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Column 517is long overdue. It will work for all our citizens and it will work for industry. Without it, society and industry will be immeasurably poorer.
Miss Emma Nicholson (Torridge and Devon, West) : I should like to speak briefly on behalf of an industry which does not pollute, which flourishes particularly in Scotland and Wales, which works well in providing high quality work of high pay for women and young people as well as for men, and which requires little Government support. However, one facet of its work is that something so successful attracts predators. I am referring not to mergers or unwanted suitors, but to actual thieves. I speak of intellectual property theft and the computer software industry.
The common buzz word is computer "hacking." It is seen as a graduate's amusement--something graduates train themselves on just for fun. They penetrate particular systems and then withdraw saying that they did not know what a mistake they had made. Talk of viruses and worms is commonplace. It is not the sort of worm that Shakespeare would have welcomed if he had seen it in the bud.
This summer, in the Copyright, Designs and Patents Bill which is now an Act, we managed to insert a fine of £2,000, which was designed to deter computer hackers. In Britain we still have much work to do in the copyright industry in giving evidence for the European Green Paper, in supporting the Uruguay round of the GATT agreement, in which copyright may be involved in the negotiations, in supporting China in its search for a fresh copyright law--the first ever copyright law on computer software-- which may well be in place within a year, and in welcoming the United States of America into the Berne convention, which it joined last week--a convention that started 101 years ago when Mark Twain wanted better recompense for his work. A fine of £2,000 is not enough to stamp out the enormous abuses that will soon affect Government and industry alike. It is imperative that the Department of Trade and Industry brings pressure, and its expertise, to bear on the Home Office, and that industry makes representations so that we get a much more rapid response and a proper criminal law put in place earlier than might otherwise be the case.
I can now do no more than put down a marker that I shall table parliamentary questions and call for the earliest action by the Government on this crucial matter.
Mr. Bryan Gould (Dagenham) : Nobody needs convincing that the flavour of the month--perhaps one ought to say colour of the month--is green. That is why we have that amazingly bland and uninformative sentence in the Gracious Speech. It is all language and no commitment, all illusion and no substance. There is, of course, a precedent. Last year, the inner cities were all the rage. They were the fashionable topic, but where are they now? There is no mention of inner cities in the Queen's Speech this year. They have disappeared from view.
The lesson is instructive, but not just because the issues are similar. The Government's conversion to the
Column 518environment is likely to be as superficial as their conversion to the inner cities proved to be. The conversion proceeds, not from any real conviction that these matters are of some significance--far from it--but from the meanest and crudest calculations of electoral expediency.
The inner cities had the temerity in the general election to elect Labour Members of Parliament. That is why the Prime Minister said, "we will have them next time." That is why they moved to the top of her agenda last year. There is an equally crude electoral consideration in respect of the environment. The opinion polls show that there is a rising tide of concern about environmental issues. That is why, after 10 years of ignoring them, the Prime Minister has suddenly been converted.
Mr. Andrew Hunter (Basingstoke) : Will the hon. Gentleman reconcile what he is saying with the testimony given today by Mr. Stanley Clinton Davis, in which he said that in vital respects of waste disposal and toxic waste disposal Government policies are entirely consistent with the requirements of the Common Market? If the hon. Gentleman doubts what I say, I refer him to the official report of the Environment Select Committee's proceedings.
For both the environment and inner cities, we know that the response has to be merely cosmetic. It can be nothing else. On the environment, a Government and Secretary of State who argue that everything must be left to the market cannot possibly grapple with the issues. The same forces are at work with the inner cities, but they are reinforced by the Prime Minister's hostility to local government and her antipathy to public spending.
The result is that all we have had on the inner cities are political and electoral gestures. We have had the glossy brochures, the cosmetic packages and the £400 a head breakfasts, but nothing has really been done to resolve the problems.
