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House of Commons

Wednesday 6 December 1989

The House met at half-past Two o'clock


[Mr. Speaker-- in the Chair ]


Scottish Episcopal Clergy Widows' and Orphans' Fund Order Confirmation Bill

Read the Third time, and passed.

Oral Answers to Questions


Renaval Programme

1. Mr. Win Griffiths : To ask the Secretary of State for Trade and Industry if he will make a statement on the operation of the EEC's Renaval programme in the United Kingdom.

The Minister for Industry (Mr. Douglas Hogg) : The Government have submitted Renaval applications for Plymouth and Gibraltar. My right hon. Friends and I hope to be able to decide soon whether to make further applications. Our decisions have been delayed by changes in the position in Brussels.

Mr. Griffiths : The Minister may not know that I was a member of the European Parliament's regional policy and planning committee which considered this programme. We were concerned that extra help, besides normal regional fund assistance, should go to areas where traditional industries were in decline. Can the Minister confirm that the shipbuilding areas in Britain that have had the biggest job losses will receive the greatest assistance from the fund, and can he tell the House the position on Tyne and Wear?

Mr. Hogg : The position is this. I understand the concern of hon. Members about the Renaval programme. Hitherto, we have taken the view that it would be premature to make a final decision on the matter, although we have not decided against making a decision. We may make an application, but we have come to no final view. The problem is that a decision on Renaval has to be taken in the context of other objective 2 funding programmes because they impact one on the other. As soon as we can have a clear view of the whole, we shall be in a good position to make a final decision.

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Consumer Credit

2. Mr. French : To ask the Secretary of State for Trade and Industry what measures he is taking to ensure that prospective borrowers are aware of their rights and duties under consumer credit legislation.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : Regulations under the Consumer Credit Act 1974 require that consumer credit agreements include statements about the rights of consumers under the Act. It is one of the duties of the Director General of Fair Trading to provide information and advice to the public about consumer credit legislation.

Mr. French : Will my hon. Friend curb the activities of credit reference agencies that give out references on people's creditworthiness by reference not to the individual, but to the address at which the individual lives? Does my hon. Friend accept that that is a dangerous and misleading practice, and will he provide a means of redress for people whose reputations are harmed in that way?

Mr. Forth : My hon. Friend has touched on an undoubtedly difficult area. We believe that the laws and regulations in this area are generally adequate and have been so until now, but my hon. Friend is right to point out what can be a difficult area. I undertake to look at the matter again urgently and to see whether there are any methods that we could use to improve the position and to address the problems that my hon. Friend has identified.

Mr. Janner : When the Minister is looking at consumer credit legislation as it affects borrowers, will he arrange for more information to be given to people who borrow from banks so that they know, for example, that when they obtain money on an overdraft it is normally repayable on demand--most people do not know that--and that if they exceed the limit they could be charged a prodigious, unwarranted and disgraceful rate of interest of which they have had no advance notice?

Mr. Forth : The hon. and learned Gentleman will be pleased to know that new regulations on credit advertisement will come into effect next February. They will cover some of the points that he has raised, such as the use of more understandable English, and they will close certain loopholes. It is always difficult to legislate or to regulate this area in such a way as to take care of all developments. One often feels that almost as soon as one has identified one difficulty, others arise. I assure the hon. and learned Gentleman that we are constantly vigilant in this area and that we shall look carefully at the point that he has raised.

Mr. Donald Thompson : Does my hon. Friend realise that constituents of mine with children and young people in their families are very worried by the fact that they are perpetually bombarded with invitations to borrow more and more money? My wife has a great sackful of these unsolicited appeals. What regulations does my hon. Friend propose to introduce to ensure that people fully understand what they are signing up for?

Mr. Forth : I know that that causes a lot of concern. Let me say immediately that section 50 of the Consumer Credit Act 1974 prohibits the sending to minors of circulars inviting them to borrow money or to apply for

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information about obtaining credit, so that aspect is already dealt with. Generally speaking, it is up to lenders to assess the way in which they offer credit, and they rarely offer it to minors, although that is something we shall have to watch. In general, existing legislation covers the point adequately.

