UK Manufacturing and Enterprise — 16 May 2000

I beg to move,

That this House condemns the Government for failing to encourage an enterprise economy, for reducing the UK's competitiveness and burdening all sectors of business with extra regulatory costs and taxation and for adding to the pressure on manufacturing, resulting in many sectors relocating outside the UK; demands that the Secretary of State for Trade and Industry outlines the Government's strategy for manufacturing as a matter of urgency, so that industry can plan for the future; and calls upon the Government to commit itself to reduce the overall cost of tax and regulation to business without delay, allowing UK firms to compete in the global market place and to retain a UK manufacturing base.

For manufacturing, Britain is the most competitive country in Europe today.

Great Britain is currently the most attractive economy in Europe for producing cars.

metal bashing is no longer a vital national asset

We had no alternative--it does not make sense for UK hauliers or the UK economy as less revenue will be raised by the Treasury.

They are not trying to fight any more. They are just going. They fear the UK simply isn't a safe place for confidential data.

The Levy, which will cost our industry over £60 million based on electrical energy consumption alone, is a serious threat to our competitiveness.

We will move to pastures greener very easily and quickly--suddenly money will leak out of the nation, with barely a whisper of warning.

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

'recognises that industry does not want a return of the boom and bust policies of the previous Government, with interest rates of 15 per cent, inflation above 10 per cent and soaring budget deficits; welcomes the Government's decisive action in taking politics out of interest rate decisions; notes that employment is currently 880,000 higher than it was when the Government came into office, and that long-term interest rates over the past year have been at their lowest for 35 years; welcomes the measures that the Government has taken to encourage enterprise, investment and innovation which particularly help manufacturing businesses; welcomes the Government's view that where firms are in difficulty the Government has a role in helping people through change as opposed to the previous Government's laissez-faire approach; and condemns the Opposition for its record in government, when manufacturing employment declined by 2¾ million.'.

We have to get used to the idea that a strong currency is not a bad thing.

Although output has increased, market share continues to be lost.

Export orders continued to fall for the thirteenth consecutive quarter. Export margins are at 25 year lows and imports continue to gain ground . . . The latest official figures show manufacturing investment was down 13 per cent. in 1999 quarter four on a year ago. The strength of sterling and the associated squeeze on margins and cash flow is forcing firms to adopt a short-term view . . . Productivity rising strongly in both manufacturing . . . and engineering . . . but this is being achieved entirely by cutting employment rather than through increased investment.

I talk to a lot of businesses, and a lot are taking decisions either to look elsewhere, or not to do it at all . . . British companies are postponing investment projects or locating them in the euro-zone because of the strength of sterling.

the problems caused by the overvalued pound and the impact it is now having on manufacturing, exporters and the tourist trade will not go away. It cannot be right that neither the Government nor the Bank of England will take any responsibility for the exchange rate.

Nissan is threatening to switch production of its next Micra car away from the UK, raising the spectre of thousands more job losses in the battered motor industry.

The Japanese company, like other manufacturers, has found its profits savaged by the high value of the pound.

We think there are sure signs of manufacturing slipping back into a recession.

almost forcing us to close it.

We have to get used to the fact that a strong currency is not a bad thing. It is a reflection of a strong economy.

Matters have been made worse by the weak euro vis-a-vis the pound.

The latter's strength against the euro and the far eastern currencies--

will make it that much more difficult for our shipbuilding companies to obtain orders.--[ Official Report, Westminster Hall , 4 April 2000; Vol. 347, c. 169WH.]

The Government share the anxieties about the exchange rate, but there are no short-term fixes.

I too know the real problems the level of the pound causes.

Many employers are afraid that the proposed Learning Skills Councils will become supplier driven instead of demand led; that the employer work-based route will become even more subservient to the academic/qualification pathway than already exists.

The paramount objective of UK monetary policy is to meet the 2½% inflation target.

Like the US, but unlike some other European countries, we now achieve low unemployment with minimal inflationary pressure . . . this reflects the impact of the profound Labour market liberalisation introduced by the previous Government in the eighties and early nineties.

The major part of university and public sector activity is research, directed at acquiring knowledge. The major part of industrial activity is development, directed at achieving what the market wants.

we will . . . promote dynamic and competitive business and industry at home and abroad.

The rhetoric is good, but the Government seems to be unaware that its actions seem to be working against creating a better climate for business.

We have a Government who are clearly not at ease with themselves. They talk the language of a new economy, but their instincts lie in the other direction. A commentator recently likened them to religious converts who sang the hymns but did not know what the words meant. They talk right, but they act left. They do their best to obscure the truth. The red book is indecipherable. Budget commentators refuse to be drawn into instant comment so that they can work out what the Chancellor has said.

I am ashamed to say that I voted for this business hostile Government . . . I have no wish to remain in a country that punishes enterprise instead of encouraging it. My company turned down six months' further work in the UK implementing e-commerce systems for our major telecommunications company, entirely because of IR35.

promote . . . industry at home and abroad?

The Government has introduced a series of well-camouflaged taxes which has put the tax burden firmly on to business. Changes by the Chancellor since 1997 will push up business taxation by almost £5 billion a year for the first five years of the Labour Government.

I think business attitudes may well have reached a watershed. There is growing disillusionment with this Government's pro-business credentials. There is a feeling that they are not hearing us. They listen but do not hear . . . It is becoming incredibly difficult for business to match the rhetoric to the reality.

entrepreneurs are being distracted from running and growing their businesses by the cumulative burden of taxation and regulation.

the prospects for obtaining sustained output, growth and low inflation are the best in 30 years.

Britain's seven biggest trade unions have joined forces in a concerted attempt to dictate policy to Tony Blair on manufacturing industry.

Thousands of jobs are being lost every week in the very heartland areas that the Labour Party is supposed to be cultivating in the run up to the next election . . . Tony Blair should wake up and smell the coffee.

Eddie Cadd, 61, a retired factory worker, said that new Labour's priorities since 1997 had been "all wrong . . . People here are worried about their jobs, about their pensions, about the things that really matter. But all he cares about--

All of us here are staunch Labour. But in certain areas we know the Tories were better for us than Labour are now. If we voted according to common sense, instead of sticking to our roots, maybe we would all vote Tory and that lot would never get in again.

Stability must be the watchword of policy.

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

The House divided: Ayes 173, Noes 337.

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