House of Commons Hansard Debates for 3 Jul 1991

Mr. Conway : Will my right hon. Friend remind the House at what level such mergers must be referred to the European Community? Does not the low level that has been set show how much sovereignty has passed from the House to the continent?

Mr. Lilley : My hon. Friend is quite correct. We faced a dilemma. Under the treaty of Rome, the Community could intervene after we made monopoly and merger decisions. We therefore faced double jeopardy. We think that it is better for mergers of 5 becu or more to be handled by the Community and for those below that figure to be handled by national Governments. Logically, there is no need for Community interference, as a Europewide monopoly would be a monopoly in at least one member state. As we started from the position written into the treaty of Rome, the present arrangements are very much better than the double jeopardy arrangements and are a satisfactory second best.

Local Businesses

12. Mr. Matthew Taylor : To ask the Secretary of State for Trade and Industry what schemes his Department has sponsored in the Truro and St. Austell area to aid local business.

Mr. Leigh : Business in the Truro and St. Austell area can benefit from a wide range of Department of Trade and Industry schemes.

Mr. Taylor : The Minister will know that I have frequently pressed for the reintroduction of assisted area status for Truro and St. Austell. Many jobs are being lost at both ends of the constituency because of the economic mess that the Government have got themselves into. They have repeatedly said that they will review the boundaries only after a general election. Given that economic mess, and as the Government have postponed the election, may we at least proceed with the review to offer some hope to local businesses?

Mr. Leigh : Most objective observers recognise that it would be unwise to tamper with the assisted area map before the general election. Some areas could be included on the map and some could be removed from it, and perhaps the St. Austell area should be included. However, it would be unwise to make boundary changes before the general election.

I recently visited the Indian Queens estate, which is close to St. Austell and is in an assisted area. Businesses on the estate are eligible for regional selective assistance and regional enterprise grants, and a raft of other Department of Trade and Industry schemes are available to the hon. Member's constituents. As the hon. Gentleman knows well from our correspondence on the point, I am discussing with the Department of the Environment

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derelict land grant which would be of considerable benefit to his constituency. I assure him that I am doing everything in my power to help his constituents.

Mr. Knapman : Does my hon. Friend agree that that typical supplementary question shows why Truro urgently needs a Conservative Member of Parliament? Is not it time that the hon. Member for Truro (Mr. Taylor) realised that free trade and level playing fields are the way to bring prosperity to Truro, St. Austell and everywhere else?

Mr. Leigh : My hon. Friend is quite right. Cornwall has led the world in free enterprise. The hon. Member for Truro (Mr. Taylor) is out of tune with his constituents, and I have no doubt that his Conservative opponent, Nick St. Aubyn, who is an excellent man, will be elected at the next election.

Inward Investment

13. Mr. Robert G. Hughes : To ask the Secretary of State for Trade and Industry if he will make a statement on Britain's recent record in attracting inward investment from the Federal Republic of Germany.

Mr. Leigh : According to figures just published by the German economics Ministry in Bonn, direct investment in the United Kingdom by German companies in 1990 amounted to £1.9 billion.

Mr. Hughes : Does my hon. Friend agree that that welcome figure is further proof of the enormous attractiveness of the United Kingdom's business climate, which has been achieved as a result of Government policies? Is that a one-off figure or does it represent a growing trend of inward investment from the Federal Republic? Does he agree that that figure and the performance of this part of the economy would be ruined by the destructive policies of the Labour party?

Mr. Leigh : Figures compiled since 1952 show that German companies have invested some £7.6 billion in this country. Remarkably, half that investment has been made in the past three years. In 1990, we received no less than 18.6 per cent. of all German foreign investment. If the doom and gloom merchants on the Opposition Benches are so right in saying that the economy is in a mess, why are we the No. 1 location for inward investment in the world and the favoured nation for German investors?

Mr. Batiste : Is it not clear that German investment in Britain merely reflects a worldwide pattern and that similar trends can be seen in America and Japan? Is not the Government's record of creating stable industrial relations and low taxation over the past 11 years the essential ingredient in ensuring that that pattern continues?

Mr. Leigh : Yes, we are indeed the preferred location for inward investors from Japan and America, and that is a two-way process. Although about £7.8 billion has been invested in this country, we have invested £16.6 billion abroad, which shows the strength of our manufacturing base.