Mr. McAllion : What has the legislation done to protect and extend the rights of savers? A constituent of mine who has spent more than two years in an old people's home, during which time her deposit account at the bank remained untouched. Without her knowledge, the bank redesignated the account as dormant and reduced the rate of interest paid on it to 1 per cent. Are the banks acting within their legal powers in doing that and does the Minister think it right for banks to profiteer at the expense of old people in the despicable way that I have described?

Mr. Forth : It is quite right that the hon. Gentleman should raise an important constituency matter at Question Time, but I ask him to write to me with the details so that we can consider the case properly. I should not like to try to give an instant answer, but if he will write to me I will see what, if anything, can be done to help to remedy his constituent's grievance.

Departmental Expansion

3. Mr. Norris : To ask the Secretary of State for Trade and Industry what plans he has to expand the role of his Department.

The Secretary of State for Trade and Industry (Mr. Nicholas Ridley) : None, Sir

Mr. Norris : I thank my right hon. Friend for giving exactly the sort of reply that I wanted ; it was excellent. Does he agree that although from time to time his Department has an excellent role to play as an enabler, it has been an unmitigated disaster whenever it has tried to act as an intervener?

Mr. Ridley : My hon. Friend is absolutely right on the latter point. I note that the Labour party policy review says :

"The DTI's role will be to develop strategies, to identify priorities and provide the assistance, resources and organising capacity which industry will need."

Is not that the very policy that east European countries have been following until now?

Mr. Vaz : Will the Minister consider establishing a specialist unit in his Department to monitor and support the work of the British textile and footwear industries? Is he aware that in the past 10 years 380,000 jobs have been lost in those two industries? The Minister for Industry came to Leicester last Friday and was made aware of the deep concern felt by textile and footwear manufacturers about the future of their industry. May we have a unit to support that vital sector of the British economy?

Mr. Ridley : We do indeed monitor the operations of all industries, including the textile industry. It is for the industries themselves to become competitive if they are to preserve their positions, and there are encouraging signs in the textile industry. The industries have benefited from the multi-fibre arrangement over the years. People in the industry have had time to adjust and in many cases have done so successfully.

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Sir Anthony Grant : Has my right hon. Friend any plans to reduce his Department's role?

Mr. Ridley : We have certain problems in our industrial performance at the moment in parts of our industrial effort where the Industrial Reorganisation Corporation, the policies of the right hon. Member for Chesterfield (Mr. Benn) and intervention generally left some deep holes.

Mr. Gordon Brown : With regard to one expanded role for the Secretary of State's Department--that of providing hidden subsidies--and given that the Secretary of State said last week that there was no need to inform the European Commission, will he tell us now whether there were any discussions between British Aerospace and the Government about failing to inform Parliament and the Commission and the risks associated with that? Are there any other matters in addition to hidden subsidies that he now feels that he should disclose to the House?

Mr. Ridley : For the hon. Gentleman's benefit, I would make a distinction between hidden ongoing subsidies or even overt ongoing subsidies and the necessary deal which has to be struck to end the tyranny of state ownership of a loss-making public corporation. I refer the hon. Gentleman to the acquisition of MBB by Daimler-Benz, which involved the privatisation of a loss-making German nationalised industry. The hon. Gentleman will discover that there, too, a deal had to be struck which was well worth it in the interests of the taxpayer to get rid of that loss- maker.

Mr. Oppenheim : Are not the Opposition guilty of trying to have it both ways on this? If the Government had tried to sell the Rover Group to the highest bidder, we would have been accused of putting the group up for a free for all instead of looking after the interests of that company. That is precisely the accusation which the Labour party levelled against us in 1976 when we tried to sell the Rover Group.

Mr. Ridley : I well remember the extraordinary commotion on the Opposition Benches when it seemed possible that the Ford Motor Company might try to buy Rover. That was not a very propitious curtain-raiser for a possible public auction of that company.

