The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton) : The Government are making a substantialcontribution under their inner-city programmes to the London borough of Brent. In 1987-88, more than £16 million was made available, including more than £10 million for training and employment programmes and more than £6 million to help regenerate the local economy and improve the environment.
Mr. Livingstone : Does the Minister accept that those funds nowhere near compensate Brent's loss of rate support grant which is now about 40 per cent.? Since we in this House trade statistics all the time, will the Minister accept an invitation to come to the advice surgery which I hold each week-- [Interruption.] I am sorry that hon. Members laugh because last night at my surgery I saw 30 people, all of whom are suffering massive problems caused by the Government's cuts in housing programmes and in DHSS funding. Will the Minister come and see the human reality into which statistics are translated at my surgery?
Mr. Newton : I have to admit, I hope with due modesty, that I am more inclined to think that the London borough of Brent needs advice more than the Government need it. I am confirmed in that view by the fact that the hon. Gentleman has said that of all the Labour councils he knew, none was as incompently and insensitively managed as Brent. He might like to draw the attention of Brent council to the fact that it has not submitted audited grant claims under the urban programme since 1981-82, and that some £6 million of grant that it could have received under that programme remains unclaimed.
Mr. Ian Bruce : Will my right hon. Friend consider the amount of taxpayers' money that has gone into an area of the south-east which currently has so many vacancies and so much private industry capital investment? Surely that is a misuse of taxpayers' money when there are so many regions which have real unemployment problems and could do with that money. Does my right hon. Friend agree that that money would be better directed to areas other than Brent?
Mr. Newton : It is certainly the case that other areas of the country have very substantial needs--including the area that I visited yesterday, where the Government invest very large sums of money. However, we should not overlook the fact that there are serious problems in some pockets of the south.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins) : My right hon. and noble Friend the Secretary oState for Trade and Industry and I met the aerospace Ministers of France, the Federal Republic of Germany and Spain in Toulouse on 15 December 1988. Representatives of Airbus Industrie and the industrial partners of that consortium were also present.
Mr. Jack : In the course of those discussions, did my hon. Friend consider the prospects for Airbus Industrie, its organisation and finance up to the year 2000? Did he discuss prospects for orders from Braniff Airways? His answer will be of immense interest to aerospace workers in the north-west of England.
Mr. Atkins : My hon. Friend would be surprised if we had not discussed the prospects for Airbus Industrie. I am particularly pleased with the Braniff order, which takes up the original Pan Am order of 50 A320s, with an option on a further 50. That is exceptionally good news because they will use the V2500 international aero-engine thereby creating a great deal of work for many people in Barnoldswick in the constituency of my hon. Friend the Member for Pendle (Mr. Lee), the Under-Secretary of State for Employment, together with the work that has been done in our respective constituencies.
Mr. Mans : I thank my hon. Friend for his replies. Will he comment further upon the financial reorganisation of Airbus? Important parts of the A320 are made in Lancashire, close to my constituency, and there is clear concern about how aircraft costings are worked out within the Airbus organisation.
Mr. Atkins : We have devoted considerable time at ministerial and consortium member level to ensure the future of Airbus Industrie in the run -up to the turn of the century to provide an excellent aeroplane at the right price. We hope that it will continue to compete properly with Boeing throughout the world. Like myself, my hon. Friend has many constituents who are making parts of the A320. It is important to them that the aircraft continues to be a success, so the reorganisation of Airbus Industrie is extremely important. We shall keep our attention on it for the foreseeable future.
Mr. Cryer : Is the Minister satisfied that sufficient investment is being provided by the Government to firms such as Rolls-Royce to provide a range of engines that will compete with the whole range of production by, for example, GEC and Pratt and Whitney? Is it not disturbing
Column 319that, while we are prepared to invest £7 billion in the European fighter aircraft, it seems to be at the expense of the neglect of the civil aircraft industry? Is it not important to develop the range of engines and the Airbus range of planes to match Boeing, particularly when British Airways seems to be handing over the whole of its fleet to Boeing sales managers? Should not the Government try to persuade British Airways to have at least part of its fleet manufactured by Airbus?
Mr. Atkins : The hon. Gentleman raises many questions, as is his wont. The majority of British Airways airliners use Rolls-Royce engines. That is of benefit to Rolls-Royce employees throughout the country. In addition, Boeing aircraft have substantial British subcontract work--not least Shorts, for example, which does an enormous amount. All in all, there is a great commitment by Boeings to the British aerospace industry, and vice versa. Long may that be so.
