Industrial Policy and Manufacturing

Guy Opperman Excerpts

Thursday 22nd November 2012 Commons Chamber

[Chris White]

I thank my hon. Friend for his intervention. As someone who worked for MG Rover, I had a great experience of the supply chain and some of the smaller businesses that supported it. They have a great part to play in our economic growth, certainly in terms of new jobs in this sector.

It seems clear from the statements that the Government have already made that they understand and appreciate the important role that manufacturing can play in supporting the UK economy. But I hope that the Minister will see these words turned into action, and I believe that means beginning the process of developing a formal UK industrial strategy for the next 10 years, at the very least. Countries such as Germany and Japan, where industrial policy is at the very heart of government, can perhaps operate without such a formal process. However, I believe that the UK would benefit from it, not only through the consultation, debate and consensus building that would be necessary in the formulation of such a document, but from having a document against which civil servants and politicians can be held accountable through regular reviews.

Parliament should be at the centre of the development of this industrial policy. We need a policy that can last beyond the lifetime of one Government, which means ensuring that we have policies that all parties support or broadly favour, so that we create the policy stability necessary for businesses to invest in the UK.

[Guy Opperman (Hexham) (Con)]

It is a year since we last debated manufacturing, on a Thursday late in November 2011. Does my hon. Friend agree that there is some evidence that actual change has taken place, particularly on local banking? That is now that much easier because of the Financial Services Bill, which we passed on 23 April. It means that the smaller businesses so favoured by my hon. Friend the Member for High Peak (Andrew Bingham) can much more ably be financed by local banks.

[Chris White]

I thank my hon. Friend for his intervention. It is fortuitous, and something I did not realise until he mentioned it, that a similar debate was held this time last year. I hope we have made more progress and that that will continue. One issue on which we have made progress is the business bank concept, about which I know that he spoke in that debate.

--- Later in debate ---

[Guy Opperman]

One such short-term policy that would have an impact is the liberalisation of small local community banking, as that would mean there would be lending directly to small and medium-sized businesses, which is what the hon. Gentleman would like. This Government are doing that, but the Opposition voted against it. Can he explain why?

[Mr Bailey]

The hon. Gentleman tempts me to address a much bigger debate about the appropriate ways of financing industry, but I am not going to do that. I have been involved in local organisations providing access to finance for small businesses, and I know that the perception of risk is crucial. It does not matter where the money might come from, because if the risk is considered too high any funds will only be available on very expensive terms.

On green issues, the decision on solar panels, the dispute that still exists at the heart of Government on the future of wind power and the delays in the implementation of the green deal make for uncertainty in an industry that needs certainty above all else, and the Government must resolve that. In the submissions I have received from bodies representing manufacturing industry, two measures have been highlighted, which I think the all-party group would also call for. First, any industrial strategy must have at its heart a degree of certainty. That requires building a cross-party consensus that will outlive any Government, so that business can invest for the long term. That is especially relevant for green industries. Secondly, there must be changes in the culture and structure of Government that will allow economic, and in particular manufacturing, priorities to be considered across Departments. That was touched on in Lord Heseltine’s recent report, and it has featured prominently in submissions from organisations representing manufacturing. If we are to convince industry that there is a future in investing in our manufacturing, there has to be general confidence that the Government recognise these priorities and that project economic growth must be a key priority for any Government.

Having an industrial strategy that highlights the most important measures and stimulates debate will go some way towards achieving what we want, but I have yet to be convinced that other Departments accept the logic of this argument. However, there is an emerging consensus in Parliament, especially on the Back Benches, and in industry that the two key issues of long-term certainty and having a driver within Government to prioritise economic growth are crucial. That fact, allied to an emerging public consensus that economic growth must be a priority, could provide the public opinion background to enable any Government to drive forward this agenda. There is therefore a challenge for both the Government and the Opposition to have such policies in place for the public to decide on at the next general election. That is crucial for the British economy and for the future welfare of everybody in this country.