offer to the regeneration of the economy and industry, the Government have to make a commitment to a partnership. Their role is to end short-termism, to invest in training, to spread knowledge about new technology, to support research, to adopt a tax structure to help investment and —most of all—to give a commitment to listen and to take their share of responsibility.

8.25 pm
Mr. Patrick Thompson (Norwich, North)

I listened with interest to the hon. Member for Birmingham, Yardley (Ms Morris). She referred to this country's cultural problems over manufacturing industry, but I suspect that she and other Opposition Members would concede that the origins of those problems go far deeper into our history than recent events or Governments.

The hon. Member for Yardley also spoke of her constituency. It is common ground in the House this evening that jobs in our constituencies, including mine, depend on the success of manufacturing industry.

I am grateful for the opportunity to speak briefly, because of my link with the parliamentary all-party group for engineering development, and my attempt, so far as one can specialise in this House, to maintain my interest in it in recent years.

I hope that two basic themes will emerge from my remarks. First, hon. Members and people outside should not talk down the achievements of our manufacturing industry, which are very great. I was able to discuss that at greater length during a Christmas Adjournment debate on engineering on Monday 14 December, which lasted one and a half hours.

The second theme is that it is important that we remain ahead of our competitors in technical developments and innovation. If we do not remain ahead if them in research, development and innovation, there will be no future for our manufacturing industry, no matter what other policies the Government put in place. Those remarks have implications for education, training and skills. I think that the Secretary of State for Employment is going to reply to the debate, and I am sure that my right hon. Friend will pass on the message to the Department that it is good to pay tribute to the efforts that my hon. Friends are making to improve our skills training, to the good of manufacturing industry.

The Opposition Front-Bench spokesman, the hon. Member for Livingston (Mr. Cook), was reticent on the question of productivity, which is crucial to the success of our manufacturing industry. That was not surprising, because, throughout the 1960s and 1970s, the United Kingdom was at the bottom of the league table for productivity growth among major industrial nations—a very poor record.

Bearing in mind the remarks made by the Opposition Front-Bench spokesman at the start of the debate, it is important to remind the House of the appalling record of Labour Governments in the 1960s and 1970s. It reduced our ability to compete in world markets. My hon. Friends the Members for Woodspring (Dr. Fox) and for Scarborough (Mr. Sykes) made very clearly indeed—much more effectively than I have time to do—the point that those were the years of overmanning, of ineffective management, of industrial chaos. But under the present Government, we are making productivity gains that are crucial to the success of our manufacturing industry. Technical innovation and improved productivity must be the right way forward.

A recent CBI report said that the achievements of our manufacturing industry tend to be played down or ignored. It referred to the attitude of the media. My hon. Friend the Member for Macclesfield (Mr. Winterton) talked about the popularity of the media as a career for young people. I was as horrified as my hon. Friends, and, indeed, Opposition Members, at my hon. Friend's revelation. Ultimately, the media have a responsibility—a responsibility that they are not facing up to—to emphasise the positive with regard to our achievements in engineering and manufacturing and our concern in general. Undoubtedly they have a right to criticise and to probe. They have a right to uncover things that are going wrong, but they also have a responsibility to emphasise our achievements and successes. The CBI was right to draw attention to this matter.

My hon. Friend the Minister for Trade has drawn attention in recent speeches to the current deficit in manufactured goods and to the need to increase our share of trade in capital goods. My right hon. and hon. Friends on the Front Bench are right to continue to emphasise the importance of manufacturing industry, which has been a common theme in this debate. Hardly a day passes without a leading industrialist arguing against any half-hearted commitment to Europe and the single market. Progress with the single market and with the Maastricht treaty is vital to the future of trade and of manufacturing industry.

I should like to place on record my hope that, under the leadership of the present Government, we can get through the process of ratifying the Maastricht treaty as soon as possible—hopefully, with more assistance from Opposition Members than we have had in recent debates. That is where the responsibility for the current delay lies. Opposition Members who, like me, support the early ratification of the Maastricht treaty ought to adopt a more responsible attitude. But this is not a debate on the Maastricht treaty. We have had enough of those for the time being.

It is high-tech companies that will lead the way. The link between technical progress and industrial progress has been well supported by all the academic research and literature that has been studied by those of us who have the time to do so. Success in high-level technology comes from the correct deployment of engineering and manufacturing skills.

I should like to put on record a number of things that I hope my right hon. and hon. Friends on the Front Bench will do their best to encourage. I hope that they will do all they can to encourage an increase in the amount of research and development going on in our companies. I hope that, in collaboration with their colleagues in the Department of Education, they will do all they can to increase the number of support personnel trained at NVQ levels 3 and 4. After all, we have a good record in the production of skilled engineers at the very top level. We do not have such a good record in the production of the technician support that is needed in industry. I hope that my right hon. and hon. Friends will take that point on board. I have made it before, and I shall no doubt return to it.

I hope that Ministers will do all they can to move away from short-termism, which has been referred to by hon. Members on both sides of the House. This is indeed a problem. Those responsible for investing in industry need to look more to the long term.

Finally, I hope that my right hon. and hon. Friends will look at the current structure of engineering in this country and do what they can to support those in the profession who are trying to end its rather hierarchical and Victorian organisation. I realise that this is something the profession has to do itself, but if we can encourage the process, that will be to the benefit of manufacturing industry.

The question of attitude and culture has been referred to. As a nation, we need to accept that our future prosperity and self-respect depend on our attitude to creative and innovative work in industry. Conservative Governments since 1979 have helped industry by sharpening incentives, curbing excessive union power, curbing inflation, which is now down to 1.7 per cent.—the lowest level for 25 years—and facilitating the continuous process of deregulation and the removal of red tape. Of course, all of this is diametrically opposite to the job-destroying panaceas that have been deployed by Opposition Members, not only today but in earlier policy pronouncements.

Our aim must be to make sure that British industry is at the forefront of technical advance. I, with my right hon. and hon. Friends, shall do all I can to support Ministers in their endeavours to encourage this. We must take every opportunity to make our manufacturing industry a success.

8.35 pm
Mr. Robert Ainsworth (Coventry, North-East)

In a debate on manufacturing, it is important that someone from Coventry should make a contribution. I am aware of the fact that many hon. Members want to take part, and, in effect, I am speaking also for my hon. Friends the Members for Coventry, South-East (Mr. Cunningham) and for Coventry, North-West (Mr. Robinson).

Having heard other hon. Members refer to manufacturing interests in their constituencies, I must say that Coventry had the lot. Coventry was at the heart of the manufacturing industry of this country. It is known for cars, but we had machine tools, defence, the aircraft industry. A roll call of the names of the companies that existed in Coventry is an indication of the very basis of British industry as it was—Jaguar, Peugeot, Talbot, Standard-Triumph, Alfred Herbert, Wickman, Webster and Bennett, Rolls Royce, GEC. We had them all.

I suppose that, with the restructuring that took place, it was inevitable that some of those names would disappear. But some of them disappeared unnecessarily because of the policies that the Conservatives have pursued since they came to power. We have had roller-coaster policies, with no stability, no strategy and no thought for the basic wealth creation of the country.

The first part of the roller-coaster was the deepest and worst recession that we have seen since the 1930s. In the first couple of years of the Conservative Administration, we lost 20 per cent. of our manufacturing base—20 per cent. that disappeared, never to reappear. That was a hammer blow to places like Coventry, where the 20 per cent. was absolutely disproportionate. The economy and communities were decimated.

The second part of the roller-coaster was the crazy, unplanned, unthought-out consumer boom of the 1980s, when we were told by the then Chancellor of the Exchequer—what a wonderful Chancellor he was: unassailable and with all the other qualities that were attributed to him—that we had achieved an economic miracle and made the breakthrough. We had a consumer boom based almost entirely on an appalling level of personal debt, which was deliberately encouraged to reach such heights that the second recession was inevitable. What we are experiencing now is the longest, if not the deepest, recession since the war.

Mr. Jim Cunningham (Coventry, South-East)

I am sure that my hon. Friend would agree that Conservative Members have made much of the interventionist policies of previous Labour Governments and certain Conservative ones. Is it not ironic that the President of the Board of Trade offered nothing to assist industries, especially those in the west midlands and in Coventry in particular? After all, in the early 1970s, it was a Conservative Government who had to intervene on behalf of the aircraft industry in Coventry. Had they not done so, we would have no aircraft industry today.

Does my hon. Friend also agree that it is ironic that, within the next few days, Rolls-Royce is due to announce a number of redundancies, as yet unquantified, which will have a serious effect not only on that company but on its subcontractors and general employment opportunities in the city?

Mr. Deputy Speaker

Order. That was a long intervention.

Mr. Ainsworth

My hon. Friend is right to draw attention to the fact that the continuing recession will add to the unemployment problem in Coventry.

In this second recession, some 7,200 of my constituents are now unemployed. In the past two years, the number of people who have been thrown out of work has gone up by 57 per cent. I accept that that increase might be lower than that suffered in other areas, but that is simply because we started from such an appallingly high level of unemployment. Parts of my constituency and other parts of Coventry have been in recession for as long as the Government have been in power. We have had not: two and a half years of recession, but 14 years of it, because Coventry is a manufacturing city and it is at the heart of our manufacturing base. For 14 years, however, the Government have not given a damn about manufacturing.

Mr. Nick Hawkins (Blackpool, South)

Will the hon. Gentleman give way?

Mr. Ainsworth

No, I will not, because of the time limit on speeches.

In many parts of Coventry, the recession has lasted for a full 14 years, and the city has suffered from all the social problems that arise from that and which cost the rest of us dear. People tend to ignore the cost of unemployment and see it as a personal tragedy for those who have lost their jobs, but it costs the rest of us a great deal.

We were recently told that the Prime Minister had undergone a transformation; that he had come to the conclusion that, after all, the manufacturing base was important. He said that he had always held that view—unlike his right hon. Friend the President of the Board of Trade, who was extremely vocal in his support of manufacturing when he was out of power but who changed his tune when he got back into it.

The only puzzle is why on earth the Prime Minister never said anything in support of manufacturing while he sat in Cabinet meetings with his predecessor. We know that she was a formidable lady, but it seems that the Prime Minister kept absolutely quiet and said absolutely nothing about his heartfelt views on the importance of the manufacturing industry. Despite its alleged importance, nothing was done until now, when, all of a sudden, the Prime Minister recognised that his views, which were once held by the minority, are now held by the majority. Where on earth was he when all the lasting damage was done to our basic national interest?

Mr. Geoffrey Robinson (Coventry, North-West)

Is it not true that, if this Pauline, Damascene conversion of the Prime Minister to the cause of manufacturing is sincere, the Budget could be used to restore capital allowances? That would give impetus to the investment that is needed in the west midlands, in my hon. Friend's constituency and in the city of Coventry.

Mr. Ainsworth

I agree. That is not the only thing that could be done, but it could offer constructive help to support the manufacturing base.

Mr. Hawkins

Will the hon. Gentleman give way?

Mr. Ainsworth

No, I am sorry. The hon. Gentleman should get one of his hon. Friends to give him some time.

I remember the "Labour isn't Working" campaign that the Conservative party waged during its 1979 election campaign. How hollow those words now seem. In 14 years, the manufacturing base of this country has shrunk from providing 32 per cent. of our output to providing just 20 per cent. It is widely recognised that our manufacturing base is no longer of a size to support the living standards that we all wish to enjoy. We have become an economic pigmy and a second-world nation.

