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Mr. Matthew Taylor : The Minister will be aware that one way of overcoming high import penetration is to assist British regional development in areas where unemployment is high and incomes are low--such as my own. Will he study the example of the Bretons, who tackled the problem very successfully? They enjoy a thriving export business, but only on the basis of a regional development fund and agency.
Mr. Redwood : Our policies have been much more successful in reducing unemployment than those of many other European countries. It is well below the EC average as a consequence of our open market and competitive policies. As the hon. Gentleman knows, we already have a regional policy. The main contributors to improved prosperity are an open trading system and sound economic policies that allow rapid growth of the sort seen in this country in recent years.
Mr. Grylls : Will my hon. Friend give more help to smaller companies, many of which could win exports if given greater encouragement through the British Overseas Trade Board and the commercial departments of British embassies? Will he also examine the potential of eastern Europe, and ascertain whether our commercial departments there could be expanded to help British exporters, as it is difficult to export to the East at present?
Mr. Redwood : I am grateful to my hon. Friend for raising this important subject. There are a number of initiatives to encourage exports. The DTI has an export initiative for smaller companies, which should get in touch with regional offices if they would like help.
I and my right hon. and hon. Friends are active in taking companies and industrialists to see the opportunities in eastern Europe. Extensive briefing is available from our embassies and from the DTI in London and the regional offices. There are enormous opportunities in eastern Europe for British business, and we would welcome companies taking up our offer of advice and help here and in the embassies abroad.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : According to the latest figures available from the business statistics office, the United Kingdom had a trade deficit with Japan in manufactured products of the electronics and information technology sector of £1.8 billion in 1987 and, provisionally, £2.2 billion in 1988.
Mr. Bidwell : Why is a major competitor like Japan ahead in production, and why are we, who are often in the forefront in invention, lagging behind? The Government appear to be unable to resolve that major problem. Is the Minister aware that there is a major deficit with Japan, much of it in high-technology goods? Does not that require urgent action by the Government and why do they not get on with it?
Mr. Forth : The hon. Gentleman highlights the important phenomenon that all the major OECD countries, except Japan, have a trade deficit in information technology. The sad truth is that most countries are unable to compete with Japan and certain other countries in that sector, partly because the Japanese have been very successful in identifying the sector and promoting it. Our export performance, which, as my hon. Friends have pointed out, is excellent, is across a wide range of goods. I see no incompatibility between our excellent performance across the range and the Japanese specialising, for example, in information technology.
Mr. Ian Taylor : Does my hon. Friend share my disturbance at the deficit with Japan? Will he note that in my constituency several companies in this sector are selling successfully into the Japanese market, which seems to show that what companies need most is not Government assistance but being based in Esher?
Mr. Forth : I congratulate my hon. Friend on the fact that companies in his constituency are capable of developing and making products in this sector which can be exported everywhere, including Japan. There are many such cases throughout the United Kingdom. I see no reason why, with a liberal economic regime and liberal Government policies, a low tax base and a skilled and trained work force, companies should not be able to compete in the sector and export throughout the world, including Japan.
Dr. Moonie : Will the Minister try to answer the question posed by my hon. Friend the Member for Ealing, Southall (Mr. Bidwell)? What does his Department intend to do about the problem other than beating its breast and sitting on its hands?
Mr. Forth : A moment ago I told the House what it is appropriate to do : we shall continue to provide an invigorating economic climate in which companies are free to make their decisions about investment, to develop their products and to seek the most effective markets for them. I hope that the Government will not propose a latter-day interventionist policy of the sort which people throughout eastern Europe have realised, belatedly but welcomely, is a total failure. We hope to continue the excellent trend of
Column 286policies that we have established over the past 10 years to liberate our industries and give them every opportunity to continue to succeed.
Mr. Ridley : I have received a number of representations, the great majority of which are in favour of my publishing the inspectors' report into the affairs of House of Fraser Holdings plc. I will do so as soon as possible.
