House of Commons Hansard Debates for 8 Jul 1992

Mr. Heseltine : The hon. Gentleman knows that our exports of manufactured goods are at an all-time high and have grown by 4 per cent. in the past 12 months. I very much hope that when Labour Members set out across the world on their holidays in a fortnight's time they will stop peddling a message of gloom about this country.

Sir Michael Grylls : Is my right hon. Friend aware that, despite the very good export record of British firms, some 70 per cent. of companies still do not export? Most of them are small and medium-sized concerns. Will my right hon. Friend pay particular attention to that sector, which needs help and encouragement to penetrate new export markets and thus give assistance to Britain?

Mr. Heseltine : I am very sympathetic to my hon. Friend's view and I hope in the near future to set out our plans to improve the service that we give to small and medium-sized companies. I should add that we export a higher proportion of our gross domestic product than virtually any other comparable nation.

Mr. Jacques Arnold : Is my right hon. Friend aware of Proyecto Venezuela, which involves the imaginative packaging of opportunities for British firms to export a wide range of products and services to that country? Have we learnt lessons from that, and will there be many opportunities to operate similar products in other countries in the future?

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Mr. Heseltine : I am grateful to my hon. Friend for drawing my attention to the need to search world markets and explore every avenue to put together the most attractive package for companies exporting from Britain. I hope that we shall be able to build on our already formidable reputation.

Mr. Morgan : The Government should be providing measures of substance, rather than the shadow that the President of the Board of Trade with his new title tends to provide. Does the right hon. Gentleman agree that if he really wants to get rid of the doom and gloom being cast over British industry he should insist that the electricity companies charge less to key British industries? The chlor-alkali industry, for example, has approached the right hon. Gentleman. That industry, which is very important in the north-west, has been crippled by a 40 per cent. rise in electricity prices. Steel, aluminium smelting and many other heavy strategic industries are also being crippled by rising profits in the recently privatised electricity industry. Is the right hon. Gentleman aware that those profits are accompanied by big losses in the industries that electricity serves?

Mr. Heseltine : The hon. Gentleman has raised an important point. We have established a regulatory system to keep the position under constant review. It is important for us to do that, but it is also important to realise that if we are to have a flourishing manufacturing economy companies must be allowed to make profits commensurate with the need to invest as a consequence of their success. Every time a company makes profits, Labour Members immediately attack it, because they fail to understand that profitability leads to investment and growth.

Mr. Page : Does my right hon. Friend agree that what is needed to help British industry is an evaluation of the efficiency and effectiveness of our foreign competitors, and that feeding that information through to British industry will enable it to become more competitive? What will the Department do to help British industry in that regard?

Mr. Heseltine : That question goes to the heart of the announcement that I made last Friday. I believe that it is essential for Britain, as a trading economy, to search the world constantly to assess its standards of competitiveness and--even more important--to establish what those standards will be in the decade ahead. I have set up a special division in my Department to advise us in that process.

Coal Privatisation

13. Mr. Foulkes : To ask the President of the Board of Trade by what means he proposes to implement his pledge to protect the pensions and concessionary coal of retired miners and widows after privatisation of British Coal.

Mr. Eggar : I have already made it clear that the pension and concessionary coal entitlements of the current and former employees will be safeguarded. The detailed implementation of those assurances will be announced as soon as possible.

Mr. Foulkes : Surely the Minister relises that such vague assurances will not reassure miners and miners' widows in my constituency and throughout the country. Miners have sacrificed their health and in some cases their lives to the

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industry, and their widows are entitled to pensions and concessionary coal. Will the Minister give an assurance that he will set up a pension trust to protect miners' pensions from the predatory purchasers who will want to take over the pits?

Mr. Eggar : I give the hon. Gentleman and the pensioners a clear, unequivocal commitment that there will be no rip-off of the British Coal pension funds.

Mrs. Currie : Is the Minister aware that it is highly likely that after the privatisation of British Coal the new company will entirely lose interest in such issues as the social clubs for retired miners and miners' welfare? There are some of these clubs in my constituency, in areas where there are now very few miners and no mines whatsoever. Will my hon. Friend take those issues into account and ensure that the facilities which exist can continue, preferably with some kind of support from what remains of British Coal, so that my constituents will not face a more difficult time in their leisure?