Mr. Skinner : Is there not another side to the issue? In the past three or four months West Germany has run into balance of payments difficulties because of its takeover of East Germany. Under the system of economic and monetary union of which we are now a part because of the

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Common Market, shall we not end up using British taxpayers' money to bail out the East German mess that the West Germans have taken over?

Mr. Leigh : I cannot speak for the hon. Gentleman's colleagues, but I have no intention of doing that. I am sorry to disappoint him, but investment from Germany is running at a very good level. That may be disappointing news for the hon. Gentleman, but it is the truth.

Mr. Favell : Could I take up the point made by the hon. Member for Bolsover (Mr. Skinner) whom I just failed to beat in the 1979 election? I remind my hon. Friend that in the 1975 manifesto issued by the pro- marketeers, those voting yes were assured that the threat of a movement of the Common Market towards an economic and monetary union had been removed and that that threat, according to the manifesto, would have restricted industrial growth and would have affected jobs. Is not it now clear that fixed exchange rates do exactly that, and it is as true now as it was in 1975?

Mr. Leigh : My hon. Friend knows my views on these matters. I have full confidence in the ability of the Chancellor and the Prime Minister to negotiate successfully.

Tendering

14. Mr. Trimble : To ask the Secretary of State for Trade and Industry whether he has made representations recently to any other EC Governments concerning tendering for supplies to the public service of such Governments.

Mr. Redwood : The Government are very keen to see compliance with all European directives by all member states. I have not made any representations recently, but the Department of Trade and Industry has a compliance unit which is very willing to help individuals and companies with compliance problems in any of the 12 member states. If the hon. Gentleman has a specific query, we shall of course take it up for him.

Mr. Trimble : May I draw the Minister's attention to the Irish Republic's Local Authorities (Combined Purchasing) Act 1939 under which the Government of the Irish Republic can insist that all goods supplied to the public service must be manufactured in Ireland and to the notes for tenderers which require the country of origin to be correctly described and even insist that Northern Ireland must not be described as Ireland? Does he agree that that gives suppliers in the Irish Republic an unfair advantage? Would not an appropriate temporary counter measure be to exclude it from tendering for public service contracts in the United Kingdom until it complies?

Mr. Redwood : Such a course of action would not be right and it would be illegal under the directive that sets out the clear obligations of this country and of all the other member states. If the hon. Gentleman believes that there are cases of discrimination in the Republic of Ireland against good offers by companies from other member states he should bring them to the Government's attention and we shall make any necessary representations on behalf of his constituents or of the companies involved.

Mr. Cash : Does my hon. Friend know that British Reinforced Concrete in my constituency was closed down

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last week because of a massive acquisition of its market share by a German company which also contributed to the closure of and loss of jobs in the Rugby Portland Cement subsidiary? Does he also know that there was a massive £75 million contract available to put security fencing around a Ministry of Defence establishment in Germany and that the Property Services Agency suggested that the British company came to see me because it was quite clear that there was no point in its attempting to get that contract because it had been going to a German company from the beginning? Will he examine that matter, and will the Government please do something to help British industry in that respect?

Mr. Redwood : Of course I will look into that matter for my hon. Friend. If it is a contract governed by either the works or the supplies directive, the German authorities must comply with it. The Council of Ministers recently agreed compliance directives to enforce the works and supplies directives because of the concerns of my hon. Friend and others. The Government are determined that if it is fair that it is opened up here, it is fair that it is opened up there as well. That is why we have a compliance unit and that is why we will willingly take up any case about which hon. Members have good evidence to help us.

Manufacturing Industry

15. Mr. McMaster : To ask the Secretary of State for Trade and Industry when he next expects to meet his European counterparts in the EC Industry Council to discuss support for manufacturing industry.

Mr. Redwood : My noble Friend the Parliamentary Under-Secretary of State for Industry and Technology will be attending the meeting of the Industry Council on 18 November. The agenda for this meeting has not yet been fixed.

Mr. McMaster : Will the Minister explain to his European counterparts why, at this time of huge trade deficit, the Government provide less support to British exporters, especially in terms of export credits, than many other European countries provide for their exporters? Is he prepared to sit back, to watch that happening and to let our trading position get worse and worse, or will he do something to help British exporters?

