House of Commons Hansard Debates for 21 Jul 1993

Sir Thomas Arnold : As competitiveness is a race among nations and as that race is getting tougher, will my right hon. Friend outline the particular steps that he proposes to take to reduce the burden on business of regulation from Brussels?

Mr. Sainsbury : I very much agree with my hon. Friend that one of the ways to help British business to be even more competitive is to reduce the burden of regulation. That is why I am delighted that my hon. Friend the Under-Secretary of State for Corporate Affairs is taking such energetic action in pursuit of my right hon. Friend the Prime Minister's deregulation initiative. My right hon. Friend the Prime Minister presided yesterday over a meeting at which we discussed further progress on deregulation. I assure my hon. Friend that we will continue to give deregulation and lifting the burden of bureaucracy from business, particularly from small businesses, the highest possible priority.

Dr. Berry : If the Minister is so satisfied with Britain's international competitiveness, will he please explain why last year we had a record trade deficit in the midst of the worst recession since the 1930s? The Government have presided over the worst growth rate of any Government since the war.

Mr. Sainsbury : I am sure that the hon. Gentleman would not want anyone to be satisfied with our competitiveness because, whatever stage we may have reached, we can be sure that our international competitors will not be resting. They are also looking at their competitiveness. We find that Britain did particularly badly in the 1960s and 1970s when, for too much of that

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time, we followed the kind of subsidy policies that are still so energetically supported by the Opposition Front Bench. The interesting thing about the 1980s is that we did markedly better and, in terms of productivity, we did better than all our major competitors. We caught up a lot of ground, but we still have further to go. That is why the Government will continue to give priority to improving the competitiveness of British industry.

Mr. Nicholas Winterton : In fully supporting the views expressed by my hon. Friend the Member for Hazel Grove (Sir T. Arnold) and in supporting my right hon. Friend the Prime Minister's initiative on deregulation, will my right hon. Friend give me and the House an assurance that, prior to the Government introducing any legislation in future, the implications for our international competitiveness will feature as part of the consideration of that legislation and its implementation?

Mr. Sainsbury : I am delighted to give my hon. Friend just that assurance. That assessment of the impact on companies, particularly small companies, will precede any further regulations. It is perhaps because I am able to give my hon. Friend that assurance that I was interested to note that the Engineering Employers Federation's industrial strategy interim report says of my Department that we "are supportive, positive and helpful and we"

the EEF--

"are happy to acknowledge this".

Mr. Bell : The House will welcome the Minister's statement that our competitiveness is steadily improving. The Opposition accept and welcome that, as we also welcome the attack on regulation. However, most of the regulations on the statute book are a consequence of 13 years of Conservative Government, and not the consequence of Brussels. If the Department of Trade and Industry's competitiveness unit uses gross domestic product per head as a measure of competitiveness, in accordance with the Department's leagues, we are 18th out of 24 in the Organisation for Economic Co-operation and Development league. How does the Minister propose to improve that record with improved investment and improved skills in our work force when we have a shortage of skills and investment?

Mr. Sainsbury : Of course, skills in the work force are an important part of the input into the competitiveness of United Kingdom industry. That is one reason why we have already taken so many measures to raise skills in our work force. Almost all those measures have been opposed by the Labour party ; they include the national curriculum, testing, training and enterprise councils, national vocational qualifications, investors in people, national education and training targets and training credits. Those measures have been consistently opposed by the Labour party.

British Telecom

11. Mr. Bates : To ask the President of the Board of Trade what representations he has received from those wishing to renationalise British Telecom.

Mr. McLoughlin : I know of no such representations to renationalise British Telecom, even from the Opposition Benches--[ Hon. Members :-- "Oh"] I am sorry. We still have some people who would like to see that. The Government

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are convinced that the privatisation of British Telecom and the introduction of competition into the telecommunications market has been largely responsible for British Telecom's transformation into a highly successful and internationally competitive telecommunications operator.