The CBI has been quoted in support of the Government, but it has recently stated that our manufacturing base is as yet insufficient to provide the critical mass necessary for a successful manufacturing economy. That is what 14 years of Tory rule has brought us. I attended a recent meeting with Mr. Howard Davies of the CBI. Conservative Members may tell us that there are signs of a recovery, but he said that those signs are no stronger than they were last May. He said that any recovery was simply discount-led.

I believe that we are being told about signs of a recovery deliberately to avoid any effective action being taken in the Budget next week. As my hon. Friend the Member for Coventry, North-West (Mr. Robinson), has suggested, the Budget could be one for jobs, recovery and investment. If that does not happen, it will be an absolute tragedy. That is what has been promised, and that is what we should be able to expect.

We should invest in our people. Let us see some sign of such investment from the Government in the Budget next week. Let us judge them on what they do, not on what they say.

8.45 pm
Mr. Rod Richards (Clwyd, North-West)

I believe that it was the 16th century Englishman, John Heywood, who said: Who is so deaf or blind as is he That wilfully will neither hear nor see? He could so easily have been writing about today's Labour party. His words would be a fitting epigram for a party that came in with the 20th century and will go out with it. It has been in opposition for such a long time that it can no longer distinguish between opposing the Government and opposing the country. That is why the Labour party takes every possible opportunity to spread doom and gloom whenever there is good news about the economy. As the Prime Minister said this afternoon, whatever is good news for the country is bad news for the Labour party. The disgraceful vote by the Labour party last night against the Maastricht treaty is the latest addition to a long chapter of treachery against our economy.

I propose to use the parameters laid down by the hon. Member for Livingston (Mr. Cook) as a measure of the manufacturing sector, but I shall refer particularly to the manufacturing industry of Wales. Since 1983, the number of people employed in manufacturing in Wales has increased by some 3.3 per cent., and among ladies employment has increased by 12 per cent. Even if one uses the unfavourable year of 1986 as the base for such a comparison, the total number of people working in the manufacturing sector in Wales has gone up by 5 per cent. Since 1983, output in Wales has gone up by almost 32 per cent., and manufacturing investment has gone up by almost 150 per cent.

It is interesting to consider the contribution that the Welsh manufacturing sector has made to the gross domestic product. In 1983, that contribution stood at 22.2 per cent., but by 1991 it had risen to 25.5 per cent. —an increase of 14.5 per cent. Since 1980, more than 800 manufacturing plants have opened in Wales, with the creation of 50,000 jobs.

Mr. Peter Hain (Neath)

How many have closed?

Mr. Richards

That is exactly what I mean—the Labour party always looks at the negative side, never the positive.

Recent evidence of growth in Wales is provided by the third-quarter index of production and construction for 1992, which showed that output had gone up by 1.4 per cent. on the previous quarter. A CBI survey on January 26 this year showed that business optimism had increased significantly. The chairman of the Welsh CBI, Sir Peter Phillips, said: These results are encouraging and indicate that Welsh manufacturing firms began 1993 with improved expectations and greater optimism. Many countries abroad invest in Wales, Japan in particular. The Japanese say that Wales is the most popular location in the United Kingdom for their consumer electronics manufacturers. That is no small wonder when one considers that companies such as Hitachi, Kyushu, Matsushita, Orion, Sharp and Sony and many others are among them. In a survey of Japanese companies that invest in Wales, one explanation given by all of them for investing in Wales is "the co-operative attitude of Government", to quote them.

Economic commentators also agree about the optimistic state of manufacturing in Wales. The chief economist of the National Westminster Bank said recently of the Welsh economy: The economy has become much more diversified than it was 10 years ago. An increasingly competitive and enterprising manufacturing sector is replacing more traditional industries, while the prominent financial and business services sector has become a major source of employment". The Labour party frequently attempts to cast a slur on the jobs that come to Wales. I draw their attention to a study conducted by the Cardiff business school, called "Japanese Investment in Wales: Economic and Social Consequences", which highlighted the research and development work being undertaken. Researchers found that, of the 23 manufacturing companies surveyed, nine had undertaken design work with one consumer electronics manufacturer intending to transfer major development work from Japan within the next couple of years.

When the Labour party talks about Wales, it is talking about south Wales. I was fascinated the other day to learn that the hon. Member for Caerphilly (Mr. Davies), in announcing an economic strategy for the whole of Wales, announced what amounted to no more than an itinerary for his hon. Friend to tour the Valleys. There was no mention of the manufacturing area in north Wales which I represent. I point out to the Labour party that, in the county of Clwyd, where my constituency is, since 1983 there have been 2,500 projects, amounting to an investment of £1 billion, creating 13,500 new jobs and protecting 2,700 other jobs.

I say to the President of the Board of Trade that it is crucial for the future economy of Clwyd, notwithstanding all the good news and good investment that has taken place in the past 14 years, that the Hamilton gas development in Liverpool bay takes place. It is important, not only to north Wales, but also to Merseyside. Some £1.5 billion of investment and several thousand jobs are at stake.

I urge my right hon. Friend the President of the Board of Trade to give the go-ahead to the Connah's Quay power station, notwithstanding that he has the difficult choice to make between gas and coal. For my part of north Wales, it is vital that the Connah's Quay power station gets the go-ahead, and that the Hamilton gas project is also allowed to proceed.

8.54 pm
Mr. Austin Mitchell (Great Grimsby)

I have to confess that after a decade spent working in television and a lifetime spent working in the Labour party, I am a great lover of melodrama, bad theatre and genuine ham acting. That was why I loved the speech given by the President of the Board of Trade today. It was a wonderful rant. He is becoming the Government's all-purpose rant boy. There is no problem so bad that it cannot be concealed by trundling out the President to give us a rant here in the Chamber.

As for the other piece of bad theatre, I am really enthusiastic about watching the deathbed repentance scene that is being enacted by the entire Government after 14 years of clobbering, weakening, undermining and destroying manufacturing industry in this country. They now discover in extremis and in Downing street—they are probably the same place these days—that manufacturing is vital to the economy and that we need policies to rebuild the manufacturing heart of this economy.

I am delighted that the repentance has come, but my worry is that it has probably come to late. Does the Prime Minister really mean it? He is moving from policy to policy like a drunk from lamp post to lamp post and one does not know whether he is just attaching himself to this lamp post and hiccupping slowly for a short while before moving off to another lamp post in that haphazard process that constitutes Government policy these days. Does he really mean it?

It seems to me that the hope is that a kind of devaluation a la 1972 and 1973—a half ton of Ted, a little dollop of Bexley Sidcup devaluation—will alleviate the pain. Coming out of the exchange rate mechanism and letting the pound go down and getting the benefits of the growth as he did is the hope, but I am afraid that it will not work, because the problems of manufacturing are too deep-seated and the damage inflicted on manufacturing is too great for a little respray job, and the alleviation of the pain that has come with the pound going down, to work this time.

We have a very deep-seated problem. The essence of it is that in this country, manufacturing output at the end of last year compared to 1970 is up by only 14 per cent. That is a record that has been equalled by no other country. Most manufacturing nations have increased their output by more than half and some have doubled in that period. Ours is up by 14 per cent., demand is up and that demand has been filled by imports. This is the key weakness of manufacturing and because output in this country has hardly gone up, demand is met by imports. Imports of finished manufactures are up by 754 per cent. in value since 1970 whereas exports of finished manufactures by value are up by 153 per cent.

Therein lies the disaster, and the process of imports getting a deeper hold on our market than in any other competing economy. Manufacturing imports filled 37 per cent. of demand, on the last figures published by this Government. That was in 1989. They have stopped publishing the figures, so far as I can see, but it must now be about 42 per cent., double the proportion taken by manufactured imports in Germany, Italy and France. Therein lies the weakness of our manufacturing, which is losing its place. Therein lies the gaping balance of payments deficit that now obsesses the House. The value of imports of manufactures in 1992 exceeded exports by 12 per cent. We are just not paying our way in the world.

Unless we produce, we cannot consume—and we cannot produce enough. That is the problem. Therein lies the loss of 3.5 million jobs in manufacturing. Usually, Conservative Members just attack Labour, but their only intelligent argument today has been that all manufacturing countries' manufacturing work forces are shrinking. That is certainly true, but nowhere has the shrinkage been as great as in this country. Those countries are producing much more with fewer workers. We are producing slightly more with a lot fewer workers—3.5 million fewer.

The difficulty that the Government face is that they have stumbled into devaluation—they were forced into a competitive devaluation without understanding it. It is certainly true that an overvalued exchange rate has constituted most of the cause of the problem. The fight against inflation led to higher exhange rates to keep imports cheap. Then there was the impact of North sea oil and the influence of finance, which wants a high and stable exchange rate, unlike the manufacturing sector. Then there was the fact of our deflated economy for much of the period. All these factors have meant high exchange rates.

The costs of production as opposed to the costs of imported manufactured goods have, because of the exchange rate, risen by 39 per cent. since 1970. No supermarket that increased its prices by 39 per cent. compared with those of the competition would survive. How can a manufacturing nation that has done exactly that survive?

The only way to get out of this is to reverse what has been happening. If overvaluation has caused the contraction of industry, it will be restored only by a competitive currency, and that will revive industry. Unfortunately, the devaluation to achieve this has to be bigger than the loss of competitiveness caused by overvaluation. Once we have lost markets it is much more difficult to win them back. We need a large devaluation to get a competitive exchange rate and the only definition of a competitive exchange rate is one with which a nation can balance its trade in conditions of full employment and high and sustainable growth. All other definitions are fallacious and a burden on industry.

We have gone only part of the way to that necessary devaluation: 16 per cent. as opposed to the 39 per cent. increase in prices. We must go further, because the only way to restore the damage is to replace imports in the British market. It is difficult to increase exports because it is difficult to set up the distribution networks, the more so in the depressed conditions of the export markets, but if we can replace imports—roll back the tide of imports—by a deliberate policy of import substitution, using the price mechanism to make imports dearer and domestic production more competitive, we can then reverse the disaster.

I offer the Prime Minister a slogan: if it is not hurting the importers, it is not working. That is the keynote of the strategy of regeneration. The problem is far greater than the Government have conceded it to be. The easy, quick devaluation that we have had hitherto goes only part of the way to solving it. There is a great deal more to do. I could give a long prescription—training, investment, industrial strategy and working with manufacturing industry to expand and widen the industrial base. I hope that that is what the Government will begin to do, after all these years of doing the opposite. I hope that this is not just another lamp post.

9.2 pm

Mr. Nick Hawkins (Blackpool, South)

I am pleased to be able to contribute, albeit briefly, to the debate, because manufacturing industry is extremely important in my constituency. Blackpool tends to be thought of only as a centre of the tourist industry. Those who know it only from occasional visits to party conferences may not realise how significant its manufacturing industry is. It is a large employer in the area, and we have a number of extremely successful companies, not only in local terms but in world terms. For instance, we have one of the leading British manufacturers of toys, having to compete with low wage costs elsewhere in the world—especially in China—which is continuing to expand its product range and enjoying a great deal of success.

We also have one of the most successful manufacturing companies in the production of street furniture, which it sells to municipal authorities throughout the United Kingdom and the world. Just outside my constituency, where it employs a large number of my constituents, we have part of ICI and, significantly, part of British Aerospace which, in recent months, has successfully attracted orders for the Tornado from Saudi Arabia and for the European fighter aircraft, now known as EFA 2000. The thousands of my constituents who work in manufacturing industry, especially those who work for British Aerospace, know that they have the Government and the Prime Minister to thank for securing their jobs.

