House of Commons Hansard Debates for 21 May 1993

Mr. French : I agree with the right hon. Gentleman--that is a sensible approach. Indeed, I do not know of any positive, useful and practical proposals that have been put 20XT

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forward by anyone to tackle the problem of bribery. The right hon. Gentleman's suggestion strikes me as being a perfectly constructive one.

There is also some evidence that our embassy staff, as a result of the influence of the combined effects of the DTI and the Foreign Office, have gone through a considerable transformation. However, there have been many examples where they have not been fighting hard enough. I shall quote from a letter sent to me by the managing director of another Gloucester company, Simon Gloster Saro : "we are now producing at Gloucester the world's market leader in Airport Crash Fire and Rescue vehicles, but our ability to sell these world wide is restricted by the well known problem of the level playing field' when compared to our overseas competitors. Our major competitors in Austria, Holland and France not only appear to be indirectly assisted by their governments but they appear to get more direct assistance and more concessional finance directly available for their business I can give you an example of one of our major foreign competitors who is in the fortunate position"

this is in the context of supplying firefighting equipment for use at airports, in which Simon Gloster Saro specialises

"to have the Austrian Ambassador in person present a soft loan and a quotation to the Government Purchasing Authority for Airport Equipment"--

the purchasing authority was in the far east.

"In spite of the competitor's vehicles being less suitable than ours, and much more expensive, the business was placed in Austria." I am happy to tell the House that that letter was written to me at the end of 1991 and the circumstances which brought that letter about have changed significantly. However, it remains the case that there is a knock-on effect because, if an order is lost in 1991 as a result of the ambassador of the opposing country, if I may put it that way, coming up front and taking an active role in securing the order, once a supplier has got into another country--in this case, Austria got in its equipment--the tendency is that the purchaser, having decided on that line of equipment, will continue placing orders with the same source in subsequent years.

So Simon Gloster Saro lost out once and will almost certainly continue to lose out to this customer in the future. That is why the change that has now taken place should have a successively beneficial effect.

I also wish to refer to export opportunities with former Soviet republics. My hon. Friend the Minister referred to Kazakhstan. It is well known that Kazakhstan offers tremendous opportunities. The combined enterprise of British Gas with Agip is an example to everyone. It secured the right to negotiate exclusively with the Government of Kazakhstan to purchase the reserves of the giant Karachaganak gas field. That was a tremendous achievement. I recall a parliamentary question that was answered on 13 January in which I asked about trade with Kazakhstan. I was able to discover how much export business was done by Belgium, Luxembourg, Denmark, the Netherlands and Germany with Kazakhstan, but, because the figures were not available, I was unable to discover how much export business Britain did with Kazakhstan. I am advised that the figures did not begin to be collected until January 1993.

I was pleased to learn from the answer to another parliamentary question that the Department of Trade and Industry section which previously dealt with the Soviet Union before it split up had been enlarged and

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restructured. There are now separate sections dealing with Transcaucasia and central Asia. That is a sensible and reasonable division.

However, when Kazakhstan was recognised at the end of January 1991, we appointed as ambassador Sir Brian Fall, who is based in Moscow. He did not present his credentials in Alma Ata until October 1992--nine months later. Since then we have had a small embassy in Alma Ata headed by a charge d'affaires. Unless there has been a recent change, the ambassador is still based in Moscow. It seems insensitive to the Government of Kazakhstan, who have sought to distance themselves from the Moscow regime, to base our ambassador in Moscow several thousand miles away. Our ambassador should have a role in securing export business. It is essential that the ambassador is located in the country itself. It will be only a disadvantage if that cannot be arranged.

There are some hidden obstacles for exporters. For example, the VAT form 101 "EC Sales List" requires the company that is exporting to include the customer's VAT registration number. The form assumes that if a company is exporting it automatically will not charge VAT. Of course, that is not the case. A company may well sell to an overseas customer for delivery in the United Kingdom. That applies particularly to certain services. If they are deliverable in the United Kingdom, VAT will still be charged, even though the supply is made to a foreign customer.