Mr. Bates : Does my hon. Friend think that that almost complete silence is due to the fact that a three-minute cheap rate telephone call is now half the price in real terms that it was 10 years ago? Is not it due to the fact that there are now 96,000 telephone boxes, of which 95 per cent. are operational, as opposed to 50 per cent. 10 years ago? Does my hon. Friend think that those improving statistics, of which we are all aware, may have been of benefit to people sceptical of the benefits of privatising the rest of the Post Office at the earliest opportunity?

Mr. McLoughlin : I am grateful to my hon. Friend. I think that I have made the Government's position on the Post Office fairly clear in my answers to earlier questions, but he is right. There have been dramatic improvements in the performance of British Telecom, in spite of all the scare stories that we consistently hear from Opposition Members at times of privatisation. There were scare stories that telephone boxes would go. My hon. Friend is right to say that more boxes are in operation ; what is more, they are working, which is quite a change from the position 10 years ago. There has been an improvement to the customer and to the country.

Mr. Barnes : What were the costs of the advertisements to encourage people to register for British Telecom shares? Will the Minister have a word with a Home Office Minister to find out how that compares with the money that was spent on encouraging people to put their names on the electoral register? For instance, last year nothing was spent on the latter in Northern Ireland, although a considerable sum was spent there on encouraging people to register for British Telecom shares. Does not that display the Government's incorrect balance of values? They push ahead with privatisation, when people try to grab what they can, rather than being involved in the democratic process.

Mr. McLoughlin : I was not sure from that question whether the hon. Gentleman was telling us that he favoured renationalisation. Since privatisation, the service provided by British Telecom has dramatically improved, and we even see occasional signs of approval from Opposition Members.

Mr. Ian Taylor : Does my hon. Friend agree that the risk from the Labour party is not simply of renationalisation but of other idiocies, such as a windfall tax on profits to cover up its overspending in other areas? Will he draw the attention of the millions of shareholders who subscribed to the successful share offer to the fact that they are likely to be savaged if there is another Labour Government?

Mr. McLoughlin : I agree with my hon. Friend that the supposed windfall tax that the Opposition were talking about would do great damage to British Telecom's future investment. Opposition Members speak with different tongues, however, because only yesterday the hon. Member for Livingston (Mr. Cook) issued a press release which ended by saying :

"These twin reforms, taken together, will benefit every industry, every citizen and every BT shareholder."

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I have yet to understand how their proposed windfall tax would benefit shareholders.

Mr. Cousins : Surely the Minister recognises that after many millions of pounds were spent pushing the BT share sale, a few weeks ago a prospectus finally emerged in which BT mentioned six major issues of fair competition and fair regulation, including one on which it is taking the Government to court? In the light of that, does the Minister advise new shareholders to hang on to their shares?

Mr. McLoughlin : Here they go again, totally criticising our intention to create wider share ownership and trying to undermine what has been a very successful share offer. We are proud of the fact that we have returned British Telecom totally to the private sector and we are amazed at the turnaround by the Opposition Members. We are proud of our wider share ownership. We will not do anything to destroy it. The Labour party would.

Mr. Maginnis : Although one welcomes and supports competition in the telecommunications industry, is the Minister content with the fact that Mercury is creaming off the best business while British Telecom continues to meet the need to invest in and service the more remote rural areas, such as my constituency?

Mr. McLoughlin : The hon. Gentleman raises a particular point. Many representations are made to the director general of the Office of Telecommunications. The director general will obviously consider the representations that are made to him. That is a very effective way of doing so. We should welcome competition in the telecommunications industry ; it is beneficial to the consumer. Obviously, the director general of Oftel will judge all those matters when he makes his decision.

Deregulation

12. Mr. Jacques Arnold : To ask the President of the Board of Trade if he will make a further statement on progress in lifting the burden of unnecessary regulation on business.

