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House of Commons

Wednesday 21 April 1993

The House met at half-past Two o'clock

PRAYERS

[Madam Speaker-- in the Chair ]

Oral Answers to Questions

TRADE AND INDUSTRY

Political Contributions

1. Mr. Winnick : To ask the President of the Board of Trade if he will bring forward legislation to compel companies to ballot shareholders and employees before contributions are paid to a political party.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : No. The present law requires sufficient disclosure. Shareholders can raise questions about political contributions at the annual general meeting if they are dissatisfied.

Mr. Winnick : Why no change? The Government demand that the trade unions ballot their members every 10 years as to whether political funds should be retained. Why not have the same for companies? Is it because it is the companies that denote money to the Tory party? Is there no limit to the sheer hypocrisy of the Government in relation to political funds? They should be thoroughly ashamed of themselves.

Mr. Hamilton : Our system of company law is very wide ranging and imposes extensive obligations on companies. If trade unions had to comply with such extensive obligations, they would not thank the hon. Gentleman for what he has said. It is very easy for a shareholder who is dissatisfied to sell his shares if he does not like his company's policy, but it is not quite as easy to change trade unions.

Mr. Matthew Banks : Does my hon. Friend agree that those who make decisions on behalf of companies to make donations are rightly subject to the accountability of shareholders? Does he further agree that those who make decisions do so in the best interests of their shareholders, their company and the prosperity of the nation as a whole?

Mr. Hamilton : I agree with my hon. Friend. If there had not been such abuses in the trade union movement, which were always supported by the hon. Gentleman and his hon. Friends over so many years, it would not have been necessary to bring in the obligations in 1984.

Mr. Fatchett : Is the Minister aware of the Sunday Times survey which showed that chairmen of companies that donated to the Conservative party had a 50 per cent. better chance of receiving a knighthood? Is not that a further indication of the corruption and sleaze which surround the Government? Is not it time that shareholders had real

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rights and were consulted before companies donate to the Tory party, which has done so much damage to the prospects of Britain's manufacturing industry?

Mr. Hamilton : I can remember a time not so long ago when it was a hanging offence in the Labour party to read the Murdoch press. I am glad to see that the Labour party has changed in some respects.

Mr. Roger Evans : Will my hon. Friend reject in terms the very sinister word in this question which so far appears to have been overlooked? The hon. Member for Walsall, North (Mr. Winnick) asked not only for shareholders, the owners of the companies to be balloted but also employees? Will my hon. Friend reject this sinister attempt to extend trade union power?

Mr. Hamilton : I certainly do reject it. It is as a result of changes that we have made to trade union law over the last 13 years that trade unions no longer pose a danger to the economic prosperity of the country.

Post Office

2. Mr. Cummings : To ask the President of the Board of Trade what has been the contribution of Post Office services to Government revenues since 1979.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : The cumulative total ofthe Post Office's external financing limit contributions from 1979-80 to 1991-92 is £802 million.

Mr. Cummings : Now that the Secretary of State has admitted that the Post Office made £800 million, will he agree that we have the best Post Office in Europe, with the most efficient work force? The Post Office, which has increased profits by over 50 per cent., is a huge public sector success and should remain so. When will he present to the House his most extensive and far-reaching review?

Mr. Heseltine : I am sorry that the hon. Member is still indulging in the language of the past. The moment that a company indicates a success by making a profit, somehow it is seen to be milking the customer. It is important that companies should earn sufficient surplus to pay for their investment programmes and to earn a reasonable return on capital, which is what the Post Office is doing.

Mr. David Nicholson : My right hon. Friend will have recalled, when he gave the information in his original reply, the value of the dictum that when an institution is in good working order it is a good idea not to mess about with it. Will he therefore give all the support that he can to the management of the Post Office so that it can continue to give an excellent service to consumers, whether in rural or urban areas? In particular, where a post office changes from Crown status to agency status, as is proposed for Wellington in my constituency, will he ensure that that post office continues to retain a central position and to provide high standards of service?