The form automatically assumes that the customer's registration number will be known. It works on the assumption that the company will have received a piece of paper from the customer placing the order. But if a company receives an order through the post, for example as the result of a direct mail campaign, it may receive back part of the direct mail that it sent out placing an order for the product that it offers. That is the experience of many publishing companies.

In those circumstances, the company does not know the VAT registration number of its purchaser. The amount of work and trouble involved in finding that number may be out of all proportion to the value of the sale. So form 101 is impractical and will cause a great deal of trouble. That is not only my view but that of one of my constituency companies, A. Searle and Co. in Gloucester, which has also drawn attention to form C1501.

Form C1501 refers to intra-EC trade statistics. It contains several boxes. The form requires the first box to be filled in with the commodity code. But it does not make provision--as A. Searle and Co. has found out--for an invoice including several different items with different commodity codes. The items must be broken down if the form is to be filled in. If they are to be broken down, with a multi-part invoice, considerable extra work is required. A. Searle and Co. asks why it cannot simply give a copy of the invoice to Customs and Excise. That always happened in the past. All the information required was on the invoice. The form seems to be extra and unnecessary.

A. Searle also draws attention to the way in which the form is designed. Two lines are required for every entry. That makes it more difficult than usual to obtain a spreadsheet computer package to deal with the form. That is especially difficult for small businesses. So I urge that such practical considerations are given careful attention when decisions to require data from exporters are made.

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Mr. John Bowis (Battersea) : On point of order, Mr. Deputy Speaker. I apologise for interrupting my hon. Friend, but there is a rumour that inflation has fallen to 1.3 per cent. Is it possible to ask for a statement from my hon. Friend the Minister to confirm that ?

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse) : Order. That is not a matter for the Chair.

Mr. Leigh : Perhaps I might help the House. I can confirm that the inflation figures were published about 15 minutes ago. They are down to 1.3 per cent. over a year. That is down from 1.9 per cent. last month. As far as

Mr. Deputy Speaker : Order. I think that we had better return to the debate.

Mr. French : While I do not intend to stray from the subject of the debate, I must say that the figures are good news for British exporters. It is good news that the Government's economic policy has continued to deliver steadily decreasing inflation which will undoubtedly assist our continued export drive. I am certain that Conservative Members will welcome that news. The Opposition are under-represented this morning--there is only one Labour Member and one Liberal Member present, but I am sure that they would also wish to welcome the news.

Mr. Don Dixon (Jarrow) : The hon. Gentleman keeps referring to the fact that there are few Members present. If he wishes to test to see if there are 40 Government Members present to form a quorum, I am prepared to call a Division to see whether there are 40 bodies on the premises.

Mr. French : If the hon. Gentleman feels that such action would be more helpful than continuing a debate on an important subject, he can take it. However, I think that Conservative Members would prefer to continue debating this important subject.

I congratulate the Department of Trade and Industry and the Minister representing it today. They have achieved a tremendous transformation in the past year or so. They are undoubtedly providing tremendous new backing and helpful support to exporters. My hon. Friend the Minister mentioned the additional export promoters who have been recruited and who will have a significant effect. They are, in the main, people who have spent much of their careers in the export business and do not come to their jobs with merely theoretical views. They have had direct experience of exporting, which is vital if they are to offer advice to others.

My hon. Friend the Minister mentioned one-stop advice shops which are important. He also mentioned the overseas visits, which are of equal importance. We now appear to have a coherent strategy to promote our exports to the best possible effect. It is a story of tremendous improvement on which I congratulate the Government. 11.52 pm

Mr. Michael Fabricant (Mid-Staffordshire) : I believe that it was in 1732 that Thomas Fuller said :

"There needs to be a long apprenticeship to understand the mysteries of the world's trade.

I am aware that the hon. Member for Leeds, Central (Mr. Fatchett) has not served such an apprenticeship--I believe that his apprenticeship consisted of writing books about industrial relations. I am sure that, were he in the

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Chamber, he would be as delighted as I am that industrial relations have improved so much over the past 13 or 14 years.

I have served some apprenticeship in industry. Ten years before becoming a Member of Parliament, I formed a company with a colleague, and I have spent the past five or six years exporting broadcasting electronic equipment manufactured in Cornwall. I am the proud possessor of a Trade and Industry credit card--one of the many innovations to have come out of the Department in the past two or three years.