I spent six years working in business, commerce and industry before coming to the House, and others with similar experience find it unacceptable that the hon. Member for Holborn and St. Pancras (Mr. Dobson) should laugh himself silly whenever my hon. Friends praise the strength of British manufacturing industry. People working at the sharp end of manufacturing do not take kindly to the hon. Gentleman's jibes.

It is a tough manufacturing world out there, and one reason why the unreconstructed clause 4 socialists whom the hon. Member for Holborn and St. Pancras epitomises are badly derided by those who lead manufacturing industry is that they know that few Opposition Members have ever spent a day doing anything productive in British industry. The vast majority of them have no experience of manufacturing of any sort, which is why they still regard profit as a dirty word.

Opposition Members still talk about imposing windfall taxes and establishing more bureaucracy. Indeed, the hon. Member for Livingston (Mr. Cook) gave as his recipe for manufacturing industry the establishment of more bureaucracy, more bodies, more quangos and more levies. Such a regime would not be appreciated by those who run manufacturing industry or those who work in it on the shop floor, whom Labour Members claim to represent. They do not represent the interests of British manufacturing industry in any form, and that is becoming increasingly clear from Opposition speeches on the subject.

I could hardly believe my ears when the hon. Member for Blyth Valley (Mr. Campbell) said that he believed in the dead hand of nationalised industry. Nor could I believe it when I heard the hon. Member for Coventry, North-East (Mr. Ainsworth) talk about what had gone wrong with manufacturing industry in his area. I lived and worked in Coventry in the late 1970s and early 1980s. The cause of the decline and collapse of manufacturing there, and throughout the west midlands, was the appalling union militancy.

Anyone representing a west midlands constituency who glosses over the history of Red Robbo and all the militant unionism that caused the downfall of manufacturing is trying to rewrite history, as Labour Members often try to do. My hon. Friends and I will not let them get away with that. We have no intention of allowing them to hoodwink the British people.

Those who have worked in manufacturing industry in the last 15 to 20 years remember only too well the days of what became known as the British disease, when Britain was the sick man of Europe. They were the days of the last Labour Government, in which the hon. Member for Holborn and St. Pancras served—[Interruption.]—rather, I should have said that he was a prospective candidate at that time. I remember it because I campaigned against him in the 1979 general election with my hon. Friend who now represents Salisbury.

I recall vividly the ways in which the hon. Member for Holborn and St. Pancras tried to defend the appalling record of trade union militancy. He now seeks to rewrite history, but I assure him that those who run manufacturing industry will not take kindly to his lighthearted approach to the whole issue. I am concerned to ensure that, when we discuss manufacturing, we take the advice of those at the sharp end and, for example, listen to the CBI, which said in October 1991: Recent years have seen a transformation in Britain's manufacturing base. The recent strength of exports confirms the widespread anecdotal evidence that companies based in Britain are able to compete successfully in some of the toughest technology-intensive markets in the world. That is the view of those running manufacturing industry. Opposition Members would do well to take their advice rather than continue to posture and try to rewrite history.

There is hardly a Member on the Opposition Benches with business management experience. I remind them, when they talk about the loss of apprenticeships, that the Labour party wrecked Britain's apprenticeship system when they were in power in the 1960s and 1970s. They and their trade union paymasters disapproved strongly of apprenticeships. They still do not appreciate that it is essential in business to make profits and to reinvest them.

Manufacturing investment has increased in each of the last three quarters in this country, and it is vital that that record continue. It will continue, because the Conservative party believes in investment, it believes in profit to ensure that that reinvestment comes about, and it believes, and will continue to believe, in supporting manufacturing industry and companies such as the successful manufacturing companies in the constituency which I am proud to represent.

9.9 pm

Mr. Frank Dobson (Holborn and St. Pancras)

In view of the speech by the President of the Board of Trade, the first thing that I must do is get some facts on the record.

The first fact is that, for almost 14 years, Britain has had a Tory Government. For 14 years, the Tories have been putting their economic theories into practice. It is they who are responsible for the state of British industry and it is they who have inflicted mass unemployment on the people of Britain. After 14 years in power, there is no one left to blame but themselves. After nearly 14 years of uninterrupted rule, those self-same Tories have clocked up a deplorable economic record.

Despite the benefits of North sea oil and gas, for the last 10 years of Tory rule Britain has had a trade deficit. For the last seven years the trade deficit has never fallen below £10 billion a year, and it has averaged nearly £16 billion. Fourteen years of Tory free-market economics has devastated some sections of British manufacturing industry. This is shown most clearly in what has happened to Britain's trade.

Under the last Labour Government, Britain had a trade surplus in motor vehicles. Last year, despite all the preposterous claims by the Prime Minister at the Dispatch Box, Britain had a £3.2 billion deficit in motor vehicles alone. In electrical machinery, the Tories turned an inherited surplus into a deficit of £1.4 billion. In furniture, a surplus has been changed into a deficit of £433 million. In telecommunications and sound equipment, the surplus the Tories inherited has become a deficit of £697 million. Our trade in textiles has moved from break-even to a deficit of £1.5 billion.

When we look at the Tories' unemployment record, their performance is still worse. There are more than 4 million people really out of work in Britain. Even the Government's figures now show more than 3 million out of work. The Tories fought the general election of 1979 using a poster that purported to show a dole queue and carried the words "Labour isn't Working". That year, unemployment totalled 1,074,000. Since the 1979 general election, unemployment has never fallen back to the level that the Tories inherited—even for a single day. Now, for the fifth out of 14 years of Tory rule, unemployment is again over 3 million. That means that, in one year in every three, the Tories have thrown 3 million of their fellow citizens on the dole.

But this 3 million total is much worse than before, because this time the Tories have pushed unemployment past the 3 million mark despite the effects of more than 30 successive fiddles, all of which have reduced the official unemployment total. If the Department of Employment statisticians were a football team, they would be banned for bringing their profession into disrepute.

Even using these disreputable figures, the situation is grimmer than ever before. More than 1 million people have been out of work for a year or more. More than 1 million young people are out of work. This time, unemployment is not limited mainly to Scotland, Wales and the north of England; it is everywhere and it is hitting everybody.

In London, unemployment is worse than it has ever been in London's history. Half a million Londoners are out of work; 58 Londoners chase every job vacancy. Women's unemployment is far worse in London than in the rest of Britain. Overall, the rate of unemployment in London is now second only to the rate in the northern region. The west midlands is in third place in this league table of misery, waste and disrepair; and even in the previously prosperous south-east, unemployment is now around the national average.

Mr. Mackinlay

One feature of the debate is that, until my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) mentioned the south-east, 10 million who live outside Greater London but within the south-east had not been mentioned. Was not the south-east the cockpit of the last election, as it probably will be of the next? Do not many people in the south-east feel betrayed and deceived by the Conservatives, who said that, if people voted Conservative on Thursday, the recovery would continue on Friday? Does my hon. Friend agree that thousands in the south-east who are unemployed or whose businesses have gone bust want to know which Friday the Prime Minister was referring to?

Mr. Dobson

This is indeed the case. As my hon. Friend, knows, I was recently in Basildon, where one in five men are out of work. I think that fewer of them will vote Tory in future.

For years, the Tories and their friends in the City and on the City pages of the newspapers told the people that making things was old hat, and that manufacturing was a job for the third world. The future, they said, was with the service industries. Large manufacturers were seen as creatures of the past; it was said that the self-employed would lead Britain to prosperity.

To be fair, the Tories practised what they preached, and the banks helped them. Manufacturing industry was run down, and it is still being run down. The trouble is that the service industries are going down with it. If we look at who makes up the jobless now, we find that there are more than 900,000 white collar workers, a third higher than last time the official total topped 3 million. Nor have the self-employed been spared the harsh winds of the free market. Last summer, 275,000 people who were formerly self-employed were on the dole, and the Government have yet to publish the most recent figures.

Much of the blame for all that rests with the Tory attitude to manufacturing. In 1979, there were 7,261,000 people employed in manufacturing in Britain, making things for others to buy and use at home and abroad. These were not old smokestack industries such as the Secretary of State referred to in his speech to the Tories at Harrogate, but industries making motor vehicles, electrical plant, furniture, textiles, and telecommunications and sound equipment. But by last December, that total of 7.2 million had plunged to just 4.3 million, and it is still falling fast. By now, manufacturing jobs lost under the Government may exceed 3 million.

Suddenly, the Prime Minsiter has noticed. He said that he did not agree with the neglect of manufacturing industry and that he used to be in a minority, poor lamb, but now he is in a better position to expound his views. As my hon. Friend the Member for Livingston (Mr. Cook) pointed out, there is no evidence that the Prime Minister ever said anything about it before, still less that he did anything. His must have been the industrial strategy that dared not speak its name.

Whatever the Prime Minister may say now, and whatever views he may expound, his record is worse than that of Mrs. Thatcher. While Mrs. Thatcher was Prime Minister, manufacturing jobs were lost at a rate of 186,000 a year. That was not a record to be sneezed at, but it pales beside the record of the present incumbent. The rot seems to have set in when he became Chancellor. In the last quarter under Nigel Lawson, manufacturing jobs went up. During the period that the Prime Minister has lived in Downing Street, first at No. 11 and now at No. 10, manufacturing jobs have fallen every quarter—at a rate of 252,000 a year since he became Chancellor—and at a rate of 312,000 a year since he became Prime Minister.

Never mind what the Government are saying now about manufacturing industry in the 1980s; let us remember what they said at the time. Nigel Lawson, then Chancellor of the Exchequer, told the House that he was at a loss to understand the selective importance attached by Labour to the manufacturing sector. Later, in Washington, he warned that the world should not be seduced by the wonders of high-tech into overlooking the fact that many of the jobs of the future will be in labour intensive service industries which are not so much low-tech as no-tech". To be fair to the Government, no one could claim that they fell victim to the high-tech seduction. Far from it; they have let the country become a total pushover for everybody else's high-tech exports. The Government encouraged banks to invest in service industries and not to give priority to manufacturing, not that the bankers needed much encouragement. When it comes to short-sighted stupidity, it is a toss-up 'whether the British banks or the British Government take first place.

The banks invested tens of billions of pounds in property speculation. The Government encouraged them to invest in Canary Wharf, by giving its Canadian owners £370 million of taxpayers' money. It still went bust, and the banks lost a fortune. The banks then went round their small and medium-sized business customers calling in loans, ending overdraft facilities and refusing money needed for expansion. That was not because small and medium-sized businesses were getting things wrong but because the banks had got things wrong and needed to recoup the money that they had lost in property speculation. That sums up what has been wrong with Britain under the Tories. Incompetent financial institutions have been on the make, leaving no funds for companies making useful products.

Manufactured goods can be sold abroad, but there was no chance of selling abroad many of the products of the service industries that the Tories promoted in the 1980s. There is no recorded case in history of anyone exporting a speculative office block. Even now, after all the Tory rundown, when manufacturing has fallen to less than a quarter of our national production, it still contributes no less than two thirds of our overseas earnings and all that the fashionable service industries can do is make up the remaining third.

The neglect of manufacturing shows that, when we stop making things, it does not just mean that Britain cannot export; it means that we have to import goods for our own use. If there is a boom in the high street and in the shopping centres, much of what is bought will be imported goods that we once made for ourselves. It is a fact of life that, when people stop working, they stop producing. The goods that our people stopped producing, our country started importing.