Mr. Heseltine : My hon. Friend is right to seek an assurance that we are committed to enabling the Post Office to provide a high standard of service. That is why we have made it absolutely clear that the universality of service and of charge is not negotiable in any of the options that we are considering. However, I cannot ignore the fact

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that company after company that has moved from the public to the private sector has been able to achieve significant improvements in productivity, has played a role in the international market and has earned greater returns for this country than ever it was able to do in the public sector.

Mr. Robin Cook : May I invite the President of the Board of Trade to correct a misunderstanding that he appears to have of my hon. Friend's question? My hon. Friend put it to him that the Post Office is one of the most profitable in the world, that it has the most reliable delivery service, at one of the cheapest prices, in Europe, and that in Britain it has achieved a growth in productivity that is double the average for the services sector over the past decade. My hon. Friend's question to the President was, why put all that at risk by privatising the Post Office, because of this Government's obsession with selling anything that they can sell off? Since the President has apparently announced that he cannot do it for another year, because he cannot figure out a way to do it, would not it be much better to end the damaging uncertainty, the delay in investment and the anxiety of staff by announcing that he intends to drop the whole idea and accept that the Post Office is a public service which should belong in the public sector?

Mr. Heseltine : That is the language with which the Labour party has sought to attack every change that this party has made over the past 10 years. It is because we have faced the Labour party down time and again that British Gas, the power companies and the water companies are winning in the world marketplace. Every time that we take a difficult decision on behalf of British industry, it is resisted by the Labour party. That is a very good reason why we should stay in power and have the courage to go on doing so.

Mr. Cormack : Does my right hon. Friend accept that many of us, who have strongly supported privatisation, still have reservations about privatising the royal mail? Does he accept that the figures that he gave to the House this afternoon illustrate a very good case for removing economic restraint on the Post Office, but not a very strong case for privatising it?

Mr. Heseltine : My hon. Friend is right to express concern, but what I have to make clear to the House is that the overwhelming majority of post offices are already in the private sector. My hon. Friend will also realise that within the public sector there are unavoidable public accounting disciplines which constrain the ability of a public sector organisation to compete effectively with the private sector. What is happening in the Post Office is that increasingly a sector of its market is being eaten into by private sector companies and by new technology, whether it is the fax machine, or the bike or the courier. All these things are putting the Post Office under competitive pressure. That is why many people think that we can preserve the standards of the royal mail but widen the opportunities for the people who work in it.

Mr. Hain : I remind the President of the Board of Trade that, unlike the other utility services that have been privatised, the Post Office's costs are 80 per cent. labour intensive and there is no way in which he can guarantee to rural and outlying areas the quality of service that they enjoy at present. May I also remind him, that on top of the

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£800 million that has been contributed, through negative external financing limit payments, to the Treasury coffers, the Treasury has received an additional £400 million in corporation tax over this period. By privatising the Post Office, the President will perhaps reap a one-off return of an equivalent scale, but he will forgo year upon year of income to the Treasury from a service which the public respects and is the best in the world.

Mr. Heseltine : I am the first to recognise the quality of the service, but the question that I have to answer is how can we enable the Post Office to build on the quality of its service and widen the opportunities for Britain in so doing? The issue is whether there would be an opportunity for the Post Office in a private sector context in an international competitive world, which would be bigger than that in which it can involve itself today.

3. Mr. John Marshall : To ask the President of the Board of Trade if he will make a statement about the future of the Post Office.

Mr. Heseltine : No decisions have yet been taken on the future organisation and structure of the Post Office. I will make an announcement to the House when we have reached conclusions.

Mr. Marshall : Does my right hon. Friend accept that the fears expressed about the consequences of privatising the Post Office are precisely the same as those expressed about the privatisation of British Telecom? Does he agree that the current uncertainty is bad for the staff, customers and management of the Post Office? Will he bring it to an end speedily by announcing the imminent privatisation of the Post Office?

