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House of Commons

Wednesday 16 May 1990

The House met at half-past Two o'clock

PRAYERS

[Mr. Speaker-- in the Chair ]

Oral Answers to Questions

TRADE AND INDUSTRY

Dangerous Goods

1. Mr. Jack Thompson : To ask the Secretary of State for Trade and Industry what further steps he is taking to strengthen legislation against sellers of dangerous goods.

2. Mr. Gareth Wardell : To ask the Secretary of State for Trade and Industry what further steps he is taking to strengthen legislation against sellers of dangerous goods.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : The introduction of the general safety requirement in part II of the Consumer Protection Act 1987 means that it is now a criminal offence to sell any consumer product that is not reasonably safe. That is supported by specific regulations and by a range of enforcement powers that enable action to be taken effectively and swiftly against unsafe consumer goods. I see no justification for further legislation in this area.

Mr. Thompson : Will the Minister take into account the fact that local authorities have had carefully to examine staffing levels in their trading standards departments simply as a result of the introduction of the poll tax? Will he consider at least changing part II of the Consumer Protection Act 1987 to extend the period of time for prosecutions from six months to about three years? There is great demand among local authorities for that change and it is important that it is considered. Will the Minister also consider legislation on the importation of radioactive goods such as smoke detectors, certain types of switchgear and watches?

Mr. Forth : The hon. Gentleman gives me an opportunity to pay tribute to the work done by trading standards departments up and down the land, which do excellent work on behalf of the consumer. Of course, it is for local authorities to decide their priorities. I hope that all local authorities will always give the highest priority to their duties under the Consumer Protection Act 1987 to give resources to the trading standards departments. I am confident that they will do so. As for radioactive material, if the hon. Gentleman will write to me, I shall consider the matter carefully in order to assess, apart from anything else, whether it is my responsibility. I should like to consider the matter in more detail.


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Mr. Wardell : Will the Minister give three good reasons why he is not prepared to amend part II of the Consumer Protection Act 1987 in order to allow trading standards officers more time to prosecute sellers of goods that result in injury or put people's lives at risk?

Mr. Forth: I shall give the hon. Gentleman one reason. Although my Department has asked for them, I have not yet received positive and substantial reasons why we need such an extension of the time limit. I give the hon. Gentleman this undertaking. As and when anyone gives me real evidence that the six-months time limit is a real obstacle to the effective pursuit of prosecutions, I shall look at it positively. We have asked for such evidence and we are still waiting.

Mr Nicholas Bennett : Will my hon. Friend consider referring to the Office of Fair Trading a range of goods that have come on to the market in the past couple of years, which claim to be innocuous, are prettily packaged and have no price on them? The appear to be coming from an address in Walworth road.

Mr. Forth : If I can pick up the drift of what my hon. Friend is saying, I suspect that one of the problems with the products emerging from Walworth road is that we are still waiting for full disclosure of all the details, to say nothing of the fine print. When we see some of that, the goods may well be categorised as grotesquely unsafe to the public.

Mr. Nigel Griffiths : Does not the Minister realise that not only trading standards officers of local authorities but the prosecution service and the testing stations of his Department determine delays in bringing prosecutions against the sellers of dangerous goods? When trading standards officers throughout the country are telling the Minister that sellers of dangerous goods get away scot-free because of the six-month time limit on prosecutions, why has the Minister failed to review that serious loophole in our consumer protection law?

Mr. Forth : In his relatively brief tenure in office, the hon. Gentleman has made a speciality of making unsubstantiated statements from the Dispatch Box. I tell him in all generosity that I have had no such information or approaches from trading standards departments. When I receive detailed and substantial evidence that the time limit is causing the problem that he suggests, and as I have undertaken to his hon. Friend the Member for Gower (Mr. Wardell), I shall consider it positively, but I am awaiting that evidence. The hon. Gentleman might well prod trading standards departments to come forward more quickly.

Teesside Development Corporation

3. Mr. Holt : To ask the Secretary of State for Trade and Industry when he last met the chairman of Teesside development corporation to discuss development in Teesside.

