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The Minister of State for Defence Procurement (Mr. Jonathan Aitken) : We should remember that his brother used to say to the grand old Duke of York, "They will never kill me, James, to make you King." We certainly would not replace my excellent right hon. and learned Friend the Secretary of State with the shower of Opposition Members who have spoken tonight.

One admirable aspect of the debate has been the steady flow of tributes which have rightly been paid to the skill and dedication of our armed forces and to the Army in particular. I thank the two Opposition spokesman- -the hon. and learned Member for Fife, North-East (Mr. Campbell) and the hon. Member for Motherwell, North (Dr. Reid)--who paid particularly warm tributes early in their speeches. As my right hon. Friend the Minister of State for the Armed Forces made clear in his opening speech, the Government share that high admiration for the Army. The Army is a beacon of professional excellence that always

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shines brightly--it is perhaps shining particularly brightly now when we seem to be living through a not unfamiliar period of doom and gloom in our national life and every institution is under attack. The Army, happily, is immune from such attacks, perhaps because it enshrines some of the old-fashioned values of loyalty, duty, discipline and patriotism, as well as its conventional

professionalism and skill. I am sure that the Army will be gratified by the unity of the tributes paid to it in the House during today's debate.

This is the first service debate in which I have spoken from the Dispatch Box. I had always heard that they were quiet, amicable occasions, but today's debate has not turned out quite that way. I do not exactly feel--as the hon. Member for Carlisle (Mr. Martlew) said--as though I have been parachuted behind enemy lines, but the words of the poet Tennyson came to mind--

"Cannon to right of them

Cannon to left of them,

Cannon in front of them

Volley'd and thunder'd."

I hope to persuade some of the Opposition Members and some of my hon. Friends whose speeches were critical to reason a little more deeply. If they did so, they might see some of the issues in a fairer perspective.

I shall attempt to address as many issues as have been raised in the debate as possible. However, I shall not respond to those points that ranged wide of the Army subject.

I turn to the extraordinary speech of the hon. Member for Motherwell, North with some relish. The only point on which I agreed with him was his tribute to the Army. After that, with the air of a funny-money salesman about to perform the three-card trick, he took us into a world of pure statistical mumbo-jumbo and sought to persuade us that the Labour party has a consistent defence policy by projecting the trends of the Callaghan Government defence budget in 1977 to show that the Labour party was sound on defence spending today.

The argument was not convincing when one remembered that the Labour conference in 1992 proclaimed that it would require defence cuts equivalent to £6 billion. Then, to cover up the embarrassment with a convenient conjuror's handkerchief, the Labour party produced that all-singing, all- dancing formula--the defence review. Hiding behind that device, Labour Members call for increases in defence manpower and resources in speeches in the House, then go to their conference in Blackpool or Brighton, where there are simultaneous calls for huge reductions in defence spending. That formula does not fool anyone. When he finished his funny-money routine, the hon. Member for Motherwell, North showed a flash of anger on the subject of redundancies. However, he got his party's policy stance absolutely wrong. His anger was directed at the regrettable fact that some redundancies that are to take place in the Army will fall on those who are today serving on active duty in Bosnia and Northern Ireland. The hon. and learned Member for Fife, North-East made the same point, but in noticeably more cautious and measured tones.

All redundancies in the Army are much regretted. We are losing first-class people, which is painful and sad for the Army and for Britain. However, it is the Army's opinion--and not just that of the brass hats--that it would be wrong and unfair to make a special exception to the

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redundancy programme on the grounds that a service man happens to be serving in a specific operational or geographical theatre at any one time. That view is shared by all sensible people who think deeply about the Army's welfare and, of course, by Ministers.

I think it was my right hon. Friend the Member for Bridgwater (Mr. King) who said that a wounded man could be brought out of theatre and be exempt from redundancy in one place, but liable for redundancy in another. It would be nonsense to grant exemptions on the basis of special theatres. That would be unfair to the Army as a whole. I am sure that our policy is right--and the Army certainly thinks so. With his great experience as a former Secretary of State for Defence and Secretary of State for Northern Ireland, my right hon. Friend the Member for Bridgwater spoke with great authority. I was grateful to him for nailing the absurd misrepresentation that "Options for Change" was planned on a financial-only basis, without strategic considerations. As my right hon. Friend rightly said, if that were true--it certainly is not--it would be an insult, not just to him, but to the Chief of the Defence Staff and the other military advisers.

