House of Commons Hansard Debates for 16 Oct 1991

Kuwait

10. Mr. Colvin : To ask the Secretary of State for Trade and Industry whether he will make a statement on the number of new contracts that have been won in Kuwait by British companies since the end of the Gulf war.

Mr. Lilley : I know of more than 80 companies that have obtained contracts worth £470 million in connection with Kuwait

reconstruction.

Mr. Colvin : Does my right hon. Friend agree that British companies are leading the reconstruction of Kuwait because the Government give the best organised support? Has he any plans to extend the success of Kuwait elsewhere in the world where disaster strikes and reconstruction is required? Is he entirely happy with the Export Credits Guarantee Department cover provided for such work?

Mr. Lilley : I am grateful to my hon. Friend for those remarks. It is a successful effort, with industry and Government working together, to ensure that British industry plays as leading a role in the reconstruction of Kuwait as we did in its liberation. We can learn and have learnt lessons from that and we have put them into practice elsewhere. I have just led a joint operation--business and Government again working together--in Venezuela. In Caracas we set up a task force of nine business men supported by two Government officials. The task force will stay there for several months and we believe that it will make a major impact on the Venezuelan market, which will benefit a wide range of companies in this country.

Mr. Flynn : Is the Minister aware that since the Gulf war the United States has sold $18 billion worth of arms to Kuwait and other middle east countries, and that a new high-tech, smart bombs arms race is roaring ahead in spite of what the President of the United States and the British Prime Minister have said? As it is now clear, from what the United Nations Commission has said, that the British arms embargo on Iraq was as full of holes as a string vest,

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what will the Minister do to stop the sale of arms to unstable countries that are threatening world peace? How quickly will those British companies that have broken the law be prosecuted?

Mr. Lilley : On the question of sales to Kuwait, our record is second to none in promoting British industry. As for the embargo on arms, in the course of the summer I published details of every licence given for the sale of sensitive items to Iraq. If the UN team has any further information, we shall look into it thoroughly. Moreover, the Customs and Excise, which is responsible for enforcement and prosecution, will look into any evidence of law breaking. As the hon. Gentleman probably knows, there have already been some prosecutions and charges.

Mr. Rowe : My right hon. Friend will know that one of the groups of companies experiencing difficulty in getting into Kuwait consists of companies that have been blacklisted by the Americans because of allegations that they have wrongly traded with Iraq. In the case of companies about which the Americans now say that they have no firm evidence but would like to ask more questions, although, when invited to do so, they do not send them, will my right hon. Friend assure the House that he will keep up the pressure on the Americans to come clean about the allegations or take the companies off the list?

Mr. Lilley : I assure my hon. Friend that I shall pursue any such issues. Indeed, I have already pursued those concerning a firm in his constituency. In respect of an earlier question by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin), there is ECGD cover for Kuwait and I believe that that will be adequate.

Ms. Mowlam : Does the Minister accept that the activities of the Government and his Department in Kuwait exhibit a lack of judgment and, in some cases, a lack of competence? He has told us how many contracts have been awarded ; will he now say how many have been lost because of the criteria used by his Department? If the Minister is so interested in the future of oil as one of the major commodities, when will his Department take action on the possible prosecution of those involved in dummy trading in the Fox market, where oil is an important aspect?

Mr. Lilley : I do not think that the last part of the hon. Lady's question has a great deal to do with Kuwait. It is typical of those on the Labour Front Bench that when British industry is doing outstandingly well and our share of the market has risen several fold compared with what it was before the war, the hon. Lady should want a list of the contracts that we have not won. We have not won 100 per cent. of the contracts, but we have done a great deal better than any Opposition Member would have expected or would have achieved had they been in office.

11. Mr. Dalyell : To ask the Secretary of State for Trade and Industry if he will make a statement on Her Majesty's Government's support for industrial reconstruction of Kuwait.

Mr. Lilley : As I said, I am aware of 80 companies which have obtained contracts, worth in total, more than £470 million in connection with Kuwait reconstruction.

