Tory line on euro 'has failed British manufacturers'

Kenneth Clarke, the former Tory Chancellor, accused his party yesterday of failing to address the problems in British manufacturing because of its reluctance to discuss the single European currency.

During a Tory-led debate on manufacturing and enterprise, Mr Clarke said that the "knock-about that passes for debate" failed to focus on the real issue, which was that businesses wanted to know when Britain would join the monetary union.

Sterling had risen by 37 per cent against the German mark in the last five years. That presented exporters with a real difficulty, he told MPs.

Opening the debate, Angela Browning, the shadow Trade and Industry Secretary, claimed that the Tories would boost manufacturing by lifting the burden of regulation on business and creating a "low tax, low regulated economy".

Mrs Browning said a future Conservative government would tackle the "mess and chaos" generated by Labour's handling of manufacturing.

"We will reduce the cost to business over the lifetime of a parliament," she pledged. "Regulation has got to be cut, the cost of regulation has got to be cut. We guarantee that we will report progress to Parliament so that business will actually feel that burden lifting.

"All they feel at the moment, is regulation after regulation, tax after tax.

"We will guarantee a low tax, low regulated economy and we will ensure that UK companies are not put at a competitive disadvantage to other EU countries."

In a personal attack on Stephen Byers, the Secretary of State for Trade and Industry, she contrasted her party's approach with that of Trade ministers with "precious little experience" of business.

Despite their "lecturing and hectoring" of the business sector, Britain had slumped from fourth to eighth in the world competitiveness league, Mrs Browning said.

With problems facing car makers like Ford and Rover, and other major manufacturers, the Government had slapped £30bn of extra taxes and £10bn of extra regulation on business, leading to a "dangerous haemorrhaging" of jobs abroad. "There's not a sector of business that has been able to rely on you to put their case at the heart of Government. You have been constantly rolled over by the Treasury," she told the Secretary of State.

Mrs Browning accused the Government of "talking down" manufacturing as a "rather old industry that can be discarded".

But Mr Byers rejected her charges. "While there may be difficulties in some sectors of manufacturing, we still have a buoyant and vibrant manufacturing sector here in the UK and you should not be talking it down," he told Mrs Browning.

Manufacturing productivity was rising by 5 per cent a year and export volumes were 9.5 per cent higher than a year ago.

Mr Byers accused the Conservatives of wanting to scrap the minimum wage and the statutory right to four weeks' annual paid holiday for people working in companies employing less than 10 people.

Tories claimed the Government had imposed £10bn-worth of extra red tape on businesses but that figure included the £6.6bn cost of giving millions of people the right to paid holiday, the Secretary of State told MPs.