House of Commons Hansard Debates for 13 Jun 1991

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though it can be argued that, on average, people are better off, that has been the case under every Government since the second world war, so there is no economic miracle in that.

The problem, and the point of the debate, is that the erosion of our manufacturing base means that living standards today are built on shifting sands. Stability and security of employment are less reliable. The reason is that, over the past 12 years, the Government have shown scant regard for manufacturing industry. Ministers have often shown contempt for the manufacturing sector as they have pursued and promoted the interests of the City and of financial and other service industries.

What are the answers? We must organise our fiscal and taxation policies so that they encourage investment in manufacturing rather than in property development and the like. We must produce educational and training policies which are suited to the 21st century and which recognise the importance of vocational as well as academic subjects and qualifications.

It would also help if the Government supported British industry in their own procurement policies. The prevarication over the order for the Challenger 2 tank is a typical example of how the Government play fast and loose with the well-being of British manufacturing and of how they are willing to risk the loss of British tank-making and, far more importantly, the loss of the skills and experience of thousands of qualified engineers.

The motion refers to policies for the regions. That is a vital area in which our industries and communities must develop. Britain has become one of the most centralised and bureaucratic countries in the western world. The Government have no policy for the regions ; instead, they have merely extended the tentacles of Ministers into the regions. We in the northern region of England have long recognised that the way out of our problems-- short of a change of Government, which is what the country really needs--is to take matters into our own hands.

The local authorities in the region got together and formed the Northern Region Councils Association. That organisation came together with the regional Trades Union Congress and the regional Confederation of British Industry to form a tripartite body which gave birth to the Northern Development Company. That is the embryo of a fully fledged regional development agency, which the next Labour Government will create. That will lead to the creation of a regional assembly for the region which, far from adding to bureaucracy, will draw together, thin out and co-ordinate the myriad ad hoc bodies and quangos set up by the Government over the past 12 years. It will be an assembly under the control and direction of the people who live in and represent the region. It will be formed of people who are elected by the regional electorate and who are not appointed by Ministers. That system will allow the British people to set their own agenda and to pursue their own priorities. Just as local authorities in the north have been responsible for investment by Nissan, Komatsu and others, for modern transport systems and for quality services, so the regional assembly will be able to begin to build in accordance with the aspirations of its own people the kind of economy and infrastructure that they need. That system works well in other European countries. Incidentally, it gives them greater and more direct access to European funds than our

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own communities have. It is a more efficient and more democratic system, and it is the way forward in a modern democracy.

8.54 pm

Mr. Ray Whitney (Wycombe) : The hon. Member for Tyne Bridge (Mr. Clelland), like his hon. Friend the Member for Dunfermline, East (Mr. Brown), displays--yet again--the same negative attitude to the achievements of British industry which we have come to expect not only from the Labour party but, sadly, from the Liberal Democrats, if we are to judge by the contribution of the hon. and learned Member for Montgomery (Mr. Carlile) who seemed to misunderstand or deliberately ignore what has been achieved since 1979.

We must question whether those parties have the slightest interest in the success of British business, because one of the main points about business is to create a climate of confidence. One understands the motivation of the political climate and of the atmosphere that we generate in the House, but one must realise that confidence and a positive attitude are crucial to the success of business. We have had no glimmer of that from the Opposition, including the hon. Member for Tyne Bridge. As always, the quintessential example was the contribution by the hon. Member for Dunfermline, East.

Of course there are problems ; everyone understands that. We understand that at present, British business is encountering difficulties, but it is important to see the matter in the perspective of the achievements since 1979. Those achievements include an eight-year cycle of growth which is quite outstanding over a decade. No one could get that message from what the Opposition have said. In the decade of the 1980s, output in Britain grew faster than the output of France, of Germany and of Italy. Allowing for closures and mergers, the net increase in the number of businesses has been 375,000 since 1980. The standard of living of our people has increased by about one third. Everyone except the Opposition understands that.