The Minister for Industry (Mr. Douglas Hogg) : I have not met Mr. Norman in his capacity as chairman of the Teesside development corporation, but I am well aware of TDC's achievements. I was pleased to see that unemployment in my hon. Friend's constituency has fallen


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by 22.4 per cent. over the past 12 months. I am advised that the TDC has £1 million worth of factory space under construction.

Mr. Holt : I am grateful to my hon. and learned Friend for that reply and I hope that it will not be too long before he meets Mr. Norman. When he does, will he please convey to him the thanks of the people of Teesside for the work done by the TDC in regenerating and revitalising our area? If there is any drawback at all, it is that we still have to contend with Cleveland county council. Perhaps we can abolish that and extend the TDC to the whole area.

Mr. Hogg : I shall indeed bear in mind what my hon. Friend has said, and discuss with Mr. Norman the important fact that during the past two years, by the selective use of regional assistance, about 2,500 new jobs have been attracted into the Cleveland area. That is an important development for the whole region.

Space Research

4. Mr. Atkinson : To ask the Secretary of State for Trade and Industry if he will make a statement on United Kingdom participation in space research for peaceful purposes.

Mr. Douglas Hogg : The United Kingdom is successfully carrying out a range of civil space activities, principally through the programmes of the European Space Agency. The main emphasis of our programme is on space science and on Earth observation. Development of Earth observation services will open up new commercial opportunities and play a significant role in monitoring the global environment and climate.

Mr. Atkinson : In view of the negative vibes that we were giving out to the European Space Agency two years ago, may I thank my hon. and learned Friend for that encouraging reply? Is he aware of the various plans to develop a space plane--Hermes in France, Saenger in West Germany, the Orient Express in the United States and our own HOTOL project? Does he agree that it would be sensible to collaborate internationally on such an expensive project, and to include Japan and the Soviet Union if possible? Will he initiate international discussions along those lines?

Mr. Hogg : We do not have any intention of putting Government money into HOTOL. If it ever takes place, it is likely to be an enormously expensive project, and very few vehicles would be required. If there are industrial participants who are thinking in terms of it, I should certainly commend to those involved international co-operation of the sort suggested by my hon. Friend. I take this opportunity to emphasise the Government's commitment to the programmes sponsored by the European Space Agency.

Mr. Page : Does my hon. and learned Friend agree that the most profitable aspect of space science has been telecommunications, in which we have been enormously successful in the past? Is he concerned that we might be losing that lead? Is he fully convinced that we are giving all the support necessary to the new projects coming forward?

Mr. Hogg : That is an important question. The Government are trying to take on projects in space that are likely to give rise to the most useful programmes in the


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foreseeable future. We have done well in telecommunications in space, and British industry leads the field in that. As a specific reply to my hon. Friend, he may know that we have just announced a commitment of another £32 million towards what is known as DRTM--the data relay technology mission. We shall be researching

inter-communications between satellites and between mobile land satellites.

Steel Industry

5. Mr. John Hughes : To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.

9. Mrs. Margaret Ewing : To ask the Secretary of State for Trade and Industry if he will list the principal regular subjects of discussion at meetings between himself and the chairperson and board of British Steel plc on which he answers to Parliament.

Mr. Douglas Hogg : British Steel is now a private sector company free from Government control. Over the last 10 years there has been a transformation in the fortunes of British Steel, which is now one of the most successful and productive steel companies in the world. I am confident that that success will continue in the future.

Mr. Hughes : Does the Minister acknowledge that the product of the Government's suicidal economic policies, which have resulted in catastrophically high interest rates, is the loss of the jobs of thousands of workers in the steel industry in Scotland and Wales? Will he explain what steps he has taken to counteract that effect? Is he aware that British Steel has only 2 per cent. of the market share in the Common Market, in which demand is increasing at 3 per cent? What steps will he take to ensure that the British steel industry will meet that demand?

Mr. Hogg : I am afraid that the hon. Gentleman has not done credit to what is an important issue. The plain truth is that the fortunes of British Steel have been dramatically transformed in the past 10 years and it is now one of the most successful steel-making concerns in the whole of Europe. We should not forget that between 1975 and 1985 the subsidies to the steel industry, expressed in today's money, were £14,430 million. I should have thought that the House would be pleased to note that British Steel is now in profit.

