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House of Commons

Wednesday 19 April 1989

The House met at half-past Two o'clock

PRAYERS

[ Mr. Speaker-- in the Chair ]

Oral Answers to Questions

TRADE AND INDUSTRY

Information Technology

1. Mr. Clelland : To ask the Chancellor of the Duchy of Lancaster what was the balance of trade in information technology in 1979 and 1988.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton) : For the information technology and electronic manufacturing sector the United Kingdom had an adverse balance of trade in 1979 of £444 million. In 1987, the latest full year for which figures are available, the adverse balance for this sector was £2,226 million.

Mr. Clelland : Is that not a further example of the complete failure of the Government's industrial policy? Is it not time that the Chancellor of the Duchy and the Secretary of State got down to implementing a serious industrial policy for Britain? For example, will the right hon. Gentleman discuss with his right hon. and noble Friend the COCOM arrangements affecting trade with the Eastern bloc countries? If those arrangements were relaxed, would it not offer massive opportunities to British firms, mainly small firms, to export to Eastern bloc countries? Will the right hon. Gentleman do something about that?

Mr. Newton : In the light of the hon. Gentleman's opening remarks, I should point out that the deficit in information technology doubled between 1978 and 1979, deteriorated dramatically in the early 1980s, and since then has remained broadly stable. I invite the House to draw its own conclusions from that. On the rest of the hon. Gentleman's question, I draw attention to the many opportunities that British firms have taken and, perhaps most important of all, the obvious significance of the recent decision by one of the world's leading electronics manufacturers, Fujitsu, to come and do business in Britain.

Sir Ian Lloyd : In the light of the interesting report of the Select Committee on Trade and Industry on the subject, and in view of the fact that the rather regrettable deficit represents a large proportion of the total trade deficit, does my right hon. Friend consider the Government's response to the Select Committee report to be adequate?

Mr. Newton : My hon. Friend will be aware that my right hon. and noble Friend the Secretary of State is meeting the Select Committee next week to discuss that

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very matter. The Government have given their considered views in response to the Select Committee report. There are some differences of opinion, but well over half the Select Committee recommendations have been accepted or are already the subject of action.

Mr. Stott : Is the Minister aware that last year the trade deficit in electronics was £3.9 billion--an increase of 15 per cent. on the previous year and accounting for almost one third of the total massive balance of payments deficit? In the past year alone, the deficit in electronics, telecommunications and audio equipment has risen by a staggering 40 per cent. In the light of those disgraceful figures, is it not time that the right hon. Gentleman and his Department addressed themselves to the magnitude of the problem instead of contemptuously dismissing the recommendations of the Select Committee which at least attempted to point the Government in the right direction to rectify a quite disgraceful performance?

Mr. Newton : First, I hope that the hon. Gentleman will acknowledge that, despite the size of the absolute figure, the deficit is a relatively small proportion of a very large market and represents less than 15 per cent. of the United Kingdom market. Secondly, as I hope that I have made clear, there is no question whatever of the Government having dismissed the Select Committee recommendations contemptuously. Thirdly, the most important single thing that the Government can do is what they have done with conspicuous success--to make this country a more attractive place for people to invest in and develop their businesses.

Manufacturing Productivity

2. Mr. Roger King : To ask the Chancellor of the Duchy of Lancaster what has been the growth in manufacturing productivity since 1979 (a) in Britain and (b) in other major industrial countries.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : Between 1979 and the year to thethird quarter of 1988, the latest period for which full international comparisons are available, manufacturing productivity, as measured by output per person employed, grew by 42 per cent. in the United Kingdom. The comparable figure for Italy is 38 per cent., for the United States 37 per cent., for Japan 31 per cent., for Canada 28 per cent., for France 26 per cent. and for the Federal Republic of Germany 17 per cent.

Mr. King : I thank my hon. Friend for that reply. Does he agree that those are truly outstanding figures of achievement by British manufacturing industry? Does he also agree that many overseas companies investing in this country are finding that the levels of productivity achieved by their United Kingdom subsidiaries are at least equal and often greater than in their own countries? Is it not a fact that the chamber of commerce in Germany has identified that as a major factor in investing in Britain?