The recession is serious and it is not confined to this country. It affects Germany, France, Australia, New Zealand and the United States. We all have problems, including the problem of inflation. My right hon. Friend the Secretary of State explained--I am not sure that he was understood by the hon. Member for Dunfermline, East--the mistakes that were made in 1988. However, the mistakes made by this Government were as nothing compared with the mistakes made by the Labour party in 1988 about the need to maintain a sensible level of interest rates.

The interest rate problem is serious, although, as someone with experience of business, I believe that it is possible to exaggerate it. What is important for business is not only whether the interest rate is 1 per cent. up or 0.5 per cent. down, but whether there is general confidence in the conduct of the economy by the Government of the day. No sensible business could possibly have any confidence in either the Labour party or--after the contribution tonight of one of its members--the Liberal Democrat party. Certainly, interest rates are important and I endorse what my hon. Friends have said about the importance of the banks' contribution.

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A disturbing letter was sent to one of my constituents by one of the leading clearing banks to advise him of a forthcoming change in the bank's policy involving the recovery of the interest and service costs on his account. It stated that it did not involve a change in my constituent's business, but that the bank was making a change which

"hopefully will enable you"--

my constituent--

"to even up some of the peaks when carrying out your cash flow planning."

The letter said that my constituent would in future be charged interest at the bank's current preferential business overdraft rate of 1.4 per cent. a month, equivalent to an effective annual rate of 18.1 per cent. My constituent had previously been paying 2.5 per cent. over base rate--14 per cent. As interest rates have come down 3 per cent. in recent months, the bank is doing a so-called generous deal with him. In fact, it was ordering him to pay 18.1 per cent., which is completely unacceptable.

I hope that the banks will listen to the message strongly put to them by the Government. I hope that they will understand the message ; the Leader of the Opposition does not. He gave an extraordinary performance the other day, when he said :

"Small businesses which used to have arrangements to pay 3 per cent. above basic rate on their overdraft facilities are now paying as much as 17 per cent."--[ Official Report, 6 June 1991 ; Vol. 192, c. 403.]

The Leader of the Opposition either cannot use English properly--the way that he talked about a single European currency and the 228 words he used to say nothing show that that is a possible explanation--or he may not be good at arithmetic. He appears not to understand the difference between 3 per cent. over base rate and 17 per cent. over base rate. Whatever the explanation, it is worrying to think that the right hon. Gentleman would presume to move into No. 10, and lead the economy and business of this country. He is the leader of a party which has the effrontery to table today's motion. That demonstrates clearly the Opposition's total failure to comprehend what makes markets work.

The same is true of all the Opposition contributions today and is always true of their spokesmen. The shadow Chancellor visits businesses, utters platitudes and comes away saying that the businesses have understood him. If he were present now I would say to him that a number of business men have come to me and said, in the old American cliche , that they have heard what the shadow Chancellor says but, deep down, he is shallow and has nothing to say. That is absolutely true of the policies of the Labour party, which suggests that we do not know how to help businesses, but that it would. The Labour party has offered many pledges, in addition to which we now have the Beckett formula. None of us knows how to work out the conundrum to which my right hon. Friend the Secretary of State referred--we cannot have additional spending without growth, but we cannot have additional growth without spending. How would the Labour party square that circle? We then have to compare the various pledges made which, it has been estimated, could cost possibly £20 billion or possibly £50 billion a year.

We all know what the impact on business would be of the Labour party's continuing, extraordinary, sad relationship with the trade unions. Many important industries have been increasingly captured by left wingers

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within the trade union movement. If the Labour party were to come to power, we should be back in the old period of militancy and restrictive practices.

The hon. Member for Dunfermline, East said, with great pride, that he would introduce a national minimum wage, as advocated by Winston Churchill in 1908. We are to go forward with the Labour party to 1908. Even the Fabian Society has suggested that the national minimum wage would result in the loss of 880,000 jobs.

I could say much more, but given the lateness of the hour and the desire of my hon. Friends to make their own contributions, I will bring my remarks to a close. I cannot do so, however, without referring again to the sheer effrontery of the Labour party and of the so-called Liberal Democrats, who demonstrated tonight no comprehension or understanding of business. Labour is unwilling to suggest what its policies will cost. The hon. Member for Dunfermline, East spoke for 39 minutes, and only in the final minute did he refer to his own policies. Did he tell us what their cost would be? No, because the Opposition are scared to give the House and the country that information. The businesses of this country can be safe only in the hands of the Conservative party and of a Conservative Government.