Mrs. Ewing : This is an extremely important issue and it is clear that the Minister is not responding to the extreme anger that we feel in Scotland today about the despicable and disgraceful announcement by British Steel of the proposed closure of the hot strip mill at Ravenscraig next year. Why is not the Secretary of State for Scotland prepared to come along and sit on the Front Bench to hear the points that hon. Members are raising today? We are talking not just about the loss of 770 jobs directly but about the heart being torn out of the communities of central Scotland and about the core being removed from the Scottish economy.

When was this decision reached? Is it true that it was reached by the board in March of this year? When did the Department know about it? When did it discuss it with the Scottish Office? When will we have an opportunity to look at this in more detail?


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Mr. Hogg : The hon. Lady is being less than candid with the House. She has complained about the absence of my right hon. and learned Friend the Secretary of State for Scotland ; she knows perfectly well that my hon. Friend the Minister of State, Scottish Office is on the Front Bench, and that there is a private notice question down for answer at 3.30 pm, to which my right hon. and learned Friend the Secretary of State will be responding. So it was less than honest of the hon. Lady to pose her question in the way that she did.

Sir William Clark : Does my hon. and learned Friend agree that the success of the steel industry is proof positive that privatisation is much better than Government control?

Mr. Hogg : Absolutely ; my hon. Friend is entirely right. During the 1970s the British steel industry was virtually destroyed by the Labour party policies that were then in place. Since then, there has been a dramatic upturn in the fortunes of British Steel, which came from a considered decision to let its managers manage their business in accordance with commercial criteria.

Mr. Oppenheim : Can there be any better example of socialist economic mismanagement than the performance of British Steel in the 1970s? Is not it true that in the 1970s the Labour Government pumped huge amounts of state subsidies into British Steel, which merely encouraged it to build up huge and unnecessary surplus capacity? It was strike-bound most of the time ; it was unproductive ; and at one point it was losing £1 million a day. Contrast that with today, when British Steel is one of the most profitable and productive steel companies in the world, with one of the best-paid work forces in Britain.

Mr. Hogg : My hon. Friend is entirely right. He referred to losses, and the House will wish to know that in the period 1979-80 British Steel lost--in today's money--£3,359 million. In the same period the United Kingdom steel industry was, I regret to say, at the bottom of the output league : output per man was about 160 tonnes, whereas we are now third in the ranking with output per man at about 347 tonnes.

Dr. Reid : On this of all days, the fact that the Secretary of State for Trade and Industry is not at the Dispatch Box now is a shameful disgrace. He cuts an ever more irrelevant and pathetic figure. Does not the Minister begin to understand the feelings of bitterness and betrayal in the Motherwell area? He will be the target of those feelings, and deservedly so. Why did not he heed our warnings about privatisation? Why did he go ahead despite those warnings and why has not he lifted as much as a little finger to argue for investment at Ravenscraig? Will he have the guts to admit that his complacency was wrong and give a guarantee that he will stand alongside Opposition Members who will fight to the end to reverse the decision taken this morning by British Steel?

Mr. Hogg : The hon. Gentleman's observations simply prove that the Labour party has learned nothing at all about the proper approach to industrial policy. I repeat to the House that between 1975 and 1985 subsidies to the British steel industry, in today's money, amounted to £14,430 million. That is a disgrace. The industry is now profitable and its output is among the most remarkable in Europe. That is a tribute to the process of privatisation.


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Mr. Dickens : Does my hon. and learned Friend agree that there are as many people working for British Steel today as there were 10 years ago? The British taxpayer was putting £600 million a year into British Steel. Today it is making £800 million profit.

Mr. Hogg : My hon. Friend is entirely right to draw attention to the radically changed productivity record of British Steel. He is also entirely right when he says that what was a catastrophically loss-making industry is now profitable. We should be proud of that and not try to put back in place policies pursued by the Labour party that led to disaster.

