[Lords] Read a Second time, and committed.
Orders for Second Reading read.
To be read a Second time tomorrow.
The Chancellor of the Duchy of Lancaster (Mr. Anthony Newton) : The Government's policy is that Civil Service work should be located where it can be done most cost- effectively and provide the best service to the public, taking account also of the Government's urban and regional policies.
The Department has some 12,670 staff in post, of whom just over half work outside central London. A further 650 Patents Office posts will move to Newport by 1991, and the location of a number of other units is under review.
Mr. Sayeed : I thank my right hon. Friend for that answer. Is the willingness to move outside the south-west evenly distributed across the Civil Service grades or have middle-aged middle management demonstrated greater reluctance to move? If so, what are the implications of that?
Mr. Newton : The implications of any differences, whether described by grades or individuals, are that they must be taken into account when considering both whether a move should take place and the arrangements under which it should do so.
Mr. Ingram : Has the Minister given any consideration to relocating any of the staff in his Department to Norfolk house in my constituency, which has a long-term lease held by the Property Services Agency at a cost of £166,000 per annum, has lain vacant for a considerable number of years and could accommodate approximately 400 staff?
Mr. Newton : As I indicated, there are a number of reviews of possible further relocations taking place. Clearly, we shall bear in mind the availability of office accommodation and the supply of labour in particular locations. I note the hon. Gentleman's point.
Mr. Harris : Of the 6,000 or so members of my right hon. Friend the Minister's staff based in central London, how many were able to turn up for work today? Does he agree that the experiences of millions of people in this capital today underline the absolute necessity of dispersing more Whitehall staff to the regions? In that context, will he look at the claims of Cornwall, particularly in this age of modern information technology?
Mr. Newton : I cannot give my hon. Friend the exact breakdown that he seeks, but a number of my staff are absent. I also take note, as I hope will the Opposition Front Bench spokesmen, of what my hon. Friend said about the disruption needlessly caused to so many thousands of people by today's events. As always, I shall be mindful of Cornwall's needs.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins) : I am tempted to reply, "lots". The north-west is booming economically as a direct result of Her Majesty's Government's policies, and Tameside is no exception. The demand from domestic and foreign companies to invest in the north-west is a true measure of the faith that they have in the British economy.
Mr. Bennett : I am sure that the Minister's words will not encourage the large numbers of my constituents who have been out of work for 12 months or more. They particularly resent the way in which the Government invest so many resources in the south-east and, so far as they can see, very few in Tameside. Will the Minister particuarly impress on his Government colleagues the need to complete the motorway around the east side of Manchester and to develop a freight terminal in the Tameside, east side, of Manchester to take full advantage of the Channel tunnel when it is operational, and so as to be prepared for harmonisation in 1992?
Mr. Atkins : The hon. Gentleman will be aware that my constituency is further north than his. My hon. Friends who represent northern and north -west constituencies and I find a totally different picture from that painted by the hon. Gentleman. The north-west is doing extremely well at the moment, and long may it continue to do so. As the hon. Gentleman will understand, the points that he raised about infrastructure are matters for my right hon. Friend the Secretary of State for Transport and my right hon. Friend the Secretary of State for the Environment. I will draw their attention to the points that he makes.
Mr. Jack : Is not the validity of my hon. Friend's answer borne out when one considers the investment made by companies such as British Aerospace, Fox's Biscuits, Leyland Daf and many others in the Preston area and the capital expansion and employment programmes that they are following?
Mr. Atkins : As usual, my hon. Friend is spot on. He will know, as I do, that the local paper in Preston pointed to how the local Labour council had problems because business was booming to such an extent that there was congestion and more space was needed for offices, but that all in all they were problems of success--something that the council recognised even if Labour Members of Parliament do not.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude) : In the 12 months to April the United Kingdom was in deficit on visible trade with Belgium and Luxembourg, Denmark, the Federal Republic of Germany, France, Italy, the Netherlands and Portugal.
Mr. Williams : The length of that list is impressive. The Minister scarcely missed out any EC country. How can the Government claim that we have the strongest economy in Europe when we have a trade deficit with virtually every other Community country?
Mr. Maude : The question of with which countries we have a deficit is wholly irrelevant. The fact is that three-quarters of the imports into this country are either semi-manufactured capital goods or intermediate goods. They reflect not just increased consumer demand, which is itself an example of the prosperity which pervades this country, but are a consequence of the high investment boom that has been going on. The hon. Gentleman should welcome those signs of strength.
