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House of Commons

Wednesday 20 January 1993

The House met at half-past Two o'clock

PRAYERS

[Madam Speaker-- in the Chair ]

Oral Answers to Questions

TRADE AND INDUSTRY

Northern England

1. Mr. Mandelson : To ask the President of the Board of Trade if he will make a statement on the Government's policies to bring new industry to the north.

The Minister for Energy (Mr. Tim Eggar) : We seek to ensure that the north and all other regions in the United Kingdom benefit from the prosperity which new industry brings.

During the past six years our policies and grant incentives have enabled the north to attract £2 billion of inward investment creating or safeguarding 15,000 jobs.

Mr. Mandelson : To everyone listening in the northern region that will seem a pathetic reply, especially when regional assistance to it has been cut by 78 per cent. since 1979, unemployment has been higher there for each of the past 20 years and when the recovery was weaker in the second half of last year than it was in the first

Will the Minister give an assurance that, when he makes his announcement on regional assistance, there will be no reduction in assisted area status for any locality in the northern region? Will he give a commitment that the funding of the Northern Development Company will be maintained in real terms? When will the Government create the one-stop business advice centres, a network of which they promised us last year?

Mr. Eggar : The hon. Gentleman has not managed to improve on his record when he was advising the previous Leader of the Opposition. He does not appear to know the unemployment figures in his constituency, which have fallen sharply since 1986, and he completely downgrades the tremendous success of the northern region in attracting companies such as Nissan and Fujitsu. I am suprised that he, as a new Member, does not spend more of his time praising the people of the north, the Northern Development Company and other organisations on their spectacular success in attracting inward investment to the north.

Mr. Devlin : Has not the hon. Member for Hartlepool (Mr. Mandelson) just quoted figures that were bloated in 1978 by the massive subsidies paid to loss-making industries, particularly steel and shipbuilding? Is not it the case that, since then, we have diverted much of that money more profitably and usefully into Teeside development corporation, Tyne and Wear development corporation


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and the Northern Development Company as well as a host of other agencies that have brought new investments to the north and are currently constructing several new advance factories, one of which I shall have the honour of opening on Friday?

Mr. Eggar : I agree completely with my hon. Friend. I very much hope that inward investors will look to the messages delivered by my hon. Friend rather than to those of Opposition Members.

Mr. Fatchett : The Minister would be better advised to use his energy to answer the questions specifically put by my hon. Friend the Member for Hartlepool (Mr. Mandelson) rather than simply trading in personal abuse.

I put the same question to the Minister. Against the background of rising unemployment in the north of England in the past two years, the loss of jobs in manufacturing industry and the fact that much industry in the north of England is dependent upon regional assistance, will the Minister give the House a clear commitment that no area in the north will lose under the review of the assisted areas map?

Mr. Eggar : I am delighted to be exchanging pleasantries once again across the Dispatch Box with the hon. Gentleman now that he has followed me from education. Obviously he has not done his homework in this new area of responsibilities. He knows perfectly well that we await decisions on regional assistance in the light of the current overall look at the map.

Energy Review

2. Mr. David Nicholson : To ask the President of the Board of Trade when he expects to announce the conclusions of his review of the Government's energy policy.

9. Mr. Canavan : To ask the President of the Board of Trade what recent discussions he has had with representatives of British Coal about the future of the coal industry ; and if he will make a statement.

The President of the Board of Trade (Mr. Michael Heseltine) : I hope to be able to publish the coal review White Paper as soon as possible next month. As part of the review process I meet British Coal as necessary to discuss a range of issues.

Mr. Nicholson : Any fair-minded person will recognise that resolving the problems that my right hon. Friend inherited will require some cost-- whether financial, legislative or ideological. Will my right hon. Friend carefully examine the case for more private enterprise, rather than more subsidy, in the coal industry? Will he also take a hard look at the hidden subsidy that the British consumer pays, through the channel link, to the French nuclear industry and to the dash for gas?

Mr. Heseltine : I know of my hon. Friend's concern in such matters and I assure him that both the Select Committee and, I hope, my Department have carried out an extremely comprehensive and thorough review. I hope shortly to put the findings of the review before the House and I assure my hon. Friend that the matters that he has raised will be included in our review.