All that fits in well with the new style Department of Trade and Industry under the stewardship of the current Secretary of State. Lord Young is, I suppose, the longest serving Secretary of State for Trade and Industry for quite some time but they are not a long-lived breed under this Government. Perhaps he should have joined his predecessors a little sooner. It is fairly clear from his record that six months is about the limit of his usefulness. Six months give him all the time he needs to design a dashing new logo and to initiate the programme of television advertising for 1992, which is his only contribution to preparing British industry for that momentous occasion. Having done the things he is good at, I am afraid that all the rest has been downhill.
We see that superficiality, lack of engagement and disclaimer of responsibility for inner cities right across the board in the stewardship of the Secretary of State for Trade and Industry. He may be called the Secretary of State for Trade and Industry, but he shows an airy lack of concern for British trade and industry. Despite his title, he seems to imply that the success or failure of British industry has nothing to do with him. It is the market alone
Column 519which decides and disposes--that infallible market which must prevail. The DTI's role is simply to get out of the way.
We detected in this afternoon's debate, even from Conservative Members such as the right hon. Member for Brent, North (Sir R. Boyson) and the hon, Member for Surrey, North-West (Mr. Grylls), who professed to be the keenest of all free marketeers, that even they were anxious about where reliance on market forces would take us. The truth is that if we rely on market forces and see no role whatever for the Government, the DTI, far from being the powerhouse that it can and should be, and is in other countries, is simply a black hole imploding on itself.
The consequence of that is that we miss major opportunities that other countries well know how to exploit. Japan, France, Germany, Italy and even the United States--all successful economies--have a level of Government- industry co-operation that we have never contemplated, certainly under this Government. That means that the role of the Government in industry in co- operating, planning and enabling is simply lost and we are the weaker for it.
We see signs of the irresponsibility of the Secretary of State everywhere throughout his jurisdiction and perhaps, surprisingly, even in matters such as Barlow Clowes. Lord Young simply washed his hands of the obvious failures, deficiencies and derelictions of duty of his Department. That has meant that he has also washed his hands of the fate of 1,800 investors who should have been able to expect better of him. That irresponsibility was compounded by a willingness to mislead and to draw conclusions which could not be substantiated from the Le Quesne report. That report could not attribute and apportion blame because the Secretary of State told those involved to consider only the facts, but no one reading that report could draw the conclusions from it which Lord Young put to another place and which appear to exonerate his Department from responsibility. That means that we must now look to the ombudsman to bring Lord Young to a proper realisation of his responsibilities.
We see similar slipperiness and slipshodness in two further recent decisions by the Secretary of State. After Elders' purchase of Scottish and Newcastle shares and the decision to refer its bid to the Monopolies and Mergers Commission--the purchase raised its shareholding from 15 to nearly 25 per cent.--Lord Young was aghast, slapped the company over the wrist, but left it in possession of those shares acquired against the normally accepted rules. That is a classic example of ineffective rules applied by an ineffectual Minister. That episode demonstrates clearly that it is time we had proper statutory rules that mean what they say and are enforced in the same way and to the same degree as rules are enforced in every other part of our national life.
Even more curious was the recent decision not to refer the El Fayed bid for House of Fraser, despite undescribed, unidentified irregularities in it which, we understand, should command the attention of the serious fraud office. In other words, there were irregularities affecting the bid so serious as to go to the serious fraud office, yet we are told that nothing is to touch the validity of the bid. The Secretary of State's decision on that issue demonstrates a touching concern for the reputation of one of his predecessors, the right hon. Member for Chingford (Mr. Tebbit). It is only to be regretted that that concern does
Column 520not seem to be reciprocated. The decision is a typical piece of Youngery and adds to the confusion to which merger policy has now sunk.
As the hon. Member for Surrey, North-West said, the Secretary of State presides over the biggest explosion of takeover activity in our history. The assets involved dwarf our national budget for the NHS or for defence, yet the noble Lord seems to have no view on the massive survey and academic evidence that shows that the scale of takeovers is positively harmful to those involved and to the national economy. The Secretary of State seems to have no view on whether it should be encouraged or discouraged, or whether it matters that British industry should fall into foreign hands. He has no recognition of the special problems facing Britain because of the openness of our market to corporate control. He has nothing to say except to parrot the tautology that competition policy is about competition.
