MANUFACTURING DEBATE
24th January 2001
Mr. Michael Fabricant (Lichfield): It is a privilege to take part in this powerful debate, which has featured good contributions from the hon. Member for Wolverhampton, North-East (Mr. Purchase), who always speaks on such matters, and my hon. Friend the Member for Tewkesbury (Mr. Robertson). In particular, it is a pleasure to follow the hon. Member for Falkirk, West (Mr. Joyce), who made his maiden speech. I shall take up his invitation to see the big wheel of Falkirk as I am a keen narrow boater; in May, I am going off to the Llangollen canal. I believe that the canals connected by the Falkirk wheel link Edinburgh to Glasgow, or, as he might put it, Glasgow to Edinburgh, depending on the direction in which people happen to travel.
The hon. Gentleman had a military career before being elected and his experience will be useful to the House. He mentioned that his predecessor was independently minded. I hope that he will be too and will eventually drift down to the Bench below the Gangway to sit next to the hon. Member for Bolsover (Mr. Skinner), where truly independently minded Members sit. I note that the Government Whip is looking rather nervous at the prospect.
As I said, it is rather disappointing that events earlier today may overshadow the importance of our debate. None the less, it is a particularly important debate. The Secretary of State said over and over as a mantra, "manufacturing matters". He tried to back up the fact that the Labour party and Government care about manufacturing by quoting from this morning's edition of The Sun. He sometimes quotes from that newspaper, but it is interesting that he decided not to quote from today's front page.
The Secretary of State made the point that the climate change levy is peanuts. He may think so, but that is not what the industry says. Car manufacturing in the United Kingdom is at a crucial point in its history. I have been in the Chamber for the past few hours--as we all have--so I do not know whether a decision has been made yet by the owners of Nissan. That decision is important: workers at the Nissan Sunderland plant may hear shortly that they have won a key contract, which would safeguard thousands of jobs. However, if members of the Nissan board have voted today that they will site the new Micra plant in France, that will mean huge job losses. That will affect not just the 4,900 workers in Sunderland, but everyone working in the ailing UK car industry. I do not share the Secretary of State's optimism.
We have already seen the closure of the Ford car manufacturing plant in Dagenham, which was announced only a few weeks ago. It seems almost certain that the Vauxhall plant at Luton will close. When the Secretary of State was asked in the Chamber whether he envisaged closure of the Luton plant, he could not answer. He gave a cry that is common among Ministers--"Not me, guv: not my responsibility"--and said that that would be a commercial decision. However, the climate that the Government are creating for car manufacturing is influencing those decisions.
Mr. Kelvin Hopkins (Luton, North): I remind the hon. Gentleman that, earlier today, my right hon. Friend the Secretary of State said that he was using his influence to try to persuade Vauxhall to keep its plant in Luton open. I certainly encourage my right hon. Friend in that.
Mr. Fabricant: That is the least that I would expect from the right hon. Gentleman. However, at the same time, he says that the matter has nothing to do with him: the two statements are in direct conflict with one another and, frankly, make no sense at all.
The Society of Motor Manufacturers and Traders says that the current rate of output in car manufacturing is disappointing. It says that that is
It continues:
In the short-term, things are not looking good.
That is primarily because of the climate change levy, about which I spoke a little earlier.
Martin Temple of the Engineering Employers Federation said:
We have never opposed the need for action on climate change, but believe the Levy to be one of the most badly designed economic instruments in recent times.
Martin Temple is right, and if people want to know why, it is because of a point made by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in his opening speech. A firm such as Sony, which is far-reaching and green-conscious and has already invested money in making its plant one of the healthiest and safest in Europe, will still pay the climate change levy and will receive no refund.
It makes no sense at all to put companies in that position. Such an arrangement acts as a disincentive for firms such as Sony that want to play a real part in the community of nations which seeks to enhance our lives and those of future generations. The levy is a disincentive for those firms to invest in plant that minimises emissions of greenhouse gases.