Mr. Colvin : What decisions did the meeting to which my hon. Friend referred make about the recommendations of the independent committee that was set up to discuss the future of Airbus Industrie? The so-called committee of wise men recommended, first, a new streamlined supervisory board ; secondly, a new executive board ; and, thirdly, the appointment of a managing director and finance director. Those people will make Airbus Industrie more accountable to the people whom we represent--the taxpayers-- and make it easier for Airbus Industrie to agree terms with possible American partners on the next generation of long-haul aircraft.
Mr. Atkins : As the chairman of the Conservative Back Bench Committee on these matters, my hon. Friend speaks with great authority. He recently went to Toulouse to explore further developments. As I said earlier, we are working extremely hard to ensure that Airbus Industrie is reorganised so that there is a finance director. The first decision that we took last December was to appoint Dr. Friderichs as chairman of the supervisory board. We are pleased with him. He is a German gentleman with considerable expertise and experience. We have asked him to report to us as soon as he possibly can on how the rest of the board should be structured, with particular reference to a British finance director.
Mr. Dalyell : Could it be delicately suggested to them that, before retirement, they might like to follow the example of John Mogg and Colette Bowe, and put their versions of what happened in relation to Westland in January 1986 into a bank vault?
Mr. Newton : The matter has been fairly fully raised by the hon. Gentleman in the House over a very long period. I have nothing to add to the full accounts that the Prime Minister has given to the House.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : The inner-city task forces are central to the Government's action for cities programme. Their objectives are to secure more jobs for local people, to improve their employability, to encourage and facilitate local enterprise and to support environmental initiatives, which also contribute to these objectives. The Nottingham and Highfields (Leicester) task forces have both made sound progress towards achieving those aims. To date, they have committed £2.8 million to more than 100 projects which, among other things, are expected to create around 730 jobs and 2,230 training places for local people. A number of projects have also attracted additional support from the private sector and from other Government programmes.
Mr. Boswell : Bearing in mind that I too come from the east midlands, but represent a more rural constituency, will my hon. Friend accept that the news is equally welcome to us as it is to the inner cities? In view of the fact that 1989 is British Food and Farming Year and that good work is being done by the Country Trust, the Association of Agriculture and other organisations will my hon. Friend bear in mind the countryside's scope as an educational and social resource which can work alongside his project?
Mr. Forth : I praise my hon. Friend for his ingenuity in managing to bring his praiseworthy words about the countryside into a question about the inner-city task forces. In view of the type of constituency that he represents, I am glad that he appreciates the good work that has been done, and continues to be done, by the inner-city task forces. I am sure that everyone will appreciate that the benefits that come directly to people in the inner cities are a contribution to the improved well-being of society as a whole.
Mr. Vaz : In view of the Minister's cheerful explanation about the Highfields task force--which I dispute--does he think that it is appropriate at this stage to enable local authorities to play a more direct role in the operation of the inner-city task forces? Does he agree that now is the time to place the task forces under the direct control of local authorities? He will recall that when the matter has been raised on previous occasions, the Minister has said that he will come before the House with proposals to create outer estate task forces. Has progress been made on that?
Mr. Forth : I think that I can understand why the hon. Gentleman in particular has raised the question in that way. The sad truth is that whereas task forces have been able to work well with local authorities-- including Labour-controlled local authorities--in virtually every task force area, Leicester, his own local authority, has refused to co-operate with the task force and has made its work more difficult. It has obstructed its work and has, therefore, contributed to making it less effective than those in other cities. I hope that the hon. Gentleman's contribution will be to go back to his local authority and
Column 321urge it to take a more constructive approach, so that his constituents can benefit as much as those in other city areas.
Mr. Devlin : Does the Minister accept that similar problems have been experienced by Government projects in other parts of the country? In Middlesbrough, for example, there are problems with the Teesside development corporation, which is being obstructed in every way by Middlesbrough council, which has now said that it has not had consultation with the Teesside development corporation, having not asked for any. It has the support of the local Labour Member in this matter.
Mr. Forth : My hon. Friend has raised an important point and I am sure that it has not been lost on the local people. When they see what can be done when local authorities co-operate with organisations such as the task forces in bringing benefits to the local people, they will judge for themselves whether it is correct for the local authority to be helpful or unhelpful. There are many examples of areas where local authorities and the task forces work well together to the benefit of the people in the inner cities. As a result of what my hon. Friend has said and the question put by the hon. Member for Leicester, East (Mr. Vaz), the point will be noted by the local electorate in local elections.
Mr. Alton : Although I confirm what the Minister said about the successful role that the task forces can play in the regeneration of an economy, does he accept that there is something in the comments of the hon. Member for Leicester, East (Mr. Vaz) about the lack of accountability of some task forces? Does the Minister recognise that some people perceive the task force as a gauleiter in carpet slippers? The task forces should be more accountable to the local community and should contain a greater local element when they are established.