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Mr. Canavan : Will the Secretary of State investigate the astonishing claim made earlier this week by the chief executive of Scottish Power that, towards the end of last year, British Coal did not even bid for a contract to supply 800,000 tonnes of coal to Scottish power stations, so that Scottish Power had almost no option but to go for subsidised imports? In view of the Government's complete lack of an integrated energy policy and the fact that the Secretary of State was found guilty of flouting the law by unnecessarily closing pits, will the right hon. Gentleman face up to his responsibilities and intervene to save the British coal industry, or resign and make way for someone who will?

Mr. Heseltine : The hon. Gentleman will realise that the specific issue of tendering for coal supplies to the Scottish electricity industry or any other consumer is a matter for British Coal. I shall certainly draw the attention of British Coal to the issues raised by the hon. Gentleman. British Coal is charged with the responsibility of advancing the interests of British coal and it must decide whether to bid for contracts. As to the hon. Gentleman's general observations, he will find that our review will be extremely comprehensive and we shall look carefully at the large subsidies in the energy industry, many of which we have sought to reduce during the past decade to fulfil our energy policy objective of providing a diversity of supply at competitive prices.

Mr. Robathan : In my right hon. Friend's deliberations on the future energy policy of the United Kingdom, will he take into account his Department's renewable energy advisory group recommendations, in particular the generation target of 1500 MW by the year 2000 and the idea of a renewable energy obligation? Will he also look into the sensible use of combined heat and power and municipal waste-to-energy schemes? When is he likely to make his decisions on those matters?

Mr. Heseltine : My hon. Friend raises two more aspects of the wide- ranging review that we are conducting. I assure him that we shall deal with both matters when we produce our White Paper.

Mr. Fisher : As part of his review of energy policy, will the President of the Board of Trade give the House the time scale for the review of the 10 pits ordered by the High Court? Will he assure the House that that review will be no less thorough and rigorous than that of the 21 pits? Will he allow coaling to start in the 10 pits so that the reviews may be of equal parity and importance and conducted on an equal basis?

Mr. Heseltine : The hon. Gentleman is right. We have asked Boyds--an internationally respected firm of consultants--to introduce the degree of independence to the consultative processes now under way in the light of our judgment of the court findings. It is now for Boyds to conduct the review and we have asked it to look at the evidence and the state of the pits. That matter was also raised in the light of the assurances given by the chairman of British Coal to myself, the Select Committee and the courts. It is for Boyds to determine the speed at which it conducts its review, which must be done thoroughly. It is for British Coal to consult the unions on whether they accept the element of independence that the appointment


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that I have made could provide in the circumstances. When the exercise has been conducted and I have received the report, I shall ensure that the House is fully informed.

Mr. Kynoch : While conducting his review of energy policy, will my right hon. Friend ensure that there is a proper balance between all forms of energy, with particular reference to the North sea oil and gas industry, which contributes an important amount to the economy of the north-east of Scotland?

Mr. Heseltine : I very much agree with my hon. Friend. It is important that all aspects of energy provision are considered in our review and that is what we are doing.

Mr. Robin Cook : Has the President already forgotten that since last Question Time, the courts have ruled that his decision of 13 October was unlawful and that his decision of 19 October to shut 10 pits was both unlawful and irrational?

Would not the rational response to that ruling be to let the miners who clock on at those pits every day go underground and dig coal? Why, then, does not the right hon. Gentleman instruct British Coal to reopen the 10 pits that it unlawfully shut? As he has told the House that he has met the top people in British Coal, who will all keep their jobs, will he say which pits on the list he has visited during the review and what meetings he has had with the people working there who face the sack?

Mr. Heseltine : The hon. Gentleman is fully aware that we have continual discussions with British Coal, which is responsible for the management of pits. We have not instructed British Coal to resume coaling at the 10 pits, for the simple reason that it advises us that it does not need the additional coal. It already has large stocks, both at the pithead and with the generators. The contractual prospects for British Coal would not justify the additional cost of extracting that coal now.