Since "Options for Change" we have added commitments in Bosnia. It was envisaged in the original statement that there might have to be extra military resources--[ Hon. Members :-- "It was planned."] No, it was not the plan. But there was certainly a plan for

possibilities--that was always said and always recorded. [Interruption.] No one is being smug. I do not know why there is so much joviality among Opposition Members when the Government do what is sensible and right in accordance with changing commitments, because commitments have changed and increased and my right hon. and learned Friend the Secretary of State deserves great credit for thinking about the matter for a long time. I know that he was thinking for many months before he made the announcement on 3 February which was widely welcomed in the House and the country. The hon. and learned Member for Fife, North-East made a serious allegation, which was repeated by the hon. Member for Stockton, North (Mr. Cook), about the rules of engagement in Bosnia. I was surprised by their allegation that those rules somehow resulted in weapons having to be handed in, according to statements made to those two hon. Members when they were on their travels.

There are no United Kingdom or United Nations rules of engagement which require members of United Kingdom forces in the former Yugoslavia to hand over their personal weapons under any circumstances, nor is there any local clarification note to that effect. Of course we shall look into the reports by the two hon. Members but they are out of tune with everything that we know.

Mr. Menzies Campbell : Perhaps the Minister is about to offer some reassurance to me and to the hon. Member for Stockton, North (Mr. Cook). I suppose that we both stand as credible witnesses and I assure the Minister that when the matter was put to a senior British officer the answer was that which we have reported to the House. If by doing that we bring about a change in circumstances in Croatia, we shall have done our duty by the House and by our forces.

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Mr. Aitken : Of course, I accept that the two hon. Members have correctly reported what they were told. We shall get it clarified down the chain of command.

Two hon. Members raised constituency matters. One was my hon. Friend the Member for Richmond, Yorks (Mr. Hague), who rightly takes great pride in Catterick. Like him, I am glad that it is expanding and that infantry recruitment training is to go there. I was glad to hear his welcome for market testing. I assure him that there will be a level playing field and open and fair competitions. I hope and expect that many in-house bids will succeed.

The other Member to raise a constituency point was the hon. Member for The Wrekin (Mr. Grocott). The Donnington depot to which he referred is being market-tested and I accept that there will need to be the fullest consultation with the work force. The market testing programme is on a level and fair playing field and if it does result, as market testing programmes usually do, in savings of about 20 per cent., they will go to the sharp end of the defence budget. All those who care about our defences will welcome that programme.

Mr. Ian Bruce : Will my hon. Friend give way briefly?

Mr. Aitken : I should prefer to make progress.

The hon. Member for Denton and Reddish (Mr. Bennett) wanted a review of defence lands. We need our present training areas. The defence estate consists of 600,000 acres and 80 per cent. of it is needed for training. As we reduce our training areas in Germany, we need our domestic training areas and we must keep them.

My hon. Friend the Member for Upminster (Sir N. Bonsor), who is the Chairman of the Select Committee on Defence, made an important speech. I thank him for his leadership on the Select Committee and for its important work. He spoke about the equipment budget and, as the Minister responsible for that budget, I am pleased to have something to say about it, although I cannot make announcements now on the equipment issues that he raised.

The equipment programme for the Army remains strong and healthy, with AS90, Warriors, and tenders having gone out for the attack helicopters. For those who take a great interest in Royal Ordnance plc, I am pleased to announce that, in line with the strategy for ammunition procurement announced on 20 January, a five-year contract for the supply of L106 fuses has today been awarded to Royal Ordnance plc. It is a vital order, which is worth up to £15 million to the factories in Blackburn.

Mr. Greg Pope (Hyndburn) : As the Minister is aware, that contract has been long fought for, not just by me but by my hon. Friends the Members for Blackburn (Mr. Straw) and for Rossendale and Darwen (Ms. Anderson). The award of the contract is extremely good news, not just for defence procurement but for the economy of east Lancashire, where the Royal Ordnance factory has long been a skills base which has spread into the wider economy. I hope that the Minister will accept my thanks and congratulations and those of my hon. Friends the Members for Blackburn and for Rossendale and Darwen.

Mr. Aitken : I am grateful to the hon. Gentleman for his kind remarks.

My hon. Friend the Member for Upminster raised the great issue of overstretch. The kernel of the charge that he and many other hon. Members made against the

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Government was that the present arrangements are such that the Army is unable to meet the 24-month interval between emergency tours. We know and accept that that is a difficult problem. We have always acknowledged that the process of restructuring would inevitably lead to additional pressures and demands on service personnel and we are sensitive to the impact of those additional demands. That is why my right hon. and learned Friend made his important announcement on 3 February.