Mr. Gordon Brown : Will the Minister explain how privatisation has ensured the future of Ravenscraig and the strip plant? Is not he ashamed to come before the House as the "do nothing" Minister who has simply walked away from his responsibilities to the steel industry? Will he confirm that the Secretary of State has not only refused to answer questions today but has failed to meet British Steel? When the chief executive of British Steel came to the Department of Trade and Industry yesterday no Minister bothered to meet him and he was met by only a few officials. Will the Minister now meet British Steel and demand that it explains itself? Will he call for the additional long-term investment that is now needed for a long-term and viable future for the steel industry in Scotland, England and Wales? How much more of Britain's manufacturing industry will he betray before he ends this dereliction of duty?

Mr. Hogg : I must say to the hon. Gentleman that I find his ranting profoundly depressing. Clearly, he has not understood or has not listened to any of the facts that I have given to the House. When the Labour Government were last in power the steel industry made a loss, in today's money of £3,359 million. That was a result of the type of policy--if the hon. Gentleman has one--that he is now calling for--that is, massive intervention. As the hon. Gentleman well knows, my right hon. and learned Friend the Secretary of State for Scotland has been in the far east selling Britain most effectively as a manufacturing country for inward investment. He also knows that my right hon. and learned Friend is coming to respond to a private notice question. The hon. Gentleman is a Scottish Member, so he would be the first to complain if some other Minister were first to make such a response.

Consumer Capital Goods

6. Mr. Stern : To ask the Secretary of State for Trade and Industry what proposals he intends to bring forward to amend the law relating to the protection of purchasers of consumer capital goods.

Mr. Forth : The Government have announced their support for the Law Commission's recommendations to amend legislation on the sale and supply of goods and services. Those recommendations cover other transactions within the ambit of that legislation and not only those for "consumer capital goods". The private Member's Bill introduced by the hon. Member for Clwyd, South-West (Mr. Jones) would give legislative effect to those proposals.

Mr. Stern : Will not that private Member's Bill, which is at the moment in the other place, be a useful addition to the body of law if it is passed in its present form? However,


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once that Bill is passed, is not there still scope for a fresh look at protection of the purchasers of consumer capital goods?

Mr. Forth : My hon. Friend is correct. In the shape in which it left the House and went to the other place, the private Member's Bill has the Government's full support, and I hope that it ends up on the statute book, because it would add considerably and significantly to consumer protection. My hon. Friend is also correct to say that I undertook that when the Bill is resolved one way or another by both Houses of Parliament, it will be appropriate for me and the Department to look at consumer guarantees-- something on which my hon. Friend has pressed me on a number of occasions-- to see whether it is appropriate to consider further legislation in that sector. I have undertaken to do that in the past and I gladly do so again.

Mr. Ashdown : While we are on the subject of consumer protection, is the Minister aware of the disgraceful failure of the Insurance Brokers Registration Council to protect the interests of consumers in the Wessex Trust affair, in which so many have lost, often their life savings? Is he further aware that the IBRC has lost applications for grants and sought to discourage eligible applications? If he says that he cannot and will not intervene to ensure that the IBRC fulfils its obligations, will he at least express his disapproval of its actions?

Mr. Forth : Far be it from me to invade your territory, Mr. Speaker, but if the right hon. Gentleman spent more time in the House, he would realise that he was asking supplementary questions not only on a subject which has nothing to do with the main question, but on something which has nothing to do with my responsibilities. It is entirely a matter for my hon. Friend the Parliamentary

Under-Secretary of State for Corporate Affairs. However, if the right hon. Gentleman wishes to write to the correct Minister in my Department, he will get an answer from my hon. Friend.

EC Trade

7. Mr. Dunnachie : To ask the Secretary of State for Trade and Industry when he will next meet his counterparts in the European Commission to discuss United Kingdom trade with the European Community.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood) : My right hon. Friend and I regularly meet European Commissioners and discuss with them a wide range of subjects.

Mr. Dunnachie : Is the Minister aware that imports to the United Kingdom from the EEC totalled some £2.7 billion in the 1970s and that in 1989, the figure had risen to £63.5 billion? In the light of that, will he outline his plans to improve the figure?