Mr. Riddick : Is my hon. Friend aware that my local council -- Labour-controlled Kirklees -- is imposing smokeless zones on the rural parts of my constituency, despite the fact that the council's own figures show that emissions of smoke and sulphur dioxide are well within the legal limit? The result will be that hundreds, if not thousands, of local households will switch from burning coal to burning gas. Is not that Labour hypocrisy in action?

Mr. Heseltine : My hon. Friend brings out one of the less attractive features of the controversy that has surrounded the pit closures. It must also be said that we have not heard a great deal from the environmental lobbies, which were so vociferous in urging us to achieve better environmental standards in this area.

Mining Industry

3. Mr. John Evans : To ask the President of the Board of Trade if he will make a statement on his Department's support for the British mining industry.

Mr. Eggar : We are engaged in a wide-ranging review of the prospects for 21 of the pits proposed for closure by British Coal, in the context of the Government's energy policy. We shall shortly be publishing a White Paper setting out the results of that review, which will then be debated in the House.


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Mr. Evans : Will the Minister give an undertaking that in view of the High Court's ruling that British Coal and the Government acted unlawfully in closing the 10 collieries, which include Parkside in my constituency, he will ensure that the criteria under which Boyds reviews those collieries will be exactly the same as the criteria being used in the review of the other 21 collieries? Everyone could then be sure that those 10 collieries were getting a fair deal. Will the Minister give the House and the country a further undertaking that the miners at the 10 collieries will not be dismissed, at least until the House has had the opportunity to debate the Government's review of the future of the British coal industry?

Mr. Eggar : On the first part of the hon. Gentleman's question, Boyds' report on the 21 pits plus the additional 19 will be published. With regard to the report on the 10 pits which my right hon. Friend has asked Boyds to prepare, both the unions and British Coal will be consulted. We assume that that report will also be published and made available. At that stage, the House will have an opportunity to consider it, as well as the report that is shortly to be published on the 21 pits plus the additional 19.

On the latter part of the question, there will be no compulsory redundancies until there has been a debate in the House, until the review has been published and until the House has had an opportunity to discuss the White Paper and the report of the Select Committee on Trade and Industry.

I apologise for the length of that answer, Madam Speaker.

Mr. Cormack : Does my hon. Friend accept that many thousands of miners are finding it extremely difficult to decide on their future before they know the future of their industry? Therefore, will he talk to Mr. Clarke urgently and ask that the special redundancy and early retirement arrangements be kept in force for at least another six months so that those men are relieved of the intolerable, agonising pressures that they face at the moment?

Mr. Eggar : We are acutely conscious of that point, which Mr. Neil Greatrex of the Union of Democratic Mineworkers made to me this morning.

Mr. Skinner : The 90 days are almost up.

Mr. Eggar : We have said--I think that this must be right--that we should not make any decision, nor should we press British Coal to make any decision, in advance of the publication of the White Paper, because that obviously has a bearing. The two are interconnected.

Mr. Hardy : Before reaching any conclusions, will the Minister take particular care to consider the total cost of the closures as well as the sterilisation of large volumes of coal? Will he take even more care in considering the recommendations of the electricity regulator in the recent report on electricity purchasing which appears to ignore the costs of production and reaches conclusions that are not justified by the facts, which are known to the hon. Gentleman, his Department and every hon. Member who is concerned about this matter?

Mr. Eggar : Of course, the matters mentioned in the hon. Gentleman's first point will be considered as part of the review. The responsibility for the report is Professor Stephen Littlechild's, but, as the hon. Gentleman would


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expect, that report is one of the factors that we shall consider as part of the review. It may help the House, as the matter was raised from a sedentary position, if I add that the 90 days is the minimum consultation period.

Mr. Alexander : Bearing in mind the huge anxiety among the mining communities about the final outcome, may I ask my hon. Friend to confirm that the Boyds' report on the 10 pits and the reports of the Select Committees on Employment and on Trade and Industry will all be the subject of the Government's conclusions in their White Paper before we come to the House and discuss it with a view to determining our future energy policy?

Mr. Eggar : It will be important to have those documents available, but my hon. Friend will be aware that the coal industry faces a major crisis at the beginning of April when there are no contracts for coal. If we were to delay the publication of all the documents in the way that my hon. Friend suggests, no coaling at all may be possible on 1 April. I am sure that my hon. Friend would not want that, but I shall bear in mind his other points.

