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House of Commons
Wednesday 20 March 1991
The House met at half-past Two o'clock
PRAYERS
[Mr. Speaker-- in the Chair ]
Oral Answers to Questions
TRADE AND INDUSTRY
GATT
1. Mr. Dunnachie : To ask the Secretary of State for Trade and Industry if he will make a statement on progress made in the GATT Uruguay round.
11. Mr. Waller : To ask the Secretary of State for Trade and Industry if he will make a statement about the prospects for resumption of negotiations on the Uruguay round of GATT.
The Minister for Trade (Mr. Tim Sainsbury) : The Government greatly welcome the recent resumption of negotiations in the GATT Uruguay round. We hope that the negotiations can now be brought to a successful conclusion as soon as possible. We should like all parties to commit themselves to a deadline of not later than the end of the year.
Mr. Dunnachie : When does the Minister believe that the European Commission will agree to a new negotiation position on agriculture? What is the United Kingdom's position on the reduction of subsidies for agriculture exports? Does the Minister agree with the Italian Trade Minister, who said that the system of negotiation in Europe is completely hopeless? If he does agree, what does he propose to do about it?
Mr. Sainsbury : The hon. Gentleman may know that the Commission has accepted a work programme involving negotiations to achieve specific binding commitments on three issues--internal support, market access and export competition. That is what the United States and the major agricultural exporters wanted. I believe that the offer provides considerable scope for the negotiations to move forward to a successful conclusion as soon as possible.
Mr. Waller : As serious negotiations are not expected to start until June and may not be completed by the end of the year, does my hon. Friend agree that it would be appropriate to extend MFA 4 for a further 17 months? We should bear it in mind that the bilateral agreements that will run out at the end of the year essentially depend on MFA 4, which runs out at the end of July. Many of our European partners and the United States agree that there should be no further concessions on MFA 4. Does my hon. Friend agree that that should also be our position until the new GATT arrangement is entered into?
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Mr. Sainsbury : I assure my hon. Friend that serious negotiations are under way, although they may not bring in the most difficult political decisions until June. I also assure him that we all recognise the need to extend the multi-fibre arrangement in the light of the failure to agree in Brussels last December. However, I would not go as far as to say that an extension of 17 months would be justified now. It is important and necessary to bring the negotiations to a conclusion as soon as possible ; there are dangers in not doing so. In those circumstances an initial extension of, say, five months would be more appropriate.
Mr. Madden : Given that 400 jobs a week have been lost in the clothing and textile industry in the past 12 months, will the Minister give a firm assurance along the lines of the one that he has just given? As textile workers are not only workers with a vested interest in the future of the industry but consumers too, will he make it clear that, if 10 Downing street or the Treasury has any thoughts about extending VAT to children's clothing, they will be strongly resisted by his Department?
Mr. Sainsbury : I am glad that the hon. Gentleman recognises that all his textile workers, indeed all his constituents, are consumers, because consumers will be the main beneficiaries of a successful outcome to the Uruguay round. We recognise the importance of the textile industry and that is why we welcome the progress that was made last year in the negotiations on textiles, particularly the progress in providing better mechanisms and disciplines for the GATT round, which we have always said must accompany the incorporation of textiles into the GATT.
Telecommunications
2. Mr. Tim Smith : To ask the Secretary of State for Trade and Industry what assessment he has made of the impact that the introduction of the ending of the duopoly in telecommunications, as outlined in his Department's recent White Paper on telecommunications policy, will have on consumer choice.
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley) : The Government's
telecommunications policy will ensure that consumers have the widest possible choice of high-quality services at the most competitive price.
There will be a wider choice in all aspects of telecommunications from equipment and services to networks themselves.
Mr. Smith : Has not there been a remarkable transformation in telecommunications over the past decade? Does my right hon. Friend recall that only 10 years ago there was only one supplier of telephones and telephone services and that people sometimes had to wait for weeks or months to get a telephone? Today, any number of companies are providing hardware and telephone lines. Is not that a substantial endorsement of the policies of deregulation, liberalisation and privatisation which the Government have followed?
