House of Commons Hansard Debates for 14 Jan 1994

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to update us on the exact figures and on current thinking on support for Food From Britain. I know that he shares my enthusiasm for the success of Food From Britain.

With my specific interest in agriculture, I have referred in the motion to food, and the remainder of my comments will include food, as it is an important part of the exporting scene. I shall now comment on that exporting scene more generally.

The motion draws attention to the welcome help and further initiatives contained in the recent Budget of my right hon. and learned Friend the Chancellor of the Exchequer. He announced reductions in export credit guarantee premiums for markets in Mexico, India and Turkey. It is important, when we consider what was done in the Budget, that we realise that those reductions come on top of increased cover of £2 billion announced in last year's autumn statement and last year's Budget. The measures recognised that export credit guarantees are crucial for many markets.

I ask the House to share my worry that the Treasury still seems penny- pinching when it considers export credit guarantees. There is some evidence to suggest that it is anxious to cut back on the commitment given on privatisation of the insurance services division of the Export Credits Guarantee Department, known as the national interest facility. Especially, it has decided that business in Kuwait is sufficiently good for that facility to be withdrawn. As a result, business men have to use short-term letters of credit. That is irritating to business men, and I understand that some £32 million of exports could be at risk because of the Treasury's decision.

Mr. Terry Dicks (Hayes and Harlington) : I am grateful to my hon. Friend for raising that issue. I spend a great deal of time in the recesses visiting Qatar, where there is a great demand for British goods. The help given to companies such as British Aerospace, Westland and Thorn-EMI in my constituency is somewhat lax. My right hon. Friend the Prime Minister has been supportive, as has my hon. Friend the Minister of State for Defence Procurement. The middle east is important, and my hon. Friend is right to speak about it. I hope that people will pay heed to what he says, because contracts and markets are there to be won by British companies, but they need Government support.

Mr. Alexander : I am grateful to my hon. Friend for underlining what I was about to say about Treasury support. I have the feeling that, by hardening credit terms, the Treasury is in danger of undermining business men's confidence, stability and continuity of cover.

Surely the object of export credit guarantees is not to provide cover as cheaply as possible but to enable business men to export with confidence. Such confidence is often fragile enough, and in the case of Kuwait--my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) gave another example --it is inappropriate to cut the national interest facility commitment given on privatisation. Prospects for exporters were greatly enhanced by the successful conclusion of the general agreement on tariffs and trade negotiations on 15 December. That agreement should bring down barriers against our exporters, particularly those who export food, electronics and manufactured goods. It will benefit not just our exporting companies, because it should also bring down prices for consumers, which was partly the object of the exercise in the first place. At long last, the trading practices of

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countries against which our exporters compete will go in the face of strengthened new rules on competition, subsidies and dumping. They should be a great improvement on the current GATT rules.

The debate is timely, because it draws attention to the opportunities that the GATT settlement affords, and those opportunities are on top of an already strong export position. We are now the fifth largest exporter of goods and commercial services. We export more per person than the United States of even Japan. I have already paid tribute to the companies that have achieved that and I underline it.

The people who go out and achieve these orders show expertise, determination and hard work, for which they should be thanked. They show those qualities in parts of the world where travelling and subsistence are usually difficult and often dangerous. It is in such difficult markets that such excellent increases in exports have been achieved.

Exports to China more than doubled last year and those to Korea and Japan increased by a third and a fifth respectively. The people who obtain those orders are often young, with young families, and they win those orders at a great deal of personal and family cost. The markets in which they work are often less stable and more demanding than they have ever been.

Given the right encouragement, much of our export-led success can come from the small and medium-sized enterprises, which Britain has in abundance. Future growth in the economy and in employment and exports will come from that source. But because such companies are generally quite small, they must be sensibly linked with export opportunities.

Such small companies do not need brochures and information. In common with hon. Members, companies large and small are awash with information and, like us, they find that much of it is badly targeted. They do not have time to read, review and absorb everything in case some of it may be of use some day. I hope that those who read the report of this debate will take note of the effectiveness of their lobbying of hon. Members.

The small company with export potential will decide that if information is not immediately relevant, it will be ignored. Somehow we must get relevant and topical information to small potential exporters which need it and can use it.