Mr. Eggar : Certainly I will.

Mr. Eric Clarke : Can the Minister give a guarantee that if there are any changes arising from privatisation the Government will not give those people an ultimatum and that failure to reply will not be taken as agreement, as has happened before in the case of British Coal? That would be intolerable because many people, due to eyesight and other difficulties, cannot fill in forms. Will the Minister give a guarantee that he will consult pensioners associations and others in those villages and communities before any changes are implemented?

Mr. Eggar : The hon. Gentleman made a very fair point in Committee, and I will certainly bear in mind what he has said, but it would help if some Opposition Members did not go around raising unnecessary scares.

Manufacturing Output

14. Mr. Austin Mitchell : To ask the President of the Board of Trade what was the level of manufacturing output in 1974, 1979, 1985 and 1991 with 1974 as 100.

The Minister for Industry (Mr. Tim Sainsbury) : Ninety-seven in 1979, 92 in 1985, and 103 in 1991.

Mr. Austin Mitchell : That is a fairly appalling record. I wonder whether the Minister knows of any country that has had a lower increase in manufacturing output, particularly in the past 13 years. How are we to recover ? We have lost more than 500,000 manufacturing jobs since we joined the exchange rate mechanism. With the Government crippling manufacturing by high interest rates to keep the pound up, is this not a case of running the country on the basis of Maxwell economics--raiding the pension fund to support the share price ?

Mr. Sainsbury : The hon. Gentleman seems to be joining his Opposition colleagues who spend their time running down the achievements of British manufacturing industry. It might help if he would read the CBI report, "Competing with the World's Best", which says :

"UK based manufacturers are well placed in some of the key growth markets of the future".

Mr. Batiste : Is it not clear that British manufacturing output benefits greatly as a consequence of Britain's

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having the lion's share of inward investment into the European Community from the United States, Japan and all other countries ? Will my right hon. Friend dissociate himself from Opposition Members who take every opportunity to discourage inward investment from Japan and other countries ?

Mr. Sainsbury : I am happy to join my hon. Friend in dissociating myself from the remarks of Opposition Members, to which reference has already been made. The scale of inward investment in this country proves that we have created the sort of environment which encourages manufacturers and entrepreneurs. It is disheartening to industry that the Labour party would seek to reverse all the progress that we have made in trade union law, taxation and deregulation, and would do its best to discourage British manufacturing industry.

Manufacturing Trade

15. Mr. Mullin : To ask the President of the Board of Trade what estimate he has of the size of the manufacturing trade deficit for the current financial year.

Mr. Needham : In the Financial Statement and Budget Report 1992-93, the manufacturing trade deficit for 1992 was forecast to be £5 billion.

Mr. Mullin : How is that possible after 12 years of Conservative government?

Mr. Needham : As I said earlier, the percentage deficit on visible trade, at 4.7 per cent., is 0.7 per cent. higher than it was in 1979.

Mr. Dickens : Faced with a world recession, British companies have had to take a close look at their management and work forces, as well as their overheads, other costs and production techniques. As a result of this, am I right in saying that our businesses and manufacturing industries are streamlined and efficient, and well ready to take off now that the world recession is starting to ease?

Mr. Needham : My hon. Friend is absolutely right. In the past three years the volume of United Kingdom trade has increased, rather than decreased as it did year after year when Labour was in power.

Mr. Skinner : As we have had a recession for about three years and as it is accepted that when consumer demand is much lower the balance of trade falls, is it not remarkable and dangerous to have to accept that our balance of trade deficit will probably be about £9 billion when we get the autumn statement? If that is correct and if there is an upturn in the economy, which I doubt, the danger is that the balance of payments deficit will soar well above £20 billion. Included in that deficit is £1 billion worth of coal coming into this country, when we ought to be exporting coal. We have 300 years of coal, so why is it not mined instead of the industry being run down?