I can say that the add-back of the two battalions announced by my right hon. and learned Friend will have the immediate effect of increasing the average interval between emergency tours during the difficult period of transition to the new force structure and, on the basis of our current commitments, this should comfortably exceed the target of 24 months once restructuring is complete. We now have the 15-month figure for the current year, and that will increase to 17 months. By 1995 the figure will be more than 24 months, so we are moving in the right direction.

The hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) rightly paid tribute to the work of the Royal Irish Regiment in Bosnia, and I agree with him. He raised many detailed points about the situation in Northern Ireland, particularly relating to the TAORs, and my right hon. Friend the Minister of State will write to him about the detailed points that he has raised.

I now turn to the important speech made by my hon. Friend the Member for Blaby (Mr. Robathan), who argued that a reappraisal of the command structure was needed and that we had too many chiefs and not enough Indians. He made some telling points. I certainly have some sympathy for his view that there is too much paperwork in the Ministry of Defence. I can tell him that senior service appointment numbers will fall as a consequence of "Options for Change", but senior Ministry of Defence posts are under particular scrutiny as part of the rationalisation of headquarters. I agree that he made some telling points which we will consider carefully.

I was glad that the hon. Member for Angus, East (Mr. Welsh), who spoke for the Scottish National party, came out in such strong terms for greater spending on defence and much greater expansion of our armed forces. I am glad to know that it is SNP policy, as it is apparently to strangle the workers of Rosyth by withdrawing the Trident submarines immediately.

Mr. Welsh : Strangling the workers of Rosyth is something that the Government do rather too well, and I wish that they would not. Will the Minister now answer the question about overstretch? He rather skated over it. If there were extra commitments in Bosnia following a peace plan, could the Government meet such commitments?

Mr. Aitken : I have just answered the central point made by my hon. Friend the Member for Upminster on overstretch generally. It is true that if the Vance-Owen plan was implemented and Britain made a major contribution in troop numbers, it would cause a re-evaluation of the numbers in "Options for Change" ; but that is a hypothetical situation at present.

I dealt with the point of the hon. Member for Stockton, North about the rules of engagement. He thought that the most important question was what exactly prompted the

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statement on 3 February, as though this was the most fundamental question of our time. There is no great mystery about it. I think that it was Sir Winston Churchill who said, when answering a similar charge of inconsistency from the Opposition Benches :

"My thoughts are a harmonious process in tune with the music of current events."

My right hon. Friend responded simply and wisely and was sensitive to pressures that are building up in this area.

Turning briefly to the point made by the hon. Member for Linlithgow (Mr. Dalyell) on the subject of nuclear testing, there is no question of our carrying out nuclear tests while the United States moratorium lasts, but we continue to believe that testing remains the best means of ensuring the safety and credibility of our deterrent. We are keen to develop alternative warhead-proving techniques, but we do not regard these as adequate substitutes for testing in the present state of technology. The Russians, French and Americans must speak for themselves, but I remind the hon. Member that United States legislation does not propose an immediate end to nuclear testing. Mr. Dalyell rose --

Mr. Aitken : I would rather not give way.

Mr. Dalyell : May I congratulate the Minister on actually answering the debate? Would he be indiscreet enough to say what he thinks about a Queen's Counsel and the questions on the public interest immunity certificate that I raised with him?

Mr. Aitken : I will be indiscreet enough to say that I thought that the hon. Gentleman's allegations were totally unfounded and unfair. I was grateful that at least one voice on the Government Benches, that of my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch), accepted that we could reduce numbers in the new strategic environment. An unreal and unwordly air ran throughout the debate. So many hon. Members, from all sides of the House, demanded extra spending, extra resources and extra commitments. My hon. Friends the Members for Wimbledon (Dr. Goodson- Wickes), for Upminster and for Davyhulme (Mr. Churchill) and the hon. Members for Angus, East and for Stockton, North were all on the theme that we should increase substantially defence spending in financial or resources terms. Defence spending is not an island isolated from the rest of the economy or Britain's economic needs. Nor is defence strategy isolated from a favourable change in the strategic environment, if it takes place. I should remind the House that we are withdrawing some 27,000 Army personnel from Germany, including 3 Battalion garrison at Berlin. In addition, we will lose 4 Battalion garrison from Hong Kong by 1997. Those reductions in commitment far outweigh the commitments that have been taken on. Sensible points have been made about how we should manage the changes. I took the point of my hon. Friend the Member for Canterbury (Mr. Brazier) about the need to look again at our reserve forces. We are doing just that.

