House of Commons Hansard Debates for 15 Feb 1989

Mr. Charles Wardle : Does not one important key for reducing the trade deficit and making British goods more competitive rest in the hands of employers and employees throughout the country in this year's wage round and all future pay settlements?

Mr. Clark : It is a factor certainly, but I am never comfortable arguing that work people should be paid less in the interests of some wider objective. If their productivity and the quality of the goods that they produce measure up, they have every right to negotiate separately and independently with their employers on the appropriate rate.

Ms. Armstrong : Is it not a fact that one of the major problems that has led to our incredible balance of payments deficit is that we have lost the capacity to manufacture in many areas, and that areas such as mine, which used to be the powerhouse of the country where we could manufacture and produce products that were sold all over the world, have now lost the capacity to do that? The Government ought to be involved in increasing investment in manufacturing particularly in areas such as the north where we do it well.

Mr. Clark : Government involvement in manufacturing is the last thing that the manufacturing industry wants. In fact, there is absolutely no reason why something should not be made from scratch, providing that it is competitive and is of the required quality. One has only to look at the production of Nissan cars in a green field site to see that if the product is competitive and meets a demand, it will immediately take a piece of the market.

Productivity

11. Mr. Michael Brown : To ask the Chancellor of the Duchy of Lancaster what are the latest figures he has for the productivity levels in manufacturing industry.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : Productivity in manufacturing industry, as measured by

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output per person employed, in the three months to November 1988 averaged 121.4, based on 1985 equal to 100. Productivity has grown by 7 per cent. in the last year and by 52 per cent. since 1979.

Mr. Brown : In view of that answer, will my hon. Friend confirm that Britain now has the fastest-growing manufacturing output? Will he speculate on how that compares with where Britain was in the two decades prior to 1979?

Mr. Forth : My hon. Friend, with his usual perspicacity, has put his finger on the comparison. The truth is that productivity in this country is growing and has been growing at record levels. We are now outstripping all our major competitors. My hon. Friend is right to draw attention to the fact that in the 1960s and 1970s the position was quite the reverse--we were then a picture of miserable failure. We are now a gigantic success.

Mr. Haynes : When will the Minister realise that in my constituency the hosiery and knitwear industry could increase its productivity if the Government did something about the massive imports? Those imports are crucifying that industry. When will the Government do something about it?

Mr. Forth : I do not know when the hon. Gentleman last consulted the consumers in his constituency on whether they would appreciate his removal of their freedom of choice in what they purchase. The hon. Gentleman appears to be suggesting that he would arbitrarily deny people the right to choose freely what they purchase. It is a matter of some regret that the hon. Gentleman undervalues the contribution being made by the workers and management in his constituency in their efforts to make their industry more competitive.

Mr. Devlin : Will the Minister confirm that in the north of England- -where there is a significant part of our manufacturing industry-- confidence is at an all-time high? The productivity gains that he has mentioned have been higher there than the national average.

Mr. Forth : My hon. Friend is correct. My colleagues and I often visit companies in the north and throughout the country and we find nothing but confidence in the present and in the future. I believe that that is something from which we should take great heart, and we can be confident that it will continue.

Post Office Counters

12. Mr. Steel : To ask the Chancellor of the Duchy of Lancaster whether, following the recommendations of the Monopolies and Mergers Commission in its report, "Post Office Counter Services", he will ensure that the board of Post Office Counters has received prior commitments from its major clients that its services will continue to be used by them before a multi-million pound investment is made in automating the network ; and what are the implications of the absence of such long-term commitment for this investment.

Mr. Newton : The Post Office will conduct a comprehensive financial appraisal of the proposed investment before deciding whether to seek the Government's approval to proceed. The appraisal will be

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based on a full evaluation of a pilot scheme, to begin later this year, and will take into account the possible future use of counter services by existing major clients.

Mr. Steel : I appreciate all that, but surely the point is that the Monopolies and Mergers Commission was quite explicit in saying that we must safeguard this public investment by ensuring that, if automation goes ahead, the DSS, the DVLC at Swansea and other users will guarantee that they will use it. Otherwise, public money will be wasted. Why has that recommendation not been accepted by the Post Office?