9.5 pm

Ms. Dawn Primarolo (Bristol, South) : The hon. Member for Crawley (Mr. Soames) was cheered by Conservative Members when he stressed the importance of the contribution by engineers and scientists to high-tech industries. In the aerospace and defence industries today, those very workers are being made unemployed because of the Government's strategy, and they are forced to join the dole queues because no alternative employment is available to them. That is a criminal waste of the very skills that the Government claim with such determination they want to encourage.

South-west England's aerospace industry is being devastated by Britain's changing defence needs and by the general rundown of the country's manufacturing capacity as a result of the Government's economic policies and the recession. Aerospace has been a distinctive feature of the south- west's economy since the beginning of the 20th century. The region accounts for more than 10 per cent. of all aerospace employment and for more than one third of the industry's manufacturing capacity.

In the south-west, the defence sector employs directly or supports 155,000 jobs, which represents the highest degree of job dependency of any region in the United Kingdom. When one speaks of manufacturing industry in the south-west, one is talking about high-tech industries involved in aerospace and defence work--but they are suffering unguided and unplanned changes as a consequence of the Government's economic policies.

A recent report conservatively estimated that 60,000 direct jobs and 12,000 support jobs will be lost in the aerospace and defence industries. That would have a devastating effect on the south-west. Earlier, the Secretary of State made a statement on Cumbria, and spoke of the importance of not allowing a region to decline. The south-west is on the verge of just such a decline.

The south-west has 49 aerospace establishments employing 32,000 workers, scientists, and engineers. They are in the forefront of a technology that is vital to the future and security of our manufacturing base. The names

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of the companies involved are world famous. They include British Aerospace--the biggest manufacturing employer. Ten years ago, it employed 10,000 people, but now has a work force of only a few thousand. It has made particularly dramatic cuts in its dynamics sector in Bristol. There is no long-term security for British Aerospace in Plymouth.

Rolls-Royce, another giant manufacturer, has consistently shed jobs over the past 10 years. Dowty Fuel Systems, Aerospace, Normal Air Garrett, Westland Helicopters--the list goes on. Thousands of jobs are being lost now in our region, and thousands more will follow. If we add to that the fate of Plymouth dockyards, Devonport, and the dramatic reduction in the work force there, we can see the Government's criminal waste of the most highly skilled members of our industrial manufacturing companies.

But there are alternatives to such comprehensive cuts in the south-west economy. It is important that aerospace and civil aerospace are strengthened and that we find ways of using the skills of the workers who will undoubtedly become unemployed, and rightly so, as we shift and reduce our defence expenditure so that they are no longer needed to produce the weapons of destruction. But do not believe that those skills are not needed in our economy, because they are--desperately.

All those problems are caused by interest rates, the exchange rate and the fact that the Government have done nothing to stop the growth in international sub-contracting whereby British companies which have the contracts give the work to workers in other countries--contracts subsidised by British taxpayers, who are giving work to people in Texas instead of in Bristol, Hatfield or anywhere else in Britain. If we reduce our defence expenditure, something to which I am passionately committed, billions of pounds will become available for a range of alternative spending. But part of it must go on retraining and the encouragement of alternative sectors.

Let us consider what the workers are capable of doing. Environmental technologies are so desperately needed now as we face the problems of our environment. Those people have the skills to respond in those industries. Space and telecommunications research and development need those workers. We need efficient, effective, cheap and environmentally friendly transport systems. Those workers have the skills to produce them. We talk about high tech and we emulate and praise the Japanese and the Germans. We have the skills and the workers, but we refuse to invest in their talents and abilities to build a strong manufacturing base for the future which will produce the value-added goods that we so desperately need. Let nobody say that it is up to the companies only. The Government, through their various policies, can have a dramatic effect on the future of those high-tech workers. First, they should make up their mind on their defence policy and stop the indecision in their procurement policies, which is making the future of those companies so insecure. They should decide on our defence needs and what we need to produce, and then transfer the workers to diversification to ensure that we use their skills. The Government should do something about interest rates and exhange rates and ensure that, instead of allowing

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companies to have money from British taxpayers to employ people in Texas, it is a condition that they employ people here in Britain. Those people have enormous skills and talents. That the south-west can benefit from and contribute to the future of a strong, vibrant high-technology base is indisputable. If the Government do not respond to the crisis that the companies face, they will be wasting skills. Their talk of education and high skills will be nothing but rhetoric and they will deserve the contempt in which many of the electorate in the south -west hold the Government.