Some of my hon. Friends will know that my political leanings tend to be free market. I am a great believer in the 19th century economist Walter Bagehot, who said :

"All Governments like to interfere ; it elevates their position to make out that they can cure the evils of mankind."

On a programme the other day, one of my colleagues said that if there were no Ministers, the civil service would probably continue to run the country perfectly well, but the civil servants were the engines and we were the fuel to provide innovation. I am sure that the civil servants would agree. I notice that not only was Walter Bagehot an excellent 19th century economist, but he enjoyed longevity, as he writes, even today, in The Economist .

Experience in industry often tempers political philosophy. I believe that there is no monopoly on evil or virtue in any contract into which one may enter with a customer. There is no monopoly on virtue or evil in any treaty into which we may enter with a nation or group of nations. Compromise is the hallmark of what happens in the real world.

I have said that I am a supporter of the free market. I recall the former Prime Minister speaking in the House about nuclear defence. She said that we cannot unilaterally disarm while other countries have nuclear weapons. Equally, much as I should like the whole world to disarm and allow a free market to operate, as long as other countries support their industries we must intervene to do the same. That is only logical.

It is important to consider how we intervene. Some years ago, a Japanese Prime Minister said that Japan intervenes, but the difference between Japan's intervention and that of Anglo-Saxon countries--his phrase--was that we intervene to support our weak industries while Japan does so to make its strong industries stronger. That was probably true in the 1970s, but it is no longer true. We are intervening now, delicately but effectively, to support industries that are doing well and to help them to do even better. How well are we doing? We are exporting 25 per cent. of what we produce. We are a great maritime nation and a great trading nation, and there is nothing wrong with being proud of flying the flag. Our per capita exports are greater than those of Japan or the United States of America.

The hon. Member for Leeds, Central said that I was reading out a Conservative central office brief, implying that there was some lack of authenticity about it. I have certainly read my brief--I hope that the Whip has heard that--but I would add that the information comes from the OECD, the International Monetary Fund and "Eurostat". The information is thus authentic.

Despite the recession overseas, our export volumes are at a record high. We can be triumphant about that. To some degree, our leaving the ERM had something to do with it. It has given us a competitive exchange rate and

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some of the lowest interest rates in Europe. That will encourage our business men and manufacturers to invest, and they will be able to borrow more easily and service their debts. However, I quite agree with the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), who said that British banks are often very conservative about lending to manufacturers. That certainly coincides with my experience. It is a sad reflection on banking in this country that our bankers, particularly high street bankers, go to school and university and then straight into banking, with no experience of manufacturing. It is galling trying to put a proposition to a banker only to be told by some pipsqueak that in his opinion the loan would be risky.

Mr. Stephen : Does my hon. Friend agree that the pipsqueak in question is likely to say, more often that not, "I am sorry ; I have no authority--the matter will have to be referred to head office"?

Mr. Fabricant : I agree with my hon. Friend. It is a sad indictment of banking that there are pipsqueaks not only in the high street banks but in head offices, too. However, there are fewer of them in the merchant banks where there is a far greater tradition of the entrepreneurial spirit of adventurous lending. There is still a gap, although it is being narrowed, between the amounts being lent by high street banks and those lent by merchant bankers. It is sometimes difficult to borrow money for industrial development, but when it can be found interest rates are encouragingly low.

One of the advantages of membership of the ERM was our ability to control inflation. In 1977-78, inflation was 27 to 28 per cent. It was almost impossible to compete in world markets for long-term contracts that had to be priced over six months or a year because prices could not be maintained. Tenderers had to anticipate inflation and set rates abnormally high, making tenders even more uncompetitive.

The news today of inflation of 1.3 per cent., which is the lowest in my lifetime, is to be applauded. I am delighted that we left the ERM and I can see no immediate prospect of our returning to it. I hope that the Government will continue to follow their tight fiscal policy so as to maintain low inflation, low interest rates and competitive exchange rates, while encouraging growth. For the third successive quarter there has been a reduction in unemployment. Britain enjoys the lowest corporation tax in the European Community. Companies have to operate in an environment that encourages trade and business, and low corporation tax is vital because it encourages not only British businesses but foreign businesses to invest in Britain.