Mr. Forth : Yes. My hon. Friend is correct to pay tribute to British manufacturing industry for its enormous achievements over the past several years. He is also right to recognise that it is the environment and framework provided by the Government that has enabled that to happen, and we should welcome it. We look for further improvements, but I believe that inward investment in

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Britain, such as the recently announced investment by Toyota, Fujitsu and Bosch are examples of how the productivity record in Britain is now so good that it is attracting people here in enormous numbers.

Mr. Madden : Will the Minister confirm that the British textile industry is one of the industries that has notched up considerable increases in productivity? Will he also confirm that the men and women who have co-operated in achieving that increased productivity have not had a fair share of the increased wealth that they have produced? Is he aware that their low basic rates of pay have created an over-dependence on excessive overtime working and that it is time that the men and women in the textile industry who have contributed towards increased productivity received a fair and proper share of the increased wealth they have created?

Mr. Forth : Any judgment as to what constitutes a fair and proper share should be established between the trade unions, if there are any, and the employers in a particular industry. Employers will see that it is right that the terms and conditions they offer their work force have to be acceptable and sufficient so as to attract enough labour to the company to enable it to continue. We all recognise the great strides that have been made by our textiles industries and hope that they will continue, even against a background of difficult trading conditions.

Mrs. Maureen Hicks : Does my hon. Friend agree that the vast improvement in productivity under this Government, whereby the average British employee produces 50 per cent. more than his counterpart in Japan, cannot have failed to impress and attract the Japanese and encourage them to choose the United Kingdom for Toyota--and what better location is there than the midlands?

Mr. Forth : My hon. Friend is correct to pinpoint that aspect because it is important that we continue to set an atmosphere of success and productivity. In that way we shall continue to attract the type of investment that we have announced this week, which will provide employment for our people and continuing success in our economy. We welcome those developments and are confident that they will continue.

Company Fraud

3. Mr. Andrew MacKay : To ask the Chancellor of the Duchy of Lancaster what proposals he has for improving his Department's procedures in investigating those suspected of company frauds ; and if he will make a statement.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude) : In April last year the serious fraud office waestablished for the investigation and prosecution of serious and complex fraud. An increase in resources last year allocated to investigations by the Department of Trade and Industry has already resulted in such inquiries now being concluded in a much shorter time scale. In addition, following a review last year, the Companies Bill at present being considered in another place contains provisions which significantly improve procedures and extend powers for the investigation of companies.

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Mr. MacKay : Even so, does my hon. Friend agree that there is still a regrettably long delay before people are prosecuted for company fraud, which is damaging for all concerned, including those being tried? Does he also agree, as a one-time practising barrister, that one of the principal reasons why it takes so long is that the Director of Public Prosecutions and the Department find it difficult to obtain a conviction when there are jury trials? Does he agree that the House fluffed the opportunity to change to a judge and two laymen, as the Roskill committee recommended, and that that should be implemented as a matter of urgency in the next Session of Parliament?

Mr. Maude : On the time scale, my hon. Friend will be delighted to know that in the past few years the average time for a Companies Act investigation has fallen from three years and five months to 18 months despite a general increase in the complexity of the investigations. I am sure that the House will welcome that marked improvement.

My hon. Friend is right that for a few trials of exceptional complexity the Roskill Committee recommended trial by judge and assessors rather than by jury. That was the only significant recommendation that the Government did not accept and, as my hon. Friend said, it was highly contentious. We accepted a number of other principally procedural recommendations, which should make it easier for juries to deal with exceptionally difficult cases.

Mr. Rees : Will the Minister look into the allegation of procedural confusion between the serious fraud office, his Department, fraud departments in the police force, the Crown prosecution service and the Attorney-General? With the best will on earth, people are getting the procedures wrong because they are too complicated.

Mr. Maude : A degree of complexity is inevitable. I know of no country with as sophisticated a corporate structure as ours where it is possible for administrative matters of this kind to be dealt with in a neat and tidy way. Different functions have to be carried out, and prosecuting authorities must remain independent. I do not foresee much scope for streamlining administrative structures, but I foresee scope--we have worked extremely hard to achieve this--for ensuring that the processes are much swifter. We are having considerable success along those lines.