Mr. Hill : Is it not nonsense to continue producing figures of deficits with Community countries when we are supposed to become one major trading bloc after 1992? What use are such figures to anybody in the Community, and should we not dispose of them in 1992?
Mr. Maude : I find no difficulty in the continued existence of the figures, but many people like figures for their own sake. When we place on businesses the requirement to fill in extremely detailed forms, we have to consider the use for which such information is gathered. As my hon. Friend will know, discussions are going on within Europe about the extent of detail that should be collected after 1992. We take the view that, while it may be right that there should be broad measures of trade between Community members, an excessive amount of detail is unnecessary.
Mrs. Mahon : Does the Minister realise that the large part of that deficit which is in textiles--23 per cent.--is worrying people who work in the industry, and that the Government are making things far worse by their policy of high interest rates? People in my constituency are not happy when the Minister trivialises a serious situation.
Mr. Maude : I have not trivialised it, but a percentage point on interest rates places only a third of the cost on industry of an extra percentage point on earnings. Those industries which are seeking and working extremely hard to increase their exports are not helped by the prospect of a dock strike, nor by the transport strikes today.
Sir Anthony Meyer : Will my hon. Friend confirm that there is no real danger of this country being forced to live on Brussels sprouts and that the advent of the single market in 1992 presents British industry and services with tremendous opportunities?
Mr. Maude : My hon. Friend is entirely right. That is why we have mounted a campaign to alert British businesses to the opportunities. However, we have also not sought to hide from British businesses the dangers that may be involved, and the dangers which flow from enhanced competition. The message has been that, for a business to succeed, it must be more competitive, which means containing its costs as best it can and developing its market, services and products to provide what the customer wants.
Mr. Henderson : How does the Minister explain what he would no doubt regard as the wholly irrelevant increase in our trade deficit with EC countries from £5.4 billion in 1979 to £18 billion in 1989, and what new steps does he intend to take to continue his economic miracle in Britain's trade with European countries?
Mr. Maude : The hon. Gentleman missed out of his potted economic history all the years between those two dates when Britain was in substantial surplus. I do not recall him or his colleagues popping up at every Question Time in those years saying what an economic success that was.
Mr. Marlow : There is some debate about joining the European monetary system, I believe. If we were in it, as I understand it, either sterling would be higher or interest rates would be lower, which would mean that either more money would be spent or foreign goods would be cheaper. What would that do to the trade deficit?
Mr. Maude : My hon. Friend raises a most interesting question which, as he will realise, falls outside my responsibilities. At this stage of the year it may be unwise for me to venture into that area.
Mr. Dalyell : Are the permanent secretary and the Chancellor still interested in integrity in British public life in the highest echelons of the DTI? As Colette Bowe and John Mogg have both put their accounts of events in bank vaults, would it not be wise and in the interests of posterity for Sir Brian Hayes to make a record and explain why he advised Leon Brittan not to leave the DTI? Did he know that Mr. Powell and Mr. Ingham had approved, quite improperly, the disclosure of the Law Officer's letter? Will Sir Brian reveal his personal view of the Prime Minister's behaviour during the course of those events?
Mr. Newton : I hope that the hon. Gentleman will not take the fact that I shall not comment on every part of his question as in any way endorsing the assumptions on which it was based. I can only say, as I have said before,
Column 321that I have nothing to add to the very full account given to the House by my right hon. Friend the Prime Minister some three years ago.
Mr. Barry Field : Does my right hon. Friend agree that it is a long tradition of this House that right hon. and hon. Members do not criticise civil servants, who serve all shades of Government so loyally? In view of the monocular mentality of the hon. Member for Linlithgow (Mr. Dalyell), does my right hon. Friend agree that it would be no bad thing if the hon. Gentleman were placed in storage long before retirement?
Mr. Morley : Will the Minister join me in congratulating Scunthorpe borough council on creating so many jobs in the borough--more, in fact, than its neighbouring Conservative-controlled authority, even though it has exactly the same access to exactly the same grants? Is the Minister aware of the difficulty facing Yorkshire and Humberside, including Scunthorpe, because of the way in which the integration development operations programme has overrun its plans? Has Commissioner Millan said what help he will give through transitional assistance for current schemes in both Scunthorpe and Bradford borough councils?