Mr. Heseltine : My hon. Friend is right to make the point that the Labour party has opposed every liberalisation and every measure to free the public sector which we have introduced and would therefore have prevented the large number of the advances now being achieved by the privatised companies. [ Hon. Members-- : "Jobs for the boys."] Opposition Members talk about jobs for the boys. I am glad that they recognise that we are concerned to protect the jobs of people in the privatised industries by setting them free to take advantage of the new, worldwide marketplace. I cannot today give my hon. Friend the assurance that he requests, although I am the first to recognise that many people in the Post Office are asking for exactly what he suggests.

Mr. Simon Hughes : Does not the Secretary of State realise that there is all the difference in the world between releasing a nationalised public sector industry from the constraints traditionally imposed on it and guarding the unity and coherence of a service in the national interest? I thought that his political experience would have taught him that there is all the difference in the world between popular capitalism and unpopular dogmatism. Does not he realise that privatising the Post Office would be a privatisation too far?

Mr. Heseltine : That was a classic example of the Liberal party trying to have it both ways. The hon. Gentleman must make his own decision about whether it is a journey too far, but we shall decide whether we are going to embark on the journey.

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Sir Michael Grylls : Does my right hon. Friend accept that there cannot be an organisation in the world, however good, that cannot be improved and that that must apply to the Post Office and the delivery of the mail and parcels ? Will he press ahead with his plans for the privatisation of the Post Office and to increase competition because that will also improve the service to consumers ?

Mr. Heseltine : My hon. Friend is right to ask about competition. I have tried to say how technology and the globalisation of markets are already subjecting the Post Office to a range of new services. However, the critical question at the heart of the matters is how, while protecting the absolute non-negotiability of the universality of the service and the price, we can allow the men and women who work in the Post Office to expand, to compete and to seek wider opportunities, which is not compatible with public sector discipline. That is the dilemma we face.

Mr. Cousins : Does the President accept that, on the matter of Post Office privatisation, his figleaf is becoming dangerously small ? After nearly nine months and the expenditure of £500,000 on advice from Kleinwort Benson, he has no proposals to put before the House. The Post Office awaits its opportunity as a public sector company which can mop up the postal markets of western Europe. When will he allow the Post Office the commercial freedom to be that kind of public sector success ?

Mr. Heseltine : The hon. Gentleman is completely divorced from the reality of public sector accounting. No Government have ever been able to set free a public sector enterprise outside the disciplines of the public expenditure round and Treasury control. There never has been nor ever will be such a Government. [ Hon. Members :-- "Why not ?"] Because the Labour Government designed a structure that was not compatible with a free enterprise system. If there had been such a system, the Opposition would presumably have found it in the years when they experimented so disastrously with public ownership.

Exports (Scandinavia)

4. Mr. Bates : To ask the President of the Board of Trade if he will make a statement on measures introduced to promote exports to Scandinavia.

The Minister for Trade (Mr. Richard Needham) : The full range of overseas trade services is available for companies wishing to export to Scandinavia. More specifically, my Department regularly undertakes special initiatives in relation to those markets.

Mr. Bates : I am grateful to my hon. Friend for that answer. Is he aware that the north-east exports a greater proportion of its manufacturing output than almost any other region and that an increasing amount of that trade is with Scandinavian countries, especially that involving the development of the extensive North sea oil and gas reserves, in which about 22,000 people in the north-east are already employed? Does my hon. Friend agree that those trading links with Scandinavia would be given a significant boost by the early inclusion of the Scandinavian countries in the single European market?

Mr. Needham : I agree with my hon. Friend and the sooner that we can get Maastricht out of the way, the

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sooner we can enlarge the Community. As my hon. Friend says, the oil and gas industry in the north-east is of paramount importance. The story is one of immense success and I have no doubt that it will continue. Last year, exports to the nordic countries grew by more than 5 per cent. and imports by only 2 per cent., so I am delighted to say that we are closing the gap, with the help of companies from the north-east.