Of course, British-made goods have to be sold abroad, and the Government have made that more difficult by fouling up the arrangements for export credit guarantees, leaving our exporters at a disadvantage, as the hon. Member for Macclesfield (Mr. Winterton) said. The Government have resorted to much-publicised overseas visits which have more to do with photo opportunities for Tory Ministers than with sales opportunities for British firms. The Prime Minister seems to have taken on that mantle from his predecessor. The theory was that trade follows the flag. The trouble is that their trade follows our flag.

The Prime Minister went on a much-publicised visit to China and that was really good for exports—Chinese exports. Since the right hon. Gentleman became Prime Minister, Chinese exports to Britain have doubled. It is easy for a country that uses child labour to compete. There is a rumour that the Chinese embassy has asked for one of the Prime Minister's new honours nomination forms, because the Chinese want to nominate our Prime Minister for services to their exports.

The Prime Minister also visited Hong Kong, and from that visit it was easy to judge his commitment to British exporters. He was supposed to meet our trade representative in Hong Kong, the man who is responsible for trying to export our goods to Hong Kong. The Prime Minister cancelled that appointment, because he had a more pressing one. He wanted to meet the crooked Hong Kong man, Li Ka Shing, to touch him for money for the Tory party. As usual, that Tory Minister put the vested interests of the Tory party before the interests of this country. That is the attitude that has helped to get our economy into its present dreadful state.

The attitude of successive Secretaries of State for Employment has not helped. What a useless lot they have been; but the most recent ones take the prize. They have devoted themselves to fiddling the figures and then perverting the English language to present the figures in a favourable light. Over the past three years, unemployment has risen inexorably, but we would never guess that from the monthly press releases issued by the Secretary of State.

The one for June 1991 was headed: Michael Howard welcomes slow down in unemployment increase". The total was then 2.2 million. In August 1991, he declared: this is further evidence that the worst of the recession is over". He said that on the ground that In each of the last 3 months the increase has been well below that of each of the previous 3 months". That meant that the total had risen to 2.3 million.

In September 1991 the Secretary of State said: Today's figures confirm that the recession is coming to an end". The total had hit 2.4 million. After similar statements in intervening months, in December 1991 the then Secretary of State for Employment proclaimed: The rate at which unemployment is increasing remains on a firmly downward trend". This Nostradamus of the press release claimed to detect many encouraging signs that the recession is coming to an end". That meant that the total had hit 2.5 million.

January saw the promulgation of a job seekers charter. Whatever happened to that? In February, every jobless person was promised an individual back-to-work plan. That would have consumed a lot of paper, because the total then stood at 2.6 million.

After the general election, the right hon. and learned Gentleman was succeeded by the present Secretary of State. She, to be fair, brought to the job a reputation for decency and common sense. But, sad to relate, she succumbed to the temptations of that monthly press release.

Perhaps it is not the fault of Ministers after all. Perhaps they have a rogue word processor which thrives on bent statistics, weasel words and daft predictions. In future, when they produce the monthly unemployment figures, they should not just run the spell-check on the word processor, they should lash it up to a polygraph lie detector because that is the only way that we shall ever have the truth.

In April, the right hon. Lady detected "glimmers of hope" in the figure that then stood at 2.65 million. By June she was reduced to welcoming a slow down in the rate of increase. The total then stood at 2.7 million.

In July, "Gypsy Rose Gillian" looked into her crystal ball to discern encouraging signs in today's unemployment figures. In August she talked of "signs of improvement". By October, with the figure at 2.76 million, she got round to expressing deep concern about the personal hardship of unemployed people and their families. Then came a bit of newspeak in the same press release of which George Orwell would have been proud. She said that the task of her Department was to provide unemployed people with the skills and job experience necessary to keep them in touch with the changing labour market. By November, that changing labour market had left 2.9 million people on the dole. Since then it has kept changing, always for the worse, and the total now exceeds 3 million. Apart from issuing misleading press releases, the Secretary of State has done nothing.

The Government are keen on league tables—league tables for schools, hospitals and now for the police forces. League tables, the Tories say, present useful information in a form that is easy to understand and from which it is easy to judge performance. Well, here goes.

Britain is top of the European Community league table for unemployment. Britain has more people out of work than any other EC country. Britain is the only country in the Community with more than 3 million people out of work. Britain has the fastest rising unemployment in Europe. Under the Tories, Britain is top of the table and, unless things change dramatically, it is likely to stay that way.

Britain simply cannot afford that level of unemployment. The Secretary of State has admitted that it costs the taxpayer £9,000 to keep somebody out of work for a year. Our level of unemployment is costing taxpayers £27 billion each year, equal to a tax of £1,225 for every family in the land.

But that is not the end of the story. When people are not working, they are not producing. At the present official level of unemployment, Britain is losing 3 million working days' production every day, 15 million days a week and 780 million working days a year.

We cannot afford to lose production on that scale. It means that our economy is not firing on all cylinders. It means that we are losing more than £50 billion-worth of goods and services, equal to a tax of £2,275 for every family in the land. Having 3 million people out of work is costing every family in the land a total of £3,500 in lost tax and lost production. It is the economics of the madhouse. Its other name is the free market.

The Government have done nothing to end the catastrophic rise in the jobless total. The Secretary of State and the Prime Minister keep bleating that all the conditions are in place for an economic revival. That is not true. Even if it were, I pass on to them a warning from my medically learned and hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), who pointed out to me that, when someone is in a coma, all the conditions necessary for them to come round are in place —but it does not automatically follow that they will come round.

The Secretary of State and the Prime Minister are fond of stating that they have in place the largest ever range of help for the unemployed. That may also be in place, but it certainly is not working. The number of training places available has contracted as the number of jobless have grown. Since 1990, two fifths of employment training places have disappeared. Even the chances of someone who has been on an ET course getting a job are one in five —exactly the same as someone who has not undergone that training; that is despite the phenomenal expense of employment training. The average cost per trainee, according to a parliamentary answer, is £6,014. At that rate—and I checked this—an individual could undergo a postgraduate course in nuclear physics or be a full-time student at a postgraduate medical research institute.

Youth training places have been cut by one fifth since January 1990, and only half of all YT leavers were in a job six months later. Although YT is compulsory for out-of-work 16 and 17-year-olds, it has proved so unattractive that 111,000 of them are not in training, education or work.

For the past six months, the Secretary of State has recognised that the existing scheme is a shambles and has promised new schemes. She has announced them every month for the last six months—[Interruption.]

Hon. Members

New figures—another press release.

Mr. Dobson

Whether from the word processor or the calculator, they have just arrived—and no doubt they have been seasonally adjusted.

The Secretary of State announced those changes every month—[Laughter.]

Mr. Deputy Speaker


Mr. Dobson

You must recognise, Mr. Deputy Speaker, that masters of mime can amuse all sorts of people.

The Secretary of State has announced new measures every month for the past six months, but they have still not been introduced. Since the right hon. Lady took over, 3.5 million people have tasted unemployment. If Florence Nightingale was the lady with the lamp, the Secretary of State has become the lady with the P45. For all her fine words, she has done nothing to get more people back to work or into top-quality training.

The Prime Minister decided that the Secretary of State for Employment was making such a poor fist of it that Lord Wakeham was wheeled in to sort things out. I have to warn the Secretary of State that if he makes as good a job of that as he did of electricity privatisation, the right hon. Lady should watch it—she may well inherit a shambles as big as the pit closure programme that the President of the Board of Trade inherited from the same Lord Wakeham.

The Government say that they will announce in the Budget new measures to help the unemployed. Given their track record, it is a good bet that any new Tory measures will have less to do with the unemployed than with fiddling the unemployment figures.

There are overwhelming economic reasons for making the forthcoming Budget a Budget for jobs. The Government must put full employment, which the Prime Minister says he supports, at the top of the economic agenda—not just in Britain, but across the whole European Community.

If people are not convinced by the economic arguments of the need for full employment, they should be convinced by the political imperatives. Right across Europe, millions are out of work. Far too many of them are young people. They want jobs. If the respective political parties of the left, centre and centre-right in Europe do not give them jobs, those people will look elsewhere.

Unemployment has always been the principal recruiting sergeant of the violent, racist, anti-semitic parties of the far right. With political instability and the rise of neo-fascism in Italy, with the resurgence of neo-Nazism in Germany, with the neo-falangists reappearing in Spain, with Le Pen in France and with far-right racist groups flexing their muscles here in Britain, it is time for a bold commitment to full employment. That cannot be achieved quickly, and it cannot be achieved in one country; but, with democracy itself at stake, full employment must be the aim, and it must be achieved.

This Tory Government have not the understanding, the energy or the vision to bring about the necessary changes. The plain fact is that the Government have no idea how to get our country out of the mess in which they have landed it. They have not got an economic strategy; they have not got an industrial strategy; they have not got an employment strategy. In fact, they have not got a clue.

9.35 pm
The Secretary of State for Employment (Mrs. Gillian Shephard)

This has been a good debate, featuring some remarkable contributions from hon. Members on both sides of the House. Sadly and inevitably, it has been characterised by the now customary running down of British industry and British achievement by Opposition Front Benchers: as always, they have revelled in the existence of any difficulties, while hating to point to any successes. They never tire of talking Britain down. At some points, their stance has provided an interesting contrast with the speeches of some of their own Back Benchers.

Both the right hon. Member for Halton (Mr. Oakes) and my hon. Friend the Member for Falmouth and Camborne (Mr. Coe) spoke of the need for a change of culture, a greater awareness of the importance of manufacturing, and the part that education could play in all that. My hon. Friend the Member for Falmouth and Camborne drew attention to the importance of the new framework provided by the national curriculum. Let me add to the points that he made, while encouraging the right hon. Member for Halton.

As my hon. Friend is no doubt aware, general national vocational qualifications are now available to more than 9,000 young people, and that availability will gradually be spread across the cohort. The Guardian—in the surprised tones so characteristic of that newspaper—has said: The Government seems to have a success on its hands with GNVQs. As my hon. Friend will know, GNVQs are equivelant to two A-levels, and are certainly doing their bit to change the culture in our schools.

Following our teacher placement schemes, one third of the 75,000 teachers who have been placed in industry for short periods have been placed in manufacturing, working closely with the Confederation of British Industry and its national manufacturing council. Our work with education business partnerships and Compact now covers 700 schools, 10,000 employers and 140,000 young people—and, of course, the very existence of training and enterprise councils spreads the message about the importance of manufacturing right across our society.

The hon. Member for Blyth Valley (Mr. Campbell) asked about apprenticeships. Let me tell him that 400 apprenticeships are in existence very close to him, at County Durham TEC: he may well wish to visit the TEC, and see a good example of successful youth training in action.

The hon. Member for Gordon (Mr. Bruce) was realistic enough to point out that, given the development of new technology, an expansion in the manufacturing base would not necessarily result in a huge increase in the number of jobs, but should increase the skills of the work force. Let me tell the hon. Gentleman that 76 per cent. of our work force now have qualifications. Two million more people have relevant vocational qualifications than five years ago, and 2.5 million more have A-levels or qualifications above that level. I hope, due to his interest in these matters, that the hon. Gentleman is giving every possible support to Investors in People.

I was most interested to hear at first hand from my hon. Friend the Member for Macclesfield (Mr. Winterton) of the work of the Manufacturing and Construction Industries Alliance and of the goodwill message that he had received from the Prime Minister. I am sure that he will not expect me to comment on his Budget representations, but I am certain that my right hon. Friend the Chancellor of the Exchequer will have taken careful note of them. He will also have taken careful note of the customary representation by the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey), because of his very well placed concern for the excellent product that is made in his constituency and the duties applied thereon.