Trade Performance

4. Mr. Campbell-Savours : To ask the Secretary of State for Trade and Industry what measures he intends to introduce to improve Britain's trade performance.

Mr. Ridley : The keys to trade performance are macro-economic policy, non-interference in the working of the market, the maintenance of open, competitive markets at home and abroad and not setting up an industrial reorganisation corporation.

Mr. Campbell-Savours : May I have a reflective reply to the following question? Would a falling exchange rate in any way help Britain's trade performance?

Mr. Ridley : It is not for me to answer for my right hon. Friend the Chancellor of the Exchequer on matters of macro-economic policy. However, the export figures in recent weeks have shown a decided tendency to improve now that the pound is at a slightly lower level than before.

Sir Hal Miller : Does my right hon. Friend also see a need to help to protect the competitive position of our

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manufacturing industry against the more extreme green demands, which would lead to an increase in energy prices and drive company cars off the roads of this country?

Mr. Ridley : All those factors are extremely important in maintaining the competitiveness of British industry. If we are to improve our trade deficit, it is vital that we do nothing to put British industry at a competitive disadvantage in a level playing field game with the rest of the Community and the world.

Mr. Henderson : Given the alarming £4 billion trade deficit in electronic products, and now that British Aerospace has withdrawn its interest in purchasing Ferranti, will the Secretary of State intervene to ensure that the future of Ferranti is secured through a joint venture partnership? Does he recognise that if he fails to act, Ferranti could be gobbled up by yet another hostile foreign predator with further untold damage to our balance of trade and to jobs?

Mr. Ridley : The hon. Gentleman should look carefully at the trade in electronics. He will find that although our imports in that area are very large, so are our exports. That shows that in a modern sophisticated industry a heavy import and a heavy export are signs of success, not failure. With regard to Ferranti, it is for the Ferranti board to decide what action it wants to take with the various people with whom it is discussing its future. At the present time, I have no role to play in those matters.

Mr. Wells : Does my right hon. Friend agree that the programme that his Department has pioneered in Japan has produced a remarkable increase in British exports to Japan? Will he now consider a second phase to boost that successful programme so that we can increase our trade with Japan and thus substantially decrease our trade deficit?

Mr. Ridley : I agree with my hon. Friend, but there has also been a large opening up of the Japanese market in many different ways as the result of the pressures that my right hon. Friends have placed on the Japanese and other nations. The Japanese are trying hard to open their market to exporters in other countries. It is a combination of two factors. We will certainly redouble our efforts to make every facility available to British exporters to increase their share of Japanese trade.


5. Mr. Buchan : To ask the Secretary of State for Trade and Industry what steps his Department is taking to monitor the safety of children's toys.

Mr. Forth : Local authority trading standards departments have a statutory duty to enforce the Consumer Protection Act 1987 and the toy safety regulations made thereunder. The Act provides the necessary powers for the discharge of this responsibility. The new Toys (Safety) Regulations 1989, which implement the EC directive on the safety of toys with effect from 1 January next year, will provide more comprehensive safety measures to ensure that only safe toys are placed on the market. They will also require enforcement authorities to notify my Department of enforcement action taken under those regulations.

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Mr. Buchan : It is fine that the provisions exist, but we are about 20 per cent. short of trading standards officers. That is the real problem. We are entering a period in which there is a constant television propaganda campaign for parents to buy toys. There was a disastrous case involving Kinder eggs, which are chocolate eggs with tiny inedible and poisonous toys inside them. Will the Minister ensure that there is urgent action by the Department in the form of a television campaign to warn parents?

Mr. Forth : The hon. Gentleman has raised a number of points. The number of trading standards officers is a matter for local authorities. I am sure that they will discharge their responsibility fully in that regard. My Department is organising a campaign to reach out to parents to remind them at this time of the year of what is principally their responsibility-- to ensure that they purchase only safe toys for their children or relatives.