Mr. Tony Banks : Will the Minister take an early opportunity to remind our Norwegian trading partners that if they insist on slaughtering minke whales in the north Atlantic, they will imperil both imports from and exports to this country, because many people feel that the Norwegians should desist from the obscenity of whaling?

Mr. Needham : I understand the hon. Gentleman's feelings on that subject, but I assure the House that the Government will continue to do everything that they can to promote and increase trade with the nordic countries, including Norway.

Mr. Fabricant : Does my hon. Friend agree that our sales into Scandinavia will be improved not only by the recent increases in Export Credits Guarantee Department cover, but by the fact that the pound is more competitive against the Norwegian, Danish and Swedish kroners? The fact that we have low inflation also improves our ability to sell abroad. If the high-spending, high-taxation, high-inflation policies of the Labour party were followed, we would be unable to sell not only to Scandinavia but to the rest of Europe and the rest of the world.

Mr. Needham : Of course, I agree with my hon. Friend. Another difference between us and the Labour party is that whereas we have a strategy for backing winners, the Labour party, as I know because I have just read the strategy of the hon. Member for Livingston (Mr. Cook), is returning to a strategy for picking losers.

Offshore Oil Wells

5. Mr. Ainger : To ask the President of the Board of Trade how many offshore oil exploration wells were drilled in the British sector in 1989, 1990, 1991 and 1992 ; and what is his estimate of the numbers in 1993.

The Minister for Energy (Mr. Tim Eggar) : A total of 92 exploration wells were drilled in 1989 ; 152 in 1990 ; 106 in 1991 ; and 72 in 1992. My Department does not publish forecasts for the numbers of exploration wells.

Mr. Ainger : Is the Minister aware that since the changes in petroleum revenue tax announced in the Budget, the Chancellor of the Exchequer is now known by the United Kingdom offshore oil industry as the driller killer? Is he aware that the industry expects a 30 to 40 per cent. cut in the number of wells drilled, which could mean a cut of 40,000 jobs in the offshore sector? Does he agree that the damage that will flow from the changes in PRT is unacceptable? Did the Chancellor of the Exchequer consult the Minister before the announcement was made and what does the Minister intend to do to restore confidence in our offshore exploration industry?

Mr. Eggar : Clearly I have misunderstood the hon. Gentleman. Judging by his previous written questions on the subject, I thought that he was doing his best to prevent exploration of any kind off the coast of the United

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Kingdom. Oil companies and oil supply companies have expressed both favourable views and reservations about what the Chancellor of the Exchequer announced in the Budget. A number of companies are meeting the Chancellor and my hon. Friend the Financial Secretary to the Treasury to discuss the changes in the light of the publication of the Finance Bill.

Mr. O'Neill : Does the Minister agree that the successful bidders in previous rounds have entered into drilling and exploration obligations which the new tax regime may preclude? Does the Department of Trade and Industry realise that the honouring of those obligations may become increasingly difficult? Does the Minister agree with the Treasury's view that those legal obligations may be set aside, or does he take a contrary view?

Mr. Eggar : I am amazed at the hon. Gentleman. He appears to be advocating that oil companies should break obligations into which they entered freely. I think that the hon. Gentleman should reconsider his view.

Eureka

6. Mr. Garrett : To ask the President of the Board of Trade what has been the level of participation of British companies in the EC Eureka project.

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh) : Three hundred and eight British companies have participated in Eureka projects.

Mr. Garrett : What does the President of the Board of Trade think of the case of LJ Technical Systems in my constituency about which I have corresponded with his office? That very go-ahead, innovative electronics company in Norwich joined two French companies to make a bid for funding under the Eureka project. The French companies were visited within a month by a technically qualified civil servant who approved their bid. The British company in my constituency was messed about for seven months by some daft mandarin who actually did not know what the product was for and, at the end of the process, turned it down. How is that for the dynamic DTI?