The hon. Member for Barnsley, Central (Mr. Illsley) will have heard the points made by my right hon. Friend the President of the Board of Trade about the developments in his review of the pit closure programme, including the point that the White Paper is to be published shortly. The hon. Gentleman will know that enhanced area status has already been announced for Barnsley and Doncaster. I was glad to hear that he welcomed the arrival of new jobs in his constituency. The hon. Gentleman knows that last week I was in his constituency and that I visited the very dynamic training and enterprise council for Barnsley and Doncaster. It is doing excellent work. It has already done a great deal of work in preparation for possible pit closures, should they take place.

My hon. Friend the Member for Wyre Forest (Mr. Coombs) rightly pointed out that any successful economy needs a range of employment. It needs manufacturing industries; it needs service industries. My hon. Friend will know that, in common with other countries, the service sector grew during the 1980s. That growth very much mirrors what has happened elsewhere. In the United States, the service sector has risen from 63 per cent. to 69 per cent., and in Germany from 54 per cent. to nearly 60 per cent.

I was most interested to hear the hon. Member for Alyn and Deeside (Mr. Jones) speak so warmly in defence of free trade. He clearly has not spoken recently to his hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), but no doubt they will sort that out between them at some future stage. That is merely one example of what is writ large on the Opposition Front Bench in terms of different messages from different spokesmen, a point to which I shall turn shortly. I can assure the hon. Gentleman that the stance on this side is entirely uniform. We always support free trade, whether we are working in GATT, in the Social Affairs Council or elsewhere. A little more support from the hon. Gentleman and his hon. Friends when we try to achieve level playing fields when working in the Social Affairs Council would be very welcome.

Over the weekend, the Prime Minister asked when the Leader of the Opposition last said a good word about Britain. We on this side are entitled to ask the same question tonight. When did the hon. Members for Livingston (Mr. Cook) and for Holborn and St. Pancras last say a good word about Britain? The hon. Member for Livingston was not present throughout the debate. Had he been, he would have heard a number of fair-minded comments from his hon. Friends. It seems strange to me that there is little interchange of view or of rhetoric among Opposition Members.

We certainly did not hear the hon. Members for Livingston and for Holborn and St. Pancras tonight say a good word about Britain. During the debate they have not said one word about the outstanding productivity achievements of British workers, nor one word about the record export sales achieved by British industry in overseas markets, or about the high level of investment in manufacturing industry by British business. There was not one word of recognition or encouragement for the men and women in manufacturing industry achieving successes day by day in the most difficult of world economic conditions.

The Front-Bench spokesmen do not wish to acknowledge success—

Mr. Chisholm

The Minister referred to productivity and exports. The reason why productivity may not have been mentioned is that it is easy to improve productivity by throwing thousands of people on to the dole. Productivity has increased, but output has not, purely because of unemployment. Surely the significant export figure is the deficit in manufactured trade. What was the deficit in manufactured goods in 1979, and what was it last year in the depths of a recession? It was £9.9 billion.

Mrs. Shephard

Perhaps the hon. Gentleman would like to muse on the contribution to productivity made by the Labour Government, with their overmanning and the endless succession of days lost through strikes.

Opposition Members do not want to acknowledge success; they want to wallow in imaginary failure. They want to ignore the facts, but the facts are what they will get. First, I shall give them the facts on investment. The United Kingdom has an unrivalled record in attracting investment from overseas. In the year to March 1992 alone, foreign companies launched more than 330 new investment projects in Britain, which created more than 22,000 jobs and safeguarded 30,000 more.

Of course, every time a redundancy is announced, Opposition Members want to raise the matter in the House —but do we ever hear a word from them about the 50,000 jobs created in a year by foreign companies investing in Britain? Never. But we do hear some words from them about foreign investment. Those words are "alien, perverse and undemocratic". Those are the TUC's words. Again and again, I have challenged Opposition Front-Bench spokesmen to disown those words, and I am happy to do so again now.

Ms. Diane Abbott (Hackney, North and Stoke Newington)


Mrs. Shephard

Ah, the hon. Member for Hackney, North and Stoke Newington is going to do it for them.

Ms. Abbott

Like her hon. Friends, the Minister has spoken about the amount of inward investment. Does she not accept that one of the main attractions for Japanese and other investors is the fact that British wages are only 44 per cent. of west German wages? What long-term future is there for British industry as a low-wage assembly point for Japanese industry?

Mrs. Shephard

I wonder how the hon. Lady would describe the events surrounding the moving of jobs from Dijon to Cambuslang, where wages were similar. On-costs for German employers are indeed 61 per cent. higher than they are here, so it is small wonder that we attract inward investment.

I note that Opposition Front-Bench spokesmen are not willing to disown the words of the TUC—"alien, perverse, and undemocratic". I suppose that they cannot afford to offend their union paymasters. Until they do that—

Mr. Robin Cook

The right hon. Lady has shifted her ground. Three minutes ago, she accused Opposition Members of using those words, but now she attributes them to the TUC. Will she now produce the official TUC document from which she is quoting? Will she tell us from which official document those words were taken? Will she admit that she is quoting one member of the TUC, who is not, and never has been, a member of the Labour party, and who is not eligible to join?

Mrs. Shephard

I do not suppose that the hon. Gentleman has noticed, but the whole Labour party has been trying to shift its ground on all those areas of policy. I can indeed answer the hon. Gentleman. I expect that he was present when the words were spoken at the TUC conference in 1991. I am not sure which union sponsors him, but I have no doubt that he was present when the words were spoken.

Mr. Cook

The right hon. Lady has made a serious allegation. Will she please name a single member of the Labour party who has used those words, or withdraw her allegation?

Mrs. Shephard

Perhaps I could remind the hon. Gentleman of what I said—the only words we hear about such investment are "alien, perverse and undemocratic". Let him disown the TUC's words. I note that he has not done so.

Mr. Cook

The right hon. Lady has failed to answer the question. Will she name the member of the Labour party to whom she attributes those words, or withdraw the allegations that she has made in the House?

Mrs. Shephard

I have asked the hon. Gentleman to disown the words, and he is not willing to do so.

Mr. Cook

There is no difficulty about that—those words have never been used by any member of the Labour party and they are not words with which I would associate myself. I do not understand what the right hon. Lady finds so entertaining about the matter. She has grotesquely misled the House. Will she withdraw her earlier assertion, or name the member of the Labour party to whom she attributes those words?

Mrs. Shephard

I made it perfectly clear that those words were spoken by a TUC member. I asked Opposition Members to disown them, and the hon. Gentleman has done so.

Mr. Cook

The right hon. Lady will now do the House the credit of admitting that she has attempted a smear, which has no substance, and in which she has been caught out.

Mrs. Shephard

My goodness, an accusation of a smear from the hon. Gentleman is a compliment indeed.

Let us consider for a moment that so-called "alien, perverse and undemocratic" foreign investment. In 1991, one third of all inward investment in the European Community came to Britain. More than 35 per cent. of total United States investment in Europe is located in the United Kingdom, and total investment from Japan is more than 40 per cent.

The hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) asked why firms come to this country. It is not because of the weather or because of the Opposition. Firms do not have to come here. They are free to locate anywhere, yet they choose to come here because unit costs are low and under control, because this country's strike record is lower than it has ever been in our history, and because we have an attractive tax structure, with the lowest corporation tax in the developed world. Above all, they come because—apparently unlike the Labour party—they believe in Britain.

We welcome inward investors because they create jobs in Britain: 15 per cent. of all jobs in manufacturing industry are in foreign-owned firms. The jobs are welcome to the people who work for those firms, but the benefits of inward investment are not confined to people directly employed in American, Japanese or European businesses which have come here. In the past three years, inward investors have brought more than 50 per cent. of their equipment in the United Kingdom. All that means more business and more jobs for Britain.

Those jobs have gone to all parts of Britain. Scotland, Wales and the north-east of England have done especially well, and more than half the jobs created by inward investors between 1987 and 1990 went to those areas. My hon. Friend the Member for Clwyd, North-West (Mr. Richards) described very well the effect of such inward investment.

Mr. John Gunnell (Morley and Leeds, South)

Will the right hon. Lady give way?

Mrs. Shephard

I shall not give way for the moment, as I wish to make progress.

In every country, the share of gross domestic product taken by manufacturing is falling. That is the case in Germany, the United States of America, France and Italy, as well as in Britain, and it reflects changes in methods of production and the organisation of business.

But this should not be allowed to conceal the underlying performance of business. British manufacturing industry has had a decade of success in the 1980s. In the 1960s and 1970s, when Opposition Members and their trade union paymasters directed our affairs, British industry was at the bottom of the international league table for productivity. What a contrast with the 1980s, when manufacturing output rose by 22 per cent., and productivity by almost 60 per cent. Last year alone, despite adverse world trading conditions, productivity reached record levels. It is now rising at 6 per cent. a year. This is good news for industry, good news for those who work in industry and good news for Britain.

Manufacturing Exports grew by over 50 per cent. in the 1980s. They now stand at their highest level ever. Car exports have more than doubled since 1986. We are a net exporter of chemical goods, and we are a net exporter of pharmaceutical goods, with exports growing by 18 per cent. in 1992. These successes are the result of policies aimed at encouraging enterprise, providing incentives, sweeping away unnecessary regulations and reducing burdens on business.

That is why foreign investment is coming to this country. But there are also other reasons: interest rates are the lowest in Europe; inflation at 1.7 per cent. is the lowest since 1967; unit wage costs are growing more slowly than in Japan and more slowly than in Germany; and labour costs in manufacturing are 61 per cent. of those in Germany. These are the necessary conditions for economic growth at any time and in any country. If the Opposition have not understood that, they will never understand anything.

But, of course, unemployment is difficult for anyone who faces it, and we have got to have effective help to offer to unemployed people. That is why we are creating 1.5 million opportunities for unemployed people—a wider range than has ever been provided before. But we never hear a word of praise for the Employment Service. Nearly 50,000 dedicated staff, with a budget of over £1 billion, work, day in, day out, to help people to find new jobs. Last year, they placed over 1.5 million people in jobs—6,000 each and every working day. Do we ever hear a word of praise for the training and enterprise councils—82 local groups of business people, working to provide the training that individuals and industry need?

Instead of recognising those achievements, Opposition Members prefer to preach a message of despair to unemployed people. Most people leave unemployment very quickly—over half within three months, and two thirds within six months. That is the message we should be getting across to people who have lost their jobs—a clear message that there are jobs out there, that training and enterprise councils and jobcentres are there to help people to get back to work.

It would be wonderful if, just for once, the Opposition helped to get that message across. Instead, they add to the despair of people who have lost their jobs by encouraging them to believe they will never work again. The extraordinary exaggerations and assertions of the hon. Member for Holborn and St. Pancras were over the top, even for him. That is, of course, typical of the crocodile tears from the Opposition Benches. Instead of giving hope to people who have lost their jobs, they spread despair.

Fortunately, no one takes any notice of them. They are all preaching different messages. The hon. Member for Holborn and St. Pancras wants to put a tax on jobs; the hon. Member for Dunfermline, East (Mr. Brown) claims to be concerned for the small business man; but the right hon. and learned Member for Monklands, East (Mr. Smith) has never really repudiated his pre-election tax plans, and still has not abolished the trade union block vote.