Mr. Atkins : The hon. Gentleman will be aware that he and two of his colleagues came to discuss this matter. We managed to resolve the misunderstanding that occurred--to his satisfaction, I hope, and to that of his hon. Friends the Members for Rother Valley (Mr. Barron) and for Sheffield, Central (Mr. Caborn). To date, I have no information to give him on what Commissioner Millan is doing, although we are ensuring that the commitment that I honoured in my letter to his hon. Friend will be maintained. I do not wish to be drawn on the comparison between one borough council and another, except to say that I am delighted if any borough is able to create more jobs. After all, whether boroughs are controlled by the Labour party or any other party, it is the Conservative Government's overall economic policy which has provided the environment in which those jobs have been created.
Mr. Riddick : Although as a Yorkshire Member I welcome the money coming into Yorkshire from the European Community, may I point out that we need to keep the whole matter in perspective? Are not Yorkshire companies, and British companies generally, making substantial contributions through the tax system to the European Community and helping to fund the £2 billion net contribution that Britain makes each year to the European Community? As we get only £26 million back
Column 322through regional funds, does not that pale into insignificance compared with the net contribution that we have to make?
Mr. Atkins : My hon. Friend makes his own point in his own way. As a Lancashire Member, I would not wish to be drawn on the subject of the money being given to Yorkshire. In the context of friendly rivalry, I merely hope that Lancashire is doing as well if not better than Yorkshire and Humberside.
Mr. Newton : Competitiveness involves numerous factors, including quality, reliability, assurance of delivery and after-sales service. In relation to price competitiveness alone, unit labour costs in United Kingdom manufacturing compared with those in other industrial countries, allowing for the effects of exchange rate movements, are thought to have been on average the same in 1988 as in 1979.
Mr. Bell : To translate that into real terms, 51,000 jobs were lost on Teesside alone between 1979 and 1981 and although we welcome British Steel's £600 million profit, we should not forget that it was achieved at the cost of the loss of 130,000 jobs, many of them on Teesside. Will the Minister confirm that we have lost about 9 per cent. of world trade since 1979, a loss which has been greater than that of our industrial competitors? Does the Minister think that that reflects a supply side economic failure or success?
Mr. Newton : On the specific point raised, the indications are that in recent years the decline in Britain's share of trade has stopped, and may even have been reversed after many years--indeed, decades--in which there was a persistent tendency to decline. With regard to the north-east, there is no doubt that there have been substantial changes in the pattern of employment over the period in question, but they reflect an increase in the competitiveness of the relevant industries, including steel, which means that there are now secure jobs whereas previously there were insecure jobs.
Mr. Favell : Is it not a fact that Britain has nothing to fear while the spirit that is obvious today abounds in the many people who have come into London and other industrial cities in the face of the most extraordinary difficulties? An example is the young lady I saw in a baker's in Strutton Ground today, near my London accommodation, who had come into work at 5 am. Despite having had a six-hour journey to reach home last Friday, she is back again today.
Mr. Newton : I have not had the opportunity to make that young lady's acquaintance, but I am happy to pay tribute to her efforts and to those of many others who have overcome needless industrial disruption to get to work today.
Dr. Reid : On the subject of security in the steel industry, the steel workers of Bellshill will be grateful to the Minister for his assurance that their jobs in the Clydesdale Tube Works are guaranteed. Does the Minister agree that competitiveness is often a function of investment at plant
Column 323level and that no matter what efforts are made by the work force, in the absence of that investment and technological capital equipment the work force often comes off worst? Is the Minister aware that in the Clydesdale Tube Works at Bellshill over the past two years the workers have increased quality, delivery times and productivity beyond all recognition, but we understand that there is still a threat over their heads due to lack of investment in the mills? How does the Minister intend to ensure that his assurance today that steel jobs are secure will be maintained now that he has privatised the steel industry so that it is outwith our control?
Mr. Newton : Eight or nine years ago the steel industry gained a mention in the "Guinness Book of Records" for the largest corporate loss ever made. It has now been privatised, is making substantial profits and has far greater capacity to invest than would have been the case if the previous policy had been allowed to continue.
Mr. Nicholas Bennett : Would my right hon. Friend care to speculate about the effect on the competitiveness of British industry if we had a policy of increasing company and personal taxation, imposing import controls, increasing regulation and bureaucracy, and subsidising inefficient industries--all policies that have been espoused by Opposition Members during the past few years?
Mr. Newton : More than 28,000 applications for assisted consultancy projects have been received since the launch of the scheme in January 1988. Building on this success, my right hon. and noble Friend the Secretary of State yesterday announced improvements to make it easier for smaller firms to obtain the advice they need to improve their performance, and to extend the role of enterprise counsellors to cover single market issues.