Mr. Leigh : The House will not be surprised to learn that the hon. Gentleman has told only about a quarter of the story. The truth is that an application was made on 9 July. Not within one month, or two months, but within one day, the DTI contacted that company and requested information on 10 July. The whole point of the Eureka project is that it should equal significant technological advance. We asked that question, but there was no reply. We asked again on 31 July, but again there was no reply. We asked again on 2 September, but there was no reply. A reply was finally given in October. In November, because of the highly competitive nature of the competition and the fact that there were more innovative projects, we did not give a grant.

Mr. Garrett : On a point of order, Madam Speaker. In view of the inadequacy of that reply, I give notice that I will seek to raise this matter on the Adjournment.

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Post Office

7. Ms Eagle : To ask the President of the Board of Trade what is the planned change in the Post Office contribution to Government finances between 1990-91 to 1992-93 and 1993-94 to 1995-96.

Mr. Heseltine : The Post Office's external financing limit contributions for the two years 1990-91 and 1991-92 were, respectively, zero and £74 million. The target for 1992-93 is £66 million. For the three years 1993-94 to 1995-96, the target contributions are, respectively, £181 million, £176 million and £158 million.

Ms Eagle : Does the Minister agree that seeking to increase the contributions that the Post Office makes to the Exchequer by close to three times in one year will imply a massive increase in postal charges once the price freeze ends in August? When those price increases arrive later in the year to pay for that, will we see the introduction of a Tory post tax to pay for the Government's economic mismanagement?

Mr. Heseltine : The hon. Lady may like to catch up with the facts. There has been a price freeze for 18 months and a further six months of freeze was recently announced.

Mr. Nigel Evans : My right hon. Friend has said how important the Post Office is to the country. In his drive to improve the postal service, will he assure me that regard will be given to rural post offices and that, if any changes are made, there will be assurances that the service that is currently provided to rural customers will continue to be provided?

Mr. Heseltine : My hon. Friend is well aware of the considerable importance of the rural post office network. We have made it clear in the consultation papers that we have produced that the maintenance of a very substantial rural post office network in the private sector, where it now is, is an important part of our policy, just like the universality of delivery and price.

Ms Hoey : Will the Secretary of State have a word with his colleague the Secretary of State for Social Security and try to persuade him of the folly of requiring pensions and benefits to be paid through banks rather than through post offices ? Does he realise that that would ruin our rural post offices and cause many problems for many pensioners throughout the country ?

Mr. Heseltine : Many people choose to have their pensions paid through the banking system. There are obvious issues to be explored. The Government have made it clear that automated credit transfer is part of their policy. Of course, we are aware of the complications and implication involved in that, but I would not give the sort of assurance that the hon. Lady seeks.

Pit Closures

8. Mr. Janner : To ask the President of the Board of Trade if he will make a further statement on the situation regarding the effect of pit closures on related industries.

Mr. Eggar : The Government's views are set out in the White Paper, "Prospects for Coal" and in their response to the Select Committee on Employment. It is because we

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recognise the impact of pit closures that we have expanded to £200 million the value of the package of measures to help affected areas.

Mr. Janner : Does the Minister recognise that while the Government are making arrangements for special redundancy payments for miners who are made redundant as a result of the pit closures, they have made no announcement, whether to the Select Committee on Employment, in the White Paper or elsewhere, about special redundancy measures to help people who are made redundant in related industries, as opposed to additional help for the areas in which they live ? What do the Government propose to do for the individuals and their families ? Probably as many as 100,000 people will be made redundant if the pit closure programme goes forward in any form. What special redundancy pay will they get ?

Mr. Eggar : I am surprised that the hon. and learned Gentleman, who is a distinguished Committee Chairman, continues to repeat a figure of 100,000 which seems to be a complete figment of his imagination. I wish that he would point to the positive side just once. For example, why have we not heard from him about the many jobs that will be created by the announcement that the Connah's Quay project will go ahead ?