Mr. Needham : Industry is hardly being run down when our volume of exports is at an all-time high. As to the balance of payments deficit, as a percentage of gross domestic product it is not very different from that of many other industrial countries which are also in recession.

Mrs. Angela Knight : Is my hon. Friend aware that the report published this week by the Institute of Directors shows that business volume is up and optimism is good?

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Does he agree that that survey of people who are involved in business paints a far more realistic picture than that which the gloom merchants opposite like to portray?

Mr. Needham : I agree. We have heard speaker after speaker on the Opposition Benches continue to run British exporting down instead of promoting it.

Mr. Henderson : If everything is so rosy in Britain, can the Minister explain why the trade deficit as a proportion of gross domestic product is the highest of all the G7 countries?

Mr. Needham : I did not for one moment say that everything was rosy in Britain, because we are part of a worldwide recession. What I did say, and what I continue to say, is that British exporting performance ranks alongside that of any other country in the world. So long as we promote and advertise that fact, we shall restore confidence instead of knocking it, as Opposition Members try to do.

Mr. Ian Bruce : My hon. Friend will know that the

telecommunications industry has benefited greatly from the deregulation and denationalisation of our industries. Industries throughout the world have benefited from Britain's freeing up. What is my hon. Friend doing to ensure that European and other countries free up their telecommunications industries so that we can sell our excellent products to them?

Mr. Needham : My hon. Friend knows that one of the foremost objectives of our presidency is to ensure that in the Internal Market Council we obtain enforcement and compliance in opening up the markets of Europe, particularly the public sector markets, to the sort of competition which has benefited our consumers here and has benefited suppliers in the telecommunications industry in this country.

Assisted Areas

16. Mr. Harvey : To ask the President of the Board of Trade what recognition he will give in conducting his recently announced review of assisted areas boundaries, to the cases made by black spot areas within or overlapping travel-to-work areas.

Mr. Sainsbury : The Government made it clear in the consultation document that the assisted area map will continue to be designated on the basis of travel-to-work areas. We will, however, take full account of the problems of any black spot areas within these travel-to-work areas or overlapping their boundaries.

Mr. Harvey : Does the Minister accept that travel-to-work areas are a useful guide, but should not be a straitjacket for this process? Does he also accept that travel-to-work area boundaries are long overdue for review, in that separate communities can be thrown together artificially and bear no relationship to true patterns of travel to work? Is he aware that the town of Ilfracombe in my constituency is a long-term unemployment blackspot, with unemployment higher than Liverpool and, indeed, higher than all but two of the existing development areas? Can the Minister confirm that those problems will be recognised, either by making entire

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travel-to-work areas which include blackspots into development areas, or by fragmenting the travel-to-work area map?

Finally, will the Minister take this opportunity to comment on suggestions in The Guardian that the Government intend to use the review to featherbed marginal Conservative parliamentary constituencies at the expense of those held by Opposition parties?

Madam Speaker : Order. I caution hon. Members that this is Question Time and they should not make such long speeches.

Mr. Sainsbury : Thank you, Madam Speaker. The hon. Gentleman's last remark was unworthy of him. I am, of course, aware that travel-to-work areas are not a perfect measure, but they are an indication of the areas within which people move around to seek employment opportunities. The areas will be reviewed when the data from the most recent census become available, but that will not be until 1994 and I do not think that we should delay the review of the assisted area map until then.

Replacement Parts

17. Mr. David Atkinson : To ask the President of the Board of Trade what discussions he has had with the replacement parts industry concerning the European Commission's green paper on industrial design.

Mr. Leigh : I have met representatives of the Association of British Insurers and of the Consumers Association to discuss the possible effects of the European Commission's green paper.

Mr. Atkinson : Does my hon. Friend agree that the European Commission proposals, if implemented, would devastate many thousands of small businesses in this country involved in the manufacture of spare parts for motor cars and specialised body panels? Is that not a travesty of the principle of subsidiarity, and will it not lead to a monopoly for motor vehicle manufacturers, which can only increase prices and reduce choice? Will my hon. Friend totally oppose the proposals?

