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House of Commons

Wednesday 11 March 1992

The House met at half-past Two o'clock

PRAYERS

[Mr. Speaker-- in the Chair ]

PRIVATE BUSINESS

Avon Weir Bill

[Lords]

Order for consideration read.

Ordered,

That Standing Order 205 (Notice of Third Reading) be suspended and that the Bill be now read the Third time.-- [The Chairman of Ways and Means.]

Queen's consent, on behalf of the Crown, signified.

Bill accordingly read the Third time, and passed, without amendment.

Folkestone Harbour Bill

[Lords]

Order for consideration read.

Ordered,

That Standing Order 205 (Notice of Third Reading) be suspended and that the Bill be now read the Third time.-- [The Chairman of Ways and Means.]

Queen's consent, on behalf of the Crown, signified.

Bill accordingly read the Third time, and passed, without amendment.

Oral Answers to Questions

TRADE AND INDUSTRY

Libya

1. Mr. Ron Brown : To ask the Secretary of State for Trade and Industry if he will make a statement about trade with Libya.

The Minister for Trade (Mr. Tim Sainsbury) : United Kingdom exports to Libya have been about £250 million annually. Imports have been just over £100 million.

Mr. Brown : Does not the Minister understand one thing? During my recent visit to Libya with George More, a top Scots lawyer, the British community told us that it does not want sanctions or reprisals against the Libyan regime. Whatever the problems about Lockerbie, surely the matter can be discussed sensibly around the table? That has not happened. What are the British Government doing to resolve that question? It should be remembered that trade with Libya is important. It is important for jobs as well.

Mr. Sainsbury : Does not the hon. Gentleman understand that, in spite of his apparent admiration for Colonel Gaddafi and his regime, the United Nations Security Council unanimously adopted resolution 731 and called on Libya to respond positively and effectively to the

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demands made by the United Kingdom, France and the United States? It has not responded and further action may be required.

Mr. Bill Walker : When my right hon. Friend is dealing with trade with Libya, will he bear it in mind that the United Kingdom is happy and willing to trade anywhere in the world, because that is important to us as a trading nation, but we must never sacrifice our values and standards, particularly those concerning our attitude towards international terrorism? We must make that clear to any country with which we deal, including Libya.

Mr. Sainsbury : As always, my hon. Friend puts his point clearly and effectively. I am sure that the House--at least, I hope that the House-- will join in condemning international terrorism, particularly when it is state inspired.

Mr. Kilfedder : Has Colonel Gaddafi yet given Her Majesty's Government a detailed list of all the guns, ammunition and Semtex explosives which Libya supplied to the Provisional IRA, much of which has already been used to kill and mutilate British citizens?

Mr. Sainsbury : The hon. Gentleman makes a valid point about the regime which the hon. Member for Edinburgh, Leith (Mr. Brown) appears to admire. I am not aware that any such list has been provided.

Industrial Policy

2. Mr. Eadie : To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of the Association of British Chambers of Commerce to discuss industrial policy.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley) : I meet representatives of the Association of British Chambers of Commerce from time to time to discuss a range of policies.

Mr. Eadie : The Secretary of State must be aware that 125,000 jobs were lost in the first 10 weeks of 1992. If the projection is to be believed, another 400,000 jobs are at risk unless there is a change in industrial policy. Does the right hon. Gentleman agree that the most scathing indictment of the Chancellor's Budget judgment was his admission that unemployment would increase? What kind of Government would plan the economy on the basis of increasing unemployment?

Mr. Lilley : I am afraid that that is not the view of the Association of British Chambers of Commerce, about which the hon. Gentleman asks. It welcomes my right hon. Friend the Chancellor's brilliant Budget for its changes in the uniform business rate, which it says are of enormous help to business, a great deal of assistance to growing firms and just what businesses have requested. It also welcomes the changes in VAT, which are clearly of benefit to commerce, and the measures to encourage prompt payment of VAT, the delays in which it says are a vital factor affecting a great number of firms.

Mr. Charles Wardle : Will not the control of inflation continue to be the cornerstone of industrial policy, because it will allow Britain to become more competitive in world

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markets? Did not the remarks made yesterday by my right hon. Friend the Chancellor of the Exchequer reinforce that policy?