Mr. Nelson : Does my hon. Friend agree that part of the answer may lie not in increasing the powers of the serious fraud office or of his Department, but in companies and their boards considering more adequately activities which may not necessarily amount to fraud but are certainly not intended uses of shareholders' money? Whether it concerns loans or activities wholly unassociated with the activities of a company--[ Hon. Members :-- "The Tory party."]--and whoever the non-executive staff or directors of a company may be, I suggest that the House should reconsider the proposals of the late Sir Brandon Rhys Williams on audit committees, which would allow such activity because it would be separately reported.

Mr. Maude : I hear what my hon. Friend says. As my hon. Friend no doubt did, I had a number of fascinating discussions with our late friend Sir Brandon on the subject. I do not accept the argument that the simple existence of an audit committee solves all the problems. Directors currently have a duty to account to shareholders for the

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way in which shareholders' funds are used. Proper means are available for shareholders to hold directors to account for the way in which funds are used.

Mr. John Garrett : Why has not the inspector's report into the House of Fraser takeover been published, when no criminal proceedings are pending? If the Secretary of State is still awaiting the serious fraud office report, how is he able categorically to state that there have been wrongdoings?

Mr. Maude : It was perfectly clear from the outset, and it was stated in open court in the Court of Appeal. The hon. Gentleman should know enough about the world to understand that a case is not referred to the serious fraud office unless there is some sign of wrongdoing.

Consumer Rights

4. Mr. Martyn Jones : To ask the Chancellor of the Duchy of Lancaster if he now plans to bring forward legislation affecting consumer rights.

Mr. Forth : We intend to improve the protection given to consumers in a number of ways, including the introduction of regulations under the Consumer Protection Act 1987 on price indications at bureaux de change and changes to other legislation affecting consumers' interests.

Mr. Jones : I thank the Minister for that reply, but is not the consumer getting an increasingly worse deal under this Government--who are supposed to believe in consumer choice--as a result of electricity and water price rises and private greed being put before public water and food quality? Is it not time that the consumer received a fairer deal?

Mr. Forth : The consumer gets an excellent deal in the United Kingdom, partly as a result of the general productivity of manufacturing industry, to which reference was made earlier, partly as a result of competitiveness and choice in the market-place and partly--the hon. Gentleman was right to draw attention to this--as a result of excellent arrangements that have been put in place for the protection of consumers' interests in the process of privatising our major supply industries. All of that is ample evidence that consumers are extremely well served in the Britain of 1989.

Mr. Riddick : Is my hon. Friend aware that at this very moment the main clearing banks are holding a press conference at which they intend to make an announcement about the £50 limit on cheque guarantee cards? I am sure that he will join me in hoping that the banks will announce that the limit is to be increased and that each bank will be able to set its own limit. Does my hon. Friend agree that it is disgraceful that the banks have been allowed to carry on this cosy little cartel which has operated against the interests of the consumer? Will he join me in supporting any moves to see that the Office of Fair Trading investigates that kind of closed shop?

Mr. Forth : Such matters must primarily be matters for the banks themselves. It is for them to make a judgment on how best to deal with their consumers and customers in the market-place. Each of the banks must make its own judgment about how to respond to consumer pressure from time to time. I hope that they are prepared to take a

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realistic view of the matter and to examine a limit which has stood for a long time, but it must be a matter for the banks themselves and I have no intention of seeking to interfere.

Ms. Quin : Why is the Minister not proposing more fundamental improvements to the Consumer Protection Act 1987 so that, for example, agricultural produce is included and the unjustified exemptions in relation to product safety and liability are ended? Will the Minister also consider the introduction of environmental labelling such as exists in other countries so that the increasing number of consumers who are concerned about the environment can be sure that the products that they buy help the cause of environmental protection?

Mr. Forth : On her second visit to the Dispatch Box, the hon. Lady is being slightly mischievous in seeking to lead me into concerning myself with matters of food policy which she and the House know fall principally and rightly to my right hon. Friend the Minister of Agriculture, Fisheries and Food, who is more than capable of dealing with all matters of food protection and food hygiene which come before the House.

Mr. Harris : Can my hon. Friend tell the House whether he has undergone something of a conversion on the basic question of consumer rights in the short distance from his former place in the House to the Dispatch Box?