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Mr. Dalyell : Without wishing to make a yah-boo point, with 1 million barrels of oil a day every day for nine months spewing up carcinogenic polycyclic aromatic hydrocarbons and creating graver pollution than any other anti-pollution activities in the rest of the world--that is the view of the Financial Times --how, in all seriousness, can a Secretary of State come to the House and say that we are making as great an effort to put out oil fires and reconstruct Kuwait as we did to liberate Kuwait? We are not making anything like the effort that we put into Operation Desert Storm.

Mr. Lilley : We helped in the establishment of a Kuwaiti-British group, which I am happy to say has a contract for extinguishing fires and, more importantly, ensuring that the infrastructure in the Sabriyah field is operational again. There are now only 30 fires left to extinguish in that field, and there are several hundred staff working on that operation who began work as soon as they were given the contract by the Kuwaiti Government. It may have escaped the notice of the hon. Gentleman that Kuwait is a sovereign country which gives contracts to us. We do not have the right to take over its oil fields and extinguish fires off our own bat.

Mr. Frank Cook : The Secretary of State presents a rosy picture of British industrial activity in Kuwait, especially in relation to the Kuwaiti oil field fires. How many contracts have been sold to American operators because British companies cannot cope with the work load? If the Secretary of State cannot give that information, will he undertake to contact the gentleman, whose card I have in my hand and will pass to him, in order to obtain the information that the right hon. Gentleman should have close to hand anyway?

Mr. Lilley : I shall, of course, follow up any questions that the hon. Gentleman poses on the part of his constituents or others. It is deplorable that Opposition Members should knock the successful effort made by British companies. One of the distinguishing features of the operation in Kuwait was that British companies joined the task force not just to represent themselves but to work on behalf of their whole sector including companies here. Those companies co-operated and worked together for Britain, and did not expect to be knocked by the Labour party as soon as they achieved success.

Mr. Dalyell : On a point of order, Mr. Speaker.

In view of the unsatisfactory nature--

Mr. Speaker : Order. Mr. Haynes.

Timeshare

12. Mr. Haynes : To ask the Secretary of State for Trade and Industry what further action he expects to take to eliminate malpractice in the timeshare business.

Mr. Leigh : I have asked the Commission of the European Communities to prepare a directive to regulate the selling of timeshare properties. The Commission has indicated that it hopes to bring forward a proposal shortly. In addition, we propose to amend the Trade Descriptions Act 1968 to tighten controls on statements about services and to bring timeshare award schemes within the Act's powers.

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Mr. Haynes : The Minister is bone idle. He sits in the ivory tower down at the Department of Trade and Industry while people in our constituencies suffer because of timeshare crooks. What is the Minister going to do about it? While he is at it, he should look to see how many timeshare crooks have contributed to Conservative party funds.

Mr. Leigh : The hon. Gentleman's manner is so reassuring that he would not get me into a timeshare award scheme in a million years. It is not true to say that the Government have been slow to act. Only yesterday I spoke to Commissioner Van Miert in Brussels about this issue. As soon as I could I approached him to get the Commission to act, and progress is being made. We hope that before Christmas the Commission will issue a draft directive. Moreover, we spent the last year in a review of the Trade Descriptions Act and we hope to bring in legislation, when time permits, to bring award schemes within the remit of the Act. We could not be doing more.

Sir Robert McCrindle : While I endorse the call to eliminate malpractices to which the hon. Member for Ashfield (Mr. Haynes) has just referred, does my hon. Friend agree that it would be appropriate to draw to the attention of the House and the country the fact that there is nothing wrong with the principles of timeshare and that what we seek to eliminate are the malpractices and excesses through which timeshare is sold? Will he further agree that over the past 20 or 30 years many thousands of our constituents have enjoyed considerable happiness as a result of purchasing a timeshare?