Mr. Lilley : My hon. Friend is absolutely right. I recall that at the beginning of the last decade, when British Telecom was still nationalised, about 250,000 people were waiting for more than six months to have lines installed. I am glad to say that the number of people in such a position now is negligible. Not only have the changes been
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dramatic over the past decade, but, as a result of the liberalisation that we have announced and the greater competition and choice, we foresee even greater changes in the coming decade.Mr. Henderson : Will the Secretary of State be honest enough to admit that selling further British Telecom shares has nothing to do with more competition, nothing to do with addressing the 500,000 complaints that British Telecom receives every year or securing the necessary research and development to ensure that new technology is available and that mobile phones will work, and nothing to do with increasing telephone ownership or obtaining more investment, but everything to do with failed dogma and raising money? The Government are going for the loot to try to solve the poll tax fiasco.
Mr. Lilley : I welcome the hon. Gentleman's question and the prominence that he gives to the Labour party's love of state ownership and its desire to restore British Telecom to nationalised ownership. Nationalisation has nothing to do with choice, the consumer or creating a dynamic industry such as we have created. It would certainly not have made this country the telecommunications hub of western Europe which it has become, with major companies moving their telecommunications headquarters from north America to London to take advantage of the liberalisation that we have created.
Mr. Gale : Is not there tremendous potential for the development of telecommunications and for the creation of jobs in telecommunications, voice telephony, data and entertainment? Will not that be a growth area in which Britain can take a tremendous lead? Would not the Opposition's plans to renationalise British Telecom destroy those prospects?
Mr. Lilley : My hon. Friend makes a good point. The jobs created by the proliferation of services built on the back of a liberalised telecommunications regime are important. We already have value-added services on the network, double those of France and Germany, and I foresee a great new source of jobs in the cabling of Britain through the cable television networks as well as an increase in the number of trunk networks following the end of the duopoly regime.
Shipbuilding
3. Mr. Leadbitter : To ask the Secretary of State for Trade and Industry when he next plans to meet the European Commissioner, Sir Leon Brittan, to discuss shipbuilding within the United Kingdom and the EC.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh) : My right hon. Friend the Secretary of State will meet Sir Leon Brittan on 22 March to discuss a number of issues. I shall be seeing him tomorrow to discuss shipbuilding issues in particular.
Mr. Leadbitter : I am glad that the Secretary of State is to see the Commissioner tomorrow to discuss various matters. Is the Minister aware that, as recently as 5 March this year, Lloyd's List published an account showing a dramatic 80 per cent. decline in British shipbuilding in the past decade? Is he aware that Denmark, Italy and Germany have increased their share of the world market in
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shipbuilding orders, whereas British shipbuilding's share has shrunk to 0.77 per cent? Bearing in mind today's calamitous news about shipbuilding in Barrow-in-Furness, what does the Minister propose to do to encourage our shipbuilding industry, which is one of the finest in the world, to expand? Or is he going to sit on his backside and let the industry decline further?Mr. Leigh : The hon. Gentleman's latter point was the serious part of the question. I was sorry to hear the news from Barrow today which is, of course, the result of the company's need to restructure and improve its competitiveness in the face of changing defence requirements. I shall be visiting Barrow on Monday and I shall be able to see at first hand the nature and scale of the problems facing British Shipbuilders Enterprise Ltd. and their likely impact on the local community.
I repeat that I shall be seeing Sir Leon Brittan tomorrow and I shall discuss with him the aid that we are allowed by the Commmission to give to British shipbuilding. Given that British shipbuilding has restructured so successfully over the past 10 to 15 years--it is now more competitive than it has ever been and is well placed to take advantage of the recent upsurge in shipbuilding orders worldwide--it is clearly in the interests of British Shipbuilders that we phase out subsidies as soon as we can and I shall continue to urge the Commission to do just that.
Mr. Hill : Does my hon. Friend recall that some years ago--before he was a Minister--there was a European scrap and build scheme, aimed mainly at the safety factor of merchant shipping? In his discussions with Sir Leon Brittan, will he explore the possibility of any part of such a scheme being used to support some of Britain's shipbuilding potential? Rather than wasting vast sums on some social scheme or other, the European Community might introduce a scrap and build scheme to which all the nations could agree.