The result is a series of bewilderingly confusing decisions on British Airways and British Caledonian, on Rowntrees, on Kuwaiti oil investment in British Petroleum and on Scottish and Newcastle Breweries. Who in the House can now predict what the Secretary of State's decision will be on any given issue, or which way he will jump on GEC and Plessey? That possibility is very remote because we simply do not know what criteria he now believes to be important. However, we do understand that those whose interests are most closely affected are least likely to be consulted.
A prime example of what happens when a confused ideology meets the real world occurs when the Secretary of State occasionally ventures into action, on those occasions when he decides to pursue one of his ill-judged forays into privatisation. When he does that, surprisingly, his beloved market does not seem to come up to scratch or to deliver the goods.
The National Engineering Laboratory is a successful research establishment of great importance to the Scottish economy, doing very valuable research and providing a forum of collaborative ventures for British industry. For reasons of dogma, it is to be privatised, yet, to the embarrassment and confusion of the Secretary of State, we discover that the only private buyer available has mysteriously disappeared. That confusion has yet to be cleared up.
Girobank is another success story in the public sector. It is a bank created by the public sector by a Labour Government to make good the deficiencies of the private clearing banks, yet again, for reasons of privatisation dogma, we find that Girobank is to be privatised. Yet again the Secretary of State finds that those elusive private buyers are suddenly slipping through his fingers. Those buyers have not materialised, and the price which now seems available is only half the price originally thought to be available. Yet again the consequence is quite unnecessary damage and uncertainty to a successful public enterprise.
North East Shipbuilders Limited is perhaps the most extreme example of dogma prevailing over reality. I heard someone say "stupid". But it does not seem stupid to a
Column 521shipyard worker on the Wear. Let us be quite clear that what is now threatening the future of those yards is not the absence of orders. The orders are there and can be pursued. There are orders from Cuba and from West Germany, and there may well be orders from British shipowners in future. There are also reports that the Danish ferries are the object of a purchasing bid by a Greek shipowner. There is no shortage of potential business.
What is stifling the future of those shipyards is dogma. The Government will not allow those orders to proceed, and will not allow the intervention fund help that is required until a private buyer is found. Yet again the absence of a private buyer will be allowed to destroy 2,000 jobs in shipbuilding, 6,000 jobs on Wearside and, most important of all, in the face of all market logic, as the shipbuilding industry turns up in terms of worldwide demand, it will threaten the survival of a major and essential British industry. Even where privatisation is carried out and regarded as a success in its own terms, it is still bad news. For example, British Steel is to be privatised at a price that means that the taxpayer is defrauded of £200 million. Even at that knock-down price the success of that flotation must now be in jeopardy. Those unnecessary risks are to be taken in order to jeopardise the future of an industry, the long history of which shows that its pattern and cycle of investment and demand make it unsuited to private ownership. Private owners will not stick with it for the time needed and will not provide the investment necessary to preserve its future.
Even more problematical is the privatisation of Rover, which is being sold to British Aerospace. The great salesman himself--that is his only claim to expertise--in this deal showed how maladroit he is. First, he maximised market opportunities by excluding all other potential buyers. Secondly, he negotiated a price--or giveaway--from which the European Commission had to rescue him by saying that he had offered £150 million worth of taxpayers' money more than was needed to clinch the deal. Thirdly, he handed over assets to British Aerospace of substantial value. They were so substantial as to confirm suspicions that British Aerospace is involved in an asset-stripping operation and that the Secretary of State does not care a fig for the future of the car industry, provided he can get rid of it from his desk. The Secretary of State likes a tidy desk. Unfortunately, his means of keeping his desk clear is to throw his files into the dustbin or into the hands of anybody who will walk away with them.
In case there is any suggestion that I am exaggerating, let me draw the House's attention to a memorandum from Warburg Securities to its investment clients, headed
"British Aerospace. Recommendation : buy. Price 492p."
It says :
"Asset valuation : £10.48 a share. The enlarged British Aerospace group--safely delivered yesterday--has assets valued at £10.48p per share--more than double the current share price."