Mr. Leigh : I confirm that I shall, indeed, totally oppose the measures, which are ill thought out, hasty and anti-competitive. Clearly it makes sense to have some sort of design harmonisation throughout the EC, but that should be done on a deregulatory basis. It makes no sense to insist on design harmonisation for spare parts, which could drive many small firms out of business. I confirm to my hon. Friend and to the House that we shall fight the proposals in the Council and before the Council.

Mr. Flynn : Will the Minister confirm that our influence on industrial design will decline as a result of his Department's inactivity and failure to defend the INMOS jobs about to be exported to France and Italy, and will he tell me now whether the Department has been in touch with Michel Carpentier, the director general of DGXIII? Mr. Carpentier says that the Government have not been in touch with him, and that if they had, the jobs could have been saved. He described the move of those British jobs to Europe as stupid. I know that the Government have been in touch with one department of the Commission, but has the Minister been in touch with DGXIII and DGXVI?

Mr. Leigh : The simple answer to that question is yes.

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Price Marking

18. Mr. Alexander : To ask the President of the Board of Trade what representations he has received about the proposed new price marking order.

Mr. Leigh : I have received representations from the British Retail Consortium and from trading standards officers.

Mr. Alexander : Have those representations included the fact that people selling small high-priced items such as cosmetics and pharmaceuticals could be severely disadvantaged by the proposed order? Is my hon. Friend aware that if people have to be able to see items and their prices without assistance, that would be impossible for sellers who keep goods being the counter, or under the counter? Will my hon. Friend take that concern on board?

Mr. Leigh : My hon. Friend is right to be worried about that. As with so much that comes from the Commission on such subjects, it is sensible in principle to insist that shopkeepers should display prices in shop windows and on goods displayed behind the counter, but things go wrong when the Commission tries to be far too prescriptive--laying down, for example, as does the lengthy document which I have here, that hair care products, bath products, lacquer shampoos and rinsing products should all have their prices displayed as decreed in the memorandum. That is a regulation too far. It is too prescriptive. In our negotiations with the Commission we must seek to extend it, and we shall do precisely that.

End User Certificates

20. Mr. Alton : To ask the President of the Board of Trade if he will review the arrangements made by his Department to check the authenticity of end user certificates.

Mr. Needham : Export controls in the United Kingdom are strictly enforced. My Department and other Departments involved keep under constant review the measures necessary to ensure their continued enforcement.

Mr. Alton : The Minister will have seen the disturbing allegations in The Independent concerning the illicit use of

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equipment manufactured in the United Kingdom. Given the scale of the problems illustrated in the articles, will he assure the House that he will undertake an overhaul of the existing end user arrangements as they are clearly not working satisfactorily?

Mr. Needham : I understand the hon. Gentleman's question, and his concern, but some 56,000 licence applications on military goods have been presented by the purchasers of those goods in the past five years. Those certificates form only a small part of the information on which the Department relies.

I wrote in reply to the article in The Independent, asking about Mr. Kelsey's sources of information, but so far I have heard nothing.

Mr. Churchill : Is my hon. Friend aware of recent reports in the Sunday Times suggesting that a major British defence contractor falsified documents to export items which would help a third world country to achieve nuclear weapon status? Should that not be cracked down on most firmly, and should not such firms be put on notice that they cannot expect Government defence contracts if they circumvent our laws in that underhand way?

Mr. Needham : If our laws are so circumvented and information is supplied which is knowingly incorrect, it is a criminal offence.

Mr. Campbell-Savours : Should not the principle of end user certification be extended to the export of food products for humanitarian purposes? Will the Minister confirm that under arrangements approved by the Foreign Office and the Department of Trade and Industry it is possible for British food producers to export food to Iraq--where the client is Saddam Hussein and his agencies--for consumption by the republican guard? Is that not the position now being implemented by the Department?

Mr. Needham : The Department acts as the agency for issuing licences. Food which goes to Iraq must be accepted by the UN sanctions committee and must pass the humanitarian causes requirement before it is allowed. If the hon. Gentleman is aware of a particular case, I shall be only too happy to look into it.

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