Mr. Newton : For the reasons set out clearly in the Post Office's response to the recommendations of the Monopolies and Mergers Commission it thinks that it is entirely right to seek the maximum possible commitment from potential customers, but to fall short of the absolute prior commitment of the kind that the right hon. Gentleman suggested. Frankly, I believe that few businesses would not wish to take account of customers' intentions as declared in investment decisions, but they would not regard firm commitments as an absolute sine quo non before making any such decisions.

Mr. Soames : I note what my right hon. Friend has said, but does he agree that the Post Office counter services are by and large quite disgraceful? It is ridiculous that members of the general public should be kept waiting in some cases for hours at the only times when they are able to get to the Post Office to get what they need. Will my right hon. Friend assure the House that, whatever the results of the investigation, he will ensure that services are greatly improved?

Mr. Newton : I note what my hon. Friend said. The Post Office is seeking ways of improving the efficiency of its services, including, as my hon. Friend will doubtless be aware, proposals for the future involving a number of offices being organised in a different way. I will certainly encourage the Post Office to pursue every way in which better services can be provided.

Mr. Henderson : Does the Minister recognise that since major changes have taken place in financial services in recent years, Post Office Counter Services has been operating with its hands tied behind its back? Does the Minister agree that if the Government want Post Office Counter Services to become more competitive in the high street marketplace, he should authorise an expansion of services to include such things as travel, financial services and ticket agency services?

Mr. Newton : We are prepared to look at specific proposals, if they make sense, on a case-by-case basis. The hon. Gentleman will probably be aware that I have recently agreed to the part of the Post Office dealing with television licensing taking on subscription management services in relation to satellite broadcasting because that was a sensible proposal. In general terms, one of the important things is the proposal to which the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) referred in his initial question, and we have authorised the pilot scheme for the automation of some aspects of counter services.

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Science Parks

13. Mr. Stern : To ask the Chancellor of the Duchy of Lancaster if he has any proposals to further the establishment and development of science parks.

Mr. Forth : Science parks are already well established and growing fast in the United Kingdom. There are now nearly 40, with the likelihood of five more this year. Some help is available in the assisted areas for the development of science parks from Government development agencies.

Mr. Stern : Does my hon. Friend agree that one of the advantages of such parks is the symbiosis they create with existing and new high technology industry in the area? Will my hon. Friend join me in welcoming the establishment of Emersons Green science park just outside Bristol, which will not only benefit existing high technology industry but will draw fresh industry to the area?

Mr. Forth : My hon. Friend is correct. Science parks are a success story of considerable magnitude up and down the country. He is right in welcoming the prospect of a science park near his constituency so that people in the area will be able to enjoy the benefits that have been enjoyed by others already associated with science parks.

Mr. David Shaw : Does my hon. Friend have any information on the number of jobs that have been created directly or indirectly by science parks? Can he compare those figures with the position between 1974 and 1979?

Mr. Forth : It is difficult to give my hon. Friend an exact figure, because the nature of employment in science parks is variable and difficult to define. I will endeavour to give my hon. Friend an accurate figure if he will allow me to write to him. It is evident to everybody that the science park venture has helped to combine education institutions and the world of business to bring us the best hope for growth in employment in the future.

Trade Balance

14. Mr. Teddy Taylor : To ask the Chancellor of the Duchy of Lancaster what was the surplus or deficit in trade in manufactured goods with the European Economic Community and the rest of the world, respectively, over the most recent 12-month period for which figures are available.

Mr. Alan Clark : In 1988 United Kingdom trade in manufactures was in deficit by £12 billion with the European Community and by £2 billion with the rest of the world.

Mr. Taylor : As the deficit with the EEC has increased steadily in every year since 1973 to its present horrific level and as that puts at risk the Government's successful economic policies, does the Minister agree that there is a case for a special detailed inquiry into what is going wrong in our trade with the EEC, whether it is non-tariff protection or something else? Does he agree that in view of the December 1988 figures, which were the worst in recorded history, with £3 of goods coming in for every £2 going out, there might be a case for replanning the Channel tunnel to have two tunnels going in one direction and one in the other?