Mr. Lilley : My hon. Friend is absolutely correct. That point has been made by many business organisations : Sir John Banham, for instance, welcomed my right hon. Friend's prudent Budget and the priority that he gives to reducing inflation, while the Institute of Directors said that the Budget was prudent and correct in every way.

Mr. Gordon Brown : In what will be his final appearance at Question Time as Secretary of State for Trade and Industry, will the right hon. Gentleman confirm the facts of the Budget statement? Will he confirm that investment will fall in 1992 ; that business investment will fall by 3 per cent ; and, that hundreds of thousands of men and women in this country are in danger of losing their jobs if the Government continue in office?

Given that the Prime Minister told us in January that a recovery had started when patently it had not, will he now apologise, tell us when a recovery will happen under Tory policies and agree with the country that the first step towards saving the jobs of thousands of people is for the Government to lose theirs?

Mr. Lilley : The hon. Gentleman's response to the Budget is as empty as that of his right hon. Friend the Leader of the Opposition, whose comments yesterday, I thought were proof positive that the Michelangelo virus was alive and operating inside the Labour party. It has wiped Labour Members' minds clean. What we want to hear from them is what they plan to do about the tax proposals in the Budget : will they vote against them, or will they support them? I shall be happy to give way to the hon. Member for Dunfermline, East (Mr. Brown) if Mr. Speaker will allow him to answer that question.

Mr. Squire : Does my right hon. Friend agree that there is no serious argument about the fact that the members of the Association of British Chambers of Commerce are fearful about a possible change of Government, and that the only question open to debate is whether higher taxation is worse than higher interest rates, and whether either is worse than higher inflation?

Mr. Lilley : Indeed : that is absolutely true. A recent study by James Capel and Co. showed that, of 105 leading businesses in this country, 86 per cent. believe that Labour policies would make the economic position dramatically worse. I have no doubt that, after the Budget, an even higher proportion will prefer our policies to those of the Opposition.

3. Mr. Turner : To ask the Secretary of State for Trade and Industry when he will next meet representatives of the West Midlands chambers of commerce to discuss industrial policy.

Mr. Lilley : Together with the hon. Gentleman, I had the pleasure of attending a meeting with the Wolverhampton chamber of commerce last Friday.

Mr. Turner : The Secretary of State is right. He was well wined and dined by the Wolverhampton chamber of commerce last Friday. Why, then, did the Department of Trade and Industry try to gag its president and not allow him to deliver a part of his speech that was mildly critical

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of Her Majesty's Government? Will the Secretary of State answer that question truthfully because it strikes at the very heart of democracy?

Mr. Lilley : The president of the Wolverhampton chamber of commerce delivered precisely the same speech as the one of which he sent me a copy beforehand and I have it here. He called for a reduction in the special car tax, and I am sure that he will be delighted that it has been halved. He also called for measures to favour lower-paid employees in respect of income tax, and for measures to help small businesses. I have no doubt that the Wolverhampton chamber of commerce will give a warm welcome to the Budget, as it did to my speech last Friday.

Mr. Gerald Howarth : Is my right hon. Friend aware that the measures introduced yesterday by our right hon. Friend the Chancellor, the harmonious industrial relations restored by the Government and the substantial investment from home and overseas mean that manufacturing in the heart of England is deeply grateful for all that the Government have done in the past 13 years? The last thing that manufacturing wants is a Government who adopt the European social charter which would destroy the advantage that we have in the west midlands.

Mr. Lilley : That is absolutely right. A study of leading businesses shows that a vast majority of British firms believe that if we had a Labour Government there would be slower growth, less investment, higher inflation and worse unemployment. The hon. Member for Dunfermline, East (Mr. Brown) has spent much of his time over the past few months telling industry about his policies. It has clearly listened and understood.

Trade Balance

4. Mr. Cohen : To ask the Secretary of State for Trade and Industry when he expects exports to reach the same level as imports.

The Minister for Corporate Affairs (Mr. John Redwood) : My Department does not forecast the balance of payments. The hon. Gentleman might like to know that last year saw record levels of exports from this country and that our share of manufactured exports in world trade has been rising since 1984.

