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Queen's Consent, on behalf of the Crown, signified.
Read the Third time, and passed.
1. Mr. Moss : To ask the President of the Board of Trade how many business links he will be opening in the next six months ; and if he will make a statement.
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : My Department is promoting the development of a national network of business links to provide a one-stop shop for support services for business. Three business links are now open, in Birmingham, Leicester and Congleton. By the middle of 1994, 30 will be open. My objective is to create a national network of around 200 outlets within the next two to three years.
Mr. Moss : Does my right hon. Friend accept that the business community considers his business links scheme as one of the most important initiatives to come out of his Department to promote manufacturing output and import substitution and to create new jobs? Will he assure the House that every effort will be made to speed the implementation of the one-stop shops to cover the whole country? Will he also encourage independent agencies, such as the Greater Peterborough training and enterprise council, which covers my constituency, which are setting up their own initiatives as a first step to achieving business link status?
Mr. Heseltine : I am grateful for the kind remarks of my hon. Friend. We will do all that we can to persuade the various agencies that are coming together to form the one-stop shops to move as quickly as is reasonable. There is one important caveat : we are determined to preserve the quality of the new services that are available and we would not wish to sacrifice quality for the number of units open.
Mr. Nigel Griffiths : In July 1992, the President of the Board of Trade announced his plan to set up one-stop shops. He then told the House in December 1992 about
"a major new strategy to establish one-stop shops"
and said that it was "critical that the 15"--one-stop shops
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"are seen as pace setters".--[ Official Report , 3 December 1992 ; Vol. 215, c. 414-17.]He boasted that he would
"revolutionise the delivery of support services for business."--[ Official Report , 15 April 1993 ; Vol. 222, c. 715 .]
On 17 February, he told the hon. Member for Aylesbury (Mr. Lidington) that he had had 57 bids to run those shops. On 17 March, he told the hon. Member for Langbaurgh (Mr. Bates) that he had a shortlist of 20 and on 15 April, he told the hon. Member for Dover (Mr. Shaw) that there would be 23 one- stop shops while on 19 May, he told the hon. Member for Taunton (Mr. Nicholson) that about 50 would be created. After all that, why has he opened only three in 16 months? Why have London and other parts of the country been neglected? Why has the right hon. Gentleman achieved so little despite four press releases, seven written parliamentary answers and a boastful statement in the House? Why is he even less effective than his party leader?
Mr. Heseltine : I am sorry to disappoint the hon. Gentleman, but I have not opened any one-stop shop. That is a matter for local initiative by local people. That is where the decision and the initiatives come from and that is the pace at which we can move.
2. Mr. Merchant : To ask the President of the Board of Trade what assessment he has made of the outlook for industrial production in 1994 in (a) the United Kingdom and (b) France.
The Minister for Trade (Mr. Richard Needham) : The OECD expects both industrial production and overall output to rise by more in the United Kingdom than in France this year.
Mr. Merchant : Does my hon. Friend agree that what he has just said illustrates the powerful benefits that flow from successful policies of low inflation, low interest rates, low taxation and falling unemployment? Does he agree that a comparison of British and French achievement over the past decade further illustrates the success of this Government's economic and industrial strategy?
Mr. Needham : As my hon. Friend says, the United Kingdom currently has faster growth, lower inflation and lower unemployment than does France. United Kingdom manufacturing output has grown faster than that of France between 1979 and today. It appears that when France has a socialist Government it falls behind ; when we have a socialist Government we fall behind France.
Dr. Marek : Nevertheless, does the Minister agree that if we compare the annual average rates of increase of industrial production between 1985 and the third quarter of 1993, the United Kingdom shows a rate of 0.7 per cent. whereas France shows a rate of 1.4 per cent? Is not the Minister doing a disservice to the country by bandying around selective statistics that can mean one thing or another? It would be far better if he provided us with a genuine set of statistics showing the trend, which, if we do not start in a dip or at a peak, indisputably show that France does better than we do in the long run.