Mr. O'Neill : The Minister clarified his reply to the hon. Member for Staffordshire, South (Mr. Cormack) in relation to the 90-day period and the special redundancy terms that have been offered. Will those redundancy terms remain on the table until the various problems that flow from the court decision are resolved? Can we take it that the offer will remain for as long as it takes to resolve the matter? That is the men's worry at present and the Minister was not specific in his reply.

Mr. Eggar : I understand the hon. Gentleman's point. First, I repeat that the 90-day consultation period is a minimum period, so no miner should be under the impression, as I understand some are, that on 30 January the position will suddenly change from what it was on 29 January.

The hon. Gentleman's second point relates to the end of March date for the present voluntary redundancy terms. To clarify the matter, we are acutely aware of the concern about that, but we do not think that it would be right either to announce that the scheme will stop on that date or that it will be extended beyond that date, in advance of the publication of the White Paper and the other papers. Those decisions must be taken in the light of the White Paper. I hope that the House will understand that.

Manufacturing Productivity

4. Mr. Dunn : To ask the President of the Board of Trade what is the change in manufacturing productivity for the latest period for which figures are available ; and if he will make a statement.

The Minister for Industry (Mr. Tim Sainsbury) : Manufacturing productivity in the three months to October 1992 was at record levels, 2 per cent. higher than in the previous three months and 5 per cent. higher than the same period a year earlier.

Mr. Dunn : I thank my right hon. Friend for that answer. Would he care to speculate on what those figures might be if all the restrictive practices that we abandoned, abolished and swept away were reimposed according to the policy of the Labour party?


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Mr. Sainsbury : That is a good point. It is ghastly to contemplate where we might be if we had not introduced our reforms of industrial relations law, in the teeth of persistent opposition from Labour.

Mr. Snape : Does the Minister accept that in the real world, under a Conservative Government, total employment in manufacturing continues to decline, particularly in the west midlands? Instead of planting silly questions such as this, will the right hon. Gentleman tell us what action the Government will take to save this vital sector of British Industry?

Mr. Sainsbury : I hope that the hon. Gentleman will agree that if we are to have an internationally competitive manufacturing sector, its productivity must be of the highest standard. The hon. Gentleman should bear in mind the fact that, because of our changes to industrial relations law, productivity growth in manufacturing industry since 1979 has been three times as fast as that achieved under the last Labour Government.

China (Ministerial Visit)

5. Sir Thomas Arnold : To ask the President of the Board of Trade if he will make a statement on the visit of the Minister for Trade to the People's Republic of China.

The Minister for Trade (Mr. Richard Needham) : I made a visit to Guangzhou between 3 and 5 January with a team of 20 senior business men, to pursue important opportunities in the fastest-growing region of the world. I made clear our long-term commitment to a significant expansion of trade between the United Kingdom and China. Our substantial commercial presence in Hong Kong has a vital role to play in this process.

Sir Thomas Arnold : I congratulate my hon. Friend on his successful journey, which was made at a difficult time for Anglo-Chinese relations. Does he believe that British business is taking full advantage of the opportunities that China has to offer?

Mr. Needham : I do not think that we are taking full advantage, but we are taking much greater advantage than we were even a year ago. As my hon. Friend said, there are immense opportunities for British business in China. We have a long trading relationship with the country, which is one of the fastest-growing markets in the world. It is a market which we must and will enter and I am sure that we shall be successful in it.

Mr. Bell : The Minister will be aware that we have sold nose-cone radar for fighter aircraft to the Republic of China. Last time the issue was raised in the House, he told us that there was a ban on arms trade. Is that ban extant?

Mr. Needham : Yes, Madam.

Dame Elaine Kellett-Bowman : Will my hon. Friend ensure that a rather vociferous and sometimes short-sighted minority in Hong Kong does not imperil our relations with the Republic of China, on which so many jobs and so much else will depend in the future?

