House of Commons Hansard Debates for 20 Feb 1991

Mr. Leigh : I agree with my hon. Friend. Although we cannot be a nanny state, I think that a successful market is a well-informed one. Inertia selling is a matter of fine judgment because many of those boxes are designed, according to the people who provide credit services, to protect the consumer through insurance schemes ; but I decided to prohibit inertia selling because it is wrong that someone should be required to undertake a contract without having positively requested so to do.

Financial Services (Regulation)

13. Mr. Buckley : To ask the Secretary of State for Trade and Industry whether he has any plans to alter the regulatory structure for the United Kingdom financial services sector.

Mr. Redwood : My right hon. Friend recently welcomed the statement of Sir David Walker and the publication of the new core rules. One of the most important recent changes in the regulatory system is that which encourages clear core rules and the minimum number of additional rules. My right hon. Friend also praised the wish of the regulatory bodies to concentrate compliance work on pursuing those cases that give most reason to cause suspicion. He has drawn attention to the efficacy of stressing disclosure rather than prescriptive rules. I am sure that the House will agree that these are welcome improvements in our system.

Mr. Buckley : Are not the regulations full of loopholes and ambiguities which, from Barlow Clowes to the Levitt Group, have not fulfilled the necessary requirements of control? Did not the Government accept and recognise in the body of the text of the companies legislation in 1989 that some changes are needed in the regulations? Does the Minister accept that there should be two regulatory bodies and that there should be compulsory regulation rather than the present system?

Mr. Redwood : That would mean the wholesale abolition of a large number of excellent regulatory bodies. The purpose of the self-regulatory system is to allow people, within defined limits, to make their own decisions about which body they wish to join and the conduct of the regulation in those bodies. I do not agree that the regulations are out of date or in need of wholesale reform in the way that the hon. Gentleman suggests. If he wishes to draw attention to particular loopholes or difficulties in the regulations, I or the regulatory bodies should be happy to look into them carefully. It is not fair to say that Barlow

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Clowes demonstrated that the current regulatory system is ineffective because that problem developed before the enactment of the Financial Services Act.

Mr. Donald Thompson : Does my hon. Friend realise that the financial sector does not lie only in the City of London? A great expansion in financial services has taken place in and around my constituency and my constituents need clear rules so that they can expand their businesses not only in the United Kingdom but in Europe.

Mr. Redwood : I agree with my hon. Friend that the financial services sector extends widely geographically, as well as in terms of its range of service and products. He has my assurance that I shall do everything in my power to further the interests of those legitimate businesses here and in the European Community.

West Yorkshire (Development)

14. Mrs. Mahon : To ask the Secretary of State for Trade and Industry if he intends to visit West Yorkshire during the next three months to discuss industrial and regional development.

Mr. Leigh : My right hon. Friend has no current plans to do so.

Mrs. Mahon : That is a disgraceful answer. Calderdale has lost 3, 000 jobs in the past 12 months, most of them in manufacturing. We get no outside aid and one area in my constituency, Sowerby Bridge, has been particularly devastated by the Government's economic policies. We were promised help by another Department, but it pulled out at the last minute. Is not it time that the Government developed a regional policy to help towns such as mine which are suffering badly because of the Government's disastrous economic policies?

Mr. Leigh : As one might expect, the hon. Lady does not give the whole picture about what is happening in Yorkshire. Perhaps she missed last week's Yorkshire Post, which I have here. It says : "Business confidence in Yorkshire, although falling, is more buoyant than anywhere else in the nation, the Confederation of British Industry claimed last night.

The not having it quite as bad' evidence, backed up by yesterday's small cut in interest rates, bolstered beliefs that the region might be nearing the bottom of its recession."

Unemployment in Calderdale has fallen by 5,000 in the past five years. The hon. Lady, who always strikes me as having the charm of a tricoteuse in the French revolution, should, for once, give the good news about Calderdale, which is well placed.

Mrs. Peacock : When my hon. Friend visits West Yorkshire, as well as looking at what the hon. Member for Halifax (Mrs. Mahon) mentioned, will he examine some of the successful companies that have been investing, are investing and are planning to invest in the future?