Mr. Cohen : Is not the truthful answer to my question, "Sometime never", because the Government have not invested in British manufacturing? To achieve an export-import balance under current Tory policies would mean an even worse slump than we have at present because the only thing made in Britain under the Tories is a Tory-made recession.

Mr. Redwood : The hon. Gentleman is wide of the mark. There have been good levels of investment for business and manufacturing in recent years, as the hon. Gentleman should know. It is way above the levels when the Labour party was last in control and understandably so, because Britain is now a good home for investors with much better labour relations, much better quality, much better business management and much better relations between employees and management.

Mr. Norris : How much more quickly does my hon. Friend think that we might achieve a balance between

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exports and imports when we introduce a minimum wage, increase taxes on investment, increase personal taxes and allow the trade unions to ride rough shod once again?

Mr. Redwood : My hon. Friend makes his point extremely well. Those policies would be ruinous. They would drive away inward investors, make manufacturing investment much more difficult and defer the day when we improve our balance of trade in televisions, cars and all the other things that are now improving so strongly under the Government's policies. That is why it is important that those policies should continue.

Mr. Hoyle : Yes, but will the Minister say how he could ever expect to balance exports and imports when the Chancellor has forecast growth of only 1 per cent ; when we have rising unemployment, falling investment and companies going bankrupt? Is not that a terrible record on which to fight a general election, in which the Government will be defeated?

Mr. Redwood : The trading performance of many sectors is very good, and that trading performance has been strengthening in recent months, as the hon. Gentleman should know. I draw his attention to the fact that we are now net exporters of televisions whereas we were net importers under the Labour party and to the fact that motor output has been expanding in recent years whereas it was declining under Labour. That is the heart of British manufacturing and it needs our policies to carry on its renaissance.

Mr. Roger King : Does my hon. Friend agree that one way in which we can cut down imports is to buy British? Will he extend warmhearted support to the Labour party, which advocates such a policy, but dissociate himself from the actions of the shadow Home Secretary and the Leader of the Labour party who buy foreign cars?

Mr. Redwood : I agree entirely. What humbug it is for some Opposition Members to say that one should buy British and then travel around in foreign cars. I bought a British car and I am proud of it. It works extremely well. Many of my hon. Friends have done the same. That is the best way to back Britain and British industry.

Ms. Quin : Has the Minister had time to have a look at the table published in European Economy, which clearly shows that in terms of the annual change in the volume of exports of goods and services between 1979 and 1990, the United Kingdom had a worse record than any other European Community country? Will the hon. Gentleman confirm that the Budget statement envisages a widening trade deficit over the next few years, especially in manufacturing products? The honest answer to the question asked by my hon. Friend the Member for Leyton (Mr. Cohen) is that under this Government there will never be a balance between exports and imports.

Mr. Redwood : That last statement was wild and silly. The hon. Lady should know that in the past 10 years exports of British manufactured goods have grown faster than those of France, Germany, America and even Japan, because manufacturing is doing so much better and needs our policies. She might like to know that the imports of manufactured goods amount to 17 per cent. of our national income--the same proportion as Germany.

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Mr. Warren : Does my hon. Friend agree that it is appalling that the Opposition whinge on about the failure of this country to export, when we know that what we need from both sides of the House is unanimity to help exporters and not complaints about them?

Mr. Redwood : I agree and go further : let us congratulate them. They have achieved much in recent years, but the Labour party never gives them any credit and is always moaning. There have been fine achievements in the export of cars, televisions and other consumer durables. Let us hear some praise for a change and congratulate exporters.

Footwear Industry

5. Mr. Vaz : To ask the Secretary of State for Trade and Industry if he will make a further statement on initiatives to help the footwear industry.

Mr. Sainsbury : The footwear industry, like other industries, is eligible for a range of Government assistance.

Mr. Vaz : Does not that answer prove that the past 13 years have been wasted years in terms of the Government's commitment to the footwear industry? Hundreds of thousands of jobs have been lost in Leicester, the midlands and elsewhere in the past 13 years, yet the Government have done nothing to support the industry. Now that the election has been announced, will the Minister take the opportunity to apologise to the industry's workers and employers for failing to do anything to protect them in the past 13 years?