Parts of the debate seemed unrealistic. I want to end with an illustrative anecdote which I think it is worth telling the House. I feel that it is necessary to bring us back to the realities of spending commitments and strategy. Last week I was travelling in east Germany, a country which until 1990 was bristling and bulging with the menace

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of 500,000 Warsaw pact troops, all hostile to the west. I was being taken on a tour of military installations by my host and friend, the State Secretary of Defence for the Federal Republic of Germany. One highlight of the tour was a visit to a vast encampment of military equipment at Grimma. The encampment was about the size of Hyde park and it was jam-packed with tanks, armoured cars, field guns, missile launchers and attack weapons of every description, all abandoned by the east German army and destined never to fire again, waiting only for destruction by scrap merchants.

Then I was taken to the huge Soviet barracks near Leipzig, which less than a year ago was packed with thousands and thousands of red army troops. Today those barracks are totally empty and deserted. It was a surreal, almost spooky experience to wander among those cavernous blocks and buildings in a ghost town atmosphere, to see weeds growing on the parade ground, to see cobwebs in the machine rooms where once nuclear warheads had been fitted to missiles, and to look at the broken plinth where the statute of Lenin once stood, which the troops had to salute.

In that atmosphere of complete emptiness suddenly I felt overcome by a quiet feeling of enormous pride at the realisation of what our defence policy and our commitment to NATO had achieved. Those abandoned Soviet barracks symbolised vividly and visually that the cold war was over, that we had actually won it, that our old enemies had gone home and that we are starting to make friends with them again. That happened only because the NATO alliance, and particularly the British Army of the Rhine, had held the line for many years, and had kept the peace so professionally and so patiently for

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long enough for western democratic ideals of freedom to take root and for the Communist ideology to crumble and fall.

When we consider the Army of the future, we must not forget the lessons of the recent past. The massive job of peacekeeping which the British Army did so well with our allies in Europe in the last part of the 20th century may need to be repeated, but surely in much smaller scenarios. Other tyrannies and dictatorships may arise on the European land mass in the 21st century. At home Northern Ireland remains a steadfast commitment, because there, too, the Army holds the line professionally and patiently against the IRA terrorists, whose ideology of evil and hatred will surely one day become as discredited and will crumble and fall, just as Communism fell. Of course, there may be other aggressors elsewhere in the world ; there may be other Saddam Husseins who will need to be checked by coalition forces in which the British Army will play a vital role. We all recognise that those commitments will exist, but I cannot accept the arguments that were made so easily for massively increasing resources and spending when there is no truly identifiable or immediate threat. There is plenty more work for the Army to do in the closing years of this century and early years of the next. The debate has revealed some understandable anxieties, but it also shows that the British Parliament and the British people are proud of our Army and that they will support it and require it to continue its superbly professional role in safeguarding Britain's future for many years ahead.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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Chinese and Taiwanese Bicycles

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Arbuthnot.]

10 pm

Mr. Anthony Steen (South Hams) : As it is close to bedtime, I shall tell the House a bedtime story. Although it is a bedtime story, it is a nasty story about cheating, dirty tricks and commercial chicanery. It has a devious plot. The one ray of light is the guardian angel, personified by the Minister for Trade who is on the Front Bench tonight. It is a delight to cast the Minister in the role of guardian angel, which I know he will prove when he replies to the debate. If everyone is sitting comfortably, I shall begin.

Let us set the scene. Worldwide, 100 million bicycles are made every year and 40 million of them are built in China in some of the most modern plants ever to be constructed. They look like something one would expect to see in a James Bond film--meticulously clean with thousands of Chinese rushing around in the Chenzhen free trade zone near the China sea.

How can the Chinese afford to build such modern and wonderful factories of which Britain would be envious? They can do it thanks to the World bank, to which Britain made a contribution of £110 million in 1988 and more subsequently. The World bank generously offered soft loans to China for its emerging industry, as it is called. However, not much is emerging from an industry that has 40 per cent. of the world market.

