House of Commons Hansard Debates for 14 Feb 1990

Mr. Snape : I thought that it was for the Opposition to ask supplementary questions. Does the Minister agree that the report places the United Kingdom, with Spain, at the bottom of the technology and training league? Does he agree that any further reduction in the industry budget will make it even less likely that the regions, particularly the west midlands, will be able to recover from the collapse of manufacturing industry brought about by the Government's disastrous policies?

Mr. Hogg : As might be expected, I have two pieces of good news for the hon. Gentleman. First, as regards technology, the hon. Gentleman will be very pleased to know that between 1983 and 1987 research and development investment in the United Kingdom rose by 27 per cent. in real terms. Secondly, the main lesson to be learnt from the report is the need to diversify the economies of traditional industrial regions, such as South Yorkshire. The hon. Gentleman will know that the Government have been pursuing that policy vigorously--often, I may say, opposed by the Labour party--and we have achieved very considerable success with it.

Mr. Dykes : As the Right-wing economic ideologues in this country persist in saying that we misunderstand Germany--which, apparently, is bureaucratic, over-regulated, subsidised, corporatist and inefficient-- could we send a DTI task force to Germany to acquire some of its bad habits?

Mr. Hogg : In many respects we could give the Germans some very good lessons indeed. For instance, we could give them a lesson in how to reduce unemployment in areas that have suffered economic deprivation. The House will be pleased to know, for a start, that the rate of unemployment in this country is now two thirds of the European Community average. To take Sheffield as an example, in December 1989 the rate of unemployment there was 9.6 per cent., whereas in March 1986 it was 16 per cent. That is a remarkable transformation, and it is due to this Government's policies--not those of the German Government.

Mr. Caborn : It seems as though there are two Louvain reports--the one that the Government have read, and the one that other people have read. Looking to the competition that there will be in 1992, the report shows clearly that there are major structural weaknesses in the regions of the United Kingdom. Will the Minister re-read the report and consider the first survey of state aid in the European Community? He will see that the average investment per head in manufacturing industry, apart from steel and shipbuilding, is £1,050. The United Kingdom comes at the bottom of the league with £448 and the Germans are well ahead. As for investment in research and development, training and infrastructure, the Louvain report shows clearly that that is where we are weakest.

Mr. Hogg : It would help if the hon. Gentleman were a little more candid. He has not read the report. It is in French and the hon. Gentleman does not read French.

Mr. Donald Thompson : Has my hon. Friend read the British textile industry's report? Is he aware that that

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industry, which is worried about training in this country, sent a delegation to Germany where it found that training in the German textile industry is inefficient, expensive, out of date and no good at all for young people or re-entrants?

Mr. Hogg : I am very well aware of the German textile industry's shortcomings. More broadly speaking, we think--and most sensible people also think--that the textile industry must be brought back within the general agreement on tariffs and trade. That is the only sensible way forward. The proper way forward for the textile industry is to focus on products that add value to what the industry is already doing.

Post Office

13. Mrs. Fyfe : To ask the Secretary of State for Trade and Industry when he last met the chairman of the Post Office ; and what was discussed.

Mr. Forth : I last met the chairman of the Post Office, Sir Bryan Nicholson, on 11 January. We discussed various matters of mutual interest.

Mrs. Fyfe : Will the Minister join me in congratulating the Post Office workers who have coped so ably with the extra-large load of card deliveries today? Despite the blandishments of the directors of TNT and others interested in acquiring the profitable sectors of the Post Office, will the Minister reassure the British public, especially those who live in rural areas, that their needs have not been forgotten?

Mr. Forth : I am grateful to the hon. Lady for putting the question in that way. I agree with all parts of her question. First, I congratulate the Post Office in Glasgow on its excellent performance and on one of the best staff recruitment and retention records in the United Kingdom. Secondly, I join the hon. Lady in praising the Post Office for having one of the best delivery performances in Europe and for charging less for stamps than almost any other country in Europe. I can give her the assurance that she seeks. Despite the fact that my right hon. Friend has met a number of companies interested in the kind of services provided by the Post Office, none has put forward a proposition of interest to my right hon. Friend or to me. We are concerned to maintain not just the rural network but all parts of the Post Office network.

Mr. Gow : Does my hon. Friend recall that 13 years ago, with the support of my hon. Friend the Member for Horsham (Sir P. Hordern) I introduced a Bill to end the Post Office's statutory monopoly in the collection and delivery of letters? Will he now reintroduce that Bill?

Mr. Forth : My hon. Friend is ahead of his time in many things. That is a reputation which he rightly enjoys. He must know, however--it has often been repeated--that we regard the Post Office monopoly as a privilege, not as a right, and the Post Office well understands that. The monopoly is kept under review so that an assessment can be made from to time of whether any action is appropriate. That process continues.

Mr. Henderson : The Prime Minister has repeatedly said that she believes in keeping the Royal Mail intact. The Under-Secretary of State wrote to me on 1 February saying that there were no plans to break up the Post Office monopoly, so on what basis did the Minister say today

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that propositions had been received relating to the privatisation of the Post Office? Why did departmental officials admit to the press this morning that they had received propositions and that talks had taken place with road haulage companies? Will the Minister make an honest statement and say whether the Government intend to sell off the letters business to the fat cats in the road haulage industry, or is he prepared to accept the need to protect the service throughout the country, especially in rural areas?