Mr. Forth : I am confident that when my hon. Friend studies whatever proposals I may bring before the House from time to time he will find himself fully able to support them.

Atlanta Sports Industries Ltd.

6. Mr. Hardy : To ask the Chancellor of the Duchy of Lancaster if, in the light of the problems of Atlanta Sports Industries Ltd. of Hellaby, near Rotherham, he will take urgent action to bring in amending regulations under patent law.

Mr. Forth : My Department is aware of this case, on which I have corresponded with the hon. Gentleman. As I understand the position, the problems of Atlanta Sports Industries Ltd. arose under copyright law, not patent law. The House will be aware that the Copyright, Designs and Patents Act 1988 has sought to remedy some of the weaknesses of the old law, but it cannot be retrospective. It is our intention that the detailed regulations will be in place by the summer.

Mr. Hardy : Does the Minister recognise that deficiencies in the law have caused serious and possibly increasing difficulties to that business and probably to others? After all our letters, does the Minister not recognise that a successful and enterprising business is being held back by the deficiencies of his Department, not least because the problem arose as a result of the company accepting the invitation of his Department to attend a particular trade fair?

Mr. Forth : I cannot accept that because a company has been helped by, in this case, the British Overseas Trade Board in attending a fair, the Government have any responsibility for transactions which may result from that. I believe that that is unreasonable. As the hon. Gentleman knows, most of the defects in the old law have been

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remedied by the new law, but we cannot and should not make it retrospective. Much though I regret the circumstances in which the company finds itself, it is not a matter for Government and that must remain our position.

European Regional Development Fund

7. Mr. Knox : To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.

Mr. Newton : The value of grants allocated to England from the European regional development fund since its inception in 1975 is £1, 602 million, out of a total United Kingdom allocation of £3,307 million. Since 1975 the United Kingdom has received a larger allocation from the European regional development fund than any other member state apart from Italy.

Mr. Knox : It is a large figure. Does my right hon. Friend agree that the grants are making an important contribution to strengthening the British economy, and is he satisfied that the British people are fully aware of the scale of the grants?

Mr. Newton : No, I suspect that people are not fully aware of the scale of the grants and I should be glad to join my hon. Friend in trying to improve their knowledge of that matter. It is encouraging that local authorities and others concerned with the areas that are eligible are increasingly aware of the grants and are being increasingly effective in preparing good plans and playing a key part in making sure that we get our due share of the money.

Mr. Campbell-Savours : Is the Minister satisfied that west Cumberland is getting its fair share of those European moneys? Is he aware that in west Cumberland we have 43,000 sq. ft. of empty new factory in the middle of an enterprise zone in an area of high unemployment? Will he help us to find someone to occupy that factory? How about a bit of the Japanese money which seems to be circulating as we seem to have very little Japanese investment in west Cumberland? Can we have some?

Mr. Newton : First, I welcome the warmth of the hon. Gentleman's implied welcome for some of the investment that has been going elsewhere. I am afraid that I am not in a position to direct Japanese companies, but I shall certainly draw their attention to the existence of one enthusiastic Member of Parliament.

Mr. Soames : Is my right hon. Friend aware that my constituency is the engine room of the British economy and that the infrastructure has consequently suffered greatly, especially due to the parsimony and greed of the Department of Transport? Will my right hon. Friend have a word with those responsible for the European regional development fund to see whether they can give us any assistance to build some better roads?

Mr. Newton : I must say that the prospect of the European Commission proposing the distribution of funds designed to help those who are having more difficult times for what my hon. Friend describes as the engine room of the British economy seems remote. I hope that my hon. Friend will allow me not to comment on his remarks about

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my right hon. Friend the Secretary of State for Transport, save to say, within the terms of collective responsibility, that I cannot quite agree with my hon. Friend.

Mrs. Clwyd : I am delighted that such opportunities exist in England, but will the Minister draw to the attention of the European regional development fund and to incoming industrialists the fact that my constituency of Cynon Valley, which contains the deprived town of Mountain Ash and 45,000 sq. ft. of factory space--2,000 sq. ft more than that in west Cumberland--would be delighted to have any industrialists come to our area, where one in four men are unemployed?