Mr. Sainsbury : I hoped that the hon. Member would be aware of the changes in fashion with which our footwear industry has had to deal and would have noticed the internationally competitive conditions in which it has had to operate. I hoped that he might be prepared to congratulate it on its 30 per cent. improvement in productivity during the past decade.

Mr. Michael Morris : My right hon. Friend the Minister should ignore the gloom and doom of the hon. Member for Leicester, East (Mr. Vaz). In very difficult trading circumstances, footwear exports in the past 12 months were up 11 per cent. in volume and 15 per cent. in value. Nevertheless, will my right hon. Friend continue to put pressure on the 35 countries that still place restrictions on our exporters?

Mr. Sainsbury : Indeed. My hon. Friend has been a close supporter of the industry for many years and has taken a close interest in its activities. I join him in congratulating the industry on its export achievements--something that we never hear from the Labour party. It has almost doubled exports since 1985 and we shall continue to work to ensure that more and more markets are open to the high-quality products that are produced in my hon. Friend's constituency.

Beer

6. Mr. Canavan : To ask the Secretary of State for Trade and Industry what response he has made to the complaints he has received about measurements relating to the head of a pint of beer in the current year.

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The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh) : After careful consideration of the complaints, I have decided that section 43 of the Weights and Measures Act 1985 should be implemented and that the trade should be allowed two years to make the necessary changes.

Mr. Canavan : Is the Minister aware that there would be widespread opposition, particularly in Scotland, to any Government imposing legislation that led to the disappearance of the traditional head on a pint of beer or to increased costs being passed on to the consumer in price increases? We all agree about the need to protect the general public against short measures, but does not the Minister realise that flat beer is just as bad, if not worse, than small beer?

Mr. Leigh : There is no question of having to serve flat beer in Scotland. I am only implementing the weights and measures legislation that the previous Labour Government introduced. I should be interested to see whether an Opposition Front-Bench spokesman will intervene on this point. Surely we all agree that no one should be served a short measure. If one pays for a pint of beer, one should get a pint of beer. If the hon. Gentleman and some brewers say that prices will increase, I can only quote a leading national newspaper which said :

"Why should a pint be a pint everywhere but in a pub? Just imagine how the brewers would react if their customers decided to hand over only 99p out of every £1 they were charged."

Mr. Nicholas Winterton : Will my hon. Friend give greater and more sympathetic consideration to the question that has just been asked, because those of us who understand cask-conditioned ale--real beer--know that it is extremely damaging for it to be dispensed under pressure? The head is an important part of a pint of beer and if beer is dispensed in the way that he is advocating through the implementation of section 43 of the Weights and Measures Act 1985, the taste, texture and colour of cask-conditioned beer could be altered to the detriment of the discerning beer-drinking public.

Mr. Leigh : My hon. Friend is quite rightly a great traditionalist, and so am I. Nothing that I am proposing will result in hand pumps being phased out. I am giving the industry two full years to bring in lined glasses. The entire stock of the nation's glasses turns over in two years so there is no reason why this measure should result in any implementation costs or why the price of a pint should go up. It is right that when one pays for a pint of beer, one should get a pint of beer.

Electronics Industry

7. Mr. Simon Coombs : To ask the Secretary of State for Trade and Industry what is his estimate of overseas earnings by the United Kingdom electronics industry in 1979 and 1991.

Mr. Redwood : Exports of electronics from this country in 1979 amounted to £2.7 billion and rose to £13.6 billion in 1990, the last full year for which I have the figures.

Mr. Coombs : Will my hon. Friend speculate on the effect on jobs in the electronics industry in my constituency and elsewhere of a Labour party proposal to increase value added tax on luxury items to 25 per cent? Does he agree

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that the right way to encourage the electronics industry to export is to help it at home by tax cuts such as those announced yesterday by our right hon. Friend?

Mr. Redwood : I agree. Such a big increase in VAT would be very damaging. I was delighted to learn recently that Arcam has announced that it will be the first British company in 10 years to make a cassette deck here in the United Kingdom. That builds on the success of the television industry and other electronic industries to which I referred in answer to earlier questions. We need to develop a good strong home market, and for that we need relatively light taxation so that people have more money in their pockets to spend. That is what the Labour party does not understand : there is no investment unless there is demand.