Nick Turner of Ernst and Young's environmental and sustainability services group said:
There is no doubt that the climate change levy will penalise a number of manufacturing enterprises in the UK, particularly those who have made considerable improvements to their energy efficiency prior to the introduction of the levy.
Sony, in south Wales, is in that very position.
The Secretary of State mentioned The Sun, which is of course a part of the Murdoch empire. However, he chose not to mention The Times although it is in the same stable, at Wapping. The Times has highlighted the fact that small businesses will be the biggest losers arising from the levy. It states:
Those who have not followed the levy through its various transformations may be shocked that the smokestack end of industry fares rather better than the rest,
The article also points out the irony that
Massive users of energy, such as steel, cement, glass and chemicals industries can strike deals with the Government to reduce levy charges by up to 80 per cent. in return for meeting targets to cut energy use. Many other businesses,
such as those in the car industry, cannot strike such deals.
I should like to deal with the statement made by the Society of Motor Manufacturers and Traders. As I mentioned in an earlier intervention, the society has said that
the Climate Change Levy will result in substantial increases in production costs for the UK motor industry. Net energy costs are estimated to increase by 10 to 15 per cent-- which we should consider in relation to changes in the euro-sterling exchange rate or, perhaps equally relevantly, the sterling-dollar rate--
for vehicle and component manufacturers as a result of the levy. The statement continues:
In a globally competitive market it is not possible to pass on these cost increases, and there are fears that UK based businesses will lose out as a consequence.
We are seeing just such an effect. Time and again, we see on television advertisements for cars that are heavily discounted or available for hire-purchase at zero interest. Around the world, it is a competitive industry. We must never forget that the United Kingdom is a great manufacturing nation and a great exporter. However, is it not disappointing that, since 1997, we have dropped from being the fourth to the 10th most competitive nation, and that we are still falling? Such a change can offer no comfort at all to UK manufacturers, including those, such as Toyota, that are near my constituency.
I welcome Toyota's decision to move Corolla production to Derby. However, when I asked the Secretary of State whether he would like to say something about the far-reaching strategic talks between Ford and Toyota, which could result in a major merger between them in the United Kingdom and elsewhere, he declined. A merger could have a traumatic effect on the car manufacturing industry not only in the United Kingdom but in other parts of the world. It was disappointing that, yet again, he simply said, "Not me, Guv; it's not my business. It's a commercial decision."
Mr. Miller: I appreciate the fact that the hon. Gentleman has recognised that there is a problem in the vehicle manufacturing industry throughout the world. Will he join me in firm criticism of the way in which General Motors has handled the situation in the UK?
Fabricant: General Motors will have made its commercial decision--now I am sounding like the Secretary of State--but the way in which it dealt with its staff showed a lack of finesse and of modern management practice. At least Ford at Dagenham discussed the issue with the staff before making its announcement. I know how the Vauxhall workers felt, because quite often I turn up at the House and hear about what the Government are doing because it has been announced on radio and television first. Those workers heard the news first on radio and television and were not consulted beforehand, and of course that is wrong.
The Government continue to say that they are not responsible for the state of manufacturing in the UK, but I refer them to the excellent British Chambers of Commerce website, which publishes a "burdens barometer". I will rattle through the list, but I promise to give Hansard a copy of the table.
The costs are as follows: trade union recognition, £15.2 million; ordinary maternity leave, £4.5 million; wider entitlement to additional maternity leave, £35 million; parental leave, £72 million; right to time off, £17.25 million; right to be accompanied in a dispute, £4.6 million; part-time workers directive, £29.4 million; national minimum wage, £674.5 million; stakeholder pensions, £200 million; working time directive, £7.65 billion; working families tax credit, £240 million; student loan repayment, £359 million; young people's time off for studying and training, £237.5 million; fire precautions regulations, £37.5 million; European works councils, £36.25 million; IR35, £5.4 million.
That makes a whopping £9.62 billion. The Government say that manufacturing matters, time and time again, but in practice, while the Government spin, manufacturing sinks.