Mr. Neil Hamilton : At the Prime Minister's progress meeting on deregulation held yesterday, Ministers welcomed progress on specific deregulation measures to reduce the burden on business and agreed to introduce an important deregulation Bill as soon as possible. Ministers also agreed to publish a document called "Working with Business : A Code for Enforcement Agencies" and a report on the operation of EC law in the United Kingdom ; to review how duplication between enforcement agencies might be eliminated ; to require a small business litmus test of the impact on them of any new regulations ; and to set up an eighth task force focusing on charities and voluntary organisations.

Mr. Arnold : I welcome the progress that is being made with the campaign to hack at red tape. Does not it contrast with the legislation, bureaucracy and interference that would follow from the adoption of the social chapter which is supported by two Opposition parties?

Mr. Hamilton : I know that dinosaurs have become much more popular recently as a result of films, but Opposition Members really must get rid of their neanderthal attitudes to the competitiveness of British

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industry. It is only by continuing to reduce the burdens on industry that we can take full advantage of international competitiveness, which will ultimately be reflected in increased employment opportunities.

Mr. Turner : Does the Minister accept that millions of people would welcome more regulations, particularly when dealing with companies such as Ever Ready, which has closed a factory in Wolverhampton, with the loss of 80 jobs? A constituent of mine visited Woolworths in Wolverhampton and found on sale Ever Ready batteries that were manufactured in China.

Mr. Hamilton : The hon. Gentleman must accept that bureaucracy and red tape do not do business in this country any good at all. The consequence of imposing extra legislative burdens on companies to increase their operating costs would simply make us less competitive. What we should be concerened about in the European Community is not what Mr. Delors called social dumping in moving jobs from France to Scotland, but moving jobs outside the European Community altogether to the deregulated economies of the far east and elsewhere.

Sir Michael Grylls : When my hon. Friend considers deregulation measures, will he consider abolishing the statutory audit? In particular, will he listen to the views of business organisations, especially the Small Business Bureau, which have made it perfectly clear that there is no reason why there should not be total abolition of the statutory audit for all privately owned companies? It serves no purpose to any outside trader dealing with privately owned companies ; therefore, let us get rid of it. I hope that my hon. Friend will be able to to do so very soon.

Mr. Hamilton : I am confident that we will be able to announce in due course a relaxation of the current audit requirements on small companies. The results of the consultation exercise in which we have been engaged for some time will be evaluated shortly. I am delighted that my hon. Friend and the Small Business Bureau have made representations to me as part of that consultation process. I hope that we shall be able to announce a radical change, to the benefit of business, in due course.

Mr. Nigel Griffiths : As the Minister has had a year to study the Institute of Directors' proposals to abolish 50 licences, including licences in respect of driving instruction, the retail sale of alcohol, the running of theatres and cinemas, and minicabs, will he repudiate the proposals to leave the public without proper protection and ensure that they are not included in his Bill?

Mr. Hamilton : I shall repudiate the hon. Gentleman and the Labour party. They have done nothing constructive to contribute to the debate. There are many ways in which we can ensure effective regulation to preserve the interests of the wider public which do not involve licensing. As part of the deregulation review, we shall be reconsidering all the legislative burdens on business of any kind to ensure that they are proportionate to the benefits that are claimed to flow from them. It can never be in the interests of business or of the people whom business employs to impose unnecessary costs on them.

Mrs. Lait : Does my hon. Friend accept that many Conservative Members are pleased to hear about the new initiatives to consult small businesses about the regulations

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that bear so heavily on the people who run those businesses? Is he happy with the means of consulting all small businesses? Has he any proposals to improve the consultation process?

Mr. Hamilton : We agreed yesterday that, in future, when we consult before legislation is put before the House, we will first view our proposals from the perspective of small business. Too often in the past, the Government have listened to what big business has had to say and to business organisations, which may not in themselves be wholly representative of all the small businesses that are active in their economic sectors. It is important that small businesses are encouraged because it is from small businesses that big businesses and future jobs will grow.

Domestic Gas Appliances

13. Mr. Connarty : To ask the President of the Board of Trade what steps he is taking to reduce the number of deaths caused by carbon monoxide poisoning in the home from unsafe gas appliances.