The clever Chinese are producing bikes in ultra high-tech plants solely because of the World bank's money to which Europe and the United States have contributed. One could say, "Good for the Chinese, " but the impact on Europe has been devastating. It has been like asking a unicyclist to compete in the tour de France.

We should not get it wrong ; the Europeans are no fools either. They are still in the story by virtue of the fact they have put a ceiling on EC bike imports which is expressed as 9.5 million ecu from what are called generalised system of preferences--GSP--countries. As China is a GSP country, the bikes can come in free without any tax whatsoever. Above that figure of 9.5 million ecu they have to pay, in theory, 17.1 per cent. tax per bicycle. As the plot unfolds, we shall see that they do not pay a penny in tax ; they have managed to find a way round it.

Under GSP there are a number of countries that enjoy special preference which allows them to import into the EC free of tax. When China realises that it has reached the ecu ceiling on imports, it does not stop manufacturing bikes ; on the contrary, it surreptitiously arranges, through subsidiary companies and agents, for its bikes to be sent to other GSP countries such as Thailand, Indonesia, Malaysia or Hong Kong. As all those countries enjoy special GSP status, each can import to the EC--free of tax- -9.5 million ecu worth of bikes, thus avoiding the 17.1 per cent. tax that would have been added if they had not switched through the other GSP countries.

Taiwan, unfortunately, is the odd man out : it has no GSP status. It therefore relocates its bicycle manufacturing industry in GSP countries. Even Taiwan has Chinese factories, with thousands of Taiwanese rushing around in ultra-modern plants making bicycles. That is swelling the number of bicycles in China, which means that more and more bicycles made in China are not moved from China to

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Europe, but go to some of the other GSP countries that have not used their quota of the EC allocation and then go to Europe. The Chinese employ other, rather shady devices. They send their bikes out of China to Hong Kong in unmarked crates with false destination labels. In Hong Kong, the bikes are repacked and sent to the United Kingdom in different containers, unassembled, in what is known in the trade as a knock-down condition, which attracts only 8 per cent. tax on accessories. That is the process of last resort, when all the other tricks have been exhausted.

Let us take a look at Thailand, Malaysia and Indonesia--all GSP countries. Bicycle exports have gone through the roof : they have grown sixfold in the past two years, not because any of those three countries are building more bikes--the Chinese and Taiwanese are building more bikes in China, and sending them to Thailand, Malaysia and Indonesia for shipment into Europe. It is a very shady story, and I know that my hon. Friend the Minister will be greatly troubled by it.

Some of those listening to this story will say, "So what? So Chinese bikes are being dumped in Britain." It matters a great deal, because Britain's bicycle industry is being squeezed into extinction. Britain used to have one of the largest bicycle industries in the world, and we were very proud of that industry ; today, thanks to the Chinese and the Taiwanese, we have only 1.2 million bicycles out of a world production of 100 million bicycles a year.

Mr. Andrew Robathan (Blaby) : Perhaps a parallel could be drawn with the method by which the Japanese have undermined our motor cycle market in past decades. They ruined that market, only to up their prices as soon as it collapsed.

Will my hon. Friend comment on the fact that, although Nottingham is the home of the Raleigh bicycle, not many Nottingham Members seem to be present to listen to his sensible comments?

Mr. Steen : I cannot see any hon. Members on the Opposition Benches. Perhaps I am suffering from restricted vision after writing one of the best speeches that I have ever written, but my hon. Friend's point is very telling. When a scare story was put out that the British motor cycle industry was going to collapse, everyone said that it was not true ; then the industry collapsed. Now the same is happening with the British bicycle industry.

It is not that Raleigh and other leading manufacturers have not modernised their plant ; on the contrary, they use robots, lasers and other innovatory products. Raleigh and Dawes, two of the leading manufacturers, are aggressive and dynamic. But how can these industries in Britain compete with the sweatshop labour in a totalitarian country that pays pence, rather than pounds, an hour, where management will stop at nothing to see that their bicycles are landed on our shores?

Where is the cavalry? Who will rescue our industry? The Canadian Mounties found that cheap imports were being dumped on their doorstep. Within five months those goods had been banned, blocked and stopped at the port of entry. Why has not the cavalry responed like the Canadian Mounties to protect Europe from this influx of bicycles? The single market and the free trade will not be much good if they are unable to prevent illegal products from flooding in.