Mr. Forth : The hon. Gentleman is confusing himself and there is a danger that he may confuse the House as well. It is no secret that my right hon. Friend the Secretary of State has met a number of companies with activities in that sector. Indeed, it would be most odd if he had not, as I believe that my right hon. Friend has shown his usual open-mindedness in wishing to hear all points of view and all proposals. I can reassure the hon. Gentleman, as I reassured the hon. Member for Glasgow, Maryhill (Mrs. Fyfe), that none of the companies' suggestions has found favour with my right hon. Friend, but we shall continue to consider the matter as it is our duty to do so.

Mr. Matthew Taylor : I would not wish to stop the Minister talking to anybody, but will he give an absolute commitment to the House that he stands four-square, 100 per cent. behind the principle that the postage rate for letters should be the same no matter where in the United Kingdom they go? That is what matters to constituents in the further-flung areas, particularly in my part of the world.

Mr. Forth : The hon. Gentleman is absolutely correct. Interestingly, that principle and the principle of universal delivery provide the greatest difficulty for those who seek to provide alternatives to the existing postal services. I believe that our insistence on those principles is crucial and I am glad to have the hon. Gentleman's support.

Mr. Nicholas Bennett : If newspapers can be delivered all over the United Kingdom at the same price, why should the Post Office continue to have a monopoly? Private enterprise has already shown that it can deliver various goods just as well as the Post Office does.

Mr. Forth : I am delighted to see my hon. Friend here, obviously in good heart and good spirits. It is untypical of him to confuse deliveries of commercial items such as newspapers with postal deliveries. The two cannot and should not be compared because the Post Office has an obligation to collect an item anywhere in the United Kingdom and to deliver it anywhere in the United Kingdom, and it does so. It is seeking to improve deliveries, but it still delivers at a standard rate. That principle has been re-emphasised not only by my right hon. Friend the Prime Minister but by my right hon. Friend the Secretary of State and we shall continue to do so.

Japan

14. Mr. Buckley : To ask the Secretary of State for Trade and Industry what is the current trade deficit with Japan ; and how much of the deficit is accounted for by manufactured goods.

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Mr. Redwood : In 1989 the deficit in total visible trade with Japan was £4.8 billion. In the same period, the deficit for manufactured goods was £5 billion. Last year United Kingdom exports to Japan increased by £525 million to £2.3 billion, an increase of 30 per cent. over 1988.

Mr. Buckley : Now that the Secretary of State accepts that we have a deficit with Japan, Germany, Italy and the United States, and an ever- increasing deficit with other EC countries, does he accept that he ought to be doing something about it? The announcement today of an upturn in output of 4.3 per cent. in 1989, compared with 7.1 per cent. in 1988, is another indication of the devastating effect on the British economy of the Government's so-called economic miracle.

Mr. Redwood : The hon. Gentleman scoffs too much when he derides the increase in output. He is talking about years of unprecedented growth in the United Kingdom economy. There has been strength in manufacturing, in invisibles and in all sectors of the economy. As I have told the House already, the trade position has been improving in recent months and there is every indication that more progress will be made in the current year.

Mr. Wells : Are not the areas in which our trade with Japan and Germany weakest the very areas in which Socialism applied in the 1960s and 1970s--motor cars, semi-conductors and all the other areas in which the Labour party tried to reorganise British industry?

Mr. Redwood : My hon. Friend makes a powerful point. It is noticeable that the output and performance of those industries are improving by the day as the Government cease to intervene and cease to pursue the policies that the Labour party pursued when in office. The more the Government continue their enterprise-loving policies, the more industry will strengthen.

Dr. Moonie : Will the Minister cast his enterprise-loving mind over the problem of computer manufacture? Can he name one major computer component in which we are in positive balance with Japan? If not, can he tell us of one thing that he intends to do in the coming year to improve the situation?

Mr. Redwood : I do not have detailed information about all component manufacturers and I would not wish to mislead the House, but I can tell the hon. Gentleman that our trade is strengthening and a great deal of inward investment is coming from Japan which is very welcome here. The hon. Member for Hemsworth (Mr. Buckley) will presumably not be telling the House today that near his constituency, Pioneer Electronics is to make a major investment, creating about 1, 200 jobs in a very important sector.

Mr. Oppenheim : Will my hon. Friend remind the Opposition that a nation that has never suffered any significant nationalisation, that has had low taxation and public spending and a superb education system and that, above all, has never suffered from a Socialist Goverment is always likely to be in better shape economically than one that has suffered from Socialism?

Mr. Redwood : That is so very true. Evidence from the other end of the spectrum can be seen in the way in which the Socialist economies of eastern Europe and the Soviet Union are trying to get information from the West about

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how to run a proper enterprise economy so to enjoy the fruits of prosperity that we in the West have enjoyed for so many years.

Monopolies and Mergers Commission

15. Mr. Jim Marshall : To ask the Secretary of State for Trade and Industry what plans he has to change the role of the Monopolies and Mergers Commission.