Mr. Needham : The governor's proposals for the 1992 elections strike me as entirely consistent with both the Basic Law and the joint declaration. China has been invited to discuss those proposals with us ; in the mean time, our trade with China continues. The vice-premier of


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China, Zhu Rongji, and the mayors of Suzhou and Shanghai have recently visited this country and I have every confidence that business between our two countries will continue to grow.

Cultural Programme

6. Mr. Cohen : To ask the President of the Board of Trade what is the current cost of the cultural programme administered by overseas trade division 3 of his Department.

Mr. Needham : My Department does not normally administer cultural programmes. However, overseas trade division 3 had a budget of £1.4 million for the cultural and entertainment programme connected with Expo 92.

Mr. Cohen : Did the existence of that cultural programme come as a surprise to the Minister and his officials? Is not that symptomatic of the absence of any serious promotion of British trade abroad? Are not the Government so ashamed of the Britain that they have run down over the past 14 years that they cannot promote British culture or help our exporters?

Mr. Needham : I was not in the slightest bit surprised by our cultural budget for Expo. We can teach anyone in the world about culture, and we did so at Expo. The British day was the most successful of all national days at Expo because of our immense cultural attainments.

Mr. Duncan : Given the importance of our cultural programmes overseas and the fact that the Sri Lankan Minister of Trade and Commerce, Mr. Abeygunasekera, is currently visiting the United Kingdom, will my hon. Friend take this opportunity to reaffirm his belief in the importance of our trade and cultural relations with Sri Lanka and, indeed, our admiration for that country's domestic policies?

Mr. Needham : Yes, although Sri Lanka is rather far from Seville.

Mining Equipment

7. Mr. Hinchliffe : To ask the President of the Board of Trade what is his policy on the mining engineering sector.

Mr. Eggar : Our policy, as for all other sectors of industry, is to help United Kingdom companies to compete successfully at home and abroad.

We are working closely with the industry to give our suppliers every proper assistance.

Mr. Hinchliffe : As the Minister will recall, I have already expressed my concern about the implications of Government policy on the coal industry for the export efforts of the British mining engineering sector. Is he aware that the British Jeffrey Diamond Company in my constituency has developed an award-winning leading edge technology in switched reluctance variable speed drives? [Laughter.] That is what it says here. Is the Minister aware that there is major export potential, but that the company and the industry as a whole are concerned that Government policies for coal are destroying the future potential of such products, which can earn for Britain, because our shop window to show these products is being destroyed with the British coal industry?


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Mr. Eggar : May I be the first to congratulate the hon. Gentleman on reading his hand? I am aware of the importance of the British coal industry to the British mining equipment industry and I understand the difficulties to which he drew attention. It is right to point out that the mining equipment industry has been a successful exporter which runs a positive balance of trade surplus. We are working hard to help it to promote exports in areas such as China.

Mr. Gallie : Is my hon. Friend aware of a company called Wallacetown Engineering in my constituency which specialises in electrical mining equipment? It currently has representatives in China seeking new business in view of the difficulties in the coal industry. There are encouraging messages, but may I have an assurance that the Department of Trade and Industry will do all in its power to encourage and help companies such as Wallacetown Engineering?

Mr. Eggar : It was precisely to help such companies that I went to China, and for precisely that reason that we are seeking to reach an agreement between the Export Credits Guarantee Department and Chinese banks to facilitate coal equipment exports.

Engineering

8. Mr. Butler : To ask the President of the Board of Trade when he will next meet motor manufacturers to discuss measures to support the engineering sector.

Mr. Sainsbury : My right hon. Friend the President of the Board of Trade and I will be meeting the Society of Motor Manufacturers and Traders and senior representatives of the leading vehicle manufacturers later today.

Mr. Butler : At that meeting, will my right hon. Friend bear in mind the importance, as set out in detail in the Bangemann report, of pre- competitive co-operation in the development of high technology products? Will he also bear in mind moves to encourage further inward investment which, in successful areas such as Milton Keynes, now accounts for 18 per cent. of our employment?

Mr. Sainsbury : I am happy to assure my hon. Friend on both points. He mentioned inward investment. The success of inward investment evident in his constituency, which I had the pleasure of visiting recently, is attributable largely to the creation of the right economic climate, a climate of low taxation, good industrial relations and minimum regulation-- the very factors which would be most put at risk by Labour's policies.

