---

Economy: Enterprise, Taxation and Manufacturing

My Lords, I will concentrate on the British motorsport industry and declare an interest as the unpaid president of the Motorsport Industry Association. I start by reminding the Minister what she said in her response to my Question during the debate on the motorsport industry on 6 March about the Motorsport Development UK(MDUK) programme. She said, "““we know that in a fiercely competitive global environment, there is absolutely no room for complacency””.—[Official Report, 6/3/08; col. GC 181.]" Five years previously, the then Minister, the right honourable Patricia Hewitt, announced government support of £16 million to sustain and develop the British motorsport industry, saying that it, "““is exactly where the future of British manufacturing lies … In such a fiercely competitive market, we cannot afford to be complacent””." Anyone reading those positive statements would applaud the Government for their plans to sustain one of the few globally successful British engineering clusters. However, reality has proved to be a long way from the rhetoric. Complacency is exactly what is evident, along with inaction. First, the highly publicised £16 million budget for MDUK was, as the Minister admitted in March, significantly reduced to £10 million, but the total reduction covered by the Minister's explanation amounted to just £4.5 million, not the complete £6 million. What has happened to the lost £1.5 million—an amount perhaps of little interest to her department but of very great interest to those in the motorsport sector who were expecting that support? Such casual oversights and misinformation smack of complacency. The MDUK board delivered an annual report in January that was devoid of any financial detail. The Minister agreed in the March debate to provide a clear, detailed financial breakdown of MDUK performance and expenditure, including salaries, overheads and expenses, and an explanation of its value or effectiveness to the industry and the taxpayer, with regional budget and spending. Eleven weeks have now passed. I have received no information—no letter, no answer from the Minister. Indeed, I had to table a Written Question on 12 March in an attempt to get a response from the department—which, after all, led this funding programme. The chairman of MDUK, when presenting his report, said that the UK motorsport industry was in, "““a healthy state, particularly at the high end””," and stable. In the March debate, I pointed out, in contrast, that in fact it faces a dramatic downturn at the high end. The noble Baroness did not share my view but since then, one of the seven UK-based Formula 1 teams has appointed an administrator. Many highly valued engineering jobs have been lost in this country. During the same period, Ferrari launched its new Italian-built and engined A1 GP car. Excellent UK companies, Zytec and Lola, have lost that global race series to Italy. The noble Baroness tried to placate my fears by explaining that, "““the majority of the A1 GP contract apparently lost to Italy has been subcontracted to UK companies””. —[Official Report, 6/3/08; col. GC 179.]" That response has proved incorrect. Furthermore, that advanced engineering business is not being lost to the emerging nations of China or India, but to our most dangerous competitors in high value-added engineering: those located in the US, Italy and Germany. In the Minister’s response, she referred to MDUK research, saying: "““The sector is supported by 2,500 engineering companies””.—[Official Report, 6/3/08; col. GC 179.]" She added, I believe incorrectly, that ““those companies are growing””. There will soon be significant reductions in the spending budgets of Formula 1 teams in the United Kingdom. These companies are at the top of the R&D and investment pyramid of world motorsport. As the majority are still based in the UK, this reduction will affect our specialised supply base far more than others in Europe. Each Formula 1 team relies on a network of these relatively small specialist suppliers, spread throughout the UK. These cutbacks will affect the employment of technicians and engineers, who are skilled in advanced, innovative, value-added, high-performance engineering. These individuals are a special asset to this country’s engineering and must, at all costs, be retained. What are the Government doing to ensure that we do not lose them? The recent Prime Minister’s Strategy Unit paper, Future Strategic Challenges for Britain, identified UK motorsport as a prime example of Britain hosting world-class, high-performance innovation and engineering leaders, where SMEs collaborate successfully with global manufacturers and global innovation networks, bringing ideas and technologies together from many places. Such global collaborations are the bedrock of a supply network in the UK motorsport industry, which now needs Government help to beat overseas competition. We cannot afford to stand by, responding with rhetoric and false promises, while such coveted UK engineering business is lost. Six years ago, this industry, through its trade association, the MIA, told the then Minister that it required a series of, "““urgent co-ordinated actions to ensure the leading position of our industry is retained in the face of increasing overseas competition””." The chairman of MDUK admitted that it had not achieved much in the area of business development in the past four years, yet this is the specific area in which the industry asked the Government to focus their support. The government response has singularly failed and now, sadly, the fears of those original industry advisers have become reality. We must start with young people to ensure the long-term competitiveness of the engineering industry. The Minister reported the success of MDUK-funded programmes, such as the Motorsport Academy and the learning grid which, "““develop an enthusiasm for engineering amongst younger students, and to develop skills once these young people are in the workforce””.—[Official Report, 6/3/08; col. GC 181.]" I therefore remind the Minister that, following the collapse of the company that her department appointed to manage the Motorsport Academy programme, motorsport industry suppliers, including the trade association, have been left with significant unpaid debts. I am surprised to hear that the Minister plans to relaunch this programme, even though industry-supported debts remain unpaid. Do the Government realistically expect to attract industry support for this, in spite of this unacceptable situation? What are the Government doing to ensure that all industry debts are paid before this project is relaunched? The Minister recently reassured the House that she was, "““passionate about the UK industry’s competitiveness and what it represents in modern manufacturing, advanced engineering and world-class skills””," and that she wished to, "““seize the benefits that this can bring to manufacturing and the economy more widely””.—[Official Report, 6/3/08; col. GC 178.]" Why, then, am I given no answers, or misleading answers? What more can I do to get some answers? I am truly incensed by the Government’s complacency. I have always approached my position as president of the MIA in a non-partisan way. Indeed, I have often gone out of my way to support the Government over the past 10 years in decisions that they have taken affecting the motorsport industry. That industry, now still the world’s leader, is entitled to expect some straight answers, less indifference and stronger support from the Government.