Mr. Redwood : The hon. Gentleman should also note that there has been a big increase in our exports to the European Community because we are trading much more widely with our European partners than we were in 1970. The House should recognise that, since 1983, the ratio between our exports and imports in manufactured goods to the European Community has been improving. That is a direct result of the economic policies pursued by the


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Government, which have led to a massive increase in investment and productivity and an improvement in our manufacturing performance. I dread to think what would happen if we took the advice of Labour Members and adopted some of the policies emerging from the Labour party's latest policy review. On page 131 of his book, the hon. Member for Dunfermline, East (Mr. Brown) recommends a major increase in corporate and investment taxation. That would be a good way to reverse the encouraging trend in the ratio between exports and imports in manufatured goods to Europe, which has been taking place since 1983.

Sir Hal Miller : When the Minister meets his counterparts, will he tell them that the motor trade has shown a positive improvement, and raise with them the question of the barriers being erected against cars made by British workers in British plants, using money supplied by British banks, albeit for a Japanese company? Will he do his best to ensure that those artificial barriers to trade are removed, so that we can complete the single market, and compete fairly, and that that takes place long before we move on to further measures of European unity?

Mr. Redwood : My hon. Friend has done a great deal for the British motor industry and I am sure that he will be pleased to know that my right hon. Friend the Secretary of State has carried the argument strongly into the counsels of our European partners. He has made it clear that cars produced in Britain, by whatever company under whatever ownership pattern, are British cars and therefore European cars and should circulate freely within the Common Market. That remains our position, and we have every confidence that our partners will accept it. My hon. Friend can rest assured that the Government will fight strongly for that right. We are proud of the revival in the British motor car manufacturing industry by new investors and existing investors who are already in this country. The cars are British. Opposition Members love to knock these investments, but they should welcome them and recognise the great contribution that British skills and money are making to the investments.

Mr. Skinner : What about the Italian fireplaces?

Ms. Quin rose --

Mr. Cryer : What about a few more Back Benchers?

Mr. Speaker : Order. We cannot have this background noise. It is extremely disruptive and it does not help our debates.

Ms. Quin : From the Minister's earlier reply it would be difficult for many people to realise that we have a huge trade deficit with the EEC. As we do have such a deficit, why are the Government cutting export promotion research?

Mr. Redwood : The Government offer a range of assistance to stimulate exports in the best way that is suitable for exporters. The DTI is happy to offer that advice and assistance through its successful export promotion.

The proof of the pudding is in the eating. Our exports are improving relative to our imports, and the Government's macro-economic policies are an important part of the policy to bring together the two lines between imports and exports. There is nothing on offer from the


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Opposition. Their latest policy review is a sham and a pipe dream of the worst sort. There are no policies within it for controlling inflation or excess demand. The Government have put forward the necessary policies, and they will work.

Regional Assistance, Shropshire

8. Mr. Gill : To ask the Secretary of State for Trade and Industry whether he will consider extending regional selective assistance to south Shropshire.

Mr. Douglas Hogg : Regional selective assistance is available to those parts of south Shropshire that have been designated as intermediate areas under the Industrial Development Act 1982. I have no plans to extend assisted area status to other parts of south Shropshire.

Mr. Gill : My hon. and learned Friend will be aware of the £14 million of taxpayers' money which is being made available to the Unitgate company for a poultry processing plant at Scunthorpe. He will further be aware of that company's declared intention to make 500 employees redundant at its plant at Craven Arms in my constituency. In refusing to make grants universally available or to scrap the system altogether, is my hon. and learned Friend aware of the serious competitive distortions that are caused within industries, leading inevitably to the transfer of jobs from one area to another? In the light of the example that I have given, will the Government review their policy?

Mr. Hogg : My hon. Friend referred to jobs in his constituency. I am sure that he is as pleased as I am to note that during the past 12 months unemployment in his constituency has fallen by 23.7 per cent. I am aware of my hon. Friend's concern about the particular application to which he has drawn attention. Indeed, he has seen my right hon. Friend the Secretary of State to discuss it. There is, however, a misunderstanding. The scheme to which my hon. Friend referred at Scunthorpe involves a chicken plant, for which RSA was provided. The facility in his constituency is a turkey concern. They have feathers in common, but nothing else. I am satisfied that RSA is being applied sensibly and usefully.