Mr. Redwood : As the hon. Gentleman should know, Britain's trade position has been improving over the past year. Exports have been rising and have been at record levels in many sectors in recent months. That is welcome. There is a comprehensive series of services to exporters from the Department of Trade and Industry and the Export Credits Guarantee Department. My hon. Friend the Minister for Trade is active in promoting the interests of all our exporters.

Mr. Forman : In all future meetings with his EC counterparts, will my hon. Friend the Minister and his right hon. Friend the Secretary of State take steps to ensure that the things that deserve protection in Britain are protected? I am thinking of the valiant stance that has already been taken to safeguard the mile, the acre and the pint.

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Mr. Redwood : Willingly I pledge that. I assure the House that Ministers in the DTI are extremely keen to stand up for British interests in the EC and we do so regularly.

Dr. Moonie : One subject that does not appear to have exercised the Minister's mind in his discussions with his European counterparts is the Scottish steel industry. Given that he has had the report of the Select Committee for several months, given that he has done nothing in that time and given his refusal to meet hon. Members whose constituencies are affected by the closures, will he tell the House how many lost jobs in the steel industry in Scotland are acceptable to him? What does the "Department of Enterprise" intend to do about it?

Mr. Redwood : I do not like the loss of any jobs, but I want a competitive and vigorous industry, run by people who know what they are doing--the managers and directors of that business. There will be an opportunity to discuss that issue in the House later this week when I am sure that hon. Members will be able to put their points more clearly.

Mr. Tim Smith : When my hon. Friend meets his counterparts in the Industry Council, will he make it clear that the support that the French Government have given to their nationalised industries is totally unacceptable? Is not it time that we had an EC directive on privatisation, requiring countries to denationalise companies that have no place in the public sector?

Mr. Redwood : That is a delightful idea, but there might be a few difficulties in negotiating it with some of our partners. As to subsidies and state involvement in nationalised industries, and the pursuit of anti- competitive practices, of course the Government regularly take up those matters with the Commission. There is an active Commissioner in Brussels who is exercised about those concerns. Indeed, recent cases have raised the issue of French intervention and subsidy for industry. The French Government are finding that some of their practices are not legal under the treaty and are being asked to roll them back.

Telecommunications

16. Mr. Hain : To ask the Secretary of State for Trade and Industry what estimate has been made of the United Kingdom's share of the European and world telecommunications markets and of the prospects until the end of the decade.

Mr. Lilley : In 1989, the United Kingdom's share of the western European and world markets for telecommunications equipment was approximately 13 per cent. and 3 per cent. respectively. No specific projections are available for the rest of the decade, but United Kingdom exports have more than doubled over the past five years. That trend should continue.

Mr. Hain : I am not surprised that the Secretary of State is unable to give any forecasts, because he has effectively given a blank cheque to American-dominated cable television companies to compete on the local loop of the telecommunications network, while denying British Telecom and other United Kingdom telecommunications operators equivalent access to the American network.

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Why is he not insisting on reciprocity, or is he willing to perpetuate that discrimination and allow Britain to fall from the first to the second division of the world telecommunications market?

Mr. Lilley : I have pressed the American authorities vigorously for complete liberalisation, to allow our companies to bring their skills and expertise to the benefit of the American telecommunications network. Meanwhile, I am not prepared to cut off our nose to spite our face by shutting the door on investment from overseas. The hon. Member may be referring to today's announcement by Sir Bryan Carsberg, which I fully support, that he seeks to ensure that new providers of local telephone services will not be impeded by the access deficit contribution, and that the terms of British Telecom's licence will be changed to enable new companies to come in and provide local services--with the extra competition, newer services and lower prices which that has always meant. We entirely reject the Labour party's policy of renationalisation.

Mr. Wells : After that welcome announcement, can my right hon. Friend tell me how an increase in competition will result from what the Director General of Oftel has told us today?

Mr. Lilley : Yes. Sir Bryan has said that he will seek a change in BT's licences so that he will have the right to waive the contribution that might otherwise be required from companies competing in the introduction of new telephone services, such as local calls, cable television services, PCN --personal communication network--services, and other mobile services. That will enable companies to build up in the early stages without the adverse effect that the charge might have had. When companies are fully established they will have to pay the charge and the contribution to the existing BT network. This will be widely welcomed by all those who value competition, who want to see choice and who welcome lower prices.

Footwear and Textiles

18. Mr. Vaz : To ask the Secretary of State for Trade and Industry if he will make a further statement on Government assistance to the footwear and textile industries.