Mr. Leigh : My hon. Friend is quite right. All the evidence shows that the problem is not with timeshare : it is with its marketing. That is why we believe it essential that we insist that those considering taking up timeshare offers be given a written prospectus, that they have a cooling off period and that deposit moneys be protected.

There is no point in acting unilaterally in this case, as most timeshare properties are situated abroad. This is a good example of European action being needed. We are pressing the European Commission to act ; it has promised to consider our request as favourably as it can.

Mr. Nigel Griffiths : The Minister knows that many people--including many Conservative Members--are being duped by bogus timeshare advertisements. He also knows that he made the same statement that he has just made to the House in a press release dated 18 February in which he also promised action. Nothing has been done since then. The Advertising Standards Authority, the Office of Fair Trading and the Consumers Association have begged the Minister to take action for the past 16 months, so why is he prepared to sit back and leave the matter to Europe, knowing full well that no protection will come into force before 1 January 1993 at the earliest?

Mr. Leigh : As 80 per cent. of timeshare properties are situated abroad, it makes sense for Europe to act in this matter. The hon. Gentleman has failed to tell the House that we have just finished an exhaustive review of the Trade Descriptions Act. He is so intent on making petty party -political points that he ignores the fact that we have had to consult hundreds of trade associations. The Trade Descriptions Act affects every buying and selling operation in this country. We have finished the review and we shall bring in legislation. What more could we do?

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Mr. Butler : Will my hon. Friend's actions cover misleading advertising sent from abroad? Will they also cover the cooling-off periods, which are so short that they are over by the time people return from their overseas holidays?

Mr. Leigh : The whole point of asking for a Commission directive is that it would cover a cooling-off period. Insisting on amending the Trade Descriptions Act is necessary to bring award schemes into the ambit of that Act and to ensure that they are properly enacted. I am afraid that we cannot act on letters sent from abroad, but I urge people to consider such letters carefully. We have issued 750,000 leaflets entitled "Your place in the sun" advising people not to go to these award schemes and to beware of timeshare operators.

Textile and Clothing Industry

13. Mr. Gareth Wardell : To ask the Secretary of State for Trade and Industry what representations he has recently received from the textile and clothing industry.

Mr. Sainsbury : My right hon. Friend has received representations on a number of issues from representatives of the textile industries.

Mr. Wardell : The recent survey of the clothing and textiles industry by the Apparel, Knitting and Textiles Alliance shows that more than 500 jobs a week are being lost in the industry and that output is more than 10 per cent. lower this year than last. In the light of that, what hope can the Minister offer for the future of British manufacturing industry in general, when skills are being destroyed on this sort of scale?

Mr. Sainsbury : I am sure that the whole House shares the hon. Gentleman's regret at lay-offs, but he will be aware from his knowledge of the industry of the great strides that it has made in improving its productivity. He will also be aware that the improvement in productivity often means that one operative can do the work that used to be done by a large number of operatives. I hope that he will also be aware of the industry's success in exporting no less than £4.6 billion worth of textiles and clothing last year. That is a tribute to the industry's success in improving its productivity and international competitiveness.

Mr. Nicholas Winterton : I am actively involved in promoting the textile and clothing industry and have benefited from some of the quality and expertise of that industry. Does my hon. Friend accept that the industry faces very unfair competition? In the last few months alone 4,000 jobs have been lost in the north-west and 25 mills and factories have closed. Does he accept that the present anti-dumping procedures in the European Community are inadequate and that by the time that Brussels decides that action can be taken the damage is done? Will he do something about that?

Mr. Sainsbury : I hope that, like my hon. Friend, we all support the British textile and clothing industry in our purchases. I agree with my hon. Friend about the slowness on occasions of the anti-dumping procedure. That is one of the matters that we are addressing in the current Uruguay round of GATT. I am optimistic that the current

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negotiations will achieve a much more effective disputes procedure and a more transparent and quicker anti- dumping procedure.