Mr. Leigh : That is an interesting suggestion. I shall certainly examine it carefully and, if appropriate, raise it with Sir Leon tomorrow. The Commission permits us to put a subsidy of 13 per cent. on large ships and we subsidise large ships to the maximum extent that we are allowed. I will pursue with Sir Leon any other ways in which we can help British Shipbuilders.
Ms. Quin : Will the Minister give a clear undertaking to discuss with Sir Leon--
Mr. Skinner : They have given money to Germany.
Mr. Speaker : Order. I think that it is better left to me. Ms. Quin.
Ms. Quin : Will the Minister give a clear undertaking that, when he meets Sir Leon Brittan, he will discuss the catastrophic job losses in Barrow? Will he confirm that, unless action is taken, the losses are likely to occur within two years rather than four years? Can he give the workers in Barrow any hope that some of them will retain jobs in the merchant shipbuilding sector, or does he propose simply to let the decline in that sector continue, as my hon. Friend the Member for Hartlepool (Mr. Leadbitter) suggested?
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Mr. Leigh : I have already said that I shall be raising a number of matters with Sir Leon Brittan tomorrow. I gave a full answer to the earlier question and I have nothing to add--except that we understand that the job losses will take place over four years. I repeat that they are the result of the restructuring deemed necessary by management in the face of changing defence requirements.Credit Lending
4. Mr. Andrew Smith : To ask the Secretary of State for Trade and Industry what further steps are being taken to curb irresponsible credit lending.
The Minister for Corporate Affairs (Mr. John Redwood) : The Government set out in December 1990 proposals for improved regulations on credit marketing and I am sure that my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs will take the hon. Gentleman's comments as a reply to the consultation document.
Mr. Smith : In view of the mounting misery caused by irresponsible lending, with mortgage repossessions doubling last year and with the Oxford money advice project in my constituency reporting default actions up by 10 per cent., bailiffs' warrants up by 16 per cent. and bankruptcy petitions up by 88 per cent., is not it time that the Minister took some action? Should not he also launch a rescue package for the many advice centres facing closure as a direct consequence of the Government's poll tax capping policy--in many cases, leaving the people in the deepest debt with nowhere to turn?
Mr. Redwood : I have just told the hon. Gentleman that the Government have taken action. We have set out proposals to make it clearer to those entering into credit agreements what the rate of interest would be and what the impact would be on their family budgets. I am sure that the hon. Gentleman would welcome those proposals if he read the document and saw what the Government were trying to do. The Government also support various schemes to help those involved in offering advice on consumer debt. That is part of helping the market work. It is most important to have clear disclosure to all those thinking of embarking on new debt and that is precisely what the proposals set out in the consultation document do.
Mr. Nicholls : Although I dismiss the nonsense that we have just heard from the hon. Member for Oxford, East (Mr. Smith) and pay credit to the steps that the Government have taken in this area, I continue to receive examples in my constituency of offers of credit that are clearly irresponsible and should not have been made. Does my hon. Friend accept that sometimes there is such a disparity in the bargaining position between lender and borrower that the matter must be kept under review? Despite the steps that have already been taken, will the Government continue to keep the matter under review and respond to individual cases that might be drawn to their attention?
Mr. Redwood : My hon. Friend can have that reassurance. Of course, the Government are watching the matter closely and are involved in consultations with regard to proposals that we believe will go a long way towards remedying the defect that my hon. Friend recognised. In the pre- agreement phase it is most
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important that the consequences of that agreement should be clear to individuals so that they can understand what impact it would have on their family budgets. I am worried about Labour's proposals, which seem to suggest that people should not be able to borrow in certain circumstances. That could make their position far worse. We want to see responsible borrowing based on a sensible regime of disclosure of the consequences to those thinking of entering into agreements.Mr. Nigel Griffiths : Why have the Government failed to implement the proposals in the 1988 White Paper to protect the public against irresponsible extortionate credit deals? With 170,000 people unable to pay bad debts to five and more creditors, why are not the Government commissioning a report from the Office of Fair Trading on extortionate credit agreements?