Strikes have been mentioned. As I have said, inflation is the lowest that I have known in my lifetime. Strikes are at their lowest level since 1891, which is well before my birth and, I suspect, before yours, Mr. Deputy Speaker. In 1979, 29 million working days were lost through strikes. The hon. Member for Jarrow (Mr. Dixon) may say that that was the year of the winter of discontent and may wish to be excused from taking the credit for that. However, in 1978, 9 million working days were lost through strikes. Last year, only 500, 000 days were lost, but even that is too much.

Over the past 14 years, we have transformed industrial relations, and that is another reason for United Kingdom

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businesses beginning to thrive again. We have had huge amounts of overseas investment and for that we should again fly the flag. We are but one of 12 EC nations, yet we attract more than 40 per cent. of all new inward investment. That statistic is often quoted in the Chamber, but it is worth repeating. Although it is not the Government's job to run companies, they have lent a helping hand by creating the environment in which business can thrive.

One of the environments that has been created is non-compliance with the social chapter. Jacques Delors has said that this country has become an investors' paradise. I think that he was criticising us, but we should be proud of that. The Labour party said that it abstained in the vote on Third Reading of the Maastricht Bill last night because it did not want to support the treaty without the social chapter. As non-adherence to the social chapter has created jobs, it is extraordinary that the Labour party, which I am convinced wants that to happen, still supports a policy that would create further unemployment. Perhaps the true motive for abstention last night was that it did not want to show the divisions within its own ranks.

The Government have given another helping hand--to the Export Credits Guarantee Department. Up to a few years ago, other countries enjoyed an advantage over us. I remember competing in nations in southern Africa and the far east and in Kenya against firms such as Siemens, which had cover from HERMES, the German equivalent of the ECGD. There are similar organisations in Japan and elsewhere. On 6 April 1992, ECGD rates were reduced by 20 per cent. In the autumn statement last year, cover in key markets went up by £700 million and in the 1993 budget, a further £1,300 million went into ECGD cover. So far from being at a disadvantage compared to HERMES, the ECGD now not only competes on an equal footing but gives British exporters a positive advantage over many of its competitors.

I, too, join my hon. Friend the Minister in complimenting the President of the Board of Trade on having extracted money from the Treasury. That is money well spent, which was worth investing. Incidentally, I hope that my right hon. Friend the Foreign Secretary will be equally successful in getting money out of the Treasury when it comes to establishing British embassies abroad. The Department of Trade and Industry and the Foreign and Commonwealth Office are co-operating far better than they used to. It is good to see the DTI having representatives in British embassies. However, we have British embassies in only a few of the 15 new countries that used to be Soviet socialist republics. The German Foreign Office has managed to establish embassies in all 15. We need representation there, as my hon. Friend the Member for Gloucester (Mr. French) has said. My hon. Friend the Minister has another excellent colleague--my hon. Friend the Member for Tatton (Mr. Hamilton), the Under-Secretary of State for Corporate Affairs, who is in charge of deregulation. That is a subject close to my heart, as I agree with Henry David Thoreau, who said in America as far back as 1849 :

"Trade and commerce, if they were not made of rubber, would never manage to bounce over the obstacles which legislators are continually putting in their way."

Let us try to sweep aside as much regulation as possible, leaving only that which assists exporters.

Last night, when we endorsed the European Communities (Amendment) Bill by giving it a Third

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Reading, we also endorsed the ability of my right hon. Friend the Prime Minister to negotiate subsidiarity into the treaty. Although "subsidiarity" is a ghastly word which means nothing to 99 per cent. of the population, it is a tremendously important facet of the Maastricht treaty. As I said, no treaty or contract has a monopoly on virtue or evil. Nothing is that simple in the real world. Even so, subsidiarity is a vital ingredient.

Let us not forget that subsidiarity can be applied not only prospectively but retrospectively. I hope that that means that we shall be able to sweep aside much of the legislation that this Parliament has had to rubber stamp and which has proved an obstacle to our trade and industry. I am sure that the same has applied in other EC states. I am pleased that we have sent the Bill to the other place, where I hope its progress will be expedited.