Car Production

10. Mr. Boswell : To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.

14. Mr. Squire : To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Nicholas Ridley) : To the nearest thousand, 1,04000 cars were produced in 1985 ; 1,019,000 in 1986 ; 1,143,000 in 1987 ; 1,227,000 in 1988 and 1,299,000 in 1989.

Mr. Boswell : I thank my right hon. Friend for that answer and recognise the improving trend that it shows. However, does he agree that the figures still show an overlarge deficit in that sector? With the new investment from both Japanese and home-grown companies, does he think that the figures will improve still further in the next five years, with consequential benefits both for the balance of trade and for British steel production?


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Mr. Ridley : My hon. Friend is right. We have reversed the disastrous effects of Labour's policies in the late 1970s, when the production of cars fell from 1.5 million to fewer than 1 million per year. With present investments in prospect, the Society of Motor Manufacturers and Traders estimates that 2 million units will be produced per annum by the mid-1990s. That will more than twice overtake the position that we inherited. It is a remarkable demonstration of the success of the Government's policies compared with those that the Opposition are still peddling.

Mr. Squire : Does my right hon. Friend agree that while those figures confirm that Opposition claims of a collapse of manufacturing industry are not borne out in the motor industry in any way, shape or form, it remains critical in such a multinational industry that wages and productivity remain competitive so that we can be attractive to investment, not just now but over the next decade?

Mr. Ridley : My hon. Friend is right--productivity is the key to competitive success and to improving wages. It may interest the House to know that Rover produced six cars per man-year in 1979, but in 1989 it produced 20 cars per man-year. That is the sort of level which, although still not adequate, shows the extreme necessity of higher productivity in British industry, and which has been achieved in that case. That is necessary if we are to regain market shares throughout the world.

Mr. Harry Ewing : Will the Secretary of State consider both aspects of the manufacture of new cars, the other aspect being the sale of new cars? Will he discuss with manufacturers the type of advertising material that places heavy emphasis on the very high top speeds that the cars can achieve in a short time? Is he aware of the number of recent tragic accidents in which youngsters have been killed trying to reach the high top speeds that manufacturers advertise for their vehicles?

Mr. Ridley : The hon. Gentleman may be interested to know that last year 991,000 cars built in British factories were sold to United Kingdom customers in the home market. That is the highest for any year since 1973. If customers want high acceleration, manufacturers must provide it. I remind the hon. Gentleman that the law of the land sets speed limits and they are enforced by the police. He is right to suggest that people should not break the law of the land and cause accidents. However, I am not responsible for the traffic laws, and it is necessary for manufacturers to produce what the customers want.

Mr. Win Griffiths : Does the Secretary of State intend to provide any evidence to the European Commission inquiry into why car prices in Britain are so much higher than in the European Community?

Mr. Ridley : As the hon. Gentleman knows, the matter has been referred to the Monopolies and Mergers Commission for an in-depth study. In view of my statutory position in relation to the MMC, it would be wrong of me to make any comment or to refer any evidence myself. The MMC's duty is to collect such evidence as it thinks necessary to pursue its inquiries.

Mr. Grylls : Does my right hon. Friend agree that the increase in the production of cars in Britain is very much attendant on their having free entry to the continental market? Although he has taken a robust line on the matter


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with his colleagues, can he tell us when the problem will be resolved and when cars from plants located in Britain will be allowed freely into countries such as France?

Mr. Ridley : I agree entirely with my hon. Friend's sentiments. At present, cars manufactured in Britain, by whatever company and whoever owns it, are allowed free circulation into the European Community. We intend to maintain that position and I believe that under the treaty of Rome it should be maintained. A new question has been raised by some member states in relation to the regime for the import of Japanese cars after 1992. I make it absolutely clear that the Government are adamant that there should be no change in the position of what are called transplants. They will continue to maintain free entry into the market, without there being any effects on any other matter.