Mr. Forth : Of course, I recognise the hon. Gentleman's point, but it is only fair to point out that great progress has been made over many decades, for example, by the use of such devices as new town development corporations, one of which was very successful in my own constituency, and which, by the very fact that they are not elected, can make progress in a way in which elected authorities cannot. The key is to get co-operation between the elected representatives in local government and the task forces for as long as they are operating in particular areas. At best, that should give us a balance between the effectiveness of the task force and the accountability of the local authority.
Mr. Newton : The Government are planning fundamental reform of restrictive trade practices legislation. Proposals were outlined in my Department's Green Paper published in March 1988 and have received widespread support. We intend to move to a system which is more closely aligned to European Community law and under which agreements with anti- competitive effects would be prohibited.
Mr. French : When reaching his decision on the action to take, will my right hon. Friend consider extending the powers of the Office of Fair Trading so that it may consider restrictive practices as they affect the location of pharmacies and the competitive pricing of pharmaceutical products?
Mr. Newton : My hon. Friend will know--I know this from former ministerial responsibilities--that the provisions governing the location of pharmacies, including the work of the rural dispensing committee, operate under other legislation. However, I shall certainly draw what my hon. Friend has said to the attention of my right hon. and learned Friend the Secretary of State for Health.
Sir Peter Emery : I do not think that what I am about to say is sub judice, Mr. Speaker. I was going to ask whether we can have an assurance that the Minister's decision will be made public as soon as possible?
Mr. Newton : You, Mr. Speaker, made the point that I must make. Although I am aware that there is considerable interest in that matter, I am also aware that my right hon. and noble Friend lodged an appeal yesterday against the court decisions which are being considered today by the Court of Appeal. My hon. Friend will understand that in those circumstances there is nothing that I can say.
Mr. Austin Mitchell : When the Minister settles down to decide whether he has a policy on restrictive trade practices, will he do something about the estate agents who have grown so fat on the Government's housing bubble, or is he just waiting for his fat friend the Chancellor to solve the problem for him by killing the housing market altogether with the insane escalation of interest rates?
Mr. Newton : The position on estate agents is that my hon. Friend the Minister for Industry and Consumer Affairs will shortly complete what have been extensive discussions with trade bodies. He will then announce our conclusions which will, of course, take account of the views expressed by the Director-General of Fair Trading in his recently published review of the Estate Agents Act 1979. I am sure that my hon. Friend, who is well known for considering all views, will take account of those expressed by the hon. Gentleman.
The Minister for Trade (Mr. Alan Clark) : United Kingdom-Tunisian trade relations are good. Provisional trade figures for January-November 1988 show United Kingdom exports of just under £29 million and imports of £34 million.
Mr. Butler : Is my hon. Friend aware that that friendly country, which is liberalising its economy and privatising, has traditionally turned its face towards France and the Francophone world but now wishes to expand its horizons, and presents considerable opportunities to English exporters should they take the chance?
Mr. Clark : I am glad that my hon. Friend has made that point. I hope to visit Tunisia in March with a high-level CBI mission to encourage further development of trade between our two countries. Last March I opened the "Tunis Week" exhibition, which was well attended and aroused a great deal of interest, and I hope to follow up in my visit.
Mr. Brown : As Tunisia has virtually a common market with Libya, would it not make sense to at least have a dialogue with Colonel Gadaffi's Government about the possibility of better relations between Britain and Libya?
Mr. Clark : In my conversations with distinguished members of the Tunisian Government and Corps Diplomatique, I have found that they express substantial reservations about their relationship with Colonel Gadaffi. I do not know what the hon. Gentleman means by "common market", but certainly Tunisia does not suffer from any of the restraints on our trade which we presently and properly impose on trade with Libya.
Mr. Hanley : Does my hon. Friend agree that the political situation in Tunisia with President Ben Ali is more stable than for many years? Following on the excellent aid provision that has been given to the Maghreb region by the United Kingdom, does my hon. Friend agree that we should take advantage of the good will which is being established between Tunisia and Britain?
Mr. Clark : Yes, indeed. The political regime has entirely altered and one of the objectives of the Tunisian Government and business leaders presently is to privatise the public sector of its economy. To that end a mission will be visiting the United Kingdom. It will also be visiting Russia. I hope that then we shall be able to tell it how to carry that out profitably and efficiently.
10. Mr. Harry Greenway : To ask the Chancellor of the Duchy of Lancaster what were the levels of investment and profitability in manufacturing industry (a) in the past year, (b) five years ago, (c) 10 years ago, and (d) 15 years ago ; and if he will make a statement.