Mr. Taylor : It is five years since the alleged irregularities and fraud took place, and 18 months since the previous Secretary of State received the report. Nothing can be done about alleged wrongful transfers of assets because of the previous Secretary of State's decision not to refer the issue to the Monopolies and Mergers Commission. Does my right hon. Friend accept that it is almost an insult to open government and justice not to publish the report and not to tell people exactly what went on?
Mr. Heffer : How early is the earliest possible moment? Is the Secretary of State aware that many of us who knew little about the matter until we saw television programmes have been shocked at what has been happening? Is it not time that not only the House but the entire population had a proper report of what happened in that case?
Mr. Ridley : How early is as soon as possible? It is as soon as I can do so. The hon. Gentleman should reserve judgment until it is possible to publish the report, which I have already said I will do as soon as that is appropriate in the light of possible proceedings.
Mr. Douglas Hogg : Through my south-west regional office, which maintains excellent relations with the North Devon Manufacturers Association, my Department has supported and will continue to support events sponsored by the association whenever possible.
Mr. Speller : Will my hon. Friend accept my thanks and congratulations on the good work of his Department in sponsoring a genuine multinational, locally based collection of industries, which is leading the way in skills training, information technology and happy co-existence to provide a good basis for prosperity in north Devon?
Mr. Hogg : I accept my hon. Friend's comments. Our efforts have been very successful. I recently studied the unemployment figures for the Barnstaple and Ilfracombe travel-to-work area and for Bideford, and then contrasted the figures for November 1984 with those for November 1989. In November 1984, the respective figures for Barnstaple and Ilfracombe and for Bideford were 14.7 per
Column 287cent. and 17.2 per cent. In November 1989, the figures were 6.7 per cent. and 8.1 per cent. That is a dramatic improvement.
Mr. Madden : What representations has the Minister received from employers in Devon about the difficulties that might face their employees should they be forced into short-time working? Is the Minister aware that, as a result of changes in Government regulations, if an employee earns more than £43 a week on short-time working he is prevented from claiming unemployment benefit for the days that he is not employed?
Will the hon. Gentleman urgently investigate the impact of the regulations in Devon and elsewhere? Will he ensure that the Secretary of State for Social Security changes the regulations soon so that they do not force short-time workers to be penalised in that way?
Mr. Hogg : I am sorry to disappoint the hon. Gentleman, but none of the members of the North Devon Manufacturers Association has made representations to that effect. However, they are pleased with the substantial improvements to the infrastructure in north Devon and, in particular, the large sums of money that the Government are spending on improving road links--for example, the £109 million spent on the north Devon link road.
Mr. Ridley : One year ago today my noble Friend Lord Young of Graffham launched a package of measures offering a wide range of help, advice and support to firms at each stage of the exporting process. Staff in the embassies and regional offices are always available to give information and advice.
I am encouraged to note that the volume of non-oil exports in the three months to November 1989 was 13 per cent. higher than a year earlier.
Mr. Hind : My right hon. Friend's news is much appreciated. He will no doubt recognise the importance of the 20 per cent. increase in exports last year, and he is to be congratulated on his recent announcement on the Export Credits Guarantee Department. Is he aware of the importance of the export credits guarantee to the north-west of England? Can he give us a timetable for the implementation of his plans?
Mr. Ridley : I am glad that my hon. Friend recognises the remarkable export performance of British industry in the past year. It represents a remarkable gain in our share of exports, to which the whole House will wish to pay tribute.
On the ECGD, my announcement before Christmas will have the effect of giving added impetus to the credit insurance industry in the long term by making sure that credit insurance will be available to our exporters within and without the Community. It will be necessary for legislation to be introduced, but I cannot estimate when it will be introduced. Apart from that difficulty, the Government will proceed with urgently required plans for the future of the ECGD as soon as possible.