The Kinder chocolate eggs case was a tragedy. A young girl died as a result of the contents of a Kinder egg. We considered the matter carefully and agonised about what we should do. In the end, my view was that as millions were sold every year it would be wrong to seek to ban the product but that we should instead seek to reinforce precisely the hon. Gentleman's point-- that parents must always satisfy themselves that anything that their young children have, use or play with is used safely and responsibly.

Mr. Buchan : On a point of order, Mr. Speaker. In view of the Minister's grossly unsatisfactory answer, I give notice that I shall seek to raise the matter on the Adjournment.

Mr. Speaker : Order. The hon. Gentleman has the right to say that, but it ends supplementaries on that question.

Internal Market

6. Mr. Clelland : To ask the Secretary of State for Trade and Industry what additional help is being given to businesses to help them to take advantage of the internal market in 1992.

16. Mr. McFall : To ask the Secretary of State for Trade and Industry what additional help is being given to businesses to help them to take advantage of the internal market in 1992.

Mr. Douglas Hogg : We provide a comprehensive single market information service through our Europe Open for Business campaign, which is regularly updated and expanded. The practical assistance available through our enterprise initiative is also particularly relevant to firms preparing for the single market. In the private sector an increasing level of information and advice is being provided to help business to adapt to the liberalised European trading conditions.

Mr. Clelland : Is the Secretary of State aware that although other European countries have been forging ahead for some time with their preparations for 1992, his Department has been so dilatory that the television advertising campaign aimed at assisting British industry was arranged so late that the British taxpayer has been landed with a bill £300,000 higher than it need have been, for which the hon. Gentleman has been severely criticised by the National Audit Office? Is the hon. Gentleman

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further aware that if a local councillor took a similar decision he would be liable to surcharge and disqualification from office for gross negligence?

Mr. Hogg : British industry is singularly well equipped to go into the 1992 market. The developments in the hon. Gentleman's own constituency demonstrate that.

Mr. Clelland : What about the £300,000?

Mr. Speaker : Order.

Mr. Hogg : Unemployment in the hon. Gentleman's constituency has fallen in the past 12 months from 12.1 to 9.8 per cent. and there are two extremely exciting developments there--the Newcastle business park, which will create 2,000 jobs by 1991 and the Gateshead Metro centre, which will create 6,500 jobs by 1991. That shows how well the economy is equipped for 1992.

Mr. McFall : The Minister will be aware of the comments of Sir John Harvey-Jones, a former chairman of ICI, who said that only half Europe's businesses will survive and that over the next five to seven years the rest will disappear, by acquisition, by mergers or by going bust. Since the implications for big businesses and for small firms are profound, will the Minister turn his attention to the hidden agenda--or is he prepared simply to accept that in areas such as my own in Scotland small businesses on the periphery will disappear because they will be sacrificed on the altar of the Government's twisted approach to 1992?

Mr. Hogg : Yet another hon. Gentleman is allowing his imagination to run riot. As the hon. Gentleman mentioned his own area, let us look at that aspect. I am glad to say that in the past 12 months unemployment in his constituency has fallen from 15.9 to 12.6 per cent. The hon. Gentleman will be pleased, I hope, to know that in the next five years the Scottish Development Agency is planning to spend £10 million in the Leven valley, which is close to the hon. Gentleman's area. That is precisely the kind of commitment that the hon. Gentleman has urged upon us.

Mr. David Evans : I congratulate the Government on the help that they are giving to companies in the run-up to 1992, but does my hon. Friend agree that companies should also be gearing up to meet the opportunities presenting themselves in the eastern bloc and the Soviet Union? Is his Department underwriting the future on the Export Credits Guarantee Department so as to help companies in that new area?

Mr. Hogg : I certainly think that the opportunities offered by the changing situation in the eastern part of Europe are exciting and that British industry should be considering how best it can respond to the investment and trading opportunities in that part of Europe.