Mr. Clark : Over the years I have got into enough trouble by commenting on the Channel tunnel to prevent

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me from doing so on the Floor of the House. The circumstances to which my hon. Friend has drawn attention cannot persist indefinitely. After 1992 the imbalances in that form will no longer exist. There is a school of thought which argues that after 1992 and the completion of the internal market, deficits will disappear in that form and the imbalances will be simply regional and sectoral.

Mr. James Lamond : Does the Minister understand that we know that he does not believe those views any more than we do? How do these disastrous figures square with the rosy picture that has just been painted about the alleged confidence of manufacturing employers in this country? When the Parliamentary Under-Secretary of State for Industry and Consumer Affairs says that his Department has received nothing but views of confidence from manufacturers, should not the hon. Gentleman tell him of the views he has received from textile manufacturers who, despite the increases in productivity and the investment that they have made, now find that this Government are the worst they have ever had to work under?

Mr. Clark : The hon. Gentleman does not do justice to the situation. Almost half our manufactured exports go to the Community, which is by far our largest single market. The level of confidence in the United Kingdom's economy and the amount of internal investment from, for example, the United States and Japan that it is drawing in, continuously--and now sharply-- raises our level of manufacturing. It is probable--indeed, my right hon. Friend the Chancellor of the Exchequer expressed this opinion as recently as in the Autumn Statement--that this deficit will diminish over the medium term.

Mr. Churchill : Is my hon. Friend aware that, whereas private enterprise, particularly in the north of England, is well advanced in plans to take advantage of the opportunities afforded by 1992, the Government seem to have a long way to go yet in that direction? Adequate infrastructure should be in place by the time the Channel tunnel opens, so that we can run high-speed freight trains and passenger services. We also need an adequate motorway system to enable us to enjoy, and capitalise on, the benefits offered by the single European market. Will my hon. Friend have a word with our right hon. Friend the Secretary of State for Transport to ensure that proper progress is made?

Mr. Clark : I shall do so, but my right hon. Friend answers questions on this topic from time to time and I suggest that my hon. Friend addresses his questions directly to him.

Manufacturing Investment

15. Mr. Pike : To ask the Chancellor of the Duchy of Lancaster in which regions there is a lower investment in constant terms in manufacturing industry in the latest year for which figures are available than in 1979.

Mr. Atkins : The latest available regional data are for 1986. In real terms, capital expenditure in manufacturing industry in 1986 was lower than in 1979 for all regions in the United Kingdom, largely due to the world recession in

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the early 1980s. Since 1986, manufacturing investment in the country as a whole has risen sharply, and is predicted to rise even faster.

Mr. Pike : Will the Minister recognise that, in the north-west region, investment in manufacturing industry for the period he mentioned was down 38 per cent., jobs in manufacturing industries were down 38 per cent. and output from manufacturing industries was down 18 per cent.? Are not those figures appalling for a key manufacturing region of the nation? Will we not further suffer as a result of the Channel tunnel and 1992, unless the Government act positively to assist our manufacturing regions?

Mr. Atkins : As a north-west Member, I resent most strongly the hon. Gentleman's attempt to do down the north-west when he knows as well as I that the facts on the ground, in his and my constituencies, and in those represented by my hon. Friends, give the lie to what he suggests. Manufacturing investment and productivity are at an all-time high, and the gap caused by the recession in 1981-82 meant that any delay in the increase was to be expected. He knows as well as I just how good the position is.

Mr. Thurnham : Does my hon. Friend welcome the fact that once small manufacturers in the regions--such as Reebok in Bolton--have succeeded in developing into large international trading concerns and have brought great wealth to this country? Will he do all that he can to assist international companies with headquarters in the regions, instead of listening to the small-minded views of Opposition Members?