Mr. Ridley : I could not be expected to answer that off the top of my head. The balance of payments includes the capital account, which produces a large amount of inward investment--about £1.5 billion from Japan alone last year--and which in turn is a major contributor to United Kingdom employment. The calculation that the hon. Gentleman seeks is somewhat wider than he would like to acknowledge.
Mr. Burt : Does my right hon. Friend agree that exports will increase in the years to come as the significant investment in manufacturing, domestic and foreign, comes on stream? Does he further agree that this is a sign of great confidence in our economy, and that if Opposition Members truly wished to support their constituents and their jobs, they would welcome that inward investment instead of carping about it, as they often do?
Mr. Ridley : My hon. Friend is right. In addition to the 13 per cent. volume increase in exports in the past 12 months, export order books have been showing a distinctly healthy trend, even in the past few months. British exports in the future will embarrass Opposition Members because they never like to hear good news.
Mr. Gordon Brown : Will the Secretary of State confirm that we have not only the biggest trade deficit of all our European competitors but the highest interest rate and the worst inflation, and that that is hitting exporters? What will he do to prevent Britain from becoming the only country in Europe, in the run-up to 1992, according to CBI figures, in which manufacturing investment this year is falling?
Mr. Ridley : I would not accuse the hon. Gentleman, in the words of the hon. Member for Kirkcaldy (Dr. Moonie), of being sufficiently clever to sit on his hands and beat his breast at the same time, but he was attempting to do something very similar in that supplementary question. Investment is keeping up extremely well and, in addition to the list of factors that he suggested, we have the lowest taxation on industrial payroll companies. Why does he wish to add a 0.5 per cent. payroll levy, which would raise a further £1 billion from British industry, thus severely debilitating it at a time when he says British industry needs help not hindrance?
Mr. Nicholas Winterton : Is my right hon. Friend aware that we must increase our manufacturing exports and that, to achieve it, the Government cannot ignore the need for a strategy for manufacturing industry? Is he further aware that unless we increase our manufacturing exports, our balance of trade deficit will continue, and there will be ongoing pressure on the pound, which will contribute to inflation and the country's economic problems?
Mr. Ridley : We have a strategy for manufacturing industry, and that is to let companies get on with the job without interfering with them. I suspect that that played a large part in the highly successful performance of British exports to which I referred.
14. Mr. Hardy : To ask the Secretary of State for Trade and Industry what is his estimate of the value of grants paid by his Department in pursuit of regional assistance plans during 1989 ; and what was the level of such assistance in real terms during 1979.
Mr. Douglas Hogg : In 1989 expenditure on regional assistance in England totalled £326.6 million ; in 1979 the figure was £297.6 million. Expressed in terms of 1989 prices, the expenditure in 1979 was £594 million.
Mr. Hardy : Does the Minister deny that the combined total from regional assistance and regional development grants was £1,130 million in 1979 and £470 million last year? Given the enormous increase in economic and environmental needs, does the Minister realise that that is an example of negligence and irresponsibility?
Mr. Hogg : The hon. Gentleman has failed to analyse the component elements of the figures. We have discontinued regional development grant, and quite right too, because it was an automatic grant which took no account of the jobs created, or of need. We are relying on regional selective assistance, which is based on need, jobs created and economic viability. That is the way forward.
Mr. Douglas Hogg : Apart from the points that my hon. Friend raised in his recent correspondence with my Department, I am not aware of having received any other representations about overcapacity in sawmilling.
Mr. Gill : In view of my hon. Friend's answers to my question and to the preceding one, what assurance can he give the House that regional selective assistance will not lead to displacement and overcapacity? Does he agree that such commercial decisions are best left to the market?
Mr. Hogg : My hon. Friend illustrates the value of having moved away from regional development grants to regional selective assistance. When considering applications for regional selective assistance, one can take into account displacement in employment opportunities and overcapacity in existing plants. That was not the case with regional development grants.
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