But they all have one thing in common: the policies on which they do agree would destroy jobs. They denigrate business. They are hostile to employers. The hon. Member for Holborn and St. Pancras has now added to his description of employers as "scum" his description of bankers as short-sighted, stupid and on the make. Opposition Members tell foreign business men—people coming here to invest their wealth in factories—that they are alien. What impact does that have on business confidence? What impact does it have in the board rooms of companies in America, Japan and Hong Kong?

The Opposition would introduce a national minimum wage. How many jobs would that destroy? They would sign up to the social charter. How many jobs would that destroy? They would put a training levy on employers. How many jobs would that destroy? Their latest idea is to subsidise jobs by taxing the utilities. What a message. Every time one made a success of one's own enterprise, one would be taxed.

Mr. Don Dixon (Jarrow)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put,put and agreed to.

Question put accordingly, That the original words stand part of the Question:-

The House divided: Ayes 263, Noes 302.

Division No. 176] [9.59 pm
Abbott, Ms Diane Clelland, David
Adams, Mrs Irene Clwyd, Mrs Ann
Ainsworth, Robert (Cov'try NE) Coffey, Ann
Allen, Graham Cohen, Harry
Alton, David Connarty, Michael
Anderson, Donald (Swansea E) Cook, Frank (Stockton N)
Anderson, Ms Janet (Ros'dale) Cook, Robin (Livingston)
Armstrong, Hilary Corbett, Robin
Ashton, Joe Corbyn, Jeremy
Austin-Walker, John Corston, Ms Jean
Banks, Tony (Newham NW) Cousins, Jim
Barnes, Harry Cox, Tom
Barron, Kevin Cryer, Bob
Battle, John Cunliffe, Lawrence
Bayley, Hugh Cunningham, Jim (Covy SE)
Beckett, Rt Hon Margaret Cunningham, Rt Hon Dr John
Beith, Rt Hon A. J. Dalyell, Tam
Bell, Stuart Darling, Alistair
Benn, Rt Hon Tony Davidson, Ian
Bennett, Andrew F. Davies, Bryan (Oldham C'tral)
Benton, Joe Davies, Rt Hon Denzil (Llanelli)
Bermingham, Gerald Davies, Ron (Caerphilly)
Berry, Dr. Roger Davis, Terry (B'ham, H'dge H'I)
Betts, Clive Denham, John
Blair, Tony Dewar, Donald
Blunkett, David Dixon, Don
Boateng, Paul Dobson, Frank
Boyce, Jimmy Donohoe, Brian H.
Boyes, Roland Dowd, Jim
Bradley, Keith Eagle, Ms Angela
Brown, Gordon (Dunfermline E) Eastham, Ken
Brown, N. (N'c'tle upon Tyne E) Enright, Derek
Bruce, Malcolm (Gordon) Etherington, Bill
Burden, Richard Evans, John (St Helens N)
Byers, Stephen Fatchett, Derek
Caborn, Richard Faulds, Andrew
Callaghan, Jim Field, Frank (Birkenhead)
Campbell, Menzies (Fife NE) Fisher, Mark
Campbell, Ronnie (Blyth V) Flynn, Paul
Campbell-Savours, D. N. Foster, Rt Hon Derek
Canavan, Dennis Foulkes, George
Cann, Jamie Fraser, John
Carlile, Alexander (Montgomry) Fyfe, Maria
Chisholm, Malcolm Galbraith, Sam
Clapham, Michael Galloway, George
Clark, Dr David (South Shields) Gapes, Mike
Clarke, Eric (Midlothian) Garrett, John
Clarke, Tom (Monklands W) George, Bruce
Gerrard, Neil Michael, Alun
Gilbert, Rt Hon Dr John Michie, Bill (Sheffield Heeley)
Godman, Dr Norman A. Michie, Mrs Ray (Argyll Bute)
Godsiff, Roger Milburn, Alan
Golding, Mrs Llin Mitchell, Austin (Gt Grimsby)
Gordon, Mildred Moonie, Dr Lewis
Graham, Thomas Morgan, Rhodri
Grant, Bernie (Tottenham) Morley, Elliot
Griffiths, Nigel (Edinburgh S) Morris. Rt Hon A. (Wy'nshawe)
Griffiths, Win (Bridgend) Morris, Estelle (B'ham Yardley)
Grocott, Bruce Morris, Rt Hon J. (Aberavon)
Gunnell, John Mudie, George
Hain, Peter Mullin, Chris
Hall, Mike Murphy, Paul
Hardy, Peter Oakes, Rt Hon Gordon
Harman, Ms Harriet O'Brien, Michael (N W'kshire)
Harvey, Nick O'Brien, William (Normanton)
Henderson, Doug O'Hara, Edward
Heppell, John Olner, William
Hill, Keith (Streatham) Orme, Rt Hon Stanley
Hinchliffe, David Parry, Robert
Hoey, Kate Pendry, Tom
Hogg, Norman (Cumbernauld) Pickthall, Colin
Home Robertson, John Pike, Peter L.
Hood, Jimmy Pope, Greg
Hoon, Geoffrey Powell, Ray (Ogmore)
Howarth, George (Knowsley N) Prentice, Ms Bridget (Lew'm E)
Howells, Dr. Kim (Pontypridd) Prentice, Gordon (Pendle)
Hoyle, Doug Prescott, John
Hughes, Kevin (Doncaster N) Primarolo, Dawn
Hughes, Robert (Aberdeen N) Purchase, Ken
Hughes, Roy (Newport E) Quin, Ms Joyce
Hughes, Simon (Southwark) Radice, Giles
Hutton, John Randall, Stuart
Ingram, Adam Raynsford, Nick
Jackson, Glenda (H'stead) Redmond, Martin
Jackson, Helen (Shef'ld, H) Robertson, George (Hamilton)
Janner, Greville Robinson, Geoffrey (Co'try NW)
Jones, Barry (Alyn and D'side) Roche, Mrs. Barbara
Jones, leuan Wyn (Ynys Môn) Rogers, Allan
Jones, Jon Owen (Cardiff C) Rooker, Jeff
Jones, Martyn (Clwyd, SW) Rooney, Terry
Jones, Nigel (Cheltenham) Ross, Ernie (Dundee W)
Jowell, Tessa Rowlands, Ted
Kaufman, Rt Hon Gerald Ruddock, Joan
Keen, Alan Salmond, Alex
Kennedy, Charles (Ross,C&S) Sedgemore, Brian
Kennedy, Jane (Lpool Brdgn) Sheerman, Barry
Khabra, Piara S. Sheldon, Rt Hon Robert
Kilfoyle, Peter Shore, Rt Hon Peter
Kinnock, Rt Hon Neil (Islwyn) Short, Clare
Kirkwood, Archy Simpson, Alan
Leighton, Ron Skinner, Dennis
Lestor, Joan (Eccles) Smith, Andrew (Oxford E)
Lewis, Terry Smith, C. (Isl'ton S & F'sbury)
Litherland, Robert Snape, Peter
Livingstone, Ken Soley, Clive
Lloyd, Tony (Stretford) Spearing, Nigel
Loyden, Eddie Spellar, John
Lynne, Ms Liz Squire, Rachel (Dunfermline W)
McAllion, John Steel, Rt Hon Sir David
McAvoy, Thomas Stevenson, George
McCartney, Ian Stott, Roger
Macdonald, Calum Straw, Jack
McFall, John Taylor, Mrs Ann (Dewsbury)
McKelvey, William Taylor, Matthew (Truro)
McLeish, Henry Thompson, Jack (Wansbeck)
McMaster, Gordon Tipping, Paddy
McNamara, Kevin Trimble, David
McWilliam, John Turner, Dennis
Madden, Max Tyler, Paul
Mahon, Alice Walker, Rt Hon Sir Harold
Marek, Dr John Wallace, James
Marshall, David (Shettleston) Walley, Joan
Marshall, Jim (Leicester, S) Wareing, Robert N
Martin, Michael J. (Springburn) Watson, Mike
Martlew, Eric Welsh, Andrew
Maxton, John Wicks, Malcolm
Meacher, Michael Wigley, Dafydd
Meale, Alan Williams, Rt Hon Alan (Sw'n W)
Wilson, Brian Young, David (Bolton SE)
Winnick, David
Wise, Audrey Tellers for the Ayes:
Worthington, Tony Mr. Eric Illsley and
Wray, Jimmy Mr. Andrew Mackinlay.
Wright, Dr Tony
Adley, Robert Deva, Nirj Joseph