Mr. Tim Smith : Will my hon. Friend encourage the European Commission to give higher priority to the creation of a genuinely single market in insurance services by 1 January 1993?

Mr. Hogg : My hon. Friend is quite right to address his remarks to that question. It is a material part of the programme and, generally speaking, we encourage the Commission to produce flat playing fields wherever possible.

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Ms. Mowlam : Shall we have to wait until the arrival of the internal market in 1992 before the Minister releases for publication the ombudsman's report into the negligence of his Department in the Barlow Clowes affair?

Mr. Hogg : That goes rather wide of the question-- [Interruption.]

Mr. Speaker : Order.

Mr. Hogg : Indeed, when one thinks about it, Mr. Speaker, it goes very wide of the question. That being so, I am not going to answer it.

Mr. Favell : Does my hon. Friend agree that it is of the utmost importance to construct high-speed links to the Channel tunnel as soon as possible? Can he tell the House why the two Labour members of the King's Cross inquiry Committee did not turn up the other day, at enormous cost--

Mr. Speaker : Order. Proceedings in private Bill Committees are not discussed in the Chamber.

Mr. Favell : Can my hon. Friend confirm that the King's Cross inquiry will be conducted with maximum efficiency and speed?

Mr. Hogg : I certainly hope so, but in view of what my hon. Friend has said, I fancy that that is not entirely in my hands.

Export Credits Guarantee Department

7. Mr. Morgan : To ask the Secretary of State for Trade and Industry what consultations he has had regarding the future operations and funding of the Export Credits Guarantee Department.

Mr. Ridley : The interdepartmental working group of officials on the Kemp review of status options for ECGD consulted interested parties both within and outside Government. It has now submitted its report to me, and I am considering it.

Mr. Morgan : In view of that characteristic piece of masterly inactivity on the part of the Secretary of State and with Britain's trade deficit about to enter the "Guinness Book of Records", is it not true that only a lunatic or the Secretary of State, or perhaps both at the same time, would think of monkeying around with those essential support services for exporters? In particular, will he give attention to the fact that any monkeying about of the kind that he may have in mind would affect 770 jobs in Cardiff where essential services are provided for small and medium-sized export businesses--support which is vital as we approach 1992?

Mr. Ridley : I do not see why the hon. Gentleman feels that the question calls for insults. They are completely misplaced. [Interruption.]

Mr. Speaker : Order.

Mr. Ridley : I suggest that the hon. Gentleman awaits the Government's decision about the Kemp report instead of trying to come to conclusions before the Government have given it the attention that it deserves. The purpose of the operation is to improve the services provided to our exporters and there is no threat to ECGD in such a course.

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Mr. Grylls : Does my hon. Friend agree that as 70 per cent. of British firms do not export we need to give them maximum help and encouragement to be bold and go into the world markets to export? Is he aware that while other countries offer export credit guarantees, British firms, especially small firms, need the services of ECGD? Will he bear that in mind when he makes his decision?

Mr. Ridley : I shall most certainly bear that important point in mind. There is no question of withdrawing services for exports of goods, from large, small or medium-sized enterprises. It is a question of the status of the ECGD and its duty to perform that function.

Ms. Quin : While I understand that the Secretary of State has still to make a final decision on the matter, will he give a clear statement to the House that he does not accept the ludicrous suggestion put forward by his hon. Friends in the Treasury that the projects division of ECGD be closed down? Will he further undertake to listen carefully to industry and those who work in ECGD before making a final decision? Does he agree that, with a £20 billion trade deficit, our export efforts need to be increased, not reduced?

Mr. Ridley : I cannot respond to both parts of the hon. Lady's supplementary question. [Hon. Members :-- "Why not?"] She asked me not to foreclose my eventual decision on the matter and at the same time to foreclose on the question of the projects group by deciding against the zero option. I promise the House that I shall make a decision abundantly clear as soon as possible, and I hope that that will be before long.