Mr. Needham : The hon. Gentleman did not listen to what I said. I took the years from 1979 to 1993 and I did not even add the point that, as we are now out of recession
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and France is still in it, the gaps are likely to increase further. If manufacturing production in 1985 is taken as 100, between 1979 and 1993 Britain's manufacturing output grew faster than that of France. Instead of knocking the achievements of our industry, the hon. Gentleman should realise that we are competing successfully against one of our great and major competitors.Mr. Batiste : Is not another key difference between us and France the fact that over the past 10 years we have encouraged inward investment in high-quality manufacturing while the French have been relatively resistant to such investment? What assessment has my hon. Friend made of the impact of that investment on British manufacturing?
Mr. Needham : We have indeed attracted 40 per cent. of the European investment made by Japan and a similar percentage from the United States. The fact is that that inward investment--as Opposition Members now realise, although they did not before--has brought immense benefits to this country, in terms of improving our quality, productivity and competiveness. Under this Government, as my hon. Friend the Member for Beckenham, (Mr. Merchant) said, with low inflation and low interest rates this country is the best possible place in Europe for foreign investment.
3. Mr. Hanson : To ask the President of the Board of Trade what assessment his Department has made of the future prospects for the British aerospace industry ; and if he will make a statement.
The Minister for Industry (Mr. Tim Sainsbury) : Prospects for long- term growth in the aerospace industry remain good.
Mr. Hanson : In the light of the projected job losses in the defence industries which will impact heavily on the aerospace industry, will the Minister today give a firm commitment to implement the unanimous recommendations of the Select Committee on Trade and Industry, particularly those relating to defence diversification?
Mr. Sainsbury : As the hon. Gentleman knows, orders from the Ministry of Defence are a matter for my right hon. and learned Friend the Secretary of State. He will also know that, as a result of the peace dividend, which we all welcome, the number of such orders is likely to be significantly lower than it was in the 1980s. We discuss that matter with the industry and do what we can to help it overcome it. It is, however, a problem not just for the industry in the United Kingdom but for industries throughout the world. As the hon. Gentleman will be aware, the United States aerospace industry looks likely to be cut by about a third as a result of the drop in orders.
Sir Thomas Arnold : What steps is my right hon. Friend taking to maintain good trading relations with China? Is not that a major export market for aerospace?
Mr. Sainsbury : My hon. Friend is right to identify China and the whole Asian and Pacific rim area as a major source of opportunity for aerospace exports--not just of complete aircraft but of aero engines and equipment. My hon. Friend the Minister for Trade and the whole Government are giving a great deal of attention to that area.
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Mr. Fatchett : In The Observer last Sunday, the President of the Board of Trade claimed that there was now a partnership between the DTI and leading British companies. Against that background, can the Minister explain why every leading British aerospace company that gave evidence to the Trade and Industry Select Committee complained about the lack of support from his Ministry? Why is it that leading British aerospace companies, in contrast to their counterparts in France, Germany and America, cannot rely upon the Government for long-term help and for a strategic view of the industry's future? Is not it the case that the Government and the Ministry simply have no view of the long-term importance of Britain's aerospace industry?
Mr. Sainsbury : Perhaps the hon. Gentleman would like to study a little more carefully than he has the evidence that was given to the Select Committee and, if he is able, to develop a slightly closer dialogue with the aerospace industry. If he does, he will find that the situation is very different from that which he describes. I assure the hon. Gentleman and the House that the Government will continue to support this important industry in the way that we have done consistently and effectively since 1979, with a programme of support amounting to more than £1.5 billion.
Mr. Nicholas Winterton : My right hon. Friend will be aware of the immense importance of the regional jet division of British Aerospace based at Woodford in the north-west. It is especially important to my constituency and to that of my hon. Friend the Member for Hazel Grove (Sir T. Arnold), as well as to Cheadle and Tatton. What is the Minister's understanding of the current position in the negotiations between British Aerospace and the Taiwan Aircraft Corporation? In the spirit of partnership that is so vital to industry nowadays, what assistance are the Government giving to ensure that the negotiations are ultimately successful?
Mr. Sainsbury : I recognise the importance of that aerospace plant to my hon. Friend's constituency and those of my other hon. Friends. As he will be aware, we have kept in the closest possible touch with the company and have provided it with a great deal of assistance in the course of the negotiations. I understand that the companies have so far been unable to conclude a deal. However, talks on possible collaboration are continuing and I understand that AVRO, which is the name that British Aerospace has given to the venture, is considering other options. A welcome development is that the general fortunes of this business are improving.