9.13 pm

Mr. John Marshall (Hendon, South) : The Opposition's motion is one of sheer effrontery. The most brazen piece of effrontery was when the hon. Member for Dunfermline, East (Mr. Brown) talked about the need for unity in respect of Europe. He should have seen the look on the face of his right hon. the Member for Bethnal Green and Stepney (Mr. Shore) and he should have listened to the pregnant silence of the hon. Members for Bradford, South (Mr. Cryer) and for Bolsover (Mr. Skinner).

It is also an act of sheer effrontery for the Labour party to pose as the friend of industry. It is as hypocritical for it to do that as it would have been for King Herod to join the Royal Society for the Prevention of Cruelty to Children.

The Labour party does not understand the role of profit in the economy. It does not understand that prosperity comes only by industry producing the right goods of the right quality at the right price. Labour fails to recognise that the only way to secure prosperity in an economy is to have economic change.

This evening, the Opposition have come here hankering after the sunset industries and the past. The hon. Member for Tyne Bridge (Mr. Clelland) said that the Government do not have a policy for the north. Little do he and the hon. Member for Blyth Valley (Mr. Campbell) realise that the hundreds of millions of pounds poured in to British Shipbuilders by the last Labour Government was money wasted. Little do they recognise that attracting Nissan to Sunderland has done more for the prosperity of the north of England and for the motor car industry than anything that the last Labour Government did.

We have listened to the Labour party talking about the need to produce the conditions for greater prosperity. Yet Labour Members opposed the Education Reform Act 1988. At a time when people are worried about technological education, what is Labour's reaction? It is to promise to get rid of city technology colleges--to return to the past.

At a time when people thought that industrial relations could not be reformed, the Labour party opposed every change that was made to improve industrial relations in our country. The Labour party supported the bully boy and the thug--it supported Scargill rather than the right of individuals to work.

The part of British industry that is thriving today, that is enjoying massive increases in productivity and investment and is meeting the needs of consumers is the sector of industry that was privatised by the Government. There is as much as 60 per cent. growth in productivity in privatised industries and increases in investment of up to

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50 per cent., but Labour opposed every step that produced those circumstances. The Labour party is the natural party of unemployment.

Mr. Frank Dobson (Holborn and St. Pancras) rose

Mr. Marshall : No, I shall not give way because there are only a few minutes left and the hon. Gentleman has only just come into the debate. I will give him a lift home tonight, but I will not let him interrupt my speech.

The Labour party is the natural party of unemployment. All Labour Governments have left office with unemployment higher than when they entered office. The Labour party is committed to a minimum national wage. It says that that will not create another two million unemployed--only another 1 million or 1.5 million. Whatever the figure, it is a national scandal that any Member of Parliament should seek to legislate another person into unemployment. How can any member of the Labour party go to the country and say that he or she has a social conscience when Labour Members are condemning some of their constituents to the dole queue? That is an act of gross inhumanity and deserves the condemnation of all hon. Members.

We heard the hon. Member for Dunfermline, East quote City circulars, like some third-rate secondary banker. He forgot to tell us that Goldman Sachs has said that a Labour Government would lead to a 3 per cent. increase in interest rates. One cannot borrow or spend on the scale that he proposes without raising interest rates, and higher interest rates would lead to lower and not higher investment. The Labour party is committed to policies which would ruin British industry. The prosperity of this country will come not through socialism but through the social market economy.

9.17 pm

Mr. Dennis Turner (Wolverhampton, South-East) : I commend the Opposition motion, which speaks up for the thousands of businesses, large and small, that have been driven to the wall by the damaging effects of this Government's economic policies.

