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Mr. Forth : If the hon. Gentleman would like to do as I have just suggested, I shall be prepared to give him the correct figures, which I am sure he would find reassuring. We believe and continue to believe that by having a low tax regime and an environment in which companies can be profitable, we leave the decision of how to invest in their hands, rather than confiscating money from companies through taxation and imposing our decisions on them about how they should invest. That surely makes sense in a vigorous, capitalist economy.
Mr. Atkins : British exports to India have risen steadily over recent years reaching a record £1.1 billion in 1988. My Department is actively promoting trade with India and we expect to see further increases, including earnings from inward investment and joint venture collaborations.
Sir George Young : Is my hon. Friend aware that while many British firms are successful in winning export orders in India, some, sadly, face difficulties in getting paid because of delays in the Indian courts. Is he aware that one firm in my constituency won its court case against nonpayment in 1981, but has not been paid because of delays in hearing the subsequent appeal? In view of the delays and the impact on general exporting to India, what help can my hon. Friend and the Department extend to British companies which find themselves in that position?
Mr. Atkins : I am fully aware of the case to which my hon. Friend refers. He will know--or perhaps I can inform him if he does not know--that my hon. Friend the Minister for Trade is pursuing the case strongly with India. We understand that at the moment there are still some difficulties, but we shall pursue the case that he has raised--it concerns a product which is perhaps unmentionable here--with full vigour and in due course, no doubt, there will be a satisfactory result.
11. Mr. Hind : To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the levels of inward investment into the United Kingdom in 1988-89, the contribution of the Government by way of regional selective assistance and the number of jobs created.
Mr. Newton : According to the latest information available to the Invest in Britain Bureau, there were 277 inward investment decisions during the financial year 1988-89 which were expected to create 24, 000 jobs. Many of these investments came without specific financial assistance, but during this period about 90 foreign-owned companies received offers of regional selective assistance, which is available only in Great Britain, worth around £140 million towards projects expected to create 18,000 jobs.
Mr. Hind : That is excellent news, and a great share of that investment is going to Lancashire, particularly Skelmersdale, with investment in Longulf from the Yemen and Garrett Air Research from the United States. Can my hon. Friend confirm that over the past five years, among EC partners, Britain has achieved one of the largest proportions of inward investment, which has created a large number of jobs? He will know that Ministers from his Department, from the Scottish Office and from the Welsh Office constantly tour the world advocating the British cause and attracting new investment and jobs.
Mr. Newton : I can confirm virtually everything that my hon. Friend has said. We estimate that over the past four years inward investment has created or safeguarded the better part of 200,000 jobs. A quarter of all United States and a third of all Japanese investment in the Community has come to the United Kingdom in recent years, and there have been some outstanding successes in my hon. Friend's part of the world. In addition to those that he mentioned, there is also Sanko Gosei, a leading Japanese manufacturer of moulds and plastics, which is to establish a £6 million plant employing 120 people at Skelmersdale.
Ms. Armstrong : Is the Minister content that regional assistance is now virtually exclusively through inward investment, certainly in the north -east? His decision last week and the incompetence shown by his Department in dealing with the European Community in the case of North-East Shipbuilders in Sunderland and the announcement last week about the closure of a factory in Newton Aycliffe mean that the 2.5 per cent. of firms in the north-east which are British based are being undermined even more. What does the Minister intend to do to ensure that he supports British investment in the regions?
Mr. Newton : Our purpose is to support the regeneration of the economic base of the north-east and other parts of the country. Nissan is achieving a great deal and providing additional opportunities for locally based industry, and Fujitsu is soon to arrive at Newton Aycliffe. The case for the success of what we are achieving makes itself.
Mr. Holt : I hope that my right hon. Friend will take no notice of the whingeing from the hon. Member for Durham, North-West (Ms. Armstrong). Is not the north-east now booming far better than it has done for many years, and is that not reflected not only in the voices
Column 337of the chambers of commerce and industry, but even in those of trade union leaders in the north-east who are admitting that that is happening?
Mr. Caborn : The Minister paints a glowing picture of the success story, but the figures for forward investment are rather different. Although that amounts to £7 billion, does not the export level of £15 billion in direct investment and £10 billion in investments in portfolios abroad show that there is a massive vote of no confidence?
Mr. Newton : No, I would not agree with a word of it. Historically, the United Kingdom has benefited from an open and liberal trading and capital movement system. It is clear that we are benefiting from that now.
Mr. Atkins : Between 1981 and 1988 the volume of United Kingdom exports of food increased by 34 per cent. and that of passenger motor cars by 25 per cent. The full set of figures will be included in the Official Report.