Mr. Flynn : What plans does the Minister have to ensure that the British-designed and British-invented transputer continues to be manufactured in this country? Is he aware that the parent company, which was nationalised as part of a French and Italian consortium, has threatened to remove the transputer from this country because of the British Government's failure to support British industry in the way that the French and Italian Governments have? Is another marvellous British invention--the miracle transputer which will be sold all over the world--about to be employed and manufactured by foreigners?

Mr. Redwood : There are many examples of good inventions developed here thanks to our industrial market-oriented policies. The United Kingdom is one of the leaders in open systems, which is a very important technological development. As for the future of the transputer, that, of course, depends on commercial decisions, but we have the right environment for many types of technological developments. We have an extremely lively electronics industry. What a pity that the Opposition never tell us any success stories.

Industrial Policy

8. Mr. Bill Michie : To ask the Secretary of State for Trade and Industry when he will next meet representatives of the Yorkshire and Humberside regional CBI to discuss industrial policy.

13. Mr. Austin Mitchell : To ask the Secretary of State for Trade and Industry when he will next meet representatives of the Yorkshire and Humberside regional CBI to discuss industrial policy.

Mr. Lilley : Ministers and officials of my Department keep in touch with the CBI on a wide range of matters.

Mr. Michie : Does the Secretary of State recall that in answer to an earlier question of mine to his colleague at the Department of Employment, I was told that 25,000 manufacturing jobs had been lost in the past 12 months in Yorkshire and Humberside? Has it occurred to the Secretary of State to discuss that with the CBI and perhaps also to nudge his colleague, the Chancellor of the Exchequer, to try to change that trend?

Mr. Lilley : If the hon. Gentleman is in contact with the CBI on Humberside, I am sure that he will have noticed its comments on the Budget. It especially welcomed the measures introduced by my right hon. Friend the Chancellor to encourage late payment of bills-- [Hon.

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Members :-- "Oh!"]--to encourage early payment of bills, and to overcome late payment of bills. The regional CBI believed that that would be of great benefit and was grateful for my right hon. Friend's measures to alleviate the uniform business rate. I do not think that any business men whom I know support the Labour party's policy of unleashing local authorities to raise the poundage for the uniform business rate without capping. During the 1980s, local authorities raised business rates by 37 per cent. more than inflation. We have frozen them, but the Labour party intends to unleash them again.

Mr. Austin Mitchell : With the Government, it is more a question of the late delivery of policies. The Secretary of State will be aware how crucial the textiles and clothing industries are to Yorkshire, Humberside and, indeed, Grimsby. Is he also aware that those industries have been losing 2,000 jobs per month in addition to the 60,000 jobs already lost and the 7 per cent. fall in production since the recession began? It is too late now to ask the right hon. Gentleman what he intends to do about that, as he will lose his job over it on 9 April, but can he tell me of any other Government who have allowed their textile industry to bleed to death in that fashion without helping it?

Mr. Lilley : The textile industry is and remains important to this country. That is why we have taken up the position that we have over GATT, a position which is widely welcomed by that industry. The hon. Gentleman's region has benefited greatly from diversification, not least because we have encouraged inward investment. I am sure that the hon. Gentleman, like me, condemns the Trades Union Congress motion which rejected "alien investment" in this country, as the TUC saw it. I am sure that the hon. Gentleman is as amazed as I am that Labour Front-Bench spokesmen refuse to dissociate themselves from that position, and therefore stand to reject "alien investment". That is one reason why they will be rejected by the electorate.

Mr. Batiste : Is my right hon. Friend aware that in many parts of the Yorkshire and Humberside region unemployment is significantly lower than it was at the time of the previous election, and that what the regional CBI fears above all else is the havoc that would be caused by a Labour Government, with their commitment to a statutory minimum wage, which would wipe out so many jobs, and to the European Community social chapter, which would make British industry uncompetitive in world terms?

Mr. Lilley : My hon. Friend is right. I receive a great many representations from business men worried about the threat of a minimum wage and about the social chapter. Business men find it especially odd that the Labour party intends to introduce a minimum wage with one hand while with the other hand it would remove our tax cuts for the lowest paid. Thus its Budget--if it ever got the chance--would hit the lowest paid disproportionately.