Mr. Alexander : As the related industries must by definition include those interested in purchasing the coal mines that are to close, is not it astonishing that British Coal is closing down those mines at the end of April and yet refusing to allow any interested purchasers to view the mines in the meantime? Is not it clear that British Coal is denying the opportunity for those coming in to purchase ongoing coal mines and does not want competition from outside at all?

Mr. Eggar : It is my understanding that, if British Coal were to decide to cease coaling at Bevercotes, which is my hon. Friend's concern, that mine would go on to a care and maintenance basis so there is no possibility of its simply not being available for sale to the private sector. However, I understand my hon. Friend's concern and that of his constituents. Clearly, it is important that British Coal moves rapidly to put mines such as Bevercotes on the market and make them available to the private sector. I take the message that my hon. Friend has delivered to me.

Mr. Robin Cook : Is the Minister aware of the anger among miners and the management of British Coal that their pension fund is to be raided to match the cost of the new subsidy? Is it the bottom line that in March the Government announced a subsidy of up to £500 million and instructed British Coal in April to save the Treasury much the same figure? Is not it true that Conservative Members did not tell us that in the debate or the White Paper because they know that no one else will accept it as fair that the miners' pension fund should pay the cost of the Government's mismanagement of the pit closures?

Mr. Eggar : What I think people are extremely angry about is the hon. Gentleman's irresponsible scaremongering. It has been made absolutely clear that there will be no rip-off of the pension funds--pensions will be safeguarded. That is the clear undertaking which has been given. What is more, British Coal will seek a court direction as to the

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way in which the surplus can be disposed of. I wish that just once the hon. Gentleman would bother to do his homework.

Mr. Dickens : Can the Minister explain why Labour Members always suppose that, by throwing resources after-- [Interruption.]

Madam Speaker : Order. The hon. Gentleman has been here for some time. He should not be asking the Minister to explain anything about Labour Members : he must ask a direct question relating to Government policy.

Mr. Dickens : When the textile workers of the north were put out of work and the mills closed, they did not have handouts such as those that have been suggested in this question. [Interruption.] That matter is relevant to the question.

Madam Speaker : Order. I am moving on.

Mr. Barron : The Minister is aware of the blackmail tactics that are being used currently at Maltby colliery to get rid of the work force and stop production at one of the most profitable and modern coal mines in Europe. That would obviously take away the market for many forms of mining eir jobs being taken away by the Government's attacks on the British coal mining industry?

Mr. Eggar : I find it extraordinary that the hon. Gentleman should describe what is happening at Maltby as blackmail. Through British Coal, the Government have committed a net £29 million to investment in the development of Maltby in order to create the super-pit of the future. Why does not the hon. Gentleman for once point to the advantages that lie ahead for his constituents rather than any downside?

Manufacturing (West Yorkshire)

9. Mrs. Mahon : To ask the President of the Board of Trade when he will next visit West Yorkshire to discuss job losses in manufacturing.

The Minister for Industry (Mr. Tim Sainsbury) : My right hon. Friend the President of the Board of Trade and other Ministers in my Department make frequent visits to Yorkshire. My right hon. Friend next plans to visit Leeds in mid-May to attend the Association of British Chambers of Commerce annual conference dinner.

Mrs. Mahon : Is the Minister aware that in Yorkshire and Humberside between 1989 and 1992, 35,000 jobs were lost in manufacturing? Will he do something for the thousands of unemployed in Halifax by unequivocally supporting Calderdale council's bid for objective 2 status and by granting Calderdale assisted area status? He must be aware that Calderdale is like the hole in the middle of the doughnut, surrounded by areas that receive help, but receiving nothing.