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The people in Brussels, I am told, are not too concerned about the dumping of bicycles in Britain, so long as they have their steak and chips and chocolates. We have to rely on the votes of member states to ensure that the dumping will stop. While our industry is bleeding to death, while our people are being put on the unemployment heap, the Eurocrats continue to make merry with a glass of Burgundy. While Brussels continues to party, Raleigh has already laid off 500 staff in the past few months because of Chinese dumping.

We are witnessing a commercially corrupt process aided by the World bank and making any competition virtually impossible. The Treasury is using taxpayers' money to put our own people out of business. But the story does not end there. We have the Taiwanese also to deal with. My hon. Friend should watch out for the Taiwanese bicycle company whose fax came into the possession of a British bicycle company. The Taiwanese have a wheeze whereby they send their bikes to Britain through a GSP country, knowing that the rule that 60 per cent. of the components have to be made in that country and that the condition of GSP preference is that 60 per cent. of the product be manufactured in that country are being broken.

There emerges the picture of ruthless men in the east aiming to destroy our bicycle market. We are dealing with cunning Chinese business men who are making a killing on the manufacture of bikes and throwing our work force on the dole.

When Raleigh buys Shimano gears from Japan it has to pay duty of 8.1 per cent. The far eastern bloc avoid paying any tax on any part of any bike as a result of the devices that I have outlined. This is a horror story. Free trade is being choked. State-run dictatorship is destroying yet another manufacturing industry in Britain. Where is the guardian angel? Where is the Minister for Trade? Have his wings been clipped? Will evil triumph?

There is a sub-plot. European Community officials are trying to correct the balance by instructing the Chinese to pay 34.4 per cent. tax on every bike imported. They believe that that is the figure that is needed to correct the unlevel playing field. Yet Commissioner Brittan has been prevented from signing. Why will he not sign? Has something been done to his right hand? Is he part of the plot? Is there something going on about which we do not know? Let us not forget the clever lawyers being employed in Brussels by the Chinese to help them to corner the market.

But the Chinese will clearly have the last laugh. Their bikes are not safe. Often, their brakes just do not work in the rain and do not conform to BS6102. When the European Community finally put on the 34.4 per cent., the unsuspecting British public will find themselves unable to stop as they head towards a brick wall.

10.14 pm

Mr. Harry Greenway (Ealing, North) : With the permission of my hon. Friend the Member for South Hams (Mr. Steen) and the Minister for Trade, I shall speak for one minute strongly to support my hon. Friend. I speak as chairman of the all-party parliamentary friends of cycling group. I wish to give two statistics which should be laid before the House.

In Denmark, 11 per cent. of the population still cycle to work whereas in the United Kingdom the figure is only 4

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per cent. People here have enough to contend with, such as dangerous roads, without having dangerous bicycles from China foisted on them.

It must be said that the ruthlessness with which the Chinese have set about getting bicycles into this country has to be observed in practice to be believed. It is only right that our great cycle industry--Raleigh and other companies have been mentioned--should be allowed a level playing field on which to operate. However, they demonstrably do not have a level playing field, as my hon. Friend the Member for South Hams so graphically outlined. We are looking to the Minister for Trade to ensure that the industry has a level playing field in the interests of our nation and of cyclists in particular. 10.15 pm

Mr. Gary Waller (Keighley) : I am grateful to my hon. Friend the Member for South Hams (Mr. Steen) for providing me with a brief opportunity to support him in the debate. He made his strong case with flamboyance and sincerity.

In a brief intervention, my hon. Friend the Member for Blaby (Mr. Robathan) drew a comparison with the destruction of the British motor cycle industry and, of course, in many ways he is right. However, there is one difference. We must admit that the Japanese stole a march on our motor cycle industry because, in many respects, their products were technologically more advanced but the products of the British cycle industry are technically supreme. Hon. Members who saw examples of its frames recognised that the most modern

technology--space technology--is now being used, and nothing can compare with those frames.

My hon. Friend the Member for South Hams mentioned anomalies which, for example, allow importers to pay nothing on components which are popular with all purchasers these days--Japanese components such as brakes and gear sets--whereas United Kingdom manufacturers importing the same components have to pay 8 per cent.

My hon. Friend also referred to dumping and the fact that injury has been proved by a European Community investigation. More than 2 million bicycles have been dumped on the United Kingdom market since 1987. Now that the United States has taken action to deal with dumping, we can expect to see more diversion into our market. The downhill path has been rapid because in six years imports from the far east have grown from 29 per cent. to 70 per cent. That is an unimaginable change in such a short time.