Mr. Redwood : The Government are consulting on all those matters at the moment. The hon. Gentleman is quite at liberty to send in his views, which we should be most interested to see. The action that we propose addresses the very issue about which the hon. Gentleman is worried. It would cover advertising and the agreements themselves and deal with matters such as sending details to minors, which we believe is quite wrong and about which there are recommendations in the consultative document. Will the Opposition please read the consultative document and give us the benefit of their advice on it?
Mr. Alton : While welcoming the consultative document and the remarks that the Minister has just made, may I ask him to accept that the phenomenal growth of consumer credit from £15 billion to £50 billion this year, coupled with the growth of credit cards--2 million are available in Germany compared with 30 million in this country--requires rather more than simply responsible borrowing and probably requires tighter controls on the kind of credit facilities that can be made available? Many families, especially poorer ones, are becoming increasingly indebted and 2.5 million families are now in serious debt.
Mr. Redwood : The savings ratio has been rising. All Conservative Members welcome that and it shows that the balance between saving and borrowing is improving in the way in which the hon. Gentleman suggests. Is the Liberal Democratic party really suggesting that people should not have access to credit on any basis? Is the hon. Gentleman aware that 84 per cent. of personal borrowing is in the form of mortgages, not in the form of credit cards? The main factor in any credit increase is mortgages, not credit cards.
Mr. Batiste : Will my hon. Friend rule out of his consultation exercise at this stage any possibility of introducing credit control curbs along the lines advocated by the Opposition? Would not they reduce the amount of credit and competition available for the mass of responsible borrowers and also destroy the credibility of United Kingdom financial institutions, thus making a free gift to their overseas competitors?
Mr. Redwood : My hon. Friend makes two extremely powerful points. The Labour scheme would not work, because there would be ways of borrowing from banks outside our jurisdiction. However, to any extent that it was effective in limiting some people in gaining access to borrowing, it could be an extremely cruel scheme. People
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need to borrow. We are trying to make sure that they do so on an informed basis, aware of what impact it will have on their budgets, so that they can come to sensible decisions before committing themselves to undesirable borrowings.Electricity Prices
5. Mr. Martyn Jones : To ask the Secretary of State for Trade and Industry what discussions he has had with large industrial users of electricity regarding the proposed increases in electricity prices.
Mr. Redwood : My right hon. Friend the Secretary of State for Energy has met the chairman of ICI to discuss that problem. My right hon. Friend the Secretary of State for Trade and Industry would be happy to hear further representations, but the main responsibility rests with the Department of Energy and with the regulator of electricity.
Mr. Jones : Of course, the main responsibility rests with the Department of Energy, but I am sure that the Secretary of State for Trade and Industry would be concerned about the effects on large industrial users of increasing electricity prices--much above the already scandalous 13 per cent. being charged to domestic consumers. Is the Minister concerned that that rise is due to the privatisation of a service industry and that, far from helping British industry, it is nailing British manufacturing industry to the wall?
Mr. Redwood : I do not agree that that is the result of privatisation. It is the result of the costs of generating power and the allocation of those costs to larger industrial users. The hon. Gentleman might like to know that our energy costs for large industrial users are below those of Germany, one of our main competitors.
Mr. John Browne : Will my hon. Friend confirm that companies are free to negotiate price with the electricity companies and generators and, furthermore, that electricity companies are free to offer discounts or even cash rebates to companies or individuals who invest in energy-saving measures?
Mr. Redwood : My hon. Friend makes good points. Of course, the idea of opening the market to competition is that large industrial users can think of other ways of gaining the power that they need by involving themselves in generation schemes or by encouraging new generators to enter the market. That is exactly what will happen. I am sure that the hon. Member for Clwyd, South-West (Mr. Jones) will welcome the progress that has been made in letting industry have more choice and control over power sources, quality and price.
Mr. John D. Taylor : Does the Minister accept that in Germany 35 per cent. of energy supplies benefit industry because they come from lignite mines near Bonn? Does he further accept that British industry would have considerably reduced electricity costs if we developed the lignite mines in the United Kingdom? Such resources would provide much greater energy than those in Iraq.