It goes on :
"Our property valuation for all BAe, Rover and Royal Ordnance sites itemised overleaf shows that Professor Roland Smith now commands 14, 323 acres worth over £2 billion. And we estimate surplus properties to be worth £1.13 billion."
Column 522It then lists in substantial detail many of the sites given away to British Aerospace in the deals with Rover and Royal Ordnance. Many of the sites contribute substantially to "easily realisable" --the words of the brochure--surplus land that will net, on its estimation, over £1 billion. That is a scandalous waste and defrauds the taxpayer. It is a matter that should be drawn to the attention of the Public Accounts Committee, and I intend so to do.
That sad catalogue means that it is not surprising that when we draw back and look at the broader picture of what has happened to British industry we find that manufacturing output, having lost 20 per cent. during the early part of the decade, has only just crept back to where it started, that investment is still lower than it was in 1979, that employment in manufacturing has fallen by 2 million jobs, that our trade deficit is heading into the stratosphere, that our investment is worse than it has ever been, and that our share of world markets is lower.
No voice from the Department of Trade and Industry is speaking out for British industry. The Secretary of State's partner in crime--and, typically, the Secretary of State is the sleeping partner--is the Chancellor of the Exchequer, who is about to repeat the same old mistakes. Having weakened the economy through excessively high interest rates and an overvalued currency, he then unleashed a level of demand that it could not conceivably meet. Now he proposes to punish us all over again by pushing up interest rates yet higher and the pound to an even more ridiculous rate. The Chancellor has his own problems. He has a strategy with no escape hatch. The only way that he can escape is by changing the strategy, but his political credibility would be fatally damaged if he were to do so. That is why we are stuck in this predicament.
What of the Secretary of State? Where is he? What is his view? Do we hear his voice? Does he agree that the balance of payments deficit in manufactures is neither here nor there? Does he say that a £15 billion deficit on our trade is a problem of success? Does he agree that that deficit can be financed by hot money? Does he say that there is no limit to the level to which British interest rates might rise? Does he say that British industry can continue to compete even as the pound rises to 3.20 deutschmarks and beyond? Or does he agree with Greenwells, which said in a research paper published today that the Chancellor's strategy is mistaken, that the deficit will become worse, not better, that it arises because of the competitive weakness of British industry, and that the Chancellor's policies are making that problem worse?
Which is it? Does the Secretary of State go silently and sheepishly with the Chancellor, or does he speak up for British industry? If he disagrees, when will we hear his voice? When will he raise that voice in the interests of British industry? If he agrees and is willing to sit silently by and watch British industry crucified, he must go before more damage is done. We can no longer afford a Secretary of State for Trade and Industry who will not do his job.
The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton) : Whatever we may disagree about, there iclearly something on which the whole House will agree, and that is that the link between the industrialists' views and the environmentalists' views has been the theme of today's debate. Obviously
Column 523industrial and commercial activity can have unwelcome effects on the environment, whether it be planning or pollution. However, that is a case for a sensible and effective system to counter or mitigate those effects ; it is not a case against industry and commerce or against economic growth. On the contrary, it is abundantly clear that a strong, competitive and profitable industry within a growing economy is an essential prerequisite for achieving our environmental aims and in sustaining the cost of measures rightly demanded of industry itself as well as in generating the wealth to pay for protecting and improving our surroundings in other more general ways.
As my right hon. Friend the Member for Henley (Mr. Heseltine) said in his very interesting speech, the very existence of a growing demand and opportunities for environmental protection and the prevention of pollution are themselves an opportunity for new industries to thrive and grow. In an important sense, therefore, the foundation of the Government's environmental policies is the policy that has so significantly raised the level of this country's capacity to generate wealth in recent years. Thus, we have opened choices, including the choice of devoting more resources to environmental aims that would previously have been closed.