Mr. Newton : The hon. Lady will have noticed that I gave not just a figure for England but a much larger figure for the United Kingdom which, of course, includes the area in which the hon. Lady is interested. I will draw the attention of my right hon. Friend the Secretary of State for Wales to the hon. Lady's remarks, but his response may be that, in general, Wales has not been doing too badly recently.

Sir Hal Miller : Is my right hon. Friend aware that parts of Hereford and Worcestershire have recently been removed by the European Commission from the scope of objective 2 of the European regional development fund? In those circumstances, will he confirm that the parts which remain United Kingdom assisted areas will not suffer in any way in terms of applications for regional selective assistance from the Government?

Mr. Newton : I am aware of the point that my hon. Friend makes and I can confirm that the Commission's proposals for the distribution of objective 2 money have no effect on the existing entitlement to assisted area status in this country and the help that goes with it. There is no direct coincidence between the two kinds of area.

Mr. Caborn : What proportion of the regional funds to which the Minister has just referred has been applied under the additionality rule, on which I understand that the regional funds have been allocated? Will he assure the House that the new European regional development fund and the Community's new structural fund arrangements will be additional to the national spend on regional assistance?

Mr. Newton : The agreed aim of everybody involved is that the European regional development fund shall add to the amount of investment taking place in development areas. The hon. Gentleman will know as well as I do that there can be a great deal of argument--I will not pretend that there is not--about precisely what that means. I do not think that I can give a more specific answer, because the whole question of the allocation under what has recently been announced in defining the objective 2 areas depends on the submission of plans, not all of which have yet been submitted.

Industry-School Links

8. Mr. Hunter : To ask the Chancellor of the Duchy of Lancaster if he will make a further statement on his policy to increase links between industry and schools.

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Mr. Forth : One hundred and forty-six DTI advisers on enterprise and education are now working, and the education service has asked them to find around 100,000 pupil work experience places in their first year.

My Department is also now offering a teacher placement service, which is being managed on our behalf by Understanding British Industry. I am pleased to announce that we have appointed a director for the service--Mr. Peter Davies. More than 80 local bodies have already expressed interest in offering the service, and the first organisers are in place. Teachers will be able to choose between a number of high-quality briefing packs. This year provides the opportunity to test both these packs and the matching service, to ensure that it all runs smoothly. The teacher placement service has been developed from the successful pilot schemes run for my Department by UBI last year. I will place in the Library a copy of the UBI's report.

Mr. Hunter : While acknowledging that industry is responding positively to the need for closer contact with schools, may I ask my hon. Friend whether he accepts that more needs to be done by all interested parties? Is he aware that in areas of high job creation, such as Basingstoke, followed closely by Crawley, the shortage of skills is becoming yet more acute, and that every measure must be taken to ensure that our school leavers have the attitude and the aptitude to contribute positively to the industrial and economic life of the country?

Mr. Forth : My hon. Friend has summed up the problem extremely ably. We all recognise the increasing difficulty of skill shortages in many parts of the country. We have gone a long way towards recognising that this problem arises, as much as anything, from the schools. That is why the education and enterprise initiative seeks--and I believe that it has made a very good start--to address the problem of the lack of what might be called enterprise culture and understanding in many of our schools, which gives rise to a lack of proper career and educational counselling of youngsters. We hope that we shall see a lot of young people getting work experience and, more important, that we shall see teachers getting experience in the business world so that they may better advise and guide their public towards careers in the wealth-creating sector.

Mr. Skinner : I wonder whether part of one of these briefing packs that are to be issued to schools will contain information about fraud in the boardroom. Will it include, for instance, the city page of The Daily Telegraph of 15 April 1989, where it is reported that Blue Arrow loaned £25 million to de Savary and his gang ; that, under section 432 of the Companies Act, the shareholders should have been fully informed of that matter, but were not ; and that one of the directors of Blue Arrow is none other than the right hon. Member for Chingford (Mr. Tebbit)? Since that right hon. Member is supposed to represent those shareholders, he ought to be asking the Secretary of State to order an investigation, but as has is not here, I am doing it for him.