Mr. Redwood : The Government welcome the development of any energy sources that improve the supply and cost of energy, subject to the normal planning constraints and the energy policy laid down by the Department of
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Energy. I am sure that in the new competitive conditions in the energy market more innovation will be a characteristic, although whether it will include what the right hon. Gentleman recommends is a matter for the market, not for me.Post Office
6. Mr. Janman : To ask the Secretary of State for Trade and Industry what plans he has to denationalise the Post Office and end its letter monopoly.
Mr. Leigh : The Government remain fully committed to the existence of a national letter service with an affordable, uniform tariff structure available to everyone, including those in rural areas. Girobank has been transferred successfully to the private sector, but no other decisions about structural changes have been taken. The Post Office's letter monopoly is a privilege, not a right. Although we keep the options under review, we have no present plans to alter the scope of the monopoly. However, in the event of a cessation or serious disruption to the letter services we would consider suspending it.
Mr. Janman : My hon. Friend will be aware that since the denationalisation of telecommunications and the introduction of competition to that industry, the price of making a telephone call has gone down in real terms. Is my hon. Friend aware that there will be considerable support on Conservative Benches if, when the Government consider the future of the Post Office, they take close account of experience to date through the privatisation of British Telecom?
Mr. Leigh : Although one might be able to admire my hon. Friend's radical zeal in seeking to privatise the Post Office, I suspect that it would be unwise at this stage for me to replicate it from the Dispatch Box.
Mr. Loyden : Recognising the Government's attitude to intervention in these matters, may I ask the Government to take into account the need for a Post Office building programme? Is he aware that in many constituencies pensioners have to queue outside in the cold months of December, January and February to get their pensions and so on? Will he take up that matter with the chairman of the Post Office?
Mr. Leigh : I am not sure what point the hon. Gentleman was making. Was he saying that he wishes the Post Office to be privatised? I know not. However, 94 per cent. of post offices are already privately run. The point of our continuing review of the Post Office is to improve structures. We are not looking at ownership alone. The most important thing is to improve the service to the public, and that is what we have always been concerned about.
Economic Priorities
7. Mr. Day : To ask the Secretary of State for Trade and Industry what representations he has received from industry about the Government's economic priorities.
Mr. Lilley : I continue to receive representations from industry supporting the Government's determination to defeat inflation and to create a climate in which enterprise and wealth creation can flourish.
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Mr. Day : Will my right hon. Friend confirm that yesterday's cut in corporation tax reflects the Government's determination to create the right climate in the market for business and, coupled with the Government's determination to drive down inflation still further, represents the real needs of British industry?Mr. Lilley : I can, indeed, confirm those points. The reduction in corporation tax that was announced yesterday by my right hon. Friend the Chancellor will be of significant benefit to industry. We already have the most attractive environment for industry of any country in western Europe, which is why we attract more inward investment than any other country in western Europe. Tax is a major part of that and we now have the lowest rate of corporation tax of any country in the EEC.
Mr. Alex Carlile : Will the Secretary of State explain why one of the Government's economic priorities is to increase unemployment in the retail sector? Does he agree that the increase in value added tax that was announced yesterday is bound to have a significant effect on that sector and will significantly increase the recession in retailing?
Mr. Lilley : That is absolute nonsense. One of the policies of the hon. and learned Gentleman's party has always been to spread VAT more widely.
Mr. Ian Taylor : Does my right hon. Friend agree that it can be estimated that a 1 per cent. downward movement in inflation could save British businesses £5 billion? Was not the key announcement in yesterday's Budget, therefore, the expectation that inflation could be down to 4 per cent. by the last quarter of this year? Does my right hon. Friend further agree that that means that, on top of the welcome corporation tax reductions yesterday, the Government are doing the right thing for British industry?
Mr. Lilley : My hon. Friend highlights an important point. The reduction in inflation that was forecast in the Budget as being faster than was previously expected will be immensely welcome to British industry. It is the key to our economic future and to solving all other economic problems.