Mr. Cash : Does my right hon. Friend agree that although it is encouraging to see the emphasis being placed on marketing in these consultancy projects, quality seems to be falling back to second in line although it is impossible to sell and market things if they are not of sufficient quality? With regard to the trade deficit and competitiveness, would it not be helpful to put extra emphasis on the importance of quality so as to ensure that we deal with the real reason for the trade deficit, which is that some countries are producing higher quality goods than we are?
Mr. Newton : Yes, I agree with my hon. Friend. One of the improvements that my right hon. and noble Friend the Secretary of State announced yesterday was greater emphasis on total quality management in one of the consultancy initiatives.
Column 324has cost? Will he do the arithmetic and tell us how much each successful application has cost as a proportion of total television advertising costs?
Mr. Newton : There would be no point in an initiative of this sort if it were not brought extensively to the attention of those at whom it is aimed. The response has been substantial. Our surveys have shown that many of the firms which have acknowledged the benefits that they have gained from the consultancy initiative would not otherwise have sought that advice and help, which is improving the competitiveness and quality of British industry.
Mr. John Townend : Is my right hon. Friend aware that in my area several small firms have taken advantage of the scheme and have benefited from the Government-aided consultancy? Does he agree that every effort should be made to increase the take-up among small firms because many are sceptical and some are frightened of consultants? Does he further agree that one way of doing that would be to have a register of small firms which have used the scheme satisfactorily and which would be available to act as referees for other small firms sceptical about the scheme?
Mr. Newton : I note and will consider my hon. Friend's suggestion. We are aiming the scheme at small firms. It is satisfactory that of the 28,000 applications to which I have referred, about 90 per cent. have been from firms employing fewer than 100 people. One of the new measures announced in the past two or three days is designed to make the scheme even more user-friendly to small firms.
Mr. Newton : I have already made that clear to the hon. Gentleman's hon. Friend, the hon. Member for The Wrekin (Mr. Grocott). The point about such a scheme is that because of the advantages that it entails we should bring it to the attention of those at whom it is aimed, and that has been achieved.
Mr. Maude : The United Kingdom is committed to ensuring that our experience of the economic benefits of free markets and deregulation is reflected in Community policy. The Community is also working in the Uruguay round of GATT negotiations to achieve a further substantial liberalisation of international trade.
Mr. Oppenheim : Can my hon. Friend confirm that the Government's opposition to protectionist trade runs to opposing vigorously any moves to protectionism emanating from within the Commission, despite recent improvements within the Commission? Can he also confirm that the best way to tackle competition from places like Japan and Korea is to look to our own problems, particularly in education and our attitude to industry, rather than imposing quotas, voluntary restraint
Column 325agreements and spurious anti-dumping duties, which only push up prices to consumers and compound the inefficiencies of European industry?
Mr. Maude : I very much agree with my hon. Friend's sentiments. I am grateful to him for acknowledging that the attitude of the European Commission on these matters is increasingly liberal. Certainly, the new Commission takes the view that free trade is very good and that we should work hard to pursue it. My hon. Friend is also right to say that it is important to open trade in other markets outside the Community. I believe that those markets are opening. It is now up to British businesses to seek to exploit those markets and to get into them and sell hard.
Mr. Cryer : Does the Minister agree that after 1992 it will be essential for the survival of the clothing and textile industry that there is a burden-sharing agreement between all 12 member states on the import of textiles and clothing into the Common Market? Does the Minister further agree that the easiest market to penetrate is the United Kingdom market, with six main suppliers supplying every major town and city throughout the United Kingdom? That is not the position in any other member state. Therefore, on the basis of equality, a burden-sharing arrangement should be made. It is vital for the continued success of the British textile industry in areas like mine in Bradford.
Mr. Maude : As the hon. Gentleman knows, the multi-fibre arrangement was never intended to be more than a temporary measure to protect industry during a period of disruption and major changes worldwide in the industry. He will know that it is the intention of the Community in the GATT negotiations to consider ways of returning to ordinary trading. He knows also that my hon. Friend the Minister for Trade is well seized of the point that he raised about burden sharing within the Community and is working hard at it. Of course, the hon. Gentleman will want to recognise that the effect of protectionism in textiles--for that is what it is--is to increase the cost of clothing, which affects worst the poorest in society, and to inhibit the industrialisation of developing countries.
Mr. Aitken : If we are so opposed to protectionist trade barriers in Europe, can my hon. Friend kindly explain our humiliating acrobatics over the recent EC broadcasting directive? How did it come about that we supported the directive requiring all media companies in this country to take more than 50 per cent. of their programming from EC sources? Having supported that protectionist measure at 2 o'clock in the morning in the House, how did it come about, since we were arguing that it is more communitaire to support the EC party line, that when we got to Brussels the following day, we were out-voted by our communitaire partners and ended up with egg all over our faces?