The motion also acknowledges the shock waves of deep recession that have reverberated throughout every region of our country, not least the west midlands, which has once again been ravaged by the slump. The motion recognises the real personal casualties of this crisis--hundreds of thousands of men and women. Many of them have been cast on the scrap heap of unemployment for the second time in the past 13 years of this wasted Government, with the financial and psychological damage attendant on the loss of a job, the loss of dignity and the loss of the pay packet, which is the only real sense of independence that is worth having for people in this society. When I read the Government's amendment, I was stunned by its deceptively self-congratulatory tone, which insults the business men and women who are now desperately trying to save bankruptcies and closures. Hon. Members may know the old saying "Some chicken! Some neck!" What a nerve the Government have--telling us in their amendment that they welcome

"the transformation of the British economy over the last 12 years".

The past 12 years of this Administration, in the so-called "enterprise culture", would be more accurately described as 12 years of candy floss culture. No better example of the

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Government's economic policies, and the failure of those policies, can be provided than the decline of manufacturing in the west midlands over the past 12 years. The Government's bequest to the people of Britain has been the experience of two major slumps and a mad inflationary rush to win the 1987 general election, along with a deteriorating share of world trade and world economic influence. In the past year, the economy of the west midlands has become considerably poorer. Both the west midlands CBI and the chambers of commerce paint a depressing picture : They show the region to be in a deepening recession, with 15 per cent. of firms saying that they expect demand to fall in the next four months. None of them expects it to rise. Only in Wales were business men more pessimistic about the level of business confidence ; it is not surprising that it is lower in the west midlands than in any other English region. Investment is also suffering as a result of the Government's economic policies. The west midlands chambers of commerce said recently that the deepest recession was being felt there, and that home manufacturing orders were at their lowest, with 58 per cent. of companies reporting a fall. The quarterly economic survey shows that manufacturing companies of all sizes expect domestic and export orders to fall by a large percentage.

The latest quarterly economic figures of the chamber of commerce in my own town, Wolverhampton, lists some depressing trade and industry statistics. Only 3 per cent. of companies report any improvement in home deliveries, while 54 per cent. report a decline ; 11 per cent. report a rise in home orders, while 54 per cent. report a fall. As for productivity in manufacturing--there are 12,000 jobs in engineering--only 3 per cent. of companies say that they are working to full capacity. Eleven per cent. are working to 80 per cent. of full capacity, while 64 per cent. are working to below 60 per cent. capacity ; 22 per cent. are in such a state that they will not survive, and will be forced to go bankrupt.

Only 3 per cent. of companies have increased staff numbers, while 61 per cent. have reduced them and 36 per cent. say that they intend to lose more workers in the next few months. Those are the grim realities in Wolverhampton, and in many other towns.

I should have liked to say more about the complacent attitude of the Department of Trade and Industry, and the role that Ministers have played in this sorry tale. Companies in my constituency that turned to the DTI for help were turned away as though they did not exist. They have not received the help that they should have been given.

I wish to finish on what, for us, may be a happier note and quote the words of Omar Khayyam :

"Ah Love ! could thou and I with Fate conspire

To grasp this sorry Scheme of Things entire,

Would not we shatter it to bits--and then

Re-mould it nearer to the Heart's Desire !"

The heart's desire of the people is to start again and to have a new Government and new policies. We shall receive their support and there will be a new Labour Government in the next 12 months. 9.25 pm

Ms. Joyce Quin (Gateshead, East) : This has been a timely debate on a vital subject and there were some powerful contributions to it. There were also, however,

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some somewhat strange speeches, given the economic situation, particularly by Conservative Members, not least the Secretary of State for Trade and Industry. I was certainly alarmed that he did not seem to recognise the escalation in unemployment and the misery that that represents, and there was no real recognition of the depth of the recession which is affecting people in Britain much more dramatically than people elsewhere.

There were, of course, the usual cheap jibes about my hon. Friends and I on the Labour Trade and Industry Front-Bench team. I am happy to let industry judge at the next election which policies it prefers--the choice will be clear, and I think I know which choice it will make.