Mr. Beggs : Will the Minister join me in welcoming today's announcement by the newly appointed Minister with responsibility for the economy in Northern Ireland that unemployment in the Province has fallen below 100,000? Regrettably, that is still 13.3 per cent. of the work force. Does the Minister share my concern that 400 redundancies have been announced at Shorts, the most efficient and effective unit in the Bombardier group? Will he assure me that he will support Shorts as it seeks to obtain new orders overseas which will enable it to reinstate those who have been made redundant and create new employment opportunities?
Mr. Sainsbury : I join the hon. Gentleman in welcoming the reduction in unemployment in Northern
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Ireland, but I recognise, as he does, that it is still far higher than we would like it to be. Indeed, I welcome the reduction in unemployment throughout the United Kingdom. Shorts is a remarkably successful company whose productivity has been transformed and it is using the considerable skills of its work force to great effect in the aerospace industry. I join the hon. Gentleman in regretting the recently announced job losses and, of course, my Department will continue to give as much help as it can to Shorts to enable it to obtain orders not only in this country, but throughout the world.4. Mr. David Atkinson : To ask the President of the Board of Trade when the European single market will be opened up for cars.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : The single market is complete in all essentialrespects, so goods manufactured in the Common Market have the right to circulate freely anywhere within it. Good progress has been made in removing obstacles to free trade in cars and car parts, but we shall continue to press the Commission to bring forward other necessary measures and to enforce existing measures to ensure that the theoretical principle of free movement is a practical reality.
Mr. Atkinson : Is my hon. Friend aware of the growing concern of British motor manufacturers that, in response to the recommendations made to his Department nearly three years ago by the Monopolies and Mergers Commission, he is shortly to announce an end to restraints on the import of Japanese manufactured cars in advance of 1999, which was agreed by the Community? Will he confirm that Britain does not intend to opt out of the EC consensus on this issue?
Mr. Hamilton : I can say to my hon. Friend that that matter is under review and we will closely consult the interests that are most affected. I know of no evidence to show that either the Commission or the Japanese Ministry of International Trade and Industry is moving in the direction that he asserts.
Mr. Roy Hughes : Does the Minister appreciate that a successful domestic car industry is to some extent dependent on an efficient steel industry? What are the Government doing about the unfair subsidies that are being paid to the steel industries in Germany, Italy and Spain? If that trend continues, it could lead to further redundancies in our steel industry.
Mr. Hamilton : I am glad that the hon. Gentleman recognises that, unlike in the 1970s, the United Kingdom now has a successful car industry. It is because of so many years of taking difficult decisions in the long- term interests of the steel industry that it is in the shape that it is in today. I agree that it would be intolerable if steel workers in this country were to be put out of work as a result of unfair state aids elsewhere in the Community. My right hon. Friend the Minister for Industry has been most vigorous in his activities in the Industry Council to ensure that close scrutiny is applied to all applications for state aids in other parts of the European Community to ensure that British steel workers are not disadvantaged as a result of unfair subsidy regimes.
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Mr. Ian Bruce : Will my hon. Friend confirm that the British car industry, particularly Japanese owners of various British car manufacturers, are doing far better within the United Kingdom than they are doing at home in Japan? Why does he feel that the British car industry is doing so much better than our European, American and Japanese partners?
Mr. Hamilton : As I am sure that my hon. Friend is aware, British industry, particularly the car industry, has addressed what in the 1960s and 1970s were long-term strategic problems. Today in particular, because the labour relations record of the motor car industry is second to none, we produce products of top-quality design which represent good value for money and which therefore regularly make increased inroads in overseas markets.
Mr. Tony Banks : May I inform the Minister that, during the recess, I had a very pleasant holiday in Florida where, in order to save money, I shared a bed--with my wife. I would have saved a greater amount of money if I had bought a Ford car in America and imported it into this country. Why can the Japanese sell cars in the United States similar to models sold here, but charge people in the United States 50 per cent. less than people here have to pay? Why do our motor manufacturers rip off the British people? Is it because the motor manufacturers are far too powerful for the Government to address?