Mr. Gill : Does my hon. Friend agree that the food manufacturing industry employs more than 500,000 people, produces 6.4 per cent. of manufacturing industry output, and continues to serve the British economy extremely well?
Mr. Allen : Is the Minister aware that in these two sectors, as in others, there will be a tremendous impact come 1992? Has he read the EEC report which states that 2 million jobs will be lost due to the effect of 1992? Some sources say that 200,000 of those jobs are in the United Kingdom. If the Minister does not know the answer, will he write to me?
Mr. Atkins : I have not yet had the pleasure of reading the report to which the hon. Gentleman refers. When I do so, I shall certainly write to the hon. Gentleman, and I hope that he will be in when I do so.
Mr. Roger King : Does my hon. Friend agree that much of the work of improving the export performance of the British motor industry has been outstanding by companies which I know are dear to his heart? Leyland-DAF, through its van subsidiary, has dramatically expanded its export potential within the Community. As for the Rover Group, one third of its production goes overseas. Jaguar is well known for its exports both to the United States and to Europe. The news that Peugeot is to start exporting cars to Japan must be a clear sign that we are in the car business to stay.
Column 338Opposition Members, my right hon. and hon. Friends know what they are talking about, usually from personal experience. My hon. Friend is rght to draw the attention of the House to the success story of the motor industry.
Following are the figures :
Exports of food and passenger motor cars |Volume indices 1985=100 |Overseas trade statistics |basis |Food<1> |Passenger motor cars<2> -------------------------------------------------------------------------------------------------------- 1981 |83.5 |100.0 1982 |82.9 |94.2 1983 |94.5 |86.1 1984 |96.5 |82.9 1985 |100.0 |100.0 1986 |109.5 |93.8 1987 |116.5 |120.6 1988 |112.1 |125.3 Sources: <1> MAFF <2> DTI
Mr. Eadie : Given the answer that the Minister gave to my hon. Friend the Member for Coventry, North-West when he expressed great doubts about the working of the regulations, will he accept that an error was made when the regulations for the City were not made statutory? Does he agree that there is an abundance of evidence that when Governments meddle with legislation and make regulations permissive rather than mandatory, they find themselves in trouble? The Government are running into trouble, and the Minister should make that confession to the House.
Mr. Maude : I do not think that the hon. Gentleman heard correctly the supplementary question put by the hon. Member for Coventry, North-West, which had nothing to do with the Financial Services Act 1986 but related to a different kind of investigation under a different piece of legislation. He did not express any views about the efficacy or otherwise of the Financial Services Act. I can reassure the hon. Member for Midlothian (Mr. Eadie) on the issue of whether financial service regulation should be statutory. His question can be answered satisfactorily--it is indeed statutory.
Mr. Charles Wardle : Has my hon. Friend had an opportunity to consider the EEC proposals for a single banking licence? Would not the creation within the Community of the largest unified market in the world for banking services present the City with considerable opportunities?
Column 339The banking directive, to which my hon. Friend refers, will make the Community a more open market for banking than the United States.
Mr. Campbell-Savours : Is the Minister aware that despite the authorisation requirements of the Financial Services Act, a number of the big, rogue fish who were responsible for running companies--a number of which had to close--are now surfacing in other guises in various parts of the City? Why are they not being cleaned out of the City, especially as FIMBRA, the Securities Association and a number of self-regulatory bodies are cleaning out their employees, who were only taking instructions from those rogue fish?
Mr. Maude : Since the Financial Services Act came into force it has been illegal to carry on investment business without being authorised by the Securities and Investments Board or one of the regulatory bodies. It is impossible for any of those to whom the hon. Gentleman referred to operate a legal investment business without being authorised. Anyone with a record of misbehaviour can be prevented from operating. If the hon. Gentleman knows of anyone who is operating without authorisation, I should be grateful if he would supply me with details immediately.
Mr. Nelson : Does my hon. Friend agree that despite the overtures from the Opposition, the Government have struck the right balance between total free licence for the City and total state regulation? While the Government cannot anticipate future needs, I am sure that they will respond as necessary. Is it not true that experience both of companies legislation and of financial services legislation has already shown that the Government's middle-way approach of encouraging and supporting the self- regulatory process in the City has been a great success and should be continued?
Mr. Maude : My hon. Friend is right. It is essential that financial services legislation has full statutory backing, but it is equally essential that it should be flexible and responsive because the regulatory bodies need to be sufficiently fleet of foot to keep abreast of the changes in the market place.
Mr. Gould : May I ask the Minister a question that he has ducked twice already? Will he publish the County NatWest report before the end of the Session and in time for the House to question Ministers on it?