Mr. Sainsbury : We all regret-- [Interruption.] We are all sorry to see job losses, but I hope that the hon. Lady will appreciate that inevitably improvements in productivity are sometimes accompanied by job losses. I cannot anticipate for her the outcome of the review of the assisted

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area map. I hope that she recognises that we have only just received from the European Community its proposals for the rules that will apply to objective 2 status. They are being considered and are not likely to be agreed by the Council of Ministers until later in the summer.

Mr. Batiste : What does my right hon. Friend advise those who, like the hon. Member for Halifax (Mrs. Mahon), bemoan job losses in West Yorkshire, but advocate policies such as the social chapter, which would cost so many jobs by making British industry uncompetitive on the world markets?

Mr. Sainbsury : I would advise, as I am sure that my hon. Friend would, that they consult industry. If they did, they would find that industry is aware that if it is to succeed, create jobs, win export orders and win a larger share of the home market, the key is productivity. That is what they seek and that is what the Government are helping them to achieve.

Small Businesses (North-west)

10. Mr. Kilfoyle : To ask the President of the Board of Trade how many new small businesses have been established during the last 12 months for which figures are available, in the north-west region.

Mr. Neil Hamilton : An indication of the number of new businesses set up in the north-west can be obtained from VAT data. During 1991--the latest year for which figures are available--there were 21, 000 registrations for VAT in the north-west. More recent figures are published by Barclays bank, which estimates that during 1992 there were 51,000 new start-ups in the north-west. The figure includes businesses with a turnover below the VAT threshold.

Mr. Kilfoyle : More than an indication of the state of the economy in the north-west are surely the Dun and Bradstreet figures for the year up to March 1993, which show that 5,046 businesses went under in the north- west in that time. Does not that give the lie to the claim propagated by the Tory party in the current county council elections in the north-west that it is the party of responsible economic management for the north-west ?

Mr. Hamilton : There are 3 million businesses in Britain and even in times of boom, businesses cease trading and new businesses are created. Even at a time of recession, many businesses are coming forward to take up the opportunities which are increasingly available to them. Lower interest rates, a more competitive exchange rate and all the north-west's advantages make me optimistic for the future. It is a great pity that the hon. Gentleman and his Opposition colleagues always seem to talk down the region rather than capitalise on its strengths and advocate them as loudly as possible.

Mr. Hendry : Is my hon. Friend aware that most of the small and medium-sized firms in my constituency and throughout the north-west report strong signs of economic upturn ? Does he agree that their continuing prosperity depends on the continuation of Government policies that deliver low inflation, low borrowing costs and freedom from the job-destroying social chapter ?

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Mr. Hamilton : I entirely agree with my hon. Friend. Were it not for the legacy of Labour party militancy on Merseyside it would be easier for us to advocate the advantages of the north-west.

Mr. Loyden : Will the Minister take note of the issue raised by my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) that many of the businesses that the Minister mentioned are opening, then closing after about six months ? If he lived in the city or the region, he would understand that. Are the several hundred people selling cigarette lighters in the centre of Liverpool classified as small businesses ?

Mr. Hamilton : It is a great shame that Liverpool has Members of Parliament like the hon. Gentleman, because if those watching our proceedings this afternoon regard him as typical of the city it is no wonder that we have difficulty in attracting people into it. However, in spite of the best efforts of people like the hon. Gentleman, we have been instrumental in attracting jobs to Liverpool, to places such as Wavertree technical park. We provided £6 million in grants, which has led to £30 million in private sector investment and the creation of 1,600 long-term jobs in the city of Liverpool.

Mr. Clifton-Brown : Does my hon. Friend agree that some new businesses that are started in the north-west do so with assisted area status aid? My hon. Friend will be aware that aid has already been granted to one business that has been relocated from my constituency to Wigan, with the aid of £1 million? I have written to my hon. Friend with details of another firm that is about to relocate to the north-west with assisted area status aid. Is it sensible use of Government money to give aid that involves a net loss of jobs--putting people out of work in one district and putting them into work in another?

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