In the light of what the hon. Member for Dagenham (Mr. Gould) said in the last few minutes, I make no apologies whatever for reminding the House once again of the degree of industrial recovery that has taken place in this country in the past eight years. We have had eight years of uninterrupted economic growth at an average of 3 per cent. That is the longest period of such growth for half a century, I tell the hon. Gentleman. [Interruption.] I shall come to the hon. Gentleman's interest in a moment. In this economy, since 1980-- [Interruption.] I shall come to 1979 in a minute. Productivity growth in this economy since 1980 has been equal to that of Japan and better than that of all other major industrial countries. In manufacturing, on which the hon. Gentleman focused, productivity is up by no less than 60 per cent. in that same period. Industrial profitability--the profitability from which the wealth to pay for our environmental measures comes--is at its best level for nearly 20 years, at over 10 per cent. in real terms for the non-North sea sector. Manufacturing productivity, at 9 per cent. in real terms, is at its highest level for many years. Investment in manufacturing is expected to be up 18 per cent. for this year alone.
I have been asked about 1979 and about manufacturing output. The hon. Gentleman will be aware, because he stated it somewhat grudgingly, that manufacturing output is now at record levels. That does not mean that it is higher than in 1979 only. It means that it is higher than in 1974, because it was still lower in 1979 than it had been in 1974. It fell when the last Labour Government were in office. What is more, since 1981, the United Kingdom's share of world trade in manufactures has stopped falling for the first time in a century. That reflects the restoration by British industry of its reputation for the quality, design and performance of its products and, no doubt, the end of this country's reputation as the most strike-torn country in the world.
Column 524recent evidence that we have from the ITEM club, which showed that our share of world trade in manufactures had fallen to 6.9 per cent., its lowest level ever.
Mr. Newton : The hon. Gentleman had an exchange with the Chancellor of the Exchequer in a debate some weeks ago on that very matter. The reference that he made to the report to which he referred was based on a misunderstanding that has already been cleared up. [Interruption.]
Mr. Newton : One of the most striking things about the British economy is that it is not only our own investors who have shown so much willingness and confidence to invest in our country, but those from overseas as well. I have with me some figures from the Invest in Britain Bureau which show that in the past 10 years about 2,250 overseas investment projects in this country worth £10.75 billion have created or safeguarded nearly 250,000 jobs. That is the foreign vote of confidence in the British economy under the present Administration.
The other matter brought out by my right hon. Friend the Secretary of State was the extent to which this greater industrial wealth that has been created has opened the way for greater expenditure on the environmental issues that are a matter of concern to us all. There is a £1 billion programme for the cleansing of power station emissions and an even larger programme of £1.2 billion over the next four years for improving sewage treatment and disposal. There is a £70 million a year programme for improving the quality of coastal waters and attempts are being made to deal with the problem of vehicle emissions.
My right hon. Friend spoke about other matters such as the international lead that Britain has given in seeking to tackle the problem of chlorofluorocarbons and their damage to our environment. Action is being taken to deal with the acid rain caused by our power stations, and work is going on to curb pollution in the North sea. A major theme of the Gracious Speech is to carry forward the policies on which this country's industrial and economic resurgence have been based. One important aspect of that is the policy of privatisation which has featured largely in the debate. Against the background of what has been achieved and the way in which it is now being copied throughout the world--
Mr. Thomas Graham (Renfrew, West and Inverclyde) : The Minister speaks about privatisation. Is he aware that the Royal Ordnance factory at Bishopton has productivity that is second to none? It is a profit-making firm, and yet the Government are allowing it to be closed.
Mr. Newton : I have spoken to people concerned with one of the Royal Ordnance factories, the one at Patricroft in the north-west rather than the one about which the hon. Gentleman speaks, and I am well aware of the purpose and point of what British Aerospace is seeking to do with the factories. It is seeking to make sure that the work is carried out in a way that safeguards the jobs of the maximum number of people. If the Government that the hon. Member would no doubt have supported had faced that need in a wide range of industries over a longer period, we would not now be facing many of the difficulties with which we are seeking to deal.
Column 525In view of some of the comments in the debate, I must reiterate what my right hon. Friend said about the Water Bill and its importance for the protection of the environment. The proposed creation of the National Rivers Authority, which will be responsible for the health of the rivers, estuaries and coastal waters in England and Wales and which will be guided by statutory river quality standards, is a major step towards improving control of the environment. The public health interest in the supply of drinking water will be met by my right hon. Friend setting statutory requirements and by local authorities' continuing scrutiny of the quality of water supplies.