Mr. Cran : Does my right hon. Friend recognise that considerable disquiet has been caused by the Government's delay in coming to a decision? In coming to a decision, will he consult the recent important study by Northern Engineering Industries which shows the effect down the line of project finance, which we now hear that the Treasury is against?

Mr. Ridley : We have not had the working group's report for long. My hon. Friend will find that the delay in giving the House a decision on the matter is not at all long. I fully understand and hear what he says about the projects group and the importance of capital goods industries to the north-east. It is certainly one of the factors that we shall take into account.

Golden Shares

8. Mr. Rooker : To ask the Secretary of State for Trade and Industry if he will list the golden shares for which he has responsibility and state his policy towards the use of these shares.

Mr. Ridley : I hold special shares in British Telecom, Cable and Wireless, British Aerospace, Rolls-Royce, British Steel, and Jaguar. Decisions on using the rights attached to each of these shares depend on the particular circumstances of each company.

Mr. Rooker : Can the Secretary of State tell the House whether he will dispose of any of those golden shares in the same way as he is to dispose of the golden share in Jaguar, thereby giving the company away to Ford? [Interruption.] Of course it was given away. Was that done in order to stop Ford complaining about being shut out of the secret

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negotiations with British Aerospace over the Rover group? He cannot object to Ford having Rover because he has given it Jaguar.

Mr. Ridley : The hon. Gentleman should realise that there are two sorts of special share. There are those which are timeless, run for an indefinite period and seek to protect national security interests of one sort or another. The other is time limited. Of the companies that I mentioned, the two which have time-limited special shares are British Steel and Jaguar. The point of those special shares is to protect an industry which is trying to convalesce from the mauling it has had as a publicly owned industry for a few years until it can stand up on its feet and compete in the market. That condition of recovery for Jaguar was abundantly met when I decided to waive the gold share.

The hon. Member for Dunfermline, East (Mr. Brown) said that we threw the company to the wolves, but the hon. Member for Dagenham (Mr. Gould), who was there at the time, did not much like that expression. I must quarrel with the hon. Member for Birmingham, Perry Barr (Mr. Rooker). The price of £1.6 billion, which Ford paid for ‡Jaguar, cannot be described as giving it away.

Mr. Roger King : Is my right hon. Friend aware that notwithstanding the rather Neanderthal approach of some Opposition Members, others, namely the hon. Member for Coventry, North-West (Mr. Robinson), have welcomed the opportunity that the Ford-Jaguar arrangements provide? My right hon. Friend's speedy decision on the question of the golden share has enabled that company to join forces with Ford to provide us with a strong element in the British motor car industry.

Mr. Ridley : I am fully prepared to accept what my hon. Friend says, although I do not think that it is for me to comment on the merits or otherwise of any particular bid or takeover. I am sure that both alternatives before Jaguar should have strengthened it and that is a great tribute to the performance of the Jaguar management until now. I do not particularly like special shares because they put one in a position where one might have to make a choice which could be said to be partial. I am more prejudiced against them having discovered that the Labour party is thinking of using them for its nefarious purposes if it ever gained power.

Mr. Hoyle : So that we might have some guidance on future policy, will the Secretary of State tell us what discussions, consultations or assurances he received from Ford prior to waiving the golden share about manufacturing in this country, research and development, and the preservation of the Jaguar mark? What consultations has he had with Ford since waiving the share?

Mr. Ridley : I wish I could have an opportunity to give the hon. Gentleman guidance on a whole range of matters. He certainly needs it. The answer to his question is none.

Mrs. Currie : Does my right hon. Friend agree that it is about time in this trading country that we stopped being so hostile to inward investment? Is he aware that my constituents in south Derbyshire work happily for the Swiss company of Nestle and for the Swedish company of Asea Brown Boveri and that we are about to welcome a Japanese company? I honestly do not believe that my

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constituents in Rolls-Royce are all that bothered either way about the golden share held by my right hon. Friend. Is not a real golden share, and the only one worth having, the share in prosperity that is brought by these companies and this investment to my region and this country?

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