Not surprisingly, all my right hon. and hon. Friends referred to the steep rise in unemployment. There is obviously great concern about it in each of their constituencies. My right hon. Friend the Member for Salford, East (Mr. Orme) listed redundancies in the north-west. My hon. Friends the Members for Hartlepool (Mr. Leadbitter), for Blyth Valley (Mr. Campbell), for Crewe and Nantwich (Mrs. Dunwoody), for Paisley, North (Mrs. Adams), for Tyne Bridge (Mr. Clelland), for Bristol, South (Ms. Primarolo) and for Wolverhampton, South-East (Mr. Turner)--I apologise if I have missed anyone --gave vivid examples from their areas.

Among the features of the debate were the contributions by hon. Members from different regions, all of them worried about the effects of the recession. Last time we had a severe recession, in the early 1980s, it particularly affected certain regions, including mine. I derive no satisfaction, however, from the fact that the current recession affects Britain as a whole. All regions are affected. Manufacturing and service sectors and traditional and modern industries are affected. It is clear that the recession is affecting the heartlands of Conservative Members. For that reason, at the next election it will not be possible for the Conservative party to try to make some exclusive appeal to areas that are not suffering. The effects of the Government's policies will be clear, even to their supporters.

Unemployment will be a big issue until the election. Even according to the Government's fiddled figures, to which my hon. Friend the Member for Blyth Valley referred, the level is appallingly high and there are worries that it will top 3 million before long. Allied to that is the concern over the number of business bankruptcies in recent months. Many examples were quoted during the debate. In addition, once again, there is a worsening trade balance. The figures this week were twice as bad as expected, with both visibles and invisibles doing badly.

In this distressing picture, it appears that accountancy is the only growth profession. This week, I read that in 1990 Britain's eight big accountancy firms earned fees totalling £226.4 million from receiverships, liquidations and administrations--an increase of 63 per cent. on what they had made from insolvencies the previous year. I was interested also to read in the press this week that the Government were thinking of linking in some way to performance the salary of the next head of the Central Statistical Office. I am sure that Employment or Trade and Industry Ministers would not like to be subject to performance-related pay at present. They would find that, with industry in recession and unemployment rising, their pay would be dropping dramatically.

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In one of my local newspapers--the Newcastle Journal --I read a brief description of the Government's economic record, written by one of the paper's economic commentators :

"My recollection of the 10 years is of two recessions and a middle bit of rampaging borrowing and rampaging prices which led to rampaging inflation and rampaging interest rates. A fair summary? The middle bit boom--nobody seems to call it the miracle' any more--was consumer-led as booms tend to be, and consumers were borrowing like mad, and companies were borrowing like mad to keep up with them, and we all wound up the creek."

It is clear that the recession in Britain is deeper than that elsewhere. This week we also heard the predictions of the Organisation for Economic Co -operation and Development that Britain under its present Administration would be the slowest to recover from it.

It was clear from the debate that wide-ranging criticisms of the Government's general economic policies are being voiced by those who were once thought to be the Government's friends and by groups in industry at the sharp end trying to produce, sell and export in today's recessionary circumstances.

The Engineering Employers Federation has reported a dramatic fall in engineering orders, with the slide expected to last well into next year. The construction sector also experienced a sharp fall in output in the first quarter, compared with the last quarter of 1990. Eighty per cent. of construction firms expect lower output during the next 12 months.

The balance of payments deficit in specific sectors is very great. In electronics, it now runs to billions of pounds, having increased from the small deficit that existed when the Conservatives came into office. It is not surprising that many of my hon. Friends also mentioned the machine tools sector, as it is vital to a manufacturing economy. However, that sector is in considerable difficulty. Many more examples could be quoted. For example, I noticed this week that shoe imports now represent 72 per cent. of the market, which is another alarming figure.

The Minister for Corporate Affairs (Mr. John Redwood) rose --

Ms. Quin : In that picture of gloom, neither the Department of Trade and Industry nor the Treasury seem to have any idea what to do about it. The Chancellor had his one weapon of interest rates, but I think that he will be dubbed--

Mr. Redwood : Nearly all Labour's policy prescriptions involve the expenditure of more public money. Will the hon. Lady tell the House how much extra money above our spending levels she can pledge for the DTI's budget ?