The Conservative party and the nation have nothing of which to be ashamed with regard to exports. We must balance supportive intervention with the invisible hand of the free market. Britain will remain and grow as a great trading nation so long as the Department of Trade and Industry continues to balance interventionist policies with support for exporters, a task at which it has been eminently successful in the past couple of years.

12.11 pm

Miss Emma Nicholson (Torridge and Devon, West) : I am pleased to be here on a Friday. That is an unusual statement to make for an hon. Member who represents a far-flung constituency. I was anxious to be here because of the nature of the debate and because it reflects on my constituency, as it does on most parts of the United Kingdom, for without exports many of the businesses in the area which I represent could not survive. In the modern world, we need Government assistance for exporters, and that assistance can be provided in a variety of ways.

I shall concentrate on many of the problems that companies face in my constituency as they strive to export and survive. I shall refer to some of the ways in which the Government have assisted and will continue to assist and point out ways in which they could do more without indulging in the sort of massive intervention which I could not support.

Industries and exports come in many shapes and sizes, so it may not be inappropriate for me to begin by congratulating Arsenal on the team's wonderful win last night. It not only won the cup final but, shortly before, won the league cup. Much was said by the hon. Member for Leeds, Central (Mr. Fatchett) about the need for manufacturing industry. Perhaps he is not aware that the international coverage of last night's wonderful match earned our television producers good foreign exchange. It is outdated to identify exports simply as coming from the manufacturing and service sectors.

I listened carefully to the hon. Gentleman's speech and regretted bitterly that there were so few Labour Members present to hear it. Perhaps the Labour party was too frightened last night to whip its Members or even to encourage them into supporting the Government's ratification of the Maastricht treaty. I believe that they were wholly wrong to have been so fearful. After all, the Maastricht treaty merely fleshes out many of the concepts contained in the Single European Act 1986. The Single

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European Act has been not only embedded in our legislation since 31 December but has become a fact, an actuality. Membership of the European Community, together with the Single European Act, will probably do more to assist our exports than any other single Act of Parliament has ever done.

I represent a farming constituency and farmers are hands-on experts on the European Community. It is ironic that sometimes the success of exports reflects adversely on jobs in the United Kingdom. For example, 92 jobs were reported lost two weeks ago in Torrington, a small town in my constituency whose early manufacturing success was built on being Britain's pre-eminent glove producing town. There were two wonderful businesses there in the 18th century. Subsequently, we had English China Clays and some opencast mining, which assisted. Unfortunately, the glove industry has gone. Ladies and gentlemen no longer wear gloves.

At present, because mine is an agricultural constituency, much of the work that Torrington has managed to create is centred on two factories--a dairy business, which recently closed with devastating job losses, and a fresh meat company with a large abattoir, which is owned by Hillsdown Holdings.

I tell the story because it shows the harshness of successful exporting. Dartmoor hill farmers have developed a niche market for small lambs, exported live and on the hoof. Spanish, French and Italian trucks are now loading up with small lambs that weigh about 12 kilos, which is smaller than the normal size that we eat in the United Kingdom. The lambs are transported across the channel and are killed in France, Italy or Spain. They are then stamped as having originated from the country in which they were killed. It is a successful, newly created export trade that has now grown to include export of some of the lowland lambs.

Those 92 job losses in the fresh meat company derive directly from the success of the Dartmoor hill farmers and the lowland farmers in exporting live lamb on the hoof to be killed in other EC nations and stamped as having been bred there. The lambs are then purchased by housewives in those countries, whose families eat the excellent Devon lamb, fondly believing it was bred in their own country.

The result is interesting. The price of lamb is higher on the hoof than it would have been dead weight killed in the abattoirs of Torrington, which has driven up the price of lamb in the United Kingdom and successful exports mean job losses in the United Kingdom.

That story shows the complexities of industry. As much as I welcome the newcomer to the Opposition Front Bench--the hon. Member for Ogmore (Mr. Powell), who is a friend of mine--I regret that the formal Opposition spokesman, the hon. Member for Leeds, Central, has seen fit to leave the debate. I make that not as a party point but because I want seriously to criticise some of the hon. Gentleman's comments. The hon. Gentleman spoke of manufacturing versus service industries. I took the opportunity to research his background. I would not criticise anyone who received his education at the London School of Economics, became an assistant lecturer there, and went on to become a lecturer at another university. That is nothing to rubbish but a splendid learning curve, and I honour the hon. Gentleman's achievements.