Mr. Forth : I welcome the hon. Gentleman's interest in the wealth- creating sector. I shall send him one of these packs, in the hope that it will increase his understanding of the process of wealth creation.

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Sir John Stokes : Is not this a serious matter? Would it not be helpful to school leavers if leading industrialists could be more articulate about the scope for getting things done in industry, compared with some other professions, which I shall not mention? Why are these industrial tycoons such shy violets? Why can they not tell us how they make money and how that benefits the country also?

Mr. Forth : My hon. Friend has made an important point. We hope that people in industry and business will be much more forthcoming and co- operative in trying to carry their message into schools and colleges so that young people may better understand how wealth is created and that it is only by the creation of wealth that we as a society can provide all the other services that we want to provide for our people.

Dr. Bray : Is the Minister aware that there is a clear understanding in industry that healthy links with schools depend on a parity of esteem and resources on the two sides, and that there is major concern that schools are simply not getting the teachers, particularly of science and mathematics, whom they need? Is he aware that, this year, applications were down by 25 per cent. for physics and by 16 per cent. for mathematics? Will the DTI lend its voice in support of industrialists who demand greater resources and esteem for teachers?

Mr. Forth : I am confident that my right hon. Friend the Secretary of State for Education and Science is aware of existing problems, and is tackling them with great vigour. The esteem in which the teaching profession is held is a matter for it. I hope that the conduct and dedication of teachers in future will help to increase the esteem in which they are held.

Mr. Ian Bruce : Does my hon. Friend agree that one of our biggest problems is schoolchildren's perception of engineering, inventing and manufacturing, and that we must sell the status of those occupations? Without them Britain will never rebuild its industrial and commercial strength. I am not one of those, and I am sure that the Minister is not, who say that Britain cannot manufacture products competitively. We must demonstrate to young people that engineering, inventing and manufacturing are the future for Britain.

Mr. Forth : I am grateful to my hon. Friend for making that point. I recently discussed those matters with the Engineering Council. It is acutely aware of the matter, and is mounting a positive and active campaign to carry the message to where it will be heard and understood. Our record in manufacturing productivity increases, to which reference has been made today, amply demonstrates that we still have the ability and the will to make improvements and to continue to make manufacturing and industry generally an attractive proposition for our young people.

Multi-Fibre Arrangement

9. Mr. Kirkwood : To ask the Chancellor of the Duchy of Lancaster if he will make a statement on Her Majesty's Government's policy on the future continuation of the multi-fibre arrangement within the current negotiations on the general agreement on tariffs and trade.

The Minister for Trade (Mr. Alan Clark) : We are committed by the GATT declaration at Punte del Este to

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formulate "modalities" for the eventual return of trade in textiles and clothing to strengthened GATT rules and disciplines.

The United Kingdom attaches the highest importance to the strengthening of GATT rules--in particular, a more effective safeguards clause to allow defensive action to be taken against sudden and damaging surges in imports, and better disciplines on unfair trade and on counterfeiting.

We look for a reduction in barriers to trade and better access to developing country markets, especially the newly industrialised economies. The committee acknowledged the contribution which all participants could make to the process of liberalisation, while preserving our existing rights under the present MFA.

Mr. Kirkwood : Having regard to recent developments in the GATT multilateral trade talks in Geneva and the importance of those developments to the knitwear industry in my constituency and in other areas, will the Minister guarantee that he will agree no further changes to the trading system for textiles and clothing unless he secures some of the aims that he mentioned, such as the effective prevention of dumping and subsidies, the GATT safeguard clause, and the dismantling of excessive trade barriers, which effectively block our exports in trade and clothing items?

Mr. Clark : I accept that all the factors that the hon. Gentleman mentioned must be taken into account in considering the degree to which the provisions of the multi-fibre arrangement are relaxed or dispensed with. Safeguards clauses are important. As many hon. Members with textile constituencies know, the existing mechanism is unsatisfactory. It is cumbersome and slow. I will ask my officials to look at possibilities for improvements and making better use of the provisions under article 19.

Mr. Brandon-Bravo : My hon. Friend will know that many hon. Members are legitimately concerned about the undeveloped world, but that same lobby also seeks completely unrestricted entry into this country of textiles from the undeveloped world. Such a policy could destroy tens of thousands of jobs in the Nottingham and east midlands area. I hope that we will not go down a road that will destroy those British jobs.

