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The Economy (Supporting Business)

I am very pleased to have been called to contribute to this debate because during all the years that I have been a Member of Parliament I have fought for, campaigned for and promoted UK manufacturing—indeed, so much so that Members on both sides of the House have identified me as "Mr. Manufacturing Industry, MP." I have stood up for manufacturing industry under successive Governments. During the 18 years of Conservative government, I formed the Manufacturing and Construction Industries Alliance, which was a partnership between big and small industry, trade unions and all who believed that manufacturing industry is one of the only sources of non-inflationary, sustainable economic growth. I believed that when I first entered the House, and I believe it today, and I also believe that, sadly, successive Governments have often sacrificed manufacturing industry in this country unnecessarily. In my local area, I am at present deeply concerned that the largest employer, AstraZeneca, a world-renowned pharmaceutical company, is reducing its work force in both my constituency and that of my immediate neighbour and colleague, my hon. Friend the Member for Tatton (Mr. Osborne), by some 1,500 jobs over a three-year period. Those jobs are not disappearing entirely, but they are disappearing from Macclesfield—both at the Hurdsfield plant and the big research development plant at Alderley park—because the company is transferring the jobs to China and Mexico. Why is it doing that? One might say that it is doing that because it is a global company, but it is also doing it because the cost of those jobs is much less in China and Mexico. Over the years the company has also transferred jobs to India. One may say that there is a good reason for it to do so, but the message I am trying to get across to the Government is that they should not increase the cost of employment and of manufacturing industry unnecessarily. The Government could take many steps at the moment to reduce the costs to manufacturing industry. It will see us come out of this recession, because things produced in this country at a competitive price and to a standard that people want, and delivered as such, are the real wealth creator, which should be encouraged. A smaller company in Poynton in my constituency, Aearo Ltd, owned by 3M, is sadly closing its plant there and transferring the jobs to Poland—again, because of the cost advantages of operating in that country. The Government should take these matters very seriously. I turn to a matter relating to the Ministry of Defence. On the periphery of my constituency is the BAE Systems facility at Woodford, where the Nimrod aircraft, which is on order for the RAF, is produced. I pay a huge tribute to the trade unions there for the way in which, over recent years, they have worked in complete co-operation with the management in order to produce a good aircraft to the MOD's delivery and specification requirements. Of course there have been problems in the past—about which industry would one say that there have been no difficulties between management and labour in the past?—but at this facility full co-operation has been given. The MOD has ordered nine Nimrods—the initial order was very much larger and it has subsequently been cut—but it is now looking, under Project Helix, for another three aircraft. I believe that the MOD's R1 mission system upgrade project could utilise the MRA4, and if it does so, that would extend the work force and the employment at Woodford for a further two years. However, the MOD is looking at the American Rivet Joint, which is a Boeing aircraft that is some 40 years old—these planes are currently lying in the desert, but I am sure that they are being properly maintained—and the thought is to lease three. I have met the Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies), who has responsibility for procurement, to discuss this matter. I have done so along with representatives of the Labour party and the Liberal Democrats, because we want to ensure that our expertise in aerospace continues. We believe that the MOD's R1 mission system upgrade project could be properly fulfilled by the MRA platform and that there is therefore a Nimrod MRA4-based solution to what the MOD requires. The Government can help, so they should retain high-tech engineering jobs in this country, rather than go to another country for purchases that can be fulfilled within our own manufacturing sector. Having made a plea on behalf of certain industries and companies in my constituency, may I say, as has been said from the Front Benches by my hon. Friend the Member for Hammersmith and Fulham (Mr. Hands) and the hon. Member for Southport (Dr. Pugh), who speaks for the Liberal Democrats, that despite receiving unprecedented valuable bail-outs from the taxpayer—the Treasury—the banks and other financial institutions are still providing little or inadequate help to hard-pressed businesses and individuals via increased lending? I have an interest in the construction industry, because I worked in it before I came into this House, and I understand it pretty well. In my view, it is market forces that have constricted the housing market, and not the financial institutions per se. I am not sure whether the Minister agrees with that observation. My view is that falling house prices are mirroring the economy at any one time, and those will correct themselves gradually once the economy has recovered. However, I stress that the lending banks and institutions must do more to help stimulate this country's housing market. The plight of small to medium-sized businesses is serious. They are the powerhouse of the modern economy, yet the commercial banks are still refusing to lend to struggling businesses. One thing that greatly annoys and frustrates me is that HBOS, which is now part of the Lloyds Banking Group, is refusing to lend to a highly successful, long-standing company in my constituency. Like many companies, it is going through difficult times and has cash flow problems, and HBOS is refusing to honour commitments to it. Having received huge handouts from the taxpayer, the banks, rather than merely representing their own interests, should seek to represent the interests of the economy of this country. As the Minister will be aware, small businesses often operate on their overdraft facilities, rather than on loans, which are aimed more at development and expansions. The Opposition have made some important proposals, which my hon. Friend the Member for Hammersmith and Fulham dealt with briefly, and called on the Government to act to assist industry in a more positive way than they are doing at the moment. One action could relate to our proposals to cut corporation tax and to cut payroll taxes for small companies; we have also called on the Government to cut national insurance contributions by a penny in the pound for small companies with fewer than five employees. I know that those are small measures, but they are all valuable. On insolvency, small and medium-sized enterprises should be able to apply for a short breathing space during which they would be able to come up with a restructuring plan, rather than go out of business. We want to save as many businesses as we can. The Government have sought to act on prompt payment, and I give them credit for doing so. As the Minister knows, lots of small businesses provide goods and services to local authorities, with payment normally coming within 30 days. Some local authorities, appreciating the position of small businesses, have implemented a 20-day rule, and I warmly welcome that.