Mr. Gordon Brown : Is not it the case that the day after what the Chancellor called the Budget for business 7,000 redundancies and almost 100 company closures have already been announced? Does the right hon. Gentleman accept that growth is down by 2 per cent. this year, manufacturing output is down by 5 per cent. and investment is down by a massive 10 per cent., which is the worst record in western Europe and the worst in British history since 1932? Why is the interest rate cut that industry needs being delayed? Is not it the case that the Budget does too little, too late to prevent a spring and summer of redundancies, closures and bankruptcies, which is the direct responsibility of this Government's Ministers who have failed?
Mr. Lilley : The hon. Gentleman plays his normal recorded message to us, unchanged since before the Budget. British industry has responded to the Budget by welcoming it and all its major tax changes, which it considers essential for the future of this country. It is significant that the hon. Gentleman did not even mention them.
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Mrs. Peacock : Has my right hon. Friend received any
representations from business men, asking him to introduce an industrial policy similar to that recently outlined by the Labour Opposition?
Mr. Lilley : No, I have not. On the contrary, I have met many business men who have said that the last thing that they want is men in Whitehall telling them how to govern their companies. They welcome the fact that we are leaving more money in the hands of business so that they can take the decisions on investment, research and development, and training, which will strengthen their companies in the future.
ICI Fertiliser Business
8. Mr. Strang : To ask the Secretary of State for Trade and Industry whether, in view of the response of ICI to the Government's rejection of the proposed sale of its fertiliser business to Kemira Oy, the Government will review the priority that they give to maintaining employment in arriving at such decisions.
Mr. Redwood : My right hon. Friend will continue to regard competition as the essential matter when deciding his policy on references to the Monopolies and Mergers Commission. As the hon. Gentleman is aware, in its report on the Kemira case, the MMC went into the issue of employment, among several others. When considering that matter, my right hon. Friend looked at the whole report before coming to his conclusion.
Mr. Strang : Yes, but when hardly a day goes past without a major announcement of an industrial closure somewhere in the country, are the Government really prepared to shut down their productive capacity and destroy the hundreds of jobs that go with it for the sake of their dogma and opposition to state enterprise? Will the Minister confirm that ICI is going ahead with its plan to close down the plants and that in Edinburgh, for example, 140 direct jobs will be lost, not to mention the indirect jobs? What message has the Minister for the employees? Surely the Government must think again when the only alternative is the dole.
Mr. Redwood : If hon. Members read the report, they will see that the market share of the merged company was predicted to fall to 35 per cent. in a falling market. We are talking about a market with over-capacity and with considerable problems resulting from that. I find it difficult to reconcile that forecast of the market and the market share with the idea that all those jobs and all that plant could have been sustained had the merger gone ahead. My right hon. Friend the Secretary of State had to weigh many difficult matters in coming to his conclusion on the judgment of the MMC, but he decided that the MMC was right in its report, and that is where the matter rests.
Taxes and Public Expenditure
9. Mr. Franks : To ask the Secretary of State for Trade and Industry what representations he has received from industry about taxes and public expenditure.
Mr. Lilley : My right hon. Friend the Chancellor's Budget is a Budget for business. It has been widely welcomed as such by industry generally.
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Mr. Franks : My right hon. Friend will be aware of the announcement early this morning of projected job losses of 3,000 to 5,000 in the shipyards of Barrow over the next four years. When formulating regional policy involving public expenditure, will my right hon. Friend recognise the inevitable consequences of the peace dividend in places such as Barrow-in-Furness? Will he recognise that, inevitably, his Department will have an increasing role to play in my constituency?Mr. Lilley : I share my hon. Friend's concern about the job losses announced in his constituency. As he will have heard, my hon. Friend the Under-Secretary will be visiting his constituency shortly to assess the position. I believe that the measures taken in the Budget will make Britain in general and Barrow-in-Furness in particular more attractive to inward investment and for the development of new businesses. The measures to encourage small businesses will be particularly helpful and the reduction in corporation tax will attract industry to this country. I hope that that will bring benefits rapidly to my hon. Friend's constituents.
Mr. Gordon Brown : How does the Secretary of State think that it will help struggling businesses if millions of purchases in our high streets and shops are to be subject to an unwanted and unnecessary 2.5 per cent. poll tax supplement? Has he, as Secretary of State for Trade and Industry, made an assessment of the number of jobs that will be lost in textiles, electronics and high streets and shops as a result of the poll tax supplement? Or is it the case that to escape from the poll tax chaos that the Government have created, they are prepared to sacrifice the interests of anyone and everyone?