Ms. Quin : Perhaps the Minister should wait for the first Budget of a Labour Government. Indeed, I do not know of any Government who have made the detailed prediction for which he asks.

Neither the DTI nor the Treasury seem to have any idea what to do in the circumstances. I believe that the Chancellor will be dubbed the Mr. Micawber Chancellor who is waiting for something--anything--to turn up. The faintest stirrings seem enough to give him hope that something will turn up.

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During the debate there have been criticisms of specific policies. Several hon. Members mentioned especially the weakening of our export services and the Bill that is currently going through the House to privatise the Export Credits Guarantee Department or, at least, its short-term division. It is not only the privatisation that is causing concern in industry, but the fact that we charge higher premiums than our competitors.

I should like to point out the irony of the fact that the Government are rightly under pressure because of the effect of bank charges on small businesses. However, the Government's own financial arm--the ECGD--charges much higher premiums to industry than do most of its competitors in Europe. Unfortunately, the ECGD seems to be able to cover fewer and fewer markets, even though, at a time of great trade deficit, one would think that we would want to encourage access to more markets for the future. That loss of markets at a crucial time is grave, and perhaps the Government should read the swingeing criticisms in the report of the export group for the construction industries, which is entitled "Farewell to the Third World". It laments the fact that Government support for access to third-world markets is practically non-existent these days.

The Government have also introduced policies such as the sale of the British Technology Group, which has been described as one of the most successful technology transfer companies in the world but, as we know, the Government do not like to hear about any successes in the public sector. Senior scientists have protested that Britain is falling behind its international competitors in research and have accused Ministers of a lack of encouragement and cash commitment. Labour published its own science programme earlier this week. Not surprisingly, several hon. Members, including many of my hon. Friends, have referred to the difficulties that small businesses are experiencing. Small firms are caught deep in the recession, with output during the past four months plunging more quickly than at any time in the past four years. According to the CBI survey, three out of four small firms are now working below capacity. Besides having difficulties with the banks, small firms have also encountered other difficulties, some of which are the result of Government policies. Small businesses are worried about the uniform business rate, plus that fact that many small business men, especially those who live in flats above their shop, are also faced with paying expensive poll tax bills, often for inadequate accommodation. There is also the problem of the bad debts that small companies have to face, added to which has been the problem of the over-zealous VAT man, who has pursued small businesses, often causing them considerable difficulties.

Mr. Ian Bruce (South Dorset) : A moment ago, the hon. Lady said that we would have to wait for the first Budget of a Labour Chancellor. However, the Labour party's own document contains one commitment--to a minimum wage. Can the hon. Lady tell all the small business men in my constituency exactly how they would be helped immediately a Labour Government came to power if they had to pay a minimum wage to every single person in their organisation, amounting to £136 per week, which Labour would then raise to a minimum wage of £204 a week to achieve two thirds of the median?

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Ms. Quin : I do not accept the hon. Gentleman's figures but, given all the discussions about a minimum wage, I am absolutely amazed that no Conservative Member has talked about the problem of low pay in our country today. If the hon. Gentleman looks at the wage differentials in France and in Germany, he will see that they have remained more or less the same during the past decade, whereas in Britain the gap between the well-off and those at the bottom of the scale has widened dramatically. I should like to hear Conservative Members expressing some concern about that fact.

Small businesses have experienced a great deal of difficulty in recent weeks and months and it is a tragedy that there is no overall Government policy for small businesses. Conservative Members should consider the range of policies that affect small businesses at present. Not content with clobbering small businesses, the Government have been making life difficult for this country's large businesses. Perhaps the Government's only small business creation policy has been to make life so difficult for the large businesses that they are forced to contract.