The message to the Minister is clear. There must be ratification as soon as possible of the anti-dumping measures which are now regarded as justified by the EC investigation. It is necessary to deal speedily with the anomalies that enable far east importers to undercut our excellent home- produced bicycles.

10.17 pm

The Minister for Trade (Mr. Richard Needham) : I have seen the yellow peril knocking at the door, and I understand my hon. Friends' concern. I fully support their comments about the lack of interest shown by the Opposition, especially as many Labour Members represent areas in which bicycle manufacturing still exists.

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We must consider a series of issues. My hon. Friend the Member for South Hams (Mr. Steen) rightly said that the matter falls under European Community competence. He knows perfectly well that the only power I have is to try to move on the debate in Europe. I am not sitting at the elbow of Sir Leon Brittan, giving him the pen. Were I in that happy position, he would no doubt have already signed the anti-dumping measure that we have supported in the European Community. However, it is an EC matter, and two separate issues are involved. One is the GSP--the generalised system of

preferences--problem about bikes coming in up to a quota level which, as my hon. Friend the Member for South Hams said, because of the way in which the rules operate, can then be circumvented by the Chinese continuing to export bikes until a GSP abuse has been proved. The key question is dumping, because that introduces an element of a tax of 34 per cent., which represents a considerable additional benefit compared with 8 per cent. Put another way, after the devaluation of the pound, that 8 per cent. has disappeared to our benefit because of that devaluation. Even so, we accept that there has been a proven case of dumping and that we should move against it. We are doing what we can, and will continue to do so, to pressurise the Community to move in that direction.

The Chinese ride around on bikes. They may produce 40 per cent. of the world output of bikes, but--I do not have the figures with me--they are also by far the world's biggest riders of bikes. It is no good our now saying that China is a backward third-world country which is not capable of making modern bicycles. The Chinese can make them. My hon. Friend the Member for South Hams says that they have been supported in that effort by the World bank. So they have, as have many other third-world countries, with the aim of trying to modernise their industries and raise their standards of living.

I accept that Chinese workers are paid much less than British workers. Unfortunately, that does not preclude them, under the rules that operate not only in terms of the Community but in terms of GATT, manufacturing products that they sell to this country. If all Chinese workers were paid as much as British workers, no doubt it would be a truly level playing field, but they are not and I am not clear what my hon. Friend suggests we should do about that.

We have an advantage in that our workers are paid, including the social cost, half that of German workers. Are we to make the same argument about dumping British products in Germany because our workers are paid half as much as theirs? That would be a dangerous route to take.

We must look at the matter of fair trade, and my hon. Friend raised a series of questions about that. He asked whether the Chinese were trying to get round the 8 per cent. by moving their finished bikes to Thailand, Indonesia, Malaysia or wherever. If my hon. Friend has evidence to that effect, he should let us have it. The only way we can tell whether a bike comes from Indonesia or China is to ask the relevant authorities in, say, Indonesia whether it is an Indonesian bike. If they say it is, we must believe that, unless we are given evidence to the contrary.

I cannot see why the Indonesians, who are not rich, should take massive numbers of Chinese bikes into Indonesia to bring them here, unless there is that level of

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corruption. In relation to Indonesia, Thailand or Malaysia, what would be the reason for them doing that? Perhaps they are Indonesian bikes, and that is one of the problems. If duties were imposed on China, perhaps they would, as my hon. Friend the Member for South Hams suggested, move out of Taiwan and start making bikes in Indonesia, which they might move to somewhere else, perhaps to India or Sri Lanka. So the problem is that one is continually chasing a chain which it is hard to catch. But if my hon. Friend is right about the bikes being moved, we shall act on that.

My hon. Friend did not make the point--I will make it for him--that it seems strange that one should have to prove the case twice. In other words, if there is an anti-dumping measure against China, it would seem reasonable to assume that one should not then have to prove further damage because China exceeded its GSP quota. I assure my hon. Friend that we shall take up the matter with the Commission to see how we can bring it to bear.

My hon. Friend the Member for South Hams raised the question of safety. I appreciate why we need a level playing field in regard to bikes--otherwise, he is right in saying that we might go downhill and crash into a wall if the brakes did not work. There are the environmental health officers ; there are the pedal bicycles safety regulations. My hon. Friend is a great expert on the subject, as are some of my other hon. Friends. Why are those regulations not being enforced? If the bikes are unsafe and fail to meet British standards, what are the environmental health officers doing? What is the Department of Transport doing?

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