Mr. Hamilton : I am most impressed by the vigour of the hon. Gentleman's paean of praise for the capitalist economy of what I am sure he once regarded as the great Satan of the United States. I hope that he enjoyed his visit to Disneyworld. As a member of a Mickey Mouse party, I am sure that he would have felt quite at home.
5. Mr. Eric Clarke : To ask the President of the Board of Trade what plans he has to meet the Engineering Employers Federation to discuss proposals to increase the level of capital investment in manufacturing industry ; and if he will make a statement.
Mr. Heseltine : My Department has regular contact with the Engineering Employers Federation about many issues, including investment. The best incentive to increased investment is low inflation, low interest rates and a growing economy.
Mr. Clarke : The President should be aware that the engineering employers asked the Chancellor to provide capital allowances to improve investment in manufacturing. The Chancellor did not listen to the employers. Did the right hon. Gentleman take up the case on behalf of the engineering employers in the Budget?
Mr. Heseltine : The hon. Gentleman will know that my right hon. and learned Friend the Chancellor and I have wide discussions on all matters that are of concern to the manufacturing and service industries. I agree with my right hon. and learned Friend that the single most important thing that he can do to help the manufacturing economy is to preserve the climate in which inflation and interest rates are low and productivity is rising. In that, my right hon. and learned Friend is doing an exemplary job.
Mr. Butcher : Does my right hon. Friend agree that one of the differences between industrial manufacturing
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managers in the United States and those in the United Kingdom is the comparative reluctance of British managers in big manufacturing companies to leave and help start-ups and buy-outs in the small and medium-sized firm sector? There is a capital shortage in the small and medium-sized engineering sector. Will the reforms in the Budget, successor to the business expansion scheme, allow British manufacturing company managers to leave and take an interest as directors in those companies in which they are now being encouraged to invest?Mr. Heseltine : My hon. Friend will know that the new scheme that my right hon. and learned Friend announced made it clear that it would be possible, under the new successor arrangements for the BES, for investors to be directors and to draw an income from the company in which they were investing. Before we make too easy a judgment about the shortage of capital in small companies, it is important to realise that throughout the 1980s that sector increased to the extent that there are now 1 million more small companies than there were in 1979. The world recession slightly stilled the pace at which the expansion was taking place. There is no ground for believing that Britain will not see a resurgence in the growth of small businesses as we come out of that recession.
Mr. Wigley : Does the President of the Board of Trade accept responsibility for intervening to maintain manufacturing industry investment where that is threatened? Would he regard as appropriate an intervention in the circumstances of the announced closure today of BP at Baglan, with the loss of 600 jobs? If so, is that a responsibility of his Department or of the Welsh Office?
Mr. Heseltine : No, I would not regard it as appropriate to intervene. I have looked at the details of the announcement by British Petroleum and, as the hon. Gentleman will know, it is closing older capacity because its new investment is coming on stream. As far as I know, there will be no adverse effect on the British balance of payments.
Mr. Garnier : Will my right hon. Friend point the EEF towards Harborough, where he will find, both in the district of Harborough and in the borough of Oadby and Wigston, profitable engineering and small engineering businesses which have made over the years, and continue to make, capital investment in their own businesses and, as a result, are not only successfully improving their customer base in this country but are looking to find new markets both here and abroad?
Mr. Heseltine : I am grateful to my hon. Friend for raising that point. By common experience--my hon. Friend the Minister for Trade constantly reminds of this--there is now a whole range of excellent small and medium-sized engineering companies not just operating as part of the supplier chain to the inward investment but pioneering export markets in an encouraging way.
Mr. Robin Cook : Why will not the President admit that the Government have an abject record on industrial investment? Does he not know that the current level of industrial investment is well below that of 1979, by 10 per cent. in absolute figures and by 40 per cent. as a proportion of GDP? If he is confident that the figures will get better, would he like to predict in what year under the Conservatives manufacturing investment will get back to
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the level that it was when they entered office--or does he privately suspect that long before they can do that an increasingly impatient electorate will have thrown them out of office?Mr. Heseltine : The hon. Gentleman knows that the manufacturing sectors of most advanced economies have been declining for many years. It is important to ensure that we create a climate in which the wealth- creating process is encouraged. He will be delighted to know that manufacturing investment is 23 per cent. up from where it was at the bottom of the recession in 1981. That is a remarkable recovery.