Many hon. Members of all parties have referred to ICI and to Hanson's possible acquisition of it. Although Conservative Members who have spoken about that matter this evening have tended to support their Minister's view, there are deep divisions about this issue in the Conservative ranks. It has been reported that the hon. Members for Macclesfield (Mr. Winterton), for Slough (Mr. Watts), for Stockton, South (Mr. Devlin) and for Chichester (Mr. Nelson) are all opposed to Hanson making a take-over bid for ICI, and that they would press for its referral to the Monopolies and Mergers Commission. That contrasts with the hands-off or non- interventionist approach of the Secretary of State for Trade and Industry.

It is a tragedy that some of our large businesses and industries have contracted so dramatically during the Tories' term of office. Many hon. Members have mentioned shipbuilding, and I fully share their concerns about the scandal of the closure of the Sunderland shipyard. We are worried about the future of other yards, too. The Scottish steel industry has also been forced to contract dramatically. It is a tragedy that the Clydesdale tube works closed on the day of the ceasefire in the Gulf when the Secretary of State for Trade and Industry was urging British firms to become involved in opportunities in rebuilding the middle east. The Clydesdale tube works produced a product which no other firm in the United Kingdom produced, so its closure was a blow not only to the Scottish steel industry but to our future balance of payments.

I realise that I have little time left if I am to keep within the time that I have been allocated. Many criticisms have been made of the Government's policy by not only Opposition Members but by Conservative Members. I suggest that the Secretary of State for Trade and Industry and his colleagues look closely at the House of Lords Hansard for Tuesday of this week. In the debate on the Export Credits Guarantee Bill, 19 Members of the other place spoke. Only one spoke in favour of the Government's proposal and that was the Government's spokesperson. The other 18 spoke against the Bill and they included two former Tory Cabinet Ministers, two former Ministers of State with responsibility for trade and export

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credit and many senior industrialists from our major industries. All of them opposed what the Government are doing. No wonder that at the end of the debate the Government spokesperson, beleaguered as he was, said that he did not know which was worse, having to face the rifle fire from the Government Benches or having to listen to the menacing rumble of the heavy artillery behind him.

An ex-Cabinet Minister quoted in The Guardian today--it is a quote taken from the Washington Post, so someone else is going round the world talking about the Government's record--spoke about the Department of Trade and Industry and the Government.

"We haven't got a team and we haven't got a theme. There is no sense of direction. When you've been in power 12 years there are no alibis. You can't blame Labour or the unions or the bloody foreigners."

Precisely. There is no scapegoat. It is the Government's responsibility and it is the Government who are to blame. I saw a recent headline in a newspaper about the forthcoming speech by the Secretary of State for Trade and Industry. It said : "Lilley sets out to woo industry."

Some courtship. If the Secretary of State went ahead and booked a table for two with industry he would end up either staring at the candlelight alone or finding himself in an almighty row with his partner. If his recent actions are part of a courtship with industry, how on earth does he behave when the relationship turns sour? My hon. Friend the Member for Hartlepool (Mr. Leadbitter) said that, if the Government were so proud of their record and so happy about what was happening in industry at present, why did they not call a general election now? The truth is that industry has been dosed with the wrong medicine for far too long. It is not only industry's health which is suffering badly as a result ; it is that of the country as a whole. Only a change to Labour would bring us back to health and give hope for the future to industry and those who work in it.

9.43 pm

The Minister for Corporate Affairs (Mr. John Redwood) : Today we have heard clearly the difference between the two sides of the House. The Opposition have an industry policy that looks back to the 1960s and 1970s, which failed then and would fail again. We have an industry policy which is in line with the best experience around the world and gives British industry the opportunity and the conditions in which it can compete and become world-beating.

I agree with the right hon. Member for Salford, East (Mr. Orme) and the hon. Member for Hartlepool (Mr. Leadbitter) that manufacturing is important. My experience in manufacturing taught me that. It taught me how crucial manufacturing industry is to Britain and its future. That is why I and my hon. Friends welcome the record levels of orders reported by my hon. Friend the Member for Beverley (Mr. Cran) at British Aerospace and why we are proud of many of the successes that British industrial companies are recording day after day. They are doing extremely well in international markets.

Opposition Members should move that the way to help British industry is to be confident about it and to be proud of its achievements, not to run it down constantly and accentuate the negative and the lousy, which they always have a habit of finding.

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