Mr. Sainsbury : Companies in the footwear and textile industries are eligible for, and have received, assistance under a range of Government schemes.

Mr. Vaz : Does the Minister realise that his answer will give no comfort to those who run our textile and footwear industries, or to those who work in them? Is he aware of the huge job losses that have occurred in those two industries in the past six months, and that cities such as Leicester--and, indeed, the rest of the east midlands--have been badly hit by the recession? Is the Minister aware that many of those job losses are directly due to Government policies--high interest rates, and Government failure to provide the same kind of assistance as is provided by other Governments to their textile and footwear industries? When will the hon. Gentleman get off his hands and start doing something legitimate to protect the interests of those two vital British industries?

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Mr. Sainsbury : I am aware of the job losses to which the hon. Gentleman refers and those are, of course, always a matter for regret. The textile industry, like other industries, has been suffering from recession, but the hon. Gentleman will also be aware that some job losses are attributable to investment in the industry, which is increasing the productivity and competitiveness of the industry and, indeed, has contributed to a successful export record. Exports of textiles and clothing increased by 12 per cent. to £4.6 billion worth in 1990. The industry deserves congratulation on that performance.

Several Hon. Members rose --

Mr. Speaker : Order. If the hon. Member for Winchester (Mr. Browne) will take that hat off I shall call him.

Mr. John Browne : Does my hon. Friend accept that the best assistance that he could give to the footwear and textile industry would be to ensure that customers, especially big notorious late paying customers, pay their bills on time? Rather than castigating the banks for not piling up more imprudent debt for British industry, would he not be better advised to call on companies to pay their bills to the footwear and textile industries more promptly?

Mr. Sainsbury : I hope that all purchasers in British industry, whether large or small, follow good practice and pay their suppliers at least in accordance with the contract conditions.

Mr. Cryer : Will the Minister tell us what representations he is making to the European Community to ensure that unfair subsidies such as those given to the textile industry in the Prato region of Italy are brought to an end? The problem has lasted for several years. The Government and the EC seem unwilling to tackle those unfair subsidies in other EC countries. The British textile industry is prepared to compete with any country on equal terms, but that is simply not happening. The situation is extremely unfair and is leading directly to job losses in cities such as Bradford, which I represent, where 14,000 jobs are still directly dependent on the textile industry.

Mr. Sainsbury : I share the hon. Gentleman's view that the British textile industry is well able to compete on that celebrated level playing field. We energetically pursue any allegations of unfair trading practices through the European Community and we are happy to listen to and follow up any submissions from the industry on those grounds. We also hope that, as a result of a successful outcome of the Uruguay round, there will be stricter rules and disciplines in which the textile industry and, indeed, all industries will have to operate.

Product Safety

22. Mr. Flynn : To ask the Secretary of State for Trade and Industry what discussion he has had with the National Consumer Council about product safety.

Mr. Leigh : I have met the National Consumer Council and its representatives on several occasions to discuss a wide range of consumer affairs, but product safety has not been raised.

Mr. Flynn : Is not it curious that some products that are meant to improve health destroy the health of thousands

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of people? Will the Minister convey to the industry our concern at the deaths that occur every year--not only suicides but many accidental deaths among people who take drugs--especially paracetamol--that are inadequately labelled? The labels are often misleading and in microscopic print. Is that a matter which the Minister could take up, in the interests of saving many lives?

Mr. Leigh : I know of the hon. Gentleman's concern. He did not say, however, that it is an offence to supply unsafe goods and that, after 1992, all members states will be required to apply high standards of safety. I am prepared to discuss the matter with consumer groups and I should add that we fund consumer groups to the tune of about £19 million a year and take their representations very seriously.

Mr. Nicholas Winterton : On a point of order, Mr. Speaker.

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Mr. Speaker : No. I will take it later, after the statements.

Mr. Winterton : I cannot do it after the statements.

Mr. Speaker : That is bad luck, I am afraid.

Mr. Winterton rose--

Mr. Speaker : Order. Will the hon. Gentleman sit down? He is a senior member of the Chairmen's Panel and he knows as well as any hon. Member that points of order are taken after statements. I ask him not to persist.

Mr. Winterton : Further to the point of order, Mr. Speaker.

Mr. Speaker : There can be nothing further to it.

Mr. Winterton rose--

Mr. Speaker : I ask the hon. Gentleman please to resume his seat.

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