Mr. Michael Brown : Will my right hon. Friend totally reject what the hon. Member for Great Grimsby (Mr. Mitchell) has just said, bearing in mind that only four days ago my hon. Friend the Under-Secretary of State was in my constituency, which adjoins Great Grimsby, to announce that Kimberly-Clark from America was to build

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a factory at Barton-upon-Humber involving 770 new jobs, thanks to the Government's industrial policy and a large Government grant to that company?

Mr. Lilley : Indeed, I was especially delighted that we won that contract for this country. The investment will create 750 jobs directly and a great many more indirectly. We pulled out all the stops and gave the company a response in record time.

Mr. Henderson : After 13 years of so-called Tory economic miracle, how does the Secretary of State explain to industrialists in Yorkshire and Humberside why manufacturing investment there is now below the 1979 level, and why there were no measures in the Budget for manufacturers and manufacturing investment?

Mr. Lilley : The hon. Gentleman knows that if we compare the position now with that of 10 years ago--at the same stage of the economic cycle--we see that manufacturing output is up by a quarter, manufacturing investment is up by a third, manufacturing productivity is up by more than a half, and manufactured exports are up by almost three quarters. Industrialists do not want to return to Labour party policies because they know full well that that would mean Front-Bench Labour Members taking decisions instead of them. They know that the Opposition team consists of a television producer, a psychiatrist, a social anthropologist, a trade union official and a charity worker--and that is about it. Not one of them has a day's experience of working in British industry.

Mr. Riddick : Is my right hon. Friend aware that a survey conducted recently among the top 200 companies in this country, many based in the north of England and in Yorkshire, showed that 86 per cent. of industrialists believed that a Labour victory at the next election would be bad for the economy? They believed that inflation would go up and that interest rates would go up, which would clearly lead to higher unemployment in Yorkshire and Humberside.

Mr. Lilley : Yes. I am sure that, following the Budget, support among business and industry will be even higher than the 86 per cent. recorded beforehand. The fact is that industrialists are scared stiff of a Labour Government and are determined to do all that they can to ensure that we achieve, as we shall, a resounding and decisive Conservative victory. That is the best thing for industry and for a strong recovery from the recession.

Regional Development Areas

9. Mr. Hind : To ask the Secretary of State for Trade and Industry when he last discussed with his EC opposite numbers revision of regional development areas ; and if he will make a statement.

Mr. Leigh : Our intention is to review the map early in the next Parliament after we have won the election.

Mr. Hind : When my hon. Friend returns to his desk after the next election has been won by the Conservatives, will he bear it in mind that in the past 10 years west Lancashire has benefited greatly from being a development area? It has attracted inward investment, there are new factories and jobs, and unemployment is now 22 per cent. lower than it was when I was elected in June 1987. In the negotiations, will my hon. Friend especially ensure that

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west Lancashire and Skelmersdale are adequately supported with European and regional selective assistance through his Department?

Mr. Leigh : When my hon. Friend has been returned with an increased majority in his marginal seat, he will no doubt wish to make representations to me as I carry on with my present job. Our review will be objective and it will be based on supporting areas in which there is a disparity in unemployment rates. Of one thing I am sure : the last thing that business in west Lancashire wants is the election of a Labour Government, who will put up business taxes, put up costs and impose a minimum wage.

Dr. Kim Howells : As the Minister knows, regional development grants have played an important part in helping to replace some of the jobs lost in mining and steel in south Wales. Is he aware that many of us are concerned because the next generation of inward investment will be attracted not by a low-wage economy or a low-wage work force, but by the best trained and educated work force in Europe? Day by day, the Government are unwilling to put more money into training. Indeed, the Department of Trade and Industry actually agrees with cuts in training imposed by the Department of Employment. Those cuts mean that regions such as south Wales will be less able to compete with other regions in Europe than they are now.

Mr. Leigh : That was a very moving speech. If it is true, why is this country the No. 1 location for inward investment? Why do we account for 41 per cent. of Japanese investment in the EC and 36 per cent. of American investment in the EC? The reason is that foreign companies want to come here for a highly trained and highly motivated work force who work for good British companies. That is the truth.

Post Office

10. Ms. Hoey : To ask the Secretary of State for Trade and Industry when he next plans to meet the Post Office chairman to discuss Post Office efficiency.

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