Mr. Leigh : Yes, of course. The hon. Member for Halifax (Mrs. Mahon) did not say that 20,000 new companies have set up in Yorkshire. She did not explain all the advantages that Yorkshire and Humberside have in the single market in attracting inward investment. She did not mention, in her strictures about regional policy, that in the current public expenditure survey round, we are planning to spend £600 million on regional policy.

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Ms. Quin : If the Minister decides to have discussions with people in West Yorkshire or elsewhere on regional policy, will he take the opportunity of disowning the views that he gave in the No Turning Back group publication on regional policy, in which he claimed that European regional policy and the European regional development fund served no purpose? Will he make it clear to the House that the views of that group are not the views of the Department of Trade and Industry?

Mr. Leigh : There seem to be three phases in the life of a parliamentarian--angry young man, angry old man and Minister in the middle. As a Minister, I fully support Government policy.

Mr. Michael Brown : Speaking as a member of the No Turning Back group to another member of the group, may I again draw my hon. Friend's attention to the Yorkshire Post from which he just quoted and refer him to its business section last Thursday where the headline was :

"Yorkshire industry lifts its head above the gloom."

May I draw his attention, for the occasion when he visits Yorkshire and Humberside, to an article referring to the growth in the docks industry in the Yorkshire and Humberside region which it says is a result of the removal of the restrictive practices that characterised the industry? Will my hon. Friend tell the hon. Member for Halifax (Mrs. Mahon) that the message is that Yorkshire and Humberside benefit every time restrictive practices are lifted?

Mr. Leigh : I have to tell Opposition Members that I could hardly fail to visit Yorkshire and Humberside. I do so every Saturday when I go across the Humber bridge to do my shopping in one of the supermarkets of my hon. Friend the Minister for Trade. My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) speaks out well for Humberside. He led the fight for the port and we congratulate him.

CBI

15. Mr. Ron Davies : To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of the CBI to discuss the condition of industry in the United Kingdom.

16. Mr. Knox : To ask the Secretary of State for Trade and Industry when he next expects to meet the president of the Confederation of British Industry to discuss manufacturing industry.

The Minister for Trade (Mr. Tim Sainsbury) : My right hon. Friend regularly meets representatives of the CBI. He met the director general most recently last week.

Mr. Davies : When the Secretary of State next meets the CBI, will he discuss with it the latest manufacturing output figures which, as I understand it, show that the value of manufacturing output has declined by some £5 billion and that the level of investment has decreased by 15 per cent? Will he also discuss with the CBI the GDP figures published today which show that, officially, we are in recession? If the Department can bring itself to acknowledge that we are in recession, will the Minister tell us what precisely he proposes to do to get industry out of that recession?

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Mr. Sainsbury : The hon. Gentleman may agree that, as the songwriter might have put it, recession is among industry's unfavourite things. I remind him and the House of some other unfavourite things of industry : excessive trade union power, high rates of business taxation, too much Government interference and continuing high rates of inflation. Those are the things which characterise Labour Governments and make them very unfavourite among business men.

Mr. Knox : When the Secretary of State next meets the president of the CBI, will he discuss with him the fact that manufacturing output last December was 4 per cent. higher than in December 1973--a period of 17 years? Does my hon. Friend believe that that represents satisfactory progress?

Mr. Sainsbury : Manufacturing output in the 1980s grew faster than in Germany, France or Italy. I suggest to my hon. Friend that we should look at the underlying strength of manufacturing industry and at the underlying strength of British industry. The massive strides and great improvements that we made during the 1980s mean that manufacturing industry, like the whole of British industry, is a great deal stronger and more resilient as it faces the 1990s than it was in 1979.

Mr. Janner : Does the Minister share with the CBI the recognition that there is a terrible underlying weakness in many manufacturing industries, including hosiery, textiles, shoes and other staple industries in areas such as Leicester which were firm before the Government came into power, but are now in a state of absolute disaster?

Mr. Sainsbury : It is strange that the hon. and learned Gentleman seems so ready to join those of his hon. Friends who spend their time running down the performance and capabilities of British industry. Manufacturing productivity grew faster in the 1980s than in any other major industrial country. It has improved by a half since 1979 and we should applaud that.