6. Mr. Waterson : To ask the President of the Board of Trade what representations he has received from the Association of British Chambers of Commerce regarding the effect of the Budget on businesses.
Mr. Sainsbury : The Budget has been well received by business, including the Association of British Chambers of Commerce.
Mr. Waterson : I am grateful for that answer. Has my right hon. Friend received special welcomes for the provision in the Budget aimed at helping small businesses, including such matters as the proposal to lift the often onerous audit requirements? May I inform him that that measure, among others, has been warmly welcomed by members of the Eastbourne chamber of commerce?
Mr. Sainsbury : I am delighted to hear the last part of my hon. Friend's comments. I can confirm that there has been a welcome for the item on audit requirements, particularly among small businesses. It was among a wide range of measures aimed at helping small businesses, all of which were welcomed by the president of the Association of British Chambers of Commerce, who said :
"We like the help for small firms."
We all like to hear that sort of response to the Budget.
Mr. Clelland : In the Minister's discussions with the chambers of commerce, did they mention that millions of pounds of taxpayers' money is being spent on providing training for non-existent jobs? Did they advise him that it would be better for the Government to provide incentives and investment in product development, thereby increasing production and jobs and providing a demand for training?
Mr. Sainsbury : Perhaps I may tell the hon. Gentleman a little more fully what the president said. He said :
"All in all, it was an astute balancing act which responds to many of the concerns and needs of business".
Mr. Anthony Coombs : Recognising the warm welcome that chambers of commerce gave the Budget, is my right hon. Friend aware of their pre-Budget submissions, which focused on the particular need for management education, especially in smaller and medium-sized firms? Will he confirm that that will be a principal priority of business links and the national vocational qualifications and their extensions to level 5?
Mr. Sainsbury : My hon. Friend is right to identify training in education, including management training, as vital ingredients for the competitiveness of British industry, particularly smaller companies. I can confirm to him that among the Government and other support services
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that will be funnelled through business links, high priority will be given to those services that help management training and assist smaller businesses in identifying their overall training needs.7. Mr. Alan W. Williams : To ask the President of the Board of Trade if he will make a statement on the place of THORP in meeting Britain's future energy needs ; and whether this will be tested at a public inquiry.
The Minister for Energy (Mr. Tim Eggar) : It is for the owners of spent fuel in the United Kingdom and overseas to make their own commercial decisions as to whether to use THORP as part of their nuclear energy production plans. My right hon. Friends have decided not to hold a public inquiry in respect of the Sellafield discharge authorisations.
Mr. Williams : The Minister will know that two of the key arguments used in the initial public inquiry in 1976 to justify THORP involved future energy demand in Britain and the need for uranium and plutonium. As the fast breeder reactor programme has been cancelled, there is a glut of plutonium on the world market and the price of uranium is one sixth of what it was in the 1970s, will the Minister acknowledge that the energy arguments for THORP have collapsed completely? As circumstances world wide have changed so radically since the 1970s, is there not an overwhelming need for a public inquiry to re-examine those very arguments?
Mr. Eggar : No. As my right hon. Friends have made clear, there is absolutely no need for a further public inquiry. Indeed, it is rather absurd to contemplate a further public inquiry 15 years after the initial public inquiry which, after all, was authorised by the right hon. Member for Chesterfield (Mr. Benn) and the funding was approved by the then Labour Government, and to reopen the whole question. The hon. Gentleman seems to forget that 3,000 jobs in west Cumbria and 2, 000 jobs elsewhere in the United Kingdom depend on the plant and that BNFL estimates the commercial benefits of the plant at £4.5 billion over 10 years. Is he in favour of more prosperity in this country or against it?
Mr. Page : As the United Kingdom is a signatory to the climate change convention to reduce the amount of carbon dioxide emissions, and as 34 per cent. of our carbon dioxide emissions come from power stations, is it not absolutely necessary that we should have a carbon dioxide-free nuclear industry in which THORP plays a vital part? Will my hon. Friend confirm that the Government have been more than scrupulous in allowing public inquiry and investigation into the viability and usefulness of THORP?