Mr. Maude : I am astonished that the hon. Gentleman can find it in himself to quibble with the reply that I have already given him. I said that we would publish the report as soon as it was proper to do so. It would be a remarkable proposition to suggest that we publish it before it is proper to do so.
Mr. Maude : I cannot do that because I do not answer for the ombudsman. He must conduct his investigation in the way that he thinks proper. I am sure that he will want to complete his investigation as soon as possible.
Mr. Newton : There are at present no controls on the import of tropical timber into the European Community. It is therefore for the judgment of the local authority concerned whether or not a purchase of such timber is appropriate.
Mr. Dalyell : Is the Minister aware that Bournemouth needs 50 new groynes, which requires three acres of rain forest trees? Is he further aware that Bournemouth has already consumed 2,000 acres or more, an area the size of Epping Forest? Is it not folly to destroy the ecosystem of rain forests and leave them to global warming, so that the sea defences deteriorate and more protection is needed for coastal defences? Should there not be a policy of using metal or concrete groynes rather than mahogany groynes?
Mr. Newton : I note the hon. Gentleman's suggestion and will ensure that it is considered by the relevant Ministers. The key issue is that we do everything possible to ensure the proper management of the rain forests. As the hon. Gentleman knows, my right hon. Friend the Minister for Overseas Development has recently been discussing that matter with the Brazilian Government. We are also seeking to make progress in a number of ways through the International Tropical Timber Organisation. The hon. Gentleman and the House may rest assured that the British Government will continue to do all that they can to achieve that broad, essential objective.
Mr. Forth : The Government have in place a number of policies to make industry even more aware of the opportunities presented by the single European market and the 1992 campaign. We are following up our spectacular success in increasing awareness with a number of policies aimed at persuading British industry--only British industry, and no one else, can affect our trade figures--of the potential offered by the single European market and the markets beyond, so that industry can gird its loins and sell British products throughout the
Column 341Community and beyond. We are confident that it will do so. In the three months to May, for example, exports to the Community grew strongly--by 8 per cent. over the previous three months-- while imports fell by 1 per cent., so we are already on the right track.
Mr. Curry : Is not British private sector well ahead of the field in investing in manufacturing and service bases in the Community? Is not that the logic of the Community, and will not the profits made overseas be turned into dividends for the benefit of shareholders and workers in the United Kingdom?
Mr. Forth : Yes. My hon. Friend, who has unparalleled knowledge of such matters as a result of the service that he has given to the European Parliament over the past 10 years, is correct to point out that Britain has already made moves to take seriously the opportunities and challenges that the Community market presents. By investing throughout the continent, Britain is placing itself in a strong position to meet that challenge as we move towards the fulfilment of the single market.
Mr. McAllion : Is the Minister aware that Britain's deficit in visible trade with the rest of the EEC has increased fivefold since the Conservative Government came to power in 1979? Does he think that that increased deficit is a product of what he described earlier as a free and vigorous capitalist economy?
Mr. Forth : In a very real sense, any deficit is obviously a product of a free and liberal trading regime. It is always up to the wealth creators and those in trade and in business in any one economy to make the best of the trading opportunities available to them. I have attempted to describe how seriously we take those opportunities and what we are doing about them. I stress again that it is not the Government but business that can improve the trade position. We are confident that the business community will do so.
Mr. Maude : As my right hon. and noble Friend the Secretary of State for Trade and Industry announced in his statement on 10 July, we do not propose to prohibit new tied loan agreements. However, we intend to impose the requirement on national brewers that tied loans should be restricted to beer sales and must be capable of termination by the borrower without penalty on no more than three months' notice.
Mr. Stern : I thank my hon. Friend for reiterating the welcome announcement of our right hon. and noble Friend the Secretary of State in confirming that the traditional source of finance available to sports clubs and to other clubs and associations in all our constituencies will remain open.
Mr. Maude : We took the view that tied loans are a particularly useful source of finance for clubs. The only danger arises when clubs or pubs are unable to repay the loan without penalty, and we are taking steps to ensure that that cannot happen.
Mr. Newton : I attended the Business in the Community president's committee on 7 March. In addition, I regularly meet representatives of BiC and its member companies in the course of carrying out my duties.
Mr. Favell : Does my right hon. Friend agree that the success of the village, town or city in which a business or industry operates depends very much on the contribution that that business or industry is prepared to make to the management of schools, the training of unemployed people and the cleanliness and general quality of the environment?
Mr. Newton : Yes, I agree. That is one of the reasons why the Department's enterprise initiative, which is harnessing and encouraging all those elements, makes such an important contribution to the development of our towns and cities.
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