Ainsworth, Peter (East Surrey) Devlin, Tim
Aitken, Jonathan Dickens, Geoffrey
Alexander, Richard Dorrell, Stephen
Alison, Rt Hon Michael (Selby) Douglas-Hamilton, Lord James
Amess, David Dover, Den
Ancram, Michael Duncan, Alan
Arbuthnot, James Duncan-Smith, Iain
Arnold, Jacques (Gravesham) Dunn, Bob
Arnold, Sir Thomas (Hazel Grv) Durant, Sir Anthony
Ashby, David Dykes, Hugh
Aspinwall, Jack Eggar, Tim
Atkins, Robert Elletson, Harold
Atkinson, David (Bour'mouth E) Emery, Rt Hon Sir Peter
Atkinson, Peter (Hexham) Evans, David (Welwyn Hatfield)
Baker, Rt Hon K. (Mole Valley) Evans, Jonathan (Brecon)
Baker, Nicholas (Dorset North) Evans, Nigel (Ribble Valley)
Baldry, Tony Evennett, David
Banks, Matthew (Southport) Faber, David
Banks, Robert (Harrogate) Fabricant, Michael
Bellingham, Henry Fairbairn, Sir Nicholas
Bendall, Vivian Fenner, Dame Peggy
Beresford, Sir Paul Field, Barry (Isle of Wight)
Biffen, Rt Hon John Fishburn, Dudley
Blackburn, Dr John G. Forman, Nigel
Body, Sir Richard Forsyth, Michael (Stirling)
Bonsor, Sir Nicholas Forth, Eric
Booth, Hartley Fowler, Rt Hon Sir Norman
Boswell, Tim Fox, Dr Liam (Woodspring)
Bottomley, Peter (Eltham) Fox, Sir Marcus (Shipley)
Bottomley, Rt Hon Virginia Freeman, Roger
Bowden, Andrew French, Douglas
Bowis, John Fry, Peter
Boyson, Rt Hon Sir Rhodes Gale, Roger
Brandreth, Gyles Gallie, Phil
Brazier, Julian Gardiner, Sir George
Bright, Graham Garel-Jones, Rt Hon Tristan
Brooke, Rt Hon Peter Garnier, Edward
Brown, M. (Brigg & Cl'thorpes) Gill, Christopher
Browning, Mrs. Angela Goodlad, Rt Hon Alastair
Bruce, Ian (S Dorset) Goodson-Wickes, Dr Charles
Budgen, Nicholas Gorman, Mrs Teresa
Burns, Simon Gorst, John
Burt, Alistair Grant, Sir Anthony (Cambs SW)
Butcher, John Greenway, Harry (Ealing N)
Butler, Peter Greenway, John (Ryedale)
Butterfill, John Griffiths, Peter (Portsmouth, N)
Carlisle, John (Luton North) Grylls, Sir Michael
Carlisle, Kenneth (Lincoln) Hague, William
Carrington, Matthew Hamilton, Rt Hon Archie (Epsom)
Carttiss, Michael Hamilton, Neil (Tatton)
Cash, William Hampson, Dr Keith
Channon, Rt Hon Paul Hanley, Jeremy
Churchill, Mr Hannam, Sir John
Clappison, James Hargreaves, Andrew
Clark, Dr Michael (Rochford) Harris, David
Clifton-Brown, Geoffrey Haselhurst, Alan
Coe, Sebastian Hawkins, Nick
Colvin, Michael Hawksley, Warren
Congdon, David. Hayes, Jerry
Conway, Derek Heald, Oliver
Coombs, Anthony (Wyre For'st) Heath, Rt Hon Sir Edward
Coombs, Simon (Swindon) Heathcoat-Amory, David
Cope, Rt Hon Sir John Hendry, Charles
Cormack, Patrick Heseltine, Rt Hon Michael
Couchman, James Higgins, Rt Hon Sir Terence L.
Cran, James Hill, James (Southampton Test)
Currie, Mrs Edwina (S D'by'ire) Hogg, Rt Hon Douglas (G'tham)
Curry, David (Skipton & Ripon) Horam, John
Davies, Ouentin (Stamford) Hordern, Rt Hon Sir Peter
Davis, David (Boothferry) Howard, Rt Hon Michael
Day, Stephen Howarth, Alan (Strat'rd-on-A)
Howell, Rt Hon David (G'dford) Rathbone, Tim
Hughes Robert G. (Harrow W) Redwood, John
Hunt, Rt Hon David (Wirral W) Renton, Rt Hon Tim
Hunt, Sir John (Ravensbourne) Richards, Rod
Hunter, Andrew Riddick, Graham
Hurd, Rt Hon Douglas Rifkind, Rt Hon. Malcolm
Jack, Michael Robathan, Andrew
Jackson, Robert (Wantage) Roberts, Rt Hon Sir Wyn
Jenkin, Bernard Robertson, Raymond (Ab'd'n S)
Jessel, Toby Robinson, Mark (Somerton)
Johnson Smith, Sir Geoffrey Roe, Mrs Marion (Broxbourne)
Jones, Gwilym (Cardiff N) Rowe, Andrew (Mid Kent)
Jones, Robert B. (W Hertfdshr) Rumbold, Rt Hon Dame Angela
Jopling, Rt Hon Michael Ryder, Rt Hon Richard
Kellett-Bowman, Dame Elaine Sackville, Tom
Key, Robert Sainsbury, Rt Hon Tim
Kilfedder, Sir James Scott, Rt Hon Nicholas
King, Rt Hon Tom Shaw, David (Dover)
Kirkhope, Timothy Shephard, Rt Hon Gillian
Knapman, Roger Shepherd, Colin (Hereford)
Knight, Greg (Derby N) Shepherd, Richard (Aldridge)
Knight, Dame Jill (Bir'm E'st'n) Shersby, Michael
Knox, David Sims, Roger
Kynoch, George (Kincardine) Smith, Sir Dudley (Warwick)
Lait, Mrs Jacqui Smith, Tim (Beaconsfield)
Lang, Rt Hon Ian Soames, Nicholas
Lawrence, Sir Ivan Speed, Sir Keith
Legg, Barry Spencer, Sir Derek
Leigh, Edward Spicer, Sir James (W Dorset)
Lennox-Boyd, Mark Spicer, Michael (S Worcs)
Lester, Jim (Broxtowe) Spink, Dr Robert
Lidington, David Spring, Richard
Lilley, Rt Hon Peter Sproat, Iain
Lloyd, Peter (Fareham) Squire, Robin (Hornchurch)
Lord, Michael Steen, Anthony
Luff, Peter Stephen, Michael
Lyell, Rt Hon Sir Nicholas Stern, Michael
MacKay, Andrew Stewart, Allan
Maclean, David Streeter, Gary
McNair-Wilson, Sir Patrick Sumberg, David
Madel, David Sykes, John
Maitland, Lady Olga Tapsell, Sir Peter
Malone, Gerald Taylor, Ian (Esher)
Mans, Keith Taylor, John M. (Solihull)
Marlow, Tony Taylor, Sir Teddy (Southend, E)
Marshall, John (Hendon S) Temple-Morris, Peter
Marshall, Sir Michael (Arundel) Thomason, Roy
Martin, David (Portsmouth S) Thompson, Sir Donald (C'er V)
Mawhinney, Dr Brian Thompson, Patrick (Norwich N)
Mellor, Rt Hon David Thurnham, Peter
Merchant, Piers Townend, John (Bridlington)
Milligan, Stephen Townsend, Cyril D. (Bexl'yh'th)
Mills, Iain Tracey, Richard
Mitchell, Andrew (Gedling) Tredinnick, David
Mitchell, Sir David (Hants NW) Trend, Michael
Moate, Sir Roger Trotter, Neville
Monro, Sir Hector Twinn, Dr Ian
Montgomery, Sir Fergus Waldegrave, Rt Hon William
Moss, Malcolm Walden, George
Nelson, Anthony Walker, Bill (N Tayside)
Neubert, Sir Michael Waller, Gary
Newton, Rt Hon Tony Ward, John
Nicholls, Patrick Wardle, Charles (Bexhill)
Nicholson, David (Taunton) Waterson, Nigel
Nicholson, Emma (Devon West) Watts, John
Norris, Steve Wells, Bowen
Onslow, Rt Hon Sir Cranley Wheeler, Rt Hon Sir John
Oppenheim, Phillip Whitney, Ray
Ottaway, Richard Whittingdale, John
Page, Richard Widdecombe, Ann
Paice, James Wiggin, Sir Jerry
Patnick, Irvine Wilkinson, John
Pattie, Rt Hon Sir Geoffrey Willetts, David
Pawsey, James Wilshire, David
Peacock, Mrs Elizabeth Winterton, Mrs Ann (Congleton)
Pickles, Eric Winterton, Nicholas (Macc'f'ld)
Porter, Barry (Wirral S) Wolfson, Mark
Portillo, Rt Hon Michael Wood, Timothy
Yeo, Tim Tellers for the Noes:
Young, Sir George (Acton) Mr. David Lightbown and
Mr. Sydney Chapman.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—