Mr. McLoughlin : The number of deaths from carbon monoxide poisoning from gas appliances is a matter of concern. That is why I welcome the introduction of the EC gas appliances directive, which sets new safety requirements for gas appliances.

Mr. Connarty : I am grateful to the Minister for that response, but it seems highly inadequate given the estimate that each year there are 200 deaths in the home from carbon monoxide poisoning caused by badly installed and poorly maintained gas appliances. Does the Minister share with me and the Council of Registered Gas Installers the concern that there are 40,000 cowboys installing gas appliances, yet CORGI members are the only people legally entitled to do so? Will the hon. Gentleman bring some influence to bear on the Health and Safety Executive to chase and prosecute the cowboys in what is basically a trade in death, rather than pursuing householders and landlords, which seems inadequate action in the face of such a threat?

Mr. McLoughlin : Any death from carbon monoxide poisoning is tragic. We do hear of a number of such cases, although I do not recognise the number quoted by the hon. Gentleman. My information is that there are between 30 and 40 such deaths a year. However, arguing about the figures does not help. I assure the hon. Gentleman that the Health and Safety Executive takes its responsibilities very seriously.

Pit Closures

14. Mr. Mullin : To ask the President of the Board of Trade what funding he will provide for British Coal to enable it to prevent pollution of the River Wear caused by the closure of pits in Durham.

Mr. Eggar : It is for British Coal and the National Rivers Authority, in the first instance, to decide what action may be necessary in respect of any threat of water pollution which may be related to any proposed pit closure.

Mr. Mullin : Is the Minister aware that the NRA is saying that if British Coal were to turn off the pumps at Easington when the pit closes, the River Wear--which

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supplies 20 per cent. of the water for the city of Sunderland--would be devastated by pollution? Is he further aware that British Coal is flatly refusing to accept any responsibility for the consequences of turning off the pumps, other than giving 14 days' notice? What is he doing to ensure that British Coal lives up to its responsibilities?

Mr. Eggar : The hon. Gentleman is not entirely accurate.

Mr. Mullin : Oh yes, I am.

Mr. Eggar : No, the hon. Gentleman is not entirely correct. If he had read the letter to him from the NRA, he would know that he had misquoted it. As I understand it, the problem relates to pumping issues at pits above Easington that have been long abandoned. It is clear that there would be an issue were pumping and production at Easington to cease. There has been a careful examination of the matter, both by the NRA and by British Coal. There is no question of any rapid decision being taken to cease pumping in that section of the Durham coal mines.

I assure the hon. Gentleman, as he was assured by my hon. Friend the Under- Secretary of State for the Environment last night, that full consultation is being carried out and there will be appropriate levels of co-operation between British Coal and the NRA.

Research and Development

15. Dr. Lynne Jones : To ask the President of the Board of Trade if he will make a statement on his policies to encourage United Kingdom manufacturing companies to increase their investment in research and development.

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Mr. McLoughlin : The best encouragement that the Government can provide is a stable economic environment with low inflation, low interest rates and low corporation tax, together with selective assistance, such as that provided by the Department in appropriate cases.

Dr. Jones : Are not United Kingdom manufacturing tools twice as old as German tools and three times as old as Japanese tools? Do not British companies spend twice as much on dividends as they spend on research and development? It is no wonder that we have such a massive trade deficit, which is unprecedented in a recession. When will the Government shake themselves out of the complacency shown by Ministers' answers this afternoon and learn from the Japanese and other Pacific rim countries, which are investing massively in research and development? Why do they not start by transferring savings from defence research and development to civil research? If they did, at least the Minister could boast that his Department's budget was somewhat larger than that of the Department of National Heritage.

Mr. McLoughlin : I am not sure whether the hon. Lady was trying to talk her question out. The fact remains that industry-funded research and development rose 28 per cent. in real terms between 1981 and 1991. Of the companies questioned by the Confederation of British Industry in an innovation trends survey, 50 per cent. planned to increase their research and development expenditure in 1993, which is very encouraging.

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