Mr. Maude : I have to tell my hon. Friend that he has got it wrong. We were actually extremely successful in achieving a common position on the broadcasting directive which was very much more liberal than that which was proposed by many of our partners in the Community.
Mr. Maude : If my hon. Friend will contain his impatience for a little while, I will tell him that we have by no means lost the agreement. It is of great regret to us, having discussed it in good faith, that two countries in the
Column 326Community, which pretend perhaps a greater adherence to European idealism than we do, went back on the agreement that they had already reached. But that does not mean that the broadcasting directive will be renegotiated. There is still a numerical majority for the common position that was reached, and I have no doubt that the qualified majority will be reasserted.
In the three years 1985 to 1987, the estimated number of new registrations for value added tax in Northumberland was 1,946. The net increase in the VAT-registered businesses in the period was 211--in fact, a 3 per cent. rise.
Mr. Amos : I am grateful to my hon. Friend for that excellent news. Does he agree that that is further proof of the Government's economic success in laying permanent foundations for the revival of the north-east, especially for small businesses and for self-employment? That success is now being broadcast far and wide throughout the region by all the media-- Tyne-Tees Television, the Evening Chronicle, The Journal and the BBC. We are grateful to the Government for their policies.
Mr. Beith : What practical support is the Minister prepared to give to ensure that European aid goes to businesses in areas of Northumberland to ensure that they benefit after 1992 from more direct communications and other investment projects that will help them to prosper?
Mr. Atkins : I paid a visit to the hon. Gentleman's constituency, and I saw just how much is required to be done as well as what is being done to benefit his part of the world. He will continue to put his case and we will seek to reflect his concern within European circles. I know that the hon. Gentleman will agree that the successes of Government policy are being shown even in his part of the world.
10. Mr. Ron Brown : To ask the Chancellor of the Duchy of Lancaster how many of the 52 recommendations of the Select Committee on Trade and Industry report on information technology have been accepted by his Department.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : The Government have broadly accepted 28 of the 52 recommendations of the Trade and Industry Committee's report on IT.
Column 327unemployment in this country, which is especially true of Leith where more than 20 per cent. of my constituents cannot get a real job? Can the Minister explain that?
Mr. Allason : Is my hon. Friend aware of the growing anxiety about computer hacking in relation to information technology? Is he also aware that, in spite of pressure from various sources about the need for legislation on this subject, it is the view of the police that they are capable of dealing with computer fraud under existing legislation?
Mr. Forth : Yes. I am grateful to my hon. Friend. He is obviously aware that there has been a lot of discussion on the subject and much concern has been expressed. The Government, however, are taking a measured view of the problem. They are examining the evidence and they are assessing how far the existing provisions are adequate to meet the problem or how far new measures may be required. I am confident that a decision will be reached shortly, so that we can give the necessary assurances on this important matter. No one will be rushed into a decision. We want to get it right rather than arrive too soon at what may be the wrong decision.
Mr. Stott : When looking into the question of information technology, the Select Committee on Trade and Industry considered the deficit in electronic goods. I am sure that the Minister is aware that last year the trade deficit in electronics was £3.9 billion, which is an increase of 15 per cent. on the previous year, and accounts for almost one third of the total trade deficit. In the past four years alone, the deficit in electronic goods--which includes computers, telecommunications and audio equipment--has risen by a staggering 40 per cent. The Minister will be further aware that that pathetic record was remarked upon extensively by the Select Committee. The Government are now involved in negotiating a detailed sector plan with the brewing industry. Is it not time that they got around the table with the IT industry to work out how Britain can begin to remedy that £4 billion trade gap in one of our most important industries?
Mr. Forth : The hon. Gentleman exhibits the delight that the Opposition have in producing what they believe is bad news on every possible occasion. But what the hon. Gentleman has not told the House is that--it is important to understand this--every major OECD country, with the exception only of Japan, has an IT trade deficit. He has also not told the House that--this is another important figure--the United Kingdom has a trade surplus with the rest of the EC in IT products ; something that the Opposition were trying to portray as an adverse picture not a few moments ago. Rather than fall into the trap that the hon. Gentleman is trying to set for the House in asking whether we shall take action to remedy one particular item that he regards as being bad news, we should acknowledge the excellent work that has been done in the IT industry, acknowledge a success story when we see one and not be driven off course by the sort of selective bad news offered up by the Opposition on these occasions.