Mr. Eggar : I completely agree with my hon. Friend. My right hon. Friends the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food have issued a lengthy decision letter of some 75 pages. As I understand it, a judicial review of that decision is likely to take place, so it is difficult for me to go further than that. With regard to environmental benefits of nuclear power, that is one of the matters that we shall want to address during the conduct of the nuclear review.
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8. Mr. Cohen : To ask the President of the Board of Trade if he will give further consideration to curtailing the export of land mines.
Mr. Needham : We believe that our current licence controls are sufficient.
Mr. Cohen : Is the Minister aware that it is estimated that there are 100 million uncleared mines in 56 countries around the world, many of which have British connections, that those mines kill thousands of people every week, and that the United Nations and the United States have said that trade in land mines is unacceptable and on a par with trade in chemical weapons? The Government could act immediately by issuing an Export of Goods (Control) Order which would ban not only the export of land mines but their design, so that British designed land mines would not be manufactured under licence in other countries. Why will the Government not act to stop the slaughter?
Mr. Needham : The Government support the United Nations General Assembly resolution calling for a moratorium on the export of anti- personnel land mines which pose any threat to the civilian population. We have not produced or exported anti-personnel land mines in the category covered by the United Nations resolution for at least a decade.
Mr. Skinner : Is the Minister sure?
Mr. Needham : Absolutely sure. We have the capability to make land mines that are self-destructing and self-neutralising as part of a runway denial system, which we believe is a perfectly proper use of land mines in making equipment for defending our forces. If the hon. Member for Leyton (Mr. Cohen) thinks back to the Gulf war, he will realise that we have an obligation to ensure that our troops are properly protected and defended by the use of equipment which will stop the enemy using its runways. That is a capacity which we wish to maintain.
Mr. Bellingham : A while back I asked the Minister about a report by Amnesty International which covered not just land mines but the export of torture and execution equipment and gave the example of a firm that exported gallows disguised as playground equipment. Does my hon. Friend agree that such exports are unacceptable, and will he update the House on the progress that he has made to stop them?
Mr. Needham : I agree that any export of equipment that can be used for torture is unacceptable. We must ensure that such trade is stopped, and whenever it comes to our notice we insist that it is stopped. I assure my hon. Friend that we will take whatever action is necessary to ensure that the export of anything that could be used for torture ceases.
9. Mr. Lidington : To ask the President of the Board of Trade if he will make a statement on the progress of the business links initiative.
Mr. Neil Hamilton : I refer my hon. Friend to the brilliant answer given by my right hon. Friend the President of the Board of Trade a moment ago.
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Mr. Lidington : When my hon. Friend considers the next batch of business links bids to come before his Department, will he give careful and sympathetic attention to the bid from Thames Valley Enterprise which has set up business links in Aylesbury, Reading and Slough that will be of considerable benefit to people in Berkshire, Buckinghamshire and south Oxfordshire with the full backing of Buckinghamshire county council and the Thames Valley chamber of commerce and industry?
Mr. Hamilton : A proposal from the Thames Valley partnership which covers my hon. Friend's constituency was accepted by the November assessment panel and those business links are due to open in May and June 1994 in Slough, Reading and Aylesbury. I commend my hon. Friend's support for the initiative.
Mr. Flynn : Will the Minister also be aware of the danger of supporting any business enterprise that seeks to build on the popularity of the royal family? Will he bear in mind the failure of that enterprise and the loss of £7 million, including £200,000 of taxpayers' money? I hope that, with his fellow Ministers, he will take steps to ensure that that money is returned to the public purse.
Mr. Hamilton : I do not know whether it was clear to my hon. Friends what the hon. Gentleman was rambling on about, but it was not clear to me.
10. Mr. Pickthall : To ask the President of the Board of Trade what is the external financing limit for the Post Office in the next two financial years.
The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : The external financing limits for the Post Office for 1994-95 and 1995-96 are, respectively, minus £226 million and minus £213 million.
Mr. Pickthall : Does the Minister agree that, in essence, that is an extra tax on the Post Office and thus on post office users? How does he justify to those post office users the fact that that gleaning of money from the Post Office will increase by more than 150 per cent. in the next three years? Does he agree with the Post Office Users National Council that that will mean lower capital investment, job losses, poorer quality services in parts of the Post Office and, most importantly, that it might prevent the Post Office from cashing in on its commercial success and becoming a world beater in its area?
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