Mr. Atkins : The figures on profitability are as follows : In 1972 the net rate of return was 8.1 per cent. ; in 1977--5.7 per cent. ; in 1982 --4 per cent. ; in 1987, the latest year for which figures are available, it was 9.2 per cent.
Investment in 1972 was £8.8 billion ; in 1977, £9.8 billion ; in 1982, £7.6 billion ; and in 1987, £10.1 billion.
Mr. Greenway : In each case are not those excellent figures and do they not give the lie to the Labour party's constant assertion that there is under-investment in manufacturing industry with the consequent loss of jobs? Is it not time for us to put that back down the throats of the Labour party? Will my hon. Friend say what the future prospects are for profitability and investment in British industry? Will he include in that answer the level of investment by the Japanese and what safeguards there are for our future investment levels to be maintained alongside this?
Mr. Atkins : There is every sign that the trends to which I have referred, which so eloquently speak of the success of the Government's economic policy, will continue. The Department of Trade and Industry does a regular survey of investment intentions. The most recent one in December showed that the figure for 1988 would be 12 per cent.--a record level of investment--11 per cent. in 1989 and yet further increases in 1990. That has been confirmed by the CBI, which has done a similar investigation. Investment intentions remain extremely buoyant.
I cannot give my hon. Friend details of Japanese investment, although I shall endeavour to give him that information. However, Japan invests more in this country than in any other country, other than the United States.
Mr. Kennedy : Does the Minister agree that obviously the level of investment and profitability in our manufacturing industry is heavily influenced by and dependent upon its ability to sell abroad? In that context, does he agree that there are rather worrying signs from those about to occupy senior positions within the new Bush Administration, as well as from the rather protectionist sentiments which are developing on Capitol hill at the moment that the Americans are wrongly perceiving 1992 and the single European market as some kind of "fortress Europe" mentality on the part of this country and our European partners? Will the Minister say what efforts the Government are making to disabuse the Americans of that misguided notion and to preserve and strengthen our manufacturing export market as a result?
Mr. Atkins : The hon. Gentleman is right to draw attention to that concern. I am cautious about predicting what a new Administration yet to be inaugurated will do, but my noble Friend the Secretary of State and I, let alone Ministers in other Departments, have spent a lot of time in the United States making sure that it realises that the concept of a fortress Europe is not one that we see as the future. The United States has a great interest in ensuring that its substantial and welcome investment in Britain will benefit it here just as much as it will in its own country.
Mr. Batiste : Will my hon. Friend confirm that employees of profitable companies should rightly expect to share in the increase of profits of those companies, but that their improved prospects today can be maintained only if increased earnings come out of improved productivity and lower unit labour costs?
Mrs. Mahon : May I draw the Minister's attention to a press release, issued earlier this week by the textile, hosiery and clothing industries, which talks about the bad agreement that we have just made with China? What does the Minister have to say to people in my constituency
Column 325whose jobs are threatened--as it says in the press release--by that agreement? I should add that I do not think that any of those people are members of the Labour party.
Mr. Atkins : The hon. Lady has raised a point which, as she knows, is as much a matter for the Commission as for Britain. I shall look into the detail of the matter and write to her. I hope that I shall be able to reassure her.
Mr. Roger King : Is my hon. Friend aware that businesses need an open world market in order to remain profitable and to increase their profitability? Will he join me in expressing anxiety about the United States' attitude towards the Range Rover product manufactured in Britain on which penal import duties are due to be levied as a result of it being restructured in the United States' market place? That will have a substantial effect on the work people in the west midlands.
Mr. Atkins : My hon. Friend makes an excellent point, which is troubling us at the moment. My hon. Friend the Minister for Trade has the matter in hand and, in his own inimitable fashion, will take what action he believes to be necessary to ensure that that extremely popular and first- rate vehicle continues to sell in large numbers in the United States.
Dr. Bray : May I suggest that the Under-Secretary checks his figures? Is he aware that by their neglect and manipulation of statistics about which the Government do not care, they have lost credibility on those about which they do care and which have substantial effects in the market? Is he aware that of some £9 billion increase in profits since 1979, only some £400 million has gone into increased investment in manufacturing industry, and that the supply side response of manufacturing industry to improve its competitiveness is completely inadequate to remedy the enormous gap in the current balance of payments? May I suggest that the Department of Trade and Industry thinks again?
Mr. Atkins : The hon. Gentleman has confused himself with his figures, so he would not expect me to follow him down that winding path. The figures that I have given are absolutely right and we are proud of the success that they represent.
