Skip to main content

Inward Investment

Volume 404: debated on Thursday 1 May 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.


What the total sums of manufacturing inward investment were in each year since 1999.[110627]

The total stock of manufacturing inward investment in the three years of 1999 to 2002 was £63.3 billion, £69.7 billion and £92 billion.

I thank the Secretary of State for that. Is she not concerned that the net figures show that we are losing out and that foreign investment into this country is not going ahead? Is she not also concerned that, at the same time, companies such as Dyson, Royal Doulton, Black and Decker and even Corus are downsizing, closing down or escaping abroad? Is she not worried that all that contributes to the fact that more than 500,000 people have lost their jobs in the manufacturing industry in this country? What representations is she making to the Chancellor to improve the lot of manufacturing in the United Kingdom?

Every job loss and every decision by a company to reduce its employment or to relocate outside the UK is of course a matter for great regret. However, the hon. Gentleman is ignoring the fact that the latest UN report on world investment confirms that the UK is the No. 1 destination for foreign direct investment in Europe. That investment is particularly important in manufacturing, and I am delighted to say that at the end of 2002 foreign direct investment in the UK was significantly higher than a year before.

One factor in location and investment decisions is the fact that the UK is outside the single currency. The hon. Gentleman may not welcome my saying this, but the impact of that on investment, jobs and trade is one of the issues that we will take into account in making our decision on membership of the euro.

Will my right hon. Friend join me in thanking and congratulating the Canadian food manufacturer, McCain, which has invested heavily to make Scarborough its European base and gone on to great success? It has also been involved in innovation and development, proving not only that it richly deserves its recent Queen's award for industry but that it is a flagship company, which is telling other companies in north America just how important it is to invest in places in Britain such as Scarborough and Whitby.

My hon. Friend is absolutely right, and I am delighted to take this opportunity to congratulate the company and all those who are helping to make Scarborough an excellent location for inward investment. That underlines the fact that under the Chancellor's stewardship the UK remains one of the best places in the world in which to set up and grow a business. It is also one of the most attractive countries in the world, second only to the United States, for foreign direct investment.

Does the Secretary of State accept that her final comment to my hon. Friend the Member for South-West Hertfordshire (Mr. Page) rather spoiled what had hitherto been a reasonable answer? Is she not aware that the high level of bureaucracy and over-regulation and the high social costs that are imposed on manufacturing, particularly through the European Union, are having a direct impact on that industry, and that many jobs are moving away from Europe and the UK for that reason? Is not the right hon. Lady somewhat concerned that our manufacturing base, for which investment is clearly very important, is shrinking because of over-regulation, high taxation and heavy on-costs, many of which are imposed because of the EU?

I am extremely concerned to ensure that this country has a strong, successful future in high-technology, high value-added manufacturing. That is why one of the first things that I did as Secretary of State was to bring together industrial leaders and trade unionists to help us to put in place the first manufacturing strategy for the UK for 30 years. As a direct result, we have established throughout all the English regions a highly successful manufacturing advisory service, which is already helping small and medium-sized manufacturers to improve their productivity and profitability. Although manufacturing jobs continue to be lost, not only in this country but in every other industrialised country, we are also growing new manufacturing industries, particularly in biosciences, which will help to create good jobs.

I also draw the hon. Gentleman's attention to the fact that every international benchmarking survey shows that our business environment is one of the best in the world, and we will continue to improve the regulatory environment to keep it that way.

What effect does the Secretary of State think that higher national insurance contributions, the climate change levy, the pensions tax and the provisions of the Employment Act 2002, which came into effect last month, will have on inward investment? Will she confirm that six years to the day since Labour was elected, the Government have produced the worst trade deficit since records began in 1697, the second worst fall in business investment since records began in 1966, a halving of the productivity growth rate achieved under the Conservative Government, the worst strike record for over a decade, and the destruction of more than 2,000 manufacturing jobs every day since this Prime Minister moved into 10 Downing street?

I know that the increase in national insurance contributions will help to secure the huge improvements in the national health service that everybody in our country, including employers, wants. I know that the climate change levy and the climate change agreements are already delivering measurable improvements in energy efficiency throughout manufacturing, thereby helping to reduce costs. I know also that the new regulations on family-friendly working that we introduced last month will give employers the benefit of access to a more flexible and highly skilled work force.

I regret the fact that the hon. Gentleman chooses to talk down the British economy and British manufacturing as he has done today. As he well knows, thanks to the decisions made by my right hon. Friend the Chancellor six years ago, ours is one of the fastest-growing major economies in the world; and our manufacturing companies, despite the very tough global conditions they face, have succeeded in keeping up and, indeed, increasing the exports they send to the rest of the world. The hon. Gentleman should congratulate them on that.