Mr. Ridley : I have no such plans.

Mr. Marshall : Does the Secretary of State accept that while competition must remain central to takeover activities, other factors such as the strategic national interest and the impact of takeovers on regional employment or unemployment must be taken into consideration?

Mr. Ridley : I am glad to hear the hon. Gentleman agree that competition is the prime concern of monopolies and mergers policy. I accept there could be examples in which the national interest is involved. We also consider implications such as regional policy, but I stress that that is very much a secondary consideration to the competition issue.

Mr. Ashby : Does my right hon. Friend agree that the Monopolies and Mergers Commission should be opened up and brought much closer to the American anti-trust laws with the ability to break up the large monopolies being created in Britain so that we can have real capitalism rather than over-large, domineering companies in any one sector?

Mr. Ridley : The commission has power to order divestment, or to suggest that I order divestment, in certain cases where monopolies are formed, and that power has been used. The policy that appeared to be evolving in the Labour party in a document called "Industry 2000"--I doubt whether anyone has heard of it--was virtually to put a stop to all takeovers. That would be disastrous for the continuing efficient function of the economy.

Mr. Mullin : Is the Secretary of State aware that W. H. Smith and Son Wholesale, which distributes many of the newspapers to which the hon. Member for Pembroke (Mr. Bennett) referred, is a monopoly? Does he plan to do anything about that?

Mr. Ridley : These matters have been looked at by the Director General of Fair Trading. I do not think that it is a monopoly because others also circulate newspapers.

Manufactured Imports

17. Mr. Tom Clarke : To ask the Secretary of State for Trade and Industry what has been the growth in imports of manufactured goods from the European Community since 1979.

Mr. Redwood : Imports of manufactured goods from the European Community have risen from £16 billion in 1979 to £52.5 billion in 1989, and exports have virtually trebled, as I mentioned earlier.

Mr. Clarke : Is not a deficit of £14.5 billion a serious matter? Is not that why the Confederation of British Industry is concerned about the impact of high interest

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rates and the uniform business rate on fixed investment in 1991? Does that not worry the Minister as we approach 1992?

Mr. Redwood : Investment has been running at record levels and we have been enjoying an investment boom. I am sure that that will strengthen our industrial base for the early 1990s and will continue the improvements to which I referred earlier.

Mr. Ian Bruce : Has my hon. Friend had a chance to read the Labour party document "Industry 2000"? Does it contain anything that would indicate-- [Interruption.]

Mr. Speaker : Order. The hon. Gentleman should be careful how his question is framed.

Mr. Bruce : Has my hon. Friend read the document and has he found anything in it to help our import-export balance, or does it propose a return to state intervention and central control? Is he surprised--

Mr. Speaker : Order. The hon. Member must ask about the Government's policy.

Mr. Redwood : I think that my hon. Friend asked about Government policy. He asked whether there were helpful ideas in a particular document. Having read the document carefully, I notice that a policy gap is developing as the document refers to very few of the ideas in the original Labour policy review. Apart from schemes that the Government are already pursuing, such as training and enterprise schemes, the document contains nothing that would help and many proposals which might be illegal under the European Community regime.

Manufacturing Industry (Competitiveness)

18. Mr. Barron : To ask the Secretary of State for Trade and Industry what representations he has received on the competitiveness of British manufacturing industry.

Mr. Douglas Hogg : Most contacts that my Department has with industry and commerce involve matters having a bearing on United Kingdom competitiveness.

Mr. Barron : Has the Minister had any direct representations on the lack of skill training in the British

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economy, especially in those areas where the major steel and coal industries have been running down? The lack of skill training has been well highlighted by my hon. Friends in relation to the Labour party campaign, "Industry 2000". Why has there been deskilling in many major industries that, according to EEC reports, lack skilled people for the jobs that we hope will exist in the future?

Mr. Hogg : That was a surprisingly uninformed question, even for the hon. Gentleman. He seems unaware that we have put the training councils in place. On a broader point, British industry is in infinitely better shape than it was 10 years ago. I should have thought that the Labour party would welcome the fact that the volume of exports is 15 per cent. higher than it was 12 months ago--a volume increase unprecedented since 1973. Incidentally, Labour Members would be well advised to tell their union friends not to pursue inflationary policies.

Mr. Caborn : On a point of order, Mr. Speaker.

Mr. Speaker : I think that the hon. Member wants to explain that he speaks French.

Mr. Caborn : I do not speak French, Sir. I should like to present to the House the report, in English, to which the Minister for Industry referred when he accused the Opposition of not being able to speak French. It is evident that the hon. Gentleman has read the wrong report, that he cannot read French and that he has reached the wrong conclusion.

Mr. Douglas Hogg : Further to the point of order, Mr. Speaker. I am prepared to accept that the hon. Member for Sheffield, Central (Mr. Caborn) may have glanced at the document and to that extent I withdraw my observation. A more interesting question is whether he understood it and whether he is prepared to submit himself for examination, and I shall report to the House on that.

Mr. Speaker : I think that that was a very helpful intervention by the Minister.

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