However, as far as I have been able to ascertain, the hon. Gentleman has no experience of industry. His

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complete lack of experience of industry was reflected in his speech--in the lamentable ignorance he displayed of many of the subjects that he tried to discuss. I am aware that the hon. Gentleman was a lecturer in industrial relations, but, judging from his responses to the interventions of my hon. Friends, I doubt whether he has experience of industrial relations other than in negotiating the salaries of university lecturers. I feel powerfully that experience of industry is a great help when debating a subject of such enormous moment.

Whether an industry is described as being in the manufacturing or service sector is only a matter of internal definition. Those are just labels that we chose to attach to an export product at a particular moment in time. My first 10 years in business were spent in the computer industry--mainly software, and a short time in hardware. That industry has seldom needed Government intervention--and on those few occasions when it has, it proved to be ineffective. It has been a success story despite being left alone, and it is a growing success. I believe that computer software is defined as a service industry.

President Reagan said that the United States should not expect to earn its living in the world by opening doors and bowing and scraping all the time. Nor should this country. That is not my definition of a service industry. I do not believe--and this may be heresy to some hon. Members who are not present--that we can earn our living in the world by pushing up the prices of houses and selling them to each other. That is a false concept of recovery. For no other capital investment or purchase are rising prices seen as a good thing. They are bad. We should seek to keep house prices as low as possible. Judging recovery by house values, as estate agents do, is folly. The only basis on which the United Kingdom should judge its own performance or recovery is exports. My hon. Friend the Minister pointed out the truth of that in his excellent and outstanding speech, which I warmly welcomed--though we have not yet discussed sub-post offices. Nevertheless, my hon. Friend made a first-class speech by any standard. I will make his point in another way by reminding the House that, of all nations, the United Kingdom needs a high export base. We are not blessed with magnificent natural resources. We have North sea oil, but our coal is deep and difficult to extract, and it is often difficult to obtain a competitive price for it.

As an island nation, we excelled in shipbuilding in the days long gone when ships were a primary way for moving people around. The situation is now different.

We need exports far more than most of our competitors do, and at a far higher level. Some 30 to 35 per cent. of our gross national product must be created by exports if we are to have a satisfactory balance of payments. Export trade is enormously important ; it is the most fundamental trigger to recovery. It is the only valid pointer and it is the one factor which will make the United Kingdom fully competent economically and fully compeemely good example of the artificial division between services and manufacturing? The writing of software is intellectual property and its export could be regarded as the export of services. The computers themselves are hardware and their

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export could be regarded as the export of manufactured products. In reality, they are both parts of the same integrated industry.

Miss Nicholson : I thank my hon. Friend for his perceptive comments. He mentioned the export of intellectual property. I am sure that my hon. Friends, especially the Minister, are well aware that the European Community sees the information market as being of equal value and equal importance to the physical market. Following the introduction of the Single European Act, the Brussels bureaucrats, for whom I have much respect, have set their minds to seeing how we can create a secure and yet free-market framework for the transmission of intellectual property and for the free flow of information. In other words, they have decided that the information market is as important as the physical market.

The hon. Member for Leeds, Central criticised heavily Conservative Members who took the time and trouble to visit British embassies and, although he did not mention them specifically, high commissions. He implied that Conservative Members were going round the world at Government expense and that they were not doing a proper job. I am delighted to tell him that, while a Member of Parliament, I have taken the opportunity, at my own expense, to visit a number of embassies and high commissions and to discuss British exports with the commercial attaches. I have had the good fortune to see the success story that many British industries have achieved in exports. One of the British success stories in exports that is rarely identified here is the Commonwealth Development Corporation. It is Britain's investment arm of our overseas aid effort. I stress that it is Britain's investment arm because I am well aware that our debate concerns exports and not aid. This effort has been going on since 1947 and is now working in 45 nations. It was gratifying to have the opportunity to be in Papua New Guinea and to see British machinery working on sugar plantations and palm oil plantations. It was wonderful to see the way in which British trade expertise, Government and private, blended together to offer Papua New Guinea the opportunity to build up its trade. That is an export industry which we fail to honour here as we should.