Mr. Henderson : The Secretary of State will know that recent proposals from the Commission identify cars produced in Sunderland, potentially in Derby and also in Swindon, as cars which, during the transitional period, would be counted as part of the Japanese quota. I understand the strong words that the Secretary of State expressed this week to the Japanese Government. Can he tell the House how he intends to ensure that cars made in Sunderland, Derby and Swindon will be classified as British? Does he accept that if he is to get majority EC support for the proposal he will inevitably have to talk to the French, the Italians and the Spanish about extending the time limit on the transitional period?

Mr. Ridley : I did not use strong words on the issue to the Japanese, but I certainly did to the Commission, and to the Spaniards, the French and the Italians. They are the ones who received the strong words, to the effect that there will be no question but that these cars will have the free circulation to which they are entitled under the treaty of Rome. I believe that the matter will be resolved soon and entirely in our favour.

Balance of Trade (Japan)

11. Mrs. Gorman : To ask the Secretary of State for Trade and Industry what recent representations he has received regarding the United Kingdom's balance of trade with Japan.

Mr. Redwood : The Department of Trade and Industry receives a number of representations from time to time on the matter. My hon. Friend may like to know that in the most recent year our exports to Japan have risen by 30 per cent. and imports by only 9 per cent. We hope that that welcome improvement in trend will continue.

Mrs. Gorman : I thank my hon. Friend for his reply. I know that he understands the free market and how it works. Does he agree that our constant worry about the balance of trade deficit with countries such as Japan is about as important as worrying about the balance of trade between Birmingham and Edinburgh, or between Bradford and Bruges? When British people voluntarily buy goods that they want, what they part with is money-- which the foreigners cannot eat or stuff into their futons, and which is subsequently reinvested in Britain. Does he agree that what we should worry about is abolishing obstacles to free trade both here and abroad?


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Mr. Redwood : In her usual colourful way, my hon. Friend has made a good economic point. She is right that the party to which she and I belong does not wish to see obstacles placed in the way of people buying the things that they wish to buy. I wish that we could say the same of the Labour party, which wants credit controls to stop people buying Japanese videos, televisions and similar products. Where my hon. Friend and I believe that it is important to make strong representations to our trading partners is if they fall short of the high standards of free trade that we all wish to see worldwide. There are occasions when it is necessary to make strong representations. My right hon. Friend the Secretary of State has just returned from a strenuous trip to Japan, where he has been making some of the points that British business wanted us to make. I should add that Japanese trade is much smoother in that respect than trade with some other countries.

Dr. Kim Howells : Does the Minister consider, in the light of his previous answer, that an additional reason for our comparatively low sales of cars and other goods to Japan may be that the Government have done their best to gut innovative research and development in this country, and that we are simply not keeping up with trends and developments in many important areas?

Mr. Redwood : I am afraid that the hon. Gentleman is badly informed. The Japanese are having to set up car plants in this country because they also wish to set up design centres here, which will draw heavily upon the skills of British designers and engineers for the next generation of Japanese cars for the European market, with a strong skill input from people in this country. He also ignores the point of my reply to the previous question--that our export performance with Japan is improving because customers recognise that we offer goods of quality with substantial skill and design content and they are buying more of our goods day by day.

Mr. Dunn : Surely the truth of the matter is that we do not enjoy free and fair trade with the empire of Japan. Is not it a fact that Japanese goods find it easy to gain access to markets in this country whereas our exports find it immensely difficulty to gain access to Japanese markets? Should not we tell the Japanese Government that unless they mend their ways in terms of economic warfare we shall declare war?

Mr. Redwood : My hon. Friend should note that the average tariff on industrial products imported into Japan is substantially lower than that on industrial products imported into the European Community. There have been some isolated sectoral problems with Japan. We are pleased with the progress made, for example, with whisky as exports are growing rapidly as a result of changes made by the Japanese Government. There are problems in the footwear and leather sector, which my right hon. Friend the Secretary of State has drawn to the attention of our Japanese opposite numbers. The House should recognise that Japan is not a bad trading partner, that we are pleased with the way trade is developing, we give a warm welcome to Japanese investors here, and it would be wrong to jeopardise that position with ill-chosen words.

Dr. Moonie : Will the Minister tell the House exactly what are the figures for the balance of our trade with Japan over the past year?


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Mr. Redwood : The balance of trade with Japan in 1989 was minus £4.8 billion.


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