Burdens on Industry

10. Mr. Gill : To ask the President of the Board of Trade what progress is being made in ridding industry of unnecessary legislative burdens.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : We have taken a wide range of measures in Whitehall, in town halls and in the European Community to promote deregulation. For the first time, all Government Departments have had to undertake a census of their regulations. Following that, by 1 April they will be providing me with their candidates for repeal and simplification.


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My right hon. Friend the President of the Board of Trade will shortly be announcing the terms of reference of a scrutiny of the formulation of European Community law and its implementation and enforcement in the United Kingdom, and my right hon. Friend the Prime Minister will shortly be holding a seminar for Cabinet and other Ministers and senior civil servants to impress on them the importance of achieving results in the deregulation initiative before the next Government reshuffle.

Mr. Gill : I am sure that many people employed in the wealth- generating sector of the economy in my constituency and in the rest of the country will be encouraged by my hon. Friend's positive response. Will he assure the House that, in considering those important matters, the Government understand that what bothers the entrepreneur and imposes a high cost burden on industry is not just one individual piece of legislation, but an amalgam of hundreds of them?

Mr. Hamilton : I fully agree with my hon. Friend that the greatest burden of regulation falls upon smaller businesses. That is a tremendous distraction from wealth creation and job creation, and we at the Department of Trade and Industry are determined to play our part in reducing that burden.

Mr. Trimble : May I draw the Minister's attention to the problems experienced by exporters, especially in the implementation of the single market? Their job has not become easier, despite no longer having to regain certain classes of papers, because under the new value added tax regulations they have to find out the VAT numbers of the persons to whom they are exporting. They have considerable difficulty, especially when dealing with countries where the cultural attitude to tax matters is different from our own.

Mr. Hamilton : I agree that, although the single European market offers great opportunities for businesses in this country and, overall, has reduced the burden of regulation, there is still much more that can be done. I am keeping a wary eye out for opportunities to reduce the burdens. If the hon. Gentleman comes across any examples among his constituents' businesses, I should be grateful if he would send me the details.

Sir Michael Grylls : Most hon. Members will give enthusiastic support to my hon. Friend's vigorous campaign to get rid of unnecessary burdens and overbearing Government measures affecting all sorts of industries, but will he ensure that he is informed of any new burdens proposed by other Departments, especially regulations and secondary legislation? Supported by the President of the Board of Trade, will my hon. Friend do all in his power to ensure that, at the highest level, Ministers are told to bring proposals to him first to find out whether they are really necessary?

Mr. Hamilton : I thank my hon. Friend for that question. He has been a doughty fighter in the cause of deregulation for many years in the House. Each Department now has its own deregulation Minister, whose responsibility within that Department is to ensure that if any new regulations are proposed they are proportionate and not too costly to businesses in this country. The deregulation initiative is centrally co-ordinated from


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within my Department, so I can assure my hon. Friend that I shall subject proposals from other Departments for increased regulation to the closest possible scrutiny.

Dangerous Toys

11. Mr. McAvoy : To ask the President of the Board of Trade how many warnings have been issued by his Department under the Consumer Protection Act 1987 to manufacturers and distributors of dangerous children's toys.

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh) : Since October 1987 my Department has served 18 prohibition notices on named companies prohibiting them from supplying toy-like items which were considered to pose a choking hazard. My Department does, of course, from time to time offer informal advice to traders on matters relating to the safety of toys and other consumer goods.

Mr. McAvoy : With so many official recalls of dangerous children's toys, kettles, car tyres, washing machines and electric light bulbs, is it not clear to the Minister that his system is ineffective and leaves tens of thousands of consumers at serious risk from dangerous products?

Mr. Leigh : No, I do not take that view. Trading standards officers are responsible for enforcing the Consumer Protection Act. The hon. Gentleman's original question referred to toys. Under the directive on the safety of toys, trading standards officers have all the powers that they need. That directive is extremely detailed and lays down strict criteria as to how toys should be manufactured and retailed. There is no evidence that trading standards officers do not have sufficient powers to ensure that toys are safe.


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