It is interesting to see the revival of a gold mine in Indonesia with British trade expertise--perhaps Department of Trade and Industry expertise in an advisory capacity. It is interesting to go to Thailand to see prawn farming and to see a huge palm oil plantation on degraded land which has allowed dispossessed peasants the opportunity to create a trade.

The United Kingdom is often wrongly criticised by ill-wishers who are British citizens for combining British trade with aid. Having seen how committed British industry workers are to the people whom they seek to serve in the poorer nations of the world, I think that it would be folly to withdraw our expertise. It would lead to the cessation of the beginnings of trade in some of the worst areas of the world that I have ever visited.

Those areas of the world are a lesson to us. In visiting factories in Indonesia or other parts of south-east Asia, the lesson that one learns is harsh : that the competition that we face far outstrips our energies and efforts. It is a shock to see people eagerly going to work in factories, where they work at two or three times the speed of factory workers in many parts of the United Kingdom. They produce goods

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and package and export them with delight, speed and excellence and with the benefit of a loose free-market structure.

Not for one moment do I want this country to revert to slave labour. Reference was made earlier in the debate to the reason for so many manufacturing companies--manufacturers of machine tools, manufacturing parts, clothing and footwear--having gone into decline, but the reason, surely, must be the effect that over-powerful trade unions once had on British industry. They had British industry round the throat and throttled much of it to death. That fact cannot be ignored.

We cannot pretend that two decades of over-strong unions never existed. We should not cease, therefore, to pay credit to the Conservative Government who, in successive terms of office, have altered the balance and made it possible for British industry again to export successfully.

The Government have embarked upon an excellent initiative in my constituency. I repeat that exporting plays perhaps the most important role of all in Torridge and West Devon. Before I turn to the two companies that I intend to mention briefly and ask the Minister for his comments, may I say how much I admire the Torridge district council's chief executive, Richard Brasington, and his staff for the huge efforts that they have made to link our part of Devon, Torridgeside, with a similar part of France. To build trade links at that level is an interesting initiative. It is going well, and I believe that it will bear fruit.

Many companies in that part of my constituency are exporters. The North Devon Manufacturers Association is an excellent body. One of its key members is Jamestan Engineering Ltd., whose founder chairman and chief executive is Bryan Shugar. Bryan has been discussing with me recently the new export centre that has opened just outside my constituency--but nearby, in Barnstaple--whose purpose is to assist industries in north Devon and in Torridgeside that want to do business in the European Community. He tells me that the centre is supported by the Department of Trade and Industry, North Devon county council, Torridge district council, the Devon and Cornwall TEC, whose chairman, Eric Dancer, is the chairman of Dartington Crystal, which is in my constituency, and the North Devon college--a first- class further education college.

Bryan suggests that this new initiative, the export centre, will provide an excellent opportunity for companies such as his to take the fast route into Europe as and when potential business opportunities there become available.

Mr. Shugar made another point of which, perhaps, we do not take sufficient account ; certainly the hon. Member for Leeds, Central did not do so. I am referring to the peace dividend. Mr. Shugar says that there is an inevitable and rapid decline in defence spending in the south-west region. Of course, that must be so, because, otherwise, the peace dividend would be just a fiction. It is therefore all the more essential that we achieve as close commercial links as possible with Europe to ensure our future growth and prosperity.

I shall briefly describe the North Devon Export Centre. Its aim is to assist businesses, especially small businesses, in north Devon to develop profitable sales in Europe and

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other parts of the world. It will provide advice on the sales potential of members' products ; help with locating suitable potential customers or agents ; and advise on leaflet and translation needs and on documentation, freight and value added tax.

The centre will arrange meetings and seminars for members on specific European business possibilities. It will produce a broadsheet of members' products for distribution, initially in France and the Republic of Ireland. It will encourage visits to our area by European trade groups and individuals so that they may meet its members. It will develop an information section on all the DTI services, exhibitions and other relevant data. It will provide members with names of translators, freight forwarders, and so on. It will even provide members with a fax service and, if required, help with initial European and overseas mail, for which a nominal charge will be made.