Mr. Beaumont-Dark : Does my hon. Friend accept that one problem faced by industry and others is caused by state and private monopolies? British Rail is increasing fares way above inflation ; British Telecom, British Gas and the water companies are all raising their prices ; and now the electricity industry has announced that it will increase charges by 13 per cent. Why should all those concerned be able to protect themselves against last year's losses when they help to encourage the losses of private industry, which has no monopolies on which to fall back?

Mr. Sainsbury : As the House knows, my hon. Friend is a robust supporter of competition. That is what Conservative Members believe in, although I have serious doubts whether the Opposition do. I shall not go into detail about all the industries that my hon. Friend mentioned, but we like to introduce competition and we ensure that regulatory control is introduced where it is absent. Such control usually ensures that the increases allowed are substantially lower than the level of inflation.

Mr. Gordon Brown : Are not manufacturing investment, manufacturing output and manufacturing employment now falling? Today's figures confirm a 6 per cent. drop in manufacturing output which is unique in western Europe. As the Minister cannot blame OPEC, the Gulf conflict, the

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EC, workers or management for the recession, whom does he blame? Is not this a direct result of the mistaken policies of discredited Ministers in a failed Government?

Mr. Sainsbury : I congratulate the hon. Gentleman on getting his facts right. It makes a change. Yesterday, for instance, when he alleged that manufacturing output had increased by only 7 per cent. since 1979, he was only 70 per cent. wrong ; the increase was 12 per cent. He is improving.

Steel Industry

17. Mr. Bill Walker : To ask the Secretary of State for Trade and Industry if he will make a statement on the profitability of the British steel industry.

Mr. Lilley : I have every confidence in the long-term prosperity of the British steel industry now that all of it is in the private sector and free from Government control.

Mr. Walker : I thank my right hon. Friend for that reply. Does he agree that the latest figures, which reveal that steel exports are increasing by about 9.5 per cent. and that imports are down by about 6.3 per cent., show clearly that the British steel industry--now privatised--is a guarantee of security in a difficult and troubled world? The failed policies of the Soviet Union and the rest of eastern Europe and those of the socialists on the Opposition Benches would guarantee the destruction of the industry and caused massive costs to the taxpayer in the past.

Mr. Lilley : My hon. Friend is absolutely right. When the previous Labour Government left office British Steel was losing about £1.7 billion a year ; now it is making a profit of £700 million a year. If the company were still making a loss under state ownership, we should be bearing those losses : billions of pounds would have to be spent on it instead of on hospitals, schools and other services which we all want and need and which the Government should be financing.

Dr. Bray : Is the Secretary of State aware that British Steel is suffering a severe recession in orders as a result of the Government's incompetent economic policies? Is he aware that it is able to survive financially only because the Government wrote off all its debt on privatisation, thus leaving it free of debt at a time when its competitors in Europe are in very different financial circumstances?

Mr. Lilley : As my hon. Friend the Member for Tayside, North (Mr. Walker) pointed out, British Steel is boosting its exports in response to weaker home demand and is also displacing imports. That must be good news. Is the hon. Gentleman saying that we should take it back into state ownership? If so, is that the policy of the Labour party?

Mr. Oppenheim : Is my right hon. Friend aware that, at the end of the era in which politicians meddled and told it which plant it should keep open, British Steel was the world's biggest loss-maker and Britain had a chronic trade deficit in steel and iron products? Since then, British Steel has become the most profitable steel company in Europe and our trade deficit in those products has changed into a substantial surplus. The last thing that British Steel wants is to go back to the bad old days when politicians told it how to run its business.

Mr. Lilley : My hon. Friend is absolutely right and he makes his point extremely well. What is more, if we had a

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state-owned, inefficient steel industry we should have to prop it up with protection and all steel-using industries would be forced to buy high-cost, inefficiently produced steel. That is very much what the Labour party seems to want.

Mr. Gordon Brown : Will the Secretary of State reply to two factual points? First, can he confirm that, in respect of the Ravenscraig strip mill, the Government's policy, as set out by the Secretary of State for Scotland, is that British Steel should review and reconsider its decision with a view to reversing it? Secondly, can he, as the Minister responsible for these matters, tell us what practical steps he has taken to implement that policy?

Mr. Lilley : I am always happy to put the hon. Member right on the facts. I entirely endorse the steps taken by my right hon. Friend the Secretary of State for Scotland.