Mr. Lilley : The hon. Gentleman is apparently unaware that a transfer of tax from one source to another does not reduce the net purchasing power of consumers. He also has not let the House know how he would raise the taxation necessary for local government. Would he increase income tax instead of value added tax? He and his party will have to come clean about that before the end of Monday.
Sir Anthony Grant : Is my right hon. Friend aware that the small firms sector gives the warmest welcome to the way in which the Chancellor responded to its representations and that the very last thing that it wants is a return to the conditions that prevailed when the hon. Member for Bradford, South (Mr. Cryer) was Minister responsible for small firms? Will my right hon. Friend convey one other representation to the Chancellor from the small firms for an early reduction in interest rates?
Mr. Lilley : I welcome the points that my hon. Friend makes. He knows more about small firms than does the whole of the Labour Front Bench put together. He is right that the Budget has been well received by small firms. In particular, the rise in the threshold below which small firms do not have to pay VAT and the fact that my right hon. Friend the Chancellor got that through the European Commission are extremely welcome. I shall convey to my right hon. Friend my hon. Friend's point about interest rates.
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Recession
10. Mr. Radice : To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-east regional CBI to discuss the recession in industry.
Mr. Leigh : Officials of my Department keep in touch with the north- east regional CBI on a wide range of business matters. The Secretary of State last met John Banham, director general of the CBI, on 5 February 1991 and he next expects to meet Sir Brian Corby, president of the CBI on 11 April 1991.
Mr. Radice : The Government have just been reminded by my hon. Friend the Member for Dunfermline, East (Mr. Brown) that, according to the Red Book, manufacturing output will fall by 5 per cent. and business investment will fall by almost 10 per cent. in 1991. In that connection, has the Minister noted the comments of the deputy director of the northern regional CBI, who said that there were no measures in the Budget that would help business confidence or investment? Is not that a scathing indictment of the Government's industrial and economic policy?
Mr. Leigh : The hon. Gentleman's comments are singularly inappropriate on the day after the Budget pumped three quarters of a billion pounds into industry. His comments are also inappropriate because in his district of Derwent, 5,000 jobs were created in the 1980s and because over the past 10 years no less than £3.5 billion of Government aid has been given to the north-east, which was carefully targeted to underpin a new spirit of enterprise. If the hon. Gentleman talked more often to business men in the north-east, as I did at the presentation of the north-east business of the year award, he would know that there is a sea change in attitudes. No fewer than 9,500 new businesses register for VAT every year in the north-east.
Mr. Holt : Will my hon. Friend take it from me that the words of Opposition Members are typical of the Labour party in the north-east? They for ever talk the region down, even though we have had more Government investment targeted into the area. We are not suffering from the recession that they talk about in such loud voices all the time. With companies such as ENRON bringing a £50 million investment for cheap electricity to the north-east, it is the Government who are bringing into that area the benefits of Conservative Government.
Mr. Leigh : I agree with my hon. Friend that it is extraordinary that 10 years ago the region was heavily reliant on three declining industries, but is now one of the most vibrant and successful regions in Britain. Why do not Opposition Members speak up for their constituencies and about what is happening in the north-east? I give a pledge to the House. I shall go to the constituency of the hon. Member for Durham, North (Mr. Radice) and talk about York Thermostar creating new jobs in his constituency. I shall talk about Eurosil--
Mr. Speaker : Order. The Minister should just answer the question that he has been asked.
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Mr. Leigh : I shall also repeat what my hon. Friend the Member for Langbaurgh (Mr. Holt) said. We shall speak up for the north-east on Conservative Benches, even if Opposition Members do not do so.Ms. Mowlam : Will the Minister now answer the question put by my hon. Friend the Member for Durham, North (Mr. Radice)? He gave not his view, but that of the CBI in the region. It is not Labour knocking the area. We fight hard in the north-east with the Tory Government. Will the Minister answer the question? What was there in the Budget to encourage investment? He should answer the CBI for a change.
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