It is a great pleasure to welcome the setting of the centre, which opened only on 4 May. It is very new and is looking specifically at ways to help small businesses to win business in Europe. It is supported by the DTI and the other organisations that I have already mentioned. That is the good news.

This is a good moment for the hon. Member for Leeds, Central to come back into the Chamber. I have criticised him, but now I propose to agree with him on one matter. I, too, have a shipbuilder in my constituency and I want to convey to my hon. Friend the Minister some thoughts from Appledore Shipbuilders Ltd. Its managing director, Mr. Jim Wilson, is as excellent as Mr. Bryan Shugar of Jamestan Engineering. However, his view of the Government's support for exports of British shipbuilding is not as glowing. He has the distinct impression that European shipyards--in particular, Italian, Dutch and German--have been getting more support than British yards. Appledore has created a niche market in dredgers. Mr. Wilson cited the case of an order from Indonesia for three dredgers which was awarded to a west German shipyard that then subcontracted the work to east Germany. That is not a political statement ; it is just a geographical identification. The price offered by the west German shipyard was almost twice that of Appledore, but the German Government made a financial aid offer of 25 years' credit with a holiday for the first eight years.

Mr. Wilson told me that east German shipyards receive 36 per cent. intervention funding, compared with a maximum of 9 per cent. for British yards. He asks that the Government--and, indeed, I as his Member of Parliament--insist that all shipyards build on a level sea. Mr. Wilson gave another example. Just over a year ago, Appledore was the front runner to receive an order for a dredger from a Belgian owner. The order was blocked because the Belgian Government insisted that it be given to a Belgian shipyard. That was confirmed to him by the managing director of the Belgian shipping company. Perhaps we play too fair and we underestimate the need to be patriotic. I make that suggestion on behalf of the Appledor Shipbuilders.

In a speech last week, the Financial Secretary to the Treasury said :

"Enterprising individuals are held up as role models on the basis of their record for product innovation, service

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improvement or production efficiency They are a testament to the system's capacity to mobilise human inventiveness, drive and originality."

It is important to encourage entrepreneurs such as Bryan Shugar and Jim Wilson by recognising the fact that, when they ask to be heard, they are not seeking major Government intervention internally in a free-market system--indeed, most senior business men I know ask that the Government leave them strictly alone--but for the Government to do their best to ensure that other Governments play by the rules that we have already accepted.

As treasurer of the Positive European group, I supported the Maastricht treaty from start to finish, and I know that it will introduce a measure of discipline. I ask the Minister to assure me that he and other Ministers will do all in their power to ensure that the Government and the Brussels bureaucrats manage to level the great unfairness that Jim Wilson has so cogently identified.

Lest the hon. Member for Leeds, Central thinks that I agree with him too much, let me tell him that when the Appledore shipyard was in public hands the work rate was much slower. As soon as it went into private hands, productivity improved immensely. For example, two dredgers were being made instead of one. That made it possible for the shipyard to compete in the wider world.

Mr. Deputy Speaker, you have been kind enough to allow me time to speak this morning for which I am grateful on behalf of my constituents who export and those who wish to do so. I am grateful to the Minister for his work and for the effort he has made this morning. I know that he has been listening and that he will be kind enough to take my thoughts into account.

As a supporter of economic and monetary union, I was sorry that we went into the exchange rate mechanism late and dropped out when we did. Had the Opposition spokesman been more accurate in his perception of me as a woman and not as a man, I could have told him that I sought devaluation as early as February or March last year. Perhaps because of my own history in exporting, I felt that our currency was above its natural level. However, I dislike immensely the fact that we had to devalue, and I am very sorry that it was forced on us.

I look forward to the day when our exports are running so high that we shall naturally re-enter the ERM. Although I am aware that it cannot be soon, I see it on the horizon. With the ratification of the Maastricht treaty, I am confident that the various stages outlined for a single European currency and for convergence will be reached in five, six or seven years, although who knows exactly when? Under this Government, the United Kingdom is a success story and will be successful in export terms in the future. I urge the Government to continue their good work and the Minister to take my comments on board.

12.43 pm

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