Mr. Favell : My right hon. Friend is to be congratulated on setting his face firmly against protectionism. Britain's steel

industry--indeed, all British industry--grew at a time when we believed in world free trade in not only manufactured goods but agricultural goods. May we have an assurance that my right hon. Friend will not allow the idiotic common agricultural policy to ruin the GATT talks?

Mr. Lilley : My hon. Friend is a great and forceful defender of free trade and I entirely endorse his remarks. We must try to ensure a speedy and successful conclusion to the GATT round. I welcome the news that talks are likely to resume today. We shall do everything in our power to ensure that the Community plays a constructive role on agriculture, as on all other matters, with a view to securing a successful outcome to the round.

Chemical and Nuclear Weapons

18. Mr. Flynn : To ask the Secretary of State for Trade and Industry what new initiatives he plans in the export of materials that can be used in the manufacture of chemical, biological and nuclear weapons.

Mr. Sainsbury : We continue to work with like-minded countries to take effective action to prevent the proliferation of chemical, biological and nuclear weapons. Controls on the export of sensitive materials for use for these purposes are kept under continual review.

Mr. Flynn : Has it occurred to the Minister that if the Gulf war had taken place a year hence, Saddam Hussein's Scud missiles might have been armed with Iraqi nuclear warheads? Is not it a scandal that British companies exported to Saddam Hussein specialist equipment that he has used in his nuclear programme? Those companies include Avesta of Birmingham, Consave of Glasgow, Magnatech of Crawley, Matric Churchill of Coventry and Swift Lewick of Rotherham. Will the Minister give us an assurance that when the nightmare of the Gulf war is over, Britain will lead the world in reducing the international arms trade, not just by exhortation but by example?

Mr. Sainsbury : The whole House will share the hon. Gentleman's worry that materials that might facilitate the production of nuclear weapons should be exported. The hon. Gentleman will be aware, not least because he tables a very large number of questions on the subject, that the

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Government's policy is to prevent the proliferation of such weapons. We maintain stringent controls on the export of all weapons and related material, equipment and technology.

Mr. Rhodes James : Is my hon. Friend aware that the Scud missiles are, in fact, Russian?

Mr. Sainsbury : My hon. Friend is right.

Retail Bankruptcies

20. Mr. McMaster : To ask the Secretary of State for Trade and Industry what protection his Department is making available to consumers who suffer loss because of retail bankruptcies during the recession.

Mr. Leigh : Where goods are purchased under a credit agreement, the Consumer Credit Act 1974 provides that the credit grantor is jointly and severally liable with the retailer for breach of contract. This provision applies where the cash price of goods is between £100 and £30,000, with up to £15,000 paid for on credit. I am not aware of any need for further provisions.

Mr. McMaster : Does not the Minister recognise that unemployment is shooting up and that businesses the length and breadth of the country are closing? Will he offer some form of protection, or at least some hope, to consumers who are suffering ; or will those people have to wait for a Labour Government?

Mr. Leigh : I am not sure whether it is Labour party policy to disagree with the Director General of Fair Trading who said--the hon. Gentleman may not be aware of this--that voluntary initiatives for industry were the right way forward.

The Gulf (Exports)

21. Mr. Jacques Arnold : To ask the Secretary of State for Trade and Industry if he will make a statement on the prospects for British exports to Kuwait and other Gulf states following the conclusion of the present hostilities.

Mr. Sainsbury : When Kuwait is liberated United Kingdom companies can resume supplying a wide range of goods and services. In recent talks with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, the Kuwait Government have promised a warm welcome to United Kingdom companies participating in the reconstruction of Kuwait.

I assure my hon. Friend that the British Government will continue to do all they can to encourage and reinforce the efforts of our manufacturing and service industries.

Mr. Arnold : Given the considerable and supreme efforts that Britain has made towards the liberation of Kuwait, is my hon. Friend confident that British industry will show itself to be effective in grasping the opportunities that will arise?

Mr. Sainsbury : My hon. Friend will be aware that British industry has been taking energetic action to that end, supported fully by my Department. An industry task force is in place in Dammam and it will be seeing representatives of the Kuwaiti reconstruction project office tomorrow for further discussions on the part that British industry can play in the reconstruction of Kuwait.

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