Mr. Clark : My hon. Friend is right. Paradoxically many of those jobs are held by former citizens of, or immigrants from the very countries for which the lobby that he identifies seeks unrestricted access.

Mr. Cryer : Will the Minister make a clear statement that the Government are committed to the renewal of the MFA? The Confederation of British Wool Textiles Ltd., the employers' organisation based in Bradford, is concerned that there has not been a clear and unambiguous statement, particularly as the industry is faced with a Community quota by 1992, instead of a quota for each member state, to make sure that there is a burden-sharing arrangement for the whole of the EEC. Emloyers are also fearful of increased water charges. The effect of those developments will be a loss of jobs. Will the Minister make a clear commitment to maintain the textile industry?

Mr. Clark : There is no commitment to maintain the MFA. The commitment is to formulate modalities for the eventual return of trade in textiles and clothing to

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strengthened GATT rules. That has been unchanged for the last 15 years since the MFA was promulgated. As I have said on the Floor of the House in debate on the subject, that return is dependent on a satisfactory solution of a very large number of other related problems.

Mr. Neil Hamilton : Does my hon. Friend agree that the commitment of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to Liberalism appears to be somewhat lukewarm in the attitude that he has evinced in his supplementary question? Does my hon. Friend also agree that arrangements such as the multi-fibre arrangement are an arbitrary restriction on consumer choice and on the export potential of Third world countries, and therefore contribute to their impoverishment? Why do we support free trade in every other area of the economy but not in this?

Mr. Clark : It is not for me to comment on the esoteric varieties of policy that the Liberal party adopts at any given moment. Consumers do not have a high purchasing power when they are out of work. There are large numbers of consumers who constantly seek advice about buying British goods. There is no special adjunct of faith that dictates and obliges that consumers should always buy the cheapest thing. They consider other factors in making a consumer choice.

Mr. Henderson : The Minister for Trade's personal commitment to the MFA is recognised in the House, and the arrangement is an important way of regulating trade between the far east and ourselves. Is he not also concerned about the growing trade gap in textiles with the EC, which is now £1.75 billion? What does he think has caused that gap? If he is concerned about it, what action will he take to try to narrow the gap?

Mr. Clark : That is a completely different subject from the multi- fibre arrangement. Trade with the EC is not governed by it. Competition, measured in terms of delivery, quality, price and so on, is the yardstick. There are elements where Government subsidy is present. Those are subject to Commission scrutiny. If any hon. Member advises me of cases where EC subsidies affect the balance of competition, we will immediately consider them closely.

New Businesses

10. Mr. Tredinnick : To ask the Chancellor of the Duchy of Lancaster how many new businesses have been established in Leicestershire each year since 1983 ; and if he will make a statement.

Mr. Maude : The numbers of new businesses registered for VAT in Leicestershire for each of the five years from 1983 to 1987 were respectively, 3,003, 2,885, 3,033, 2,961 and 3,347. During that period the total numbers of businesses registered has increased every year, growing by 13 per cent. overall.

Mr. Tredinnick : Is my hon. Friend aware that in Hinckley, the principal town in my constituency, demand for industrial land far outstrips supply, that the council has just had to release another 120 acres, and that 158 acres are currently under consideration by private developers? Does he agree that that demonstrates the effectiveness of

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Government policies and the prudent policies adopted by the Conservative-controlled Hinckley and Bosworth borough council?

Mr. Maude : My hon. Friend has it exactly right. Because my constituency borders that of my hon. Friend, I know from my local knowledge that there has been a considerable growth of economic activity in our area. New companies are doing well, employment has increased substantially and the prosperity of the area has grown markedly.

Mr. Ashby : Does my hon. Friend agree that an important element in industrial growth and in the growth of new industries is the infrastructure? Within my area of north-west Leicestershire, an excellent road system is being built, including the new M42-A42 road. However, an important element of that road system is correct and proper road signs so that people who want to go to the new industries in towns such as Coalville and Ashby know how to get there. Will my hon. Friend speak to the Secretary of State for Transport to ensure that there are properly marked road signs?

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