Mr. Redwood : As the most recent investment figures include substantial sums on car and video assembly capacity in Britain and as there are now moves to tax such products or to block their export to other member countries in the EC, can my hon. Friend assure me that the Government will try to roll back those protectionist moves in order to encourage more inward investment in the United Kingdom in such assembly activity?
Mr. Atkins : We spend a lot of time encouraging inward investment in Britain, although it is such a popular place to come to that many countries want to invest here anyway. My hon. Friend the Minister of Trade has heard my hon. Friend's comments and I am sure that he will enjoy pursuing this, as he does every other issue.
Mr. Flynn : Will the Government take action to ensure that Inmos remains British, either independently or as part of a larger British group? Does the Minister agree that the future of Inmos looks rosy in the short term under any circumstances because of the great strength of its products and its recent brilliant success? Does he further agree that if it is part of a state-owned company, SGS-Thomson, there are grave fears that future decisions on investment will be taken on national rather than commercial grounds? Will he guarantee that the British Government's involvement and investment in, and promotion of, Inmos will be at least as strong as such action by the French, Italian and American Governments in respect of their semi-conductor industries?
Mr. Forth : I am delighted that the hon. Gentleman has joined us in acknowledging that under state ownership a company's future is uncertain and in saying that he would prefer the company to remain in private ownership. I welcome his new view, which very much reflects those that we have adopted.
As the hon. Gentleman well knows--my hon. Friend the Parliamentary Under- Secretary of State for Corporate Affairs wrote to him recently--the matter is under consideration by the Director General of Fair Trading. Until he determines his views it would be improper for us to take a view.
Mr. Oppenheim : Is it not true that the British and European semi- conductor industries already get a great deal of help in the form of high tariffs, substantial Government subsidies and now, potentially, European anti-dumping duties? Do not these protectionist instruments only compound the inefficiencies of the British and European industries and disadvantage the industrial consumers of semi-conductors, making it far less likely that the assemblers of electronic products can sell them on the world market?
Mr. Forth : Yes. My hon. Friend, who has considerable and respected knowledge of these matters, has put his finger on the key, which is that everyone will prosper in a freely trading global market in which everyone benefits from the best products available in it. To look at the issue in a narrow, nationalist or protectionist way does no service to the wealth- creating sector.
Mr. John Garrett : Does the Minister agree that the Government are likely to allow the extinction of the domestically owned semi-conductor industry, with the likelihood of the control of Inmos moving abroad, together with 600 graduates, representing the largest pool of talent in this area in the world? A similar threat hangs over Plessey. Does the hon. Gentleman accept that we cannot maintain our place in the world market for information technology without a base of domestically owned semi-conductor manufacturing? Is this not another example of the vacuum where the Government's national information technology strategy should be?
Column 327matters that may be before the Director General of Fair Trading, or which may come before my right hon. and noble Friend the Secretary of State.
In principle, we believe that a free flow of capital, information and goods across national boundaries is to the benefit of consumers and producers alike, and we shall continue to encourage such moves.
Mr. Newton : I did not do so on the occasion to which I referred, but it is certainly true that a 1 per cent. increase in interest rates, even if sustained for a full year, puts up industry's costs by a good deal less than a 1 per cent. increase in wage settlements. The whole of industry needs to bear that in mind.
Mr. Corbett : Did the Secretary of State commend to the CBI the Church of England "Action in the City" programme and appeal in inner-city areas such as Birmingham heartlands? Will he encourage the CBI and its members to donate generously ; will he also chip in a few quid himself?
Mr. Newton : As it happens, we have chipped in what the hon. Gentleman is pleased to call a few quid, to the extent of several hundred thousand pounds, to various Church initiatives in this area. I met the Bishop of Willesden and the Archbishop of Canterbury's team on this matter shortly before Christmas, with a view to building on the growing co- operation between the Church's aims and the Government's aims and policies in this area.
Mr. Burt : I am sure that when my right hon. Friend last met the CBI he discussed the problems of congestion, rising land values and general unpleasantness in the south-east, and encouraged any industry worth its salt and thinking of its future to move north--particularly to the north- west, and more specifically to the metropolitan borough of Bury.
When he next sees the CBI will he encourage member firms to move to the north-west? I am sure that he will welcome the record year that north-west industry enjoyed last year, not just with firms moving north but the resurgence of traditional manufacturing industry and the growth of small firms. Is it not time to move north?
Mr. Newton : The purpose of my speech to the CBI conference was to draw its attention to the opportunities that exist and to reinforce what is already happening. My most recent visits earlier this week were slightly further east than the places mentioned by my hon. Friend. I went to Sheffield on Monday and to Newcastle and Sunderland