Some of what has been said in the debate is far fetched in the light of the fact that a quarter of the population of England and Wales already receives its drinking water from the private sector, the statutory water companies. No less significant than our policy of returning much of the public sector of industry to the more competitive framework of the private sector is the range of measures to strengthen competition policy and to enhance the opportunity for encouragement of enterprise at every level. That is reflected by the enterprise initiative and by the huge volume of applications for assisted consultancy that we have received. It is reflected in the record figures for the creation of new small businesses, and it is reflected by the response throughout industry, both large and small, to the campaign to equip British industry for the challenge of 1992. Nowhere is the link between the industrial policy and the environment clearer than in some of the less prosperous regions and those which, as a form of shorthand, we call the inner cities. Their problems have starkly shown the consequences of what happens to the environment when there is no secure and expanding industrial base. It follows that nowhere are the benefits of the greater national prosperity that we have created clearer than in those parts of the country which have faced some of the worst difficulties of earlier failures to bring about the necessary industrial change and to get the economy on the move.
I am well aware that the Opposition do not like being told some of the facts about the improvements. [Interruption.]
Mr. Tony Marlow (Northampton, North) : On a point of order, Mr. Speaker. Is there any way in which you can stop the Opposition Front Bench from behaving like a charabanc of giggling schoolboys with the Leader of the Opposition as head girl?
Mr. Newton : In the past year, the largest falls in the rate of unemployment have been recorded in the west midlands, Wales, the northern region and the north-west. The greater industrial prosperity that has been created is now clearly spreading to all our regions. The greater confidence of British industry to invest is matched by the greater willingness of people overseas to
Column 526invest in the English regions, as was made clear by the recent announcement from Ford of new plant in south Wales with an investment totalling £725 million which will create or safeguard 2,500 jobs. Mr. Brian Wilson (Cunninghame, North) rose --
That example is matched by what has happened in the past 10 years when nearly 1,300 foreign investment projects, worth more than £7.5 billion, have gone to areas which have received regional selective assistance of more than £700 million. As a result 200,000 jobs have been created or safeguarded.
Mr. Wilson rose --
Mr. Newton : Something that exposes more clearly than anything else the claims that the Opposition have sought to make today is what has happened to spending on capital programmes of key importance to the environment. On roads, spending went down by 40 per cent. under Labour, but it has gone up by 30 per cent. under us. On railways, spending was static under Labour, but it has gone up by 15 per cent. under us. On hospitals, spending went down by nearly a third under Labour, but it has gone up by more than 40 per cent. under us. When the hon. Member for Dagenham talks of our references being all illusion and no substance, he fails to remember the record of the Labour Government, who were all words and no action. They never put their money where their mouths were because they never had the money to do it.
Question put , That the amendment be made :--
The House divided : Ayes 237, Noes 348.
Division No. 1] [10 pm
Abbott, Ms Diane
Adams, Allen (Paisley N)
Archer, Rt Hon Peter
Ashley, Rt Hon Jack
Banks, Tony (Newham NW)
Barnes, Harry (Derbyshire NE)
Beith, A. J.
Benn, Rt Hon Tony
Bennett, A. F. (D'nt'n & R'dish)
Bray, Dr Jeremy
Brown, Gordon (D'mline E)
Brown, Nicholas (Newcastle E)
Brown, Ron (Edinburgh Leith)
Bruce, Malcolm (Gordon)
Buckley, George J.
Campbell, Menzies (Fife NE)
Campbell, Ron (Blyth Valley)
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Clark, Dr David (S Shields)
Clarke, Tom (Monklands W)
Clwyd, Mrs Ann
Cook, Frank (Stockton N)
Cook, Robin (Livingston)
Cunningham, Dr John
Davies, Rt Hon Denzil (Llanelli)
Davies, Ron (Caerphilly)
Davis, Terry (B'ham Hodge H'l)
Duffy, A. E. P.