Mr. Atkins : My hon. Friend, along with many other Conservative Members who represent northern constituencies, spends as much time as I do trying to encourage people to come to our region, to build headquarters of companies and to invest there. The activities of Labour Members in doing down our region do not help.

Internal Market

16. Mr. Jim Marshall : To ask the Chancellor of the Duchy of Lancaster how many standards set under the development of the internal market are based on British standards ; and how many are based on (a) German standards, (b) French standards and (c) those of other European Community countries.

Mr. Maude : The European standards bodies, Cen and Cenelec, adopt wherever appropriate agreed international standards. Very few European standards are based on an existing standard of any one Community country.

Mr. Marshall : Does the Minister accept that there is concern in the United Kingdom that other European countries appear to have more success in influencing EEC standards and that this can have significant consequences for industrial costs? Will he try with greater urgency to ensure that at least one EEC standard is based on a United Kingdom standard?

Mr. Maude : One European standard based on an existing standard is, for example, the commonly used BS 5750 on quality assurance. I am aware that there is concern about this issue and that it is, as the hon. Member says, an

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issue which matters. Industry in this country has not taken the standard-setting process as seriously as it should, and certainly not as seriously as it has been taken by industry in Germany. But in the last year, since we have been urging industry in this country to do more in this respect--and it lies with industry and not with the Government to do it--the situation has improved greatly. But I join the hon. Gentleman in urging particularly those in manufacturing industry to take this matter extremely seriously and to attach as high priority to it as does industry in Germany.

Mr. Dykes : Now that we have been involved with the EEC for nearly 16 years and are gradually getting used to working constructively with our foreign friends at long last, is the Minister satisfied with the developing regime for origin marks and trade marks in the Community on the basis of being voluntary and not compulsory in each country, but with an agreed EC standard if necessary?

Mr. Maude : A directive and regulations on Community trade marks are being negotiated. Those will have the sort of beneficial effect to which my hon. Friend refers and will, at the same time, reduce costs to business and make life easier for it.

Mr. Gould : What confidence can British industry have in a Government who have themselves failed lamentably to make adequate preparations for 1992? Is the political briefing prepared by the Minister's civil servants in response to the Labour party's analysis of the Giacconi report the best they can do, and why were civil servants involved in that exercise in the first place?

Mr. Maude : The hon. Gentleman has so little of substance to offer that he has to make use of that tawdry little effort. I sympathise with him, because he has no experience of Government and has so few colleagues with such experience, that he will not understand that it is not only proper for civil servants, but that it is their duty, to brief Ministers on any report that comments on Government policy. The document to which I believe he

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refers mentioned two reports about 1992. One was by the London business school and was rather good. The other was on behalf of the Labour party and was rather bad.

Cars

17. Mr. Adley : To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the implications for the most recently published trade statistics of the practice of United States-owned car manufacturers importing into the United Kingdom cars assembled outwith the United Kingdom.

Mr. Alan Clark : The complex pattern of trade between national plants is subject to so many variables as to rob any estimate based thereon of tangible significance. [Interruption.] I must draw the attention of the House to the fact that I wrote that personally.

Mr. Adley : Will my hon. Friend accept that that is intellectually interesting but politically unsatisfactory? Does he agree that the label "British", as applied, say, to cars manufactured by American-owned companies and assembled in Belgium, Spain or West Germany, is inaccurate? Does he agree also that, for example, Japanese cars, which are also foreign -owned, are at least being built in this country? In view of the constant advice to "Buy British", is it not important that the statistics that he does not know should be known so that we may use the phrase "Buy British" to mean something?

Mr. Clark : There is a lot in what my hon. Friend says. The mass manufacturers have a comprehensive inter-change of component supply which entails some confusion. The engines for the Fords that count in the German production total are made in the United Kingdom, just as the engines for the Vauxhalls and Peugeots that count in the United Kingdom production total are made in Germany or in France. It depends how narrowly my hon. Friend wishes to draw his definition. It might mean that the British consumer, if he really wanted to buy British, would be left with a choice of only Jaguar, Range Rover or Morgan.

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