The House divided: Ayes 297, Noes 259.

Division No. 177] [10.13 pm
Adley, Robert Curry, David (Skipton & Ripon)
Ainsworth, Peter (East Surrey) Davies, Quentin (Stamford)
Aitken, Jonathan Davis, David (Boothferry)
Alexander, Richard Day, Stephen
Alison, Rt Hon Michael (Selby) Deva, Nirj Joseph
Amess, David Devlin, Tim
Ancram, Michael Dickens, Geoffrey
Arbuthnot, James Dorrell, Stephen
Arnold, Jacques (Gravesham) Douglas-Hamilton, Lord James
Arnold, Sir Thomas (Hazel Grv) Dover, Den
Ashby, David Duncan, Alan
Aspinwall, Jack Duncan-Smith, Iain
Atkins, Robert Dunn, Bob
Atkinson, David (Bour'mouth E) Durant, Sir Anthony
Atkinson, Peter (Hexham) Dykes, Hugh
Baker, Rt Hon K. (Mole Valley) Eggar, Tim
Baldry, Tony Elletson, Harold
Banks, Matthew (Southport) Emery, Rt Hon Sir Peter
Banks, Robert (Harrogate) Evans, David (Welwyn Hatfield)
Bellingham, Henry Evans, Jonathan (Brecon)
Bendall, Vivian Evans, Nigel (Ribble Valley)
Beresford, Sir Paul Evennett, David
Biffen, Rt Hon John Faber, David
Blackburn, Dr John G. Fabricant, Michael
Body, Sir Richard Fairbairn, Sir Nicholas
Bonsor, Sir Nicholas Fenner, Dame Peggy
Booth, Hartley Field, Barry (Isle of Wight)
Boswell, Tim Fishburn, Dudley
Bottomley, Peter (Eltham) Forman, Nigel
Bottomley, Rt Hon Virginia Forsyth, Michael (Stirling)
Bowden, Andrew Forth, Eric
Bowis, John Fowler, Rt Hon Sir Norman
Boyson, Rt Hon Sir Rhodes Fox, Dr Liam (Woodspring)
Brandreth, Gyles Fox, Sir Marcus (Shipley)
Brazier, Julian Freeman, Roger
Bright, Graham French, Douglas
Brooke, Rt Hon Peter Fry, Peter
Brown, M. (Brigg & Cl'thorpes) Gale, Roger
Browning, Mrs. Angela Gallie, Phil
Bruce, Ian (S Dorset) Gardiner, Sir George
Budgen, Nicholas Garel-Jones, Rt Hon Tristan
Burns, Simon Garnier, Edward
Burt, Alistair Goodlad, Rt Hon Alastair
Butcher, John Goodson-Wickes, Dr Charles
Butler, Peter Gorman, Mrs Teresa
Butterfill, John Gorst, John
Carlisle, John (Luton North) Grant, Sir Anthony (Cambs SW)
Carlisle, Kenneth (Lincoln) Greenway, Harry (Ealing N)
Carrington, Matthew Greenway, John (Ryedale)
Carttiss, Michael Griffiths, Peter (Portsmouth, N)
Cash, William Grylls, Sir Michael
Channon, Rt Hon Paul Hague, William
Churchill, Mr Hamilton, Rt Hon Archie (Epsom)
Clappison, James Hamilton, Neil (Tatton)
Clark, Dr Michael (Rochford) Hampson, Dr Keith
Clifton-Brown, Geoffrey Hanley, Jeremy
Coe, Sebastian Hannam, Sir John
Colvin, Michael Hargreaves, Andrew
Congdon, David Harris, David
Conway, Derek Haselhurst, Alan
Coombs, Anthony (Wyre For'st) Hawkins, Nick
Coombs, Simon (Swindon) Hawksley, Warren
Cope, Rt Hon Sir John Hayes, Jerry
Cormack, Patrick Heald, Oliver
Couchman, James Heath, Rt Hon Sir Edward
Cran, James Heathcoat-Amory, David
Currie, Mrs Edwina (S D'by'ire) Hendry, Charles
Heseltine, Rt Hon Michael Pawsey, James
Higgins, Rt Hon Sir Terence L. Peacock, Mrs Elizabeth
Hill, James (Southampton Test) Pickles, Eric
Hogg, Rt Hon Douglas (G'tham) Porter, Barry (Wirral S)
Horam, John Portillo, Rt Hon Michael
Howard, Rt Hon Michael Rathbone, Tim
Howarth, Alan (Strat'rd-on-A) Redwood, John
Howell, Rt Hon David (G'dford) Renton, Rt Hon Tim
Hughes Robert G. (Harrow W) Richards, Rod
Hunt, Rt Hon David (Wirral W) Riddick, Graham
Hunt, Sir John (Ravensbourne) Rifkind, Rt Hon. Malcolm
Hunter, Andrew Robathan, Andrew
Hurd, Rt Hon Douglas Roberts, Rt Hon Sir Wyn
Jack, Michael Robertson, Raymond (Ab'd'n S)
Jackson, Robert (Wantage) Robinson, Mark (Somerton)
Jenkin, Bernard Roe, Mrs Marion (Broxbourne)
Jessel, Toby Rowe, Andrew (Mid Kent)
Johnson Smith, Sir Geoffrey Rumbold, Rt Hon Dame Angela
Jones, Gwilym (Cardiff N) Ryder, Rt Hon Richard
Jones, Robert B. (W Hertfdshr) Sackville, Tom
Jopling, Rt Hon Michael Sainsbury, Rt Hon Tim
Kellett-Bowman, Dame Elaine Scott, Rt Hon Nicholas
Key, Robert Shaw, David (Dover)
Kilfedder, Sir James Shephard, Rt Hon Gillian
King, Rt Hon Tom Shepherd, Colin (Hereford)
Kirkhope, Timothy Shepherd, Richard (Aldridge)
Knapman, Roger Shersby, Michael
Knight, Greg (Derby N) Sims, Roger
Knight, Dame Jill (Bir'm E'st'n) Smith, Sir Dudley (Warwick)
Knox, David Smith, Tim (Beaconsfield)
Kynoch, George (Kincardine) Soames, Nicholas
Lait, Mrs Jacqui Speed, Sir Keith
Lang, Rt Hon Ian Spencer, Sir Derek
Lawrence, Sir Ivan Spicer, Sir James (W Dorset)
Legg, Barry Spink, Dr Robert
Lennox-Boyd, Mark Spring, Richard
Lester, Jim (Broxtowe) Sproat, Iain
Lidington, David Squire, Robin (Hornchurch)
Lightbown, David Steen, Anthony
Lilley, Rt Hon Peter Stephen, Michael
Lloyd, Peter (Fareham) Stern, Michael
Lord, Michael Stewart, Allan
Luff, Peter Streeter, Gary
Lyell, Rt Hon Sir Nicholas Sumberg, David
MacKay, Andrew Sykes, John
Maclean, David Tapsell, Sir Peter
McNair-Wilson, Sir Patrick Taylor, Ian (Esher)
Madel, David Taylor, John M. (Solihull)
Maitland, Lady Olga Taylor, Sir Teddy (Southend, E)
Malone, Gerald Temple-Morris, Peter
Mans, Keith Thomason, Roy
Marlow, Tony Thompson, Sir Donald (C'er V)
Marshall, John (Hendon S) Thompson, Patrick (Norwich N)
Marshall, Sir Michael (Arundel) Thurnham, Peter
Martin, David (Portsmouth S) Townend, John (Bridlington)
Mawhinney, Or Brian Townsend, Cyril D. (Bexl'yh'th)
Mellor, Rt Hon David Tracey, Richard
Merchant, Piers Trend, Michael
Milligan, Stephen Trotter, Neville
Mills, Iain Twinn, Dr Ian
Mitchell, Andrew (Gedling) Waldegrave, Rt Hon William
Mitchell, Sir David (Hants NW) Walden, George
Moate, Sir Roger Walker, Bill (N Tayside)
Monro, Sir Hector Waller, Gary
Montgomery, Sir Fergus Ward, John
Moss, Malcolm Wardle, Charles (Bexhill)
Nelson, Anthony Waterson, Nigel
Neubert, Sir Michael Watts, John
Newton, Rt Hon Tony Wells, Bowen
Nicholls, Patrick Wheeler, Rt Hon Sir John
Nicholson, David (Taunton) Whitney, Ray
Nicholson, Emma (Devon West) Whittingdale, John
Norris, Steve Widdecombe, Ann
Onslow, Rt Hon Sir Cranley Wiggin, Sir Jerry
Oppenheim, Phillip Wilkinson, John
Ottaway, Richard Willetts, David
Page, Richard Wilshire, David
Paice, James Winterton, Mrs Ann (Congleton)
Patnick, Irvine Winterton, Nicholas (Macc'f'ld)
Pattie, Rt Hon Sir Geoffrey Wolfson, Mark
Wood, Timothy Tellers for the Ayes:
Yeo, Tim Mr. Nicholas Baker and
Young, Sir George(Action) Mr. Sydney Chapman.
Abbott, Ms Diane Dowd, Jim
Adams, Mrs Irene Eagle, Ms Angela
Ainsworth, Robert (Cov'try NE) Eastham, Ken
Allen, Graham Enright, Derek
Alton, David Etherington, Bill
Anderson, Donald (Swansea E) Evans, John (St Helens N)
Anderson, Ms Janet (Ros'dale) Fatchett, Derek
Armstrong, Hilary Faulds, Andrew
Ashton, Joe Field, Frank (Birkenhead)
Austin-Walker, John Fisher, Mark
Banks, Tony (Newham NW) Flynn, Paul
Barnes, Harry Foster, Rt Hon Derek
Barron, Kevin Foulkes, George
Battle, John Fraser, John
Bayley, Hugh Fyfe, Maria
Beckett, Rt Hon Margaret Galbraith, Sam
Beith, Rt Hon A. J. Galloway, George
Bell, Stuart Gapes, Mike
Benn, Rt Hon Tony Garrett, John
Benton, Joe George, Bruce
Bermingham, Gerald Gerrard, Neil
Berry, Dr. Roger Gilbert, Rt Hon Dr John
Betts, Clive Godman, Dr Norman A.
Blair, Tony Godsiff, Roger
Blunkett, David Golding, Mrs Llin
Boateng, Paul Gordon, Mildred
Boyce, Jimmy Graham, Thomas
Boyes, Roland Grant, Bernie (Tottenham)
Bradley, Keith Griffiths, Nigel (Edinburgh S)
Brown, Gordon (Dunfermline E) Griffiths, Win (Bridgend)
Brown, N. (N'c'tle upon Tyne E) Grocott, Bruce
Bruce, Malcolm (Gordon) Gunnell, John
Burden, Richard Hain, Peter
Byers, Stephen Hall, Mike
Caborn, Richard Hardy, Peter
Callaghan, Jim Harman, Ms Harriet
Campbell, Menzies (Fife NE) Harvey, Nick
Campbell, Ronnie (Blyth V) Henderson, Doug
Campbell-Savours, D. N. Heppell, John
Canavan, Dennis Hill, Keith (Streatham)
Cann, Jamie Hinchliffe, David
Carlile, Alexander (Montgomry) Hoey, Kate
Chisholm, Malcolm Hogg, Norman (Cumbernauld)
Clapham, Michael Home Robertson, John
Clark, Dr David (South Shields) Hood, Jimmy
Clarke, Eric (Midlothian) Hoon, Geoffrey
Clelland, David Howarth, George (Knowsley N)
Clwyd, Mrs Ann Howells, Dr. Kim (Pontypridd)
Coffey, Ann Hoyle, Doug
Cohen, Harry Hughes, Kevin (Doncaster N)
Connarty, Michael Hughes, Robert (Aberdeen N)
Cook, Frank (Stockton N) Hughes, Roy (Newport E)
Cook, Robin (Livingston) Hughes, Simon (Southwark)
Corbett, Robin Hutton, John
Corbyn, Jeremy Ingram, Adam
Corston, Ms Jean Jackson, Glenda (H'stead)
Cousins, Jim Jackson, Helen (Shef'ld. H)
Cox, Tom Janner, Greville
Cryer, Bob Jones, Barry (Alyn and D'side)
Cunliffe, Lawrence Jones, leuan Wyn (Ynys MÔn)
Cunningham, Jim (Covy SE) Jones, Martyn (Clwyd, SW)
Cunningham, Rt Hon Dr John Jones, Nigel (Cheltenham)
Dalyell, Tam Jowell, Tessa
Darling, Alistair Kaufman, Rt Hon Gerald
Davidson, Ian Keen, Alan
Davies, Bryan (Oldham C'tral) Kennedy, Charles (Ross,C&S)
Davies, Rt Hon Denzil (Llanelli) Kennedy, Jane (Lpool Brdgn)
Davies, Ron (Caerphilly) Khabra, Piara S.
Davis, Terry (B'ham, H'dge H'l) Kilfoyle, Peter
Denham, John Kinnock, Rt Hon Neil (Islwyn)
Dewar, Donald Kirkwood, Archy
Dixon, Don Leighton, Ron
Dobson, Frank Lestor, Joan (Eccles)
Donohoe, Brian H. Lewis, Terry
Litherland, Robert Randall, Stuart
Livingstone, Ken Raynsford, Nick
Lloyd, Tony (Stretford) Redmond, Martin
Loyden, Eddie Robertson, George (Hamilton)
Lynne, Ms Liz Robinson, Geoffrey (Co'try NW)
McAllion, John Roche, Mrs. Barbara
McAvoy, Thomas Rogers, Allan
McCartney, Ian Rooker, Jeff
Macdonald, Calum Rooney, Terry
McFall, John Ross, Ernie (Dundee W)
McKelvey, William Rowlands, Ted
Mackinlay, Andrew Ruddock, Joan
McLeish, Henry Salmond, Alex
McMaster, Gordon Sedgemore, Brian
McNamara, Kevin Sheerman, Barry
McWilliam, John Shore, Rt Hon Peter
Madden, Max Short, Clare
Mahon, Alice Simpson, Alan
Marek, Dr John Skinner, Dennis
Marshall, David (Shettleston) Smith, Andrew (Oxford E)
Marshall, Jim (Leicester, S) Smith, C. (Isl'ton S & F'sbury)
Martin, Michael J. (Springburn) Snape, Peter
Martlew, Eric Soley, Clive
Maxton, John Spearing, Nigel
Meacher, Michael Spellar, John
Meale, Alan Squire, Rachel (Dunfermline W)
Michael, Alun Steel, Rt Hon Sir David
Michie, Bill (Sheffield Heeley) Stevenson, George
Michie, Mrs Ray (Argyll Bute) Stott, Roger
Milburn, Alan Straw, Jack
Mitchell, Austin (Gt Grimsby) Taylor, Mrs Ann (Dewsbury)
Moonie, Dr Lewis Taylor, Matthew (Truro)
Morgan, Rhodri Thompson, Jack (Wansbeck)
Morley, Elliot Tipping, Paddy
Morris, Rt Hon A. (Wy'nshawe) Trimble, David
Morris, Estelle (B'ham Yardley) Turner, Dennis
Morris, Rt Hon J. (Aberavon) Tyler, Paul
Mudie, George Walker, Rt Hon Sir Harold
Mullin, Chris Wallace, James
Murphy, Paul Walley, Joan
Oakes, Rt Hon Gordon Wareing, Robert N
O'Brien, Michael (N W'kshire) Watson, Mike
O'Brien, William (Normanton) Welsh, Andrew
O'Hara, Edward Wicks, Malcolm
Olner, William Wigley, Dafydd
Orme, Rt Hon Stanley Williams, Rt Hon Alan (SW'n W)
Parry, Robert Wilson, Brian
Pickthall, Colin Winnick, David
Pike, Peter L. Wise, Audrey
Pope, Greg Worthington, Tony
Powell, Ray (Ogmore) Wray, Jimmy
Prentice, Ms Bridget (Lew'm E) Wright, Dr Tony
Prentice, Gordon (Pendle) Young, David (Bolton SE)
Prescott, John
Primarolo, Dawn Tellers for the Noes:
Purchase, Ken Mr. Eric Illsley and
Quin, Ms Joyce Mr. Jon Owen Jones.
Radice, Giles

Question accordingly agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House recognises the importance of the manufacturing base to the wealth creation process in this country; congratulates Her Majesty's Government on setting in place the basic framework for economic recovery—low inflation, low interest rates, good industrial relations and a low tax regime—supported by measures in the Autumn Statement; applauds Her Majesty's Government on its success in attracting more inward investment than any of the United Kingdom's Community partners; acknowledges the widely reported signs of recovery in business confidence; recognises the unparalleled opportunities to help individuals to get back to work; and looks forward with confidence to the prospect of a return to sustained growth.

Mr. Andrew F. Bennett (Denton and Reddish)

On a point of order, Madam Speaker. May I draw your attention to the fact that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) and I were completing a conversation in the No Lobby and, as we were about to come out, the tellers had disappeared. While I would not want to question the vote, may I ask you to put it on the record that we were present and wished to vote?

Madam Speaker

Hon. Members should be much more responsible than to spend their time gossiping in the Lobbies.