Mr. Henderson : When the Secretary of State addresses the Department of Trade and Industry textile conference in Manchester next week will he be urged by the Minister to apologise to the thousands of companies that have gone out of business in the industry in the past year and to the 35,000 workers who have lost their jobs in the industry in the same period because of the failure of Government economic policy and the bad news that that means for many of the textile communities in Lancashire, Yorkshire and the east midlands? Does the Minister agree that his failure undermines the sterling work to promote and talk up British products during the London fashion week which is now taking place?

Mr. Sainsbury : I am delighted to hear at least one Opposition Front -Bench spokesman refer to praise and talking up of British industry. It would be a relief to us all if the achievements and successes of British industry, including the textile industry, were occasionally acknowledged and if we could hear from Opposition Front-Bench spokesmen some praise instead of some denigration of the achievements of British Industry.

Mr. Waller : Does my hon. Friend agree that, as Britain generally plays by the rules, it would be in our interests for European Community competition rules in relation to textiles and clothing to be more rigorously enforced? Is it not quite unacceptable that the Spanish and Italian Governments continue to subsidise their textile and clothing industries while some Belgian companies have not yet repaid the illegal state aid that they received from the Belgian Government, despite the fact that they are required to do so by the European Commission?

Mr. Sainsbury : My hon. Friend will know that we are making progress on the important matters to which he refers. However, some issues, including continuing improper subsidies and the Belgian case to which he refers, are a matter of concern to the Government. We hope to make progress on those in the near future. We have made much progress on reducing subsidies and on creating a more open, level playing field for the textile industry and for other industries.

Recession

14. Mr. Livingstone : To ask the Secretary of State for Trade and Industry if he will make a statement on his assessment of the long-term effects of the recession in industry.

Mr. Redwood : British industry is becoming more competitive and more productive. Manufactured exports are 60 per cent. up in volume terms compared with 1979. The balance of payments deficit in manufactures has been

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closed. Total investment in the economy is above the levels of the 1970s and private consumption per head is above that in France and Germany. It is about time that Opposition Members started looking at some of the pluses in the situation.

Mr. Livingstone : Given that since the Prime Minister took office we have lost 250,000 manufacturing jobs out of a total of 750,000 jobs that have been lost and that 30,000 firms have gone bankrupt, can the Minister say upon what basis British industry can expand and tackle the balance of payments crisis? Can the Minister tell us about any point in a post-war recession at which at the depth of that recession we did not have a balance of payments surplus? What is the difference this time?

Mr. Redwood : The difference is that the hon. Gentleman does not know the facts. The manufacturing deficit has disappeared in recent months because of the great export success of British manufacturing industry, especially in the motor car industry, which has been mentioned already by my right hon. and hon. Friends.

In a recent radio programme, the hon. Gentleman said that he thought that there would be a Labour Government. That was a rather strange prediction, but the rest of his predictions seemed to be extremely accurate. He said that such a Labour Government would soon enter an economic crisis and would then lurch to the left. That is exactly what happened to the previous Labour Government when they entered an economic crisis, and it would happen again. Perhaps the hon. Gentleman believes that the Labour party's £10 billion takeover plans for British industry by renationalising public utilities are what is needed to revitalise the economy. I have news for the Opposition : that is not what is needed. It is the Government's policies which are needed to produce progress and prosperity.

Mr. Grylls : Does my hon. Friend accept that wise and experienced industrialists know well that recessions are part of the economic price of every industrialised country? Britain went into recession in an incomparably stronger position than it did 10 years previously because of tax changes, deregulation and a huge improvement in productivity. That is very much a plus and when the present recession ends, we shall be ready to win more markets.

Mr. Redwood : I agree with my hon. Friend. We were much stronger and we delayed a recession for 10 years, a much longer period than the Labour Government were able to delay recessions in their time. There have, of course, been slowdowns around the world and it is difficult to resist all of those all the time. The important thing is that the economy will recover. All private sector forecasters are looking to growth next year. That is why Opposition Members are so glum. There will be more good news, and they do not like good news.

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