In terms of the small business sector, are the rules restricting the number of subsidised attendances at trade fairs monitored for effectiveness? No one wants to waste money. Big companies will go to trade fairs anyway, but smaller companies need continuing help until they have found their feet in international markets.

I pose another question to which I have no answer. Can the Government do more to encourage smaller firms to export directly and make them aware of the value of exporting? Such smaller firms often rely for basic exports on being sub-contractors and suppliers to larger firms. They should have more easily obtainable advice on such basics as market research on other countries, the availability of finance and how to go about appointing agents or distributors. Exporters tell me that they regret the passing of the Export Credits Guarantee Department comprehensive short-term bankers guarantee scheme, which gave er cent. over base rate discount finance. I understand that that was of great value to small and medium-sized enterprises,

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which financed their export growth in that way. My plea is for smaller businesses to receive better targeting of information and of financial assistance.

I spoke about the personnel involved in exporting, and what I am about to say does not denigrate in any way many excellent exporters. Because of my interest in the subject, I have received

representations from constituents and others that too often there is a lack of professional and specialised training by exporters. A recent Dun and Bradstreet report showed that 38 per cent. of exporters took no outside advice on exporting, and that an amazing 87 per cent. provided no specialised training for their export staff. The firm of Yvonne Palmer International in Nottingham, which specialises in export personnel, says that while companies are properly prepared to invest in plant and machinery, they are reluctant to invest in personnel who will best produce export sales. It says that they need to be better paid and better trained, and that companies often opt for a recent graduate with no specialised training or experience.

Just because a young man or woman has an honours degree in Spanish does not mean that, by definition or on its own, he or she will make a suitable export sales manager for Mexico or some other Spanish speaking country. To assume that is non-productive and can be damaging, but Yvonne Palmer International tells me that such a pattern is being repeated time and again.

The DTI has recently seconded 100 people from industry to help exporters. So far, so good--that has to be welcomed--but I pose the question to the Government whether perhaps that is just tinkering with the problem, which is much vaster than 100 personnel can possibly cope with, bearing in mind the potential for exports. In any event, the export strategy of those larger companies, which have released 100 senior personnel to help, must surely be of a different character and pattern from those of companies that have to pioneer new markets, make suitable arrangements and set up agents and distributors. The answer may be for the Government to set up high-level marketing courses for senior, and potentially senior, exporting personnel. They could do that possibly through a national export college, set up and managed under the auspices of the institute of exports.

I am calling not for Government finance, but for co-ordination and training at a very high level. Perhaps the next step might be the formation of a national export council, joining together the experience of exporters, at all levels, who could then decide what specific training would fit the bill. That should not be too difficult a task. The CBI has already established a national manufacturing council. The precedents are there.

There are times and issues in the life of Parliament, and the House of Commons in particular, when party political controversy plays little part in our deliberations. I believe that today's subject is one of them. I have tried to highlight the importance of export markets, particularly food. I have tried to point out the ways in which the industry seeks help, interest and commitments from the Government. If I have succeeded and obtained that, encouraged better opportunities for our exporters and obtained an even greater commitment from Government towards the importance of their work, the debate and the time that we are spending on it today will have been worth while.

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10.12 am

Mr. Archy Kirkwood (Roxburgh and Berwickshire) : It is a pleasure to follow the hon. Member for Newark (Mr. Alexander). He is a well-known and acknowledged expert, as someone who has taken an interest in exports. I agree strongly with his concluding remarks, that it should not be a matter for hard party political controversy, and that we all have a common interest in trying to provide the conditions and the background against which exporters in this country can prosper in future.

Through his work in the House, the hon. Gentleman has contributed a great deal towards that end, and I think that the whole House is grateful to him for that and for raising the subject today. In my experience, Friday debates are perhaps the most constructive of all in many ways, because people listen to what is said, and the atmosphere is a good deal more conducive to constructive discussion and argument. I welcome the opportunity to contribute to the debate. Against a background of difficult trading conditions recently, the Government have done quite a bit to try to do what they can to help, but I think that right hon. and hon. Members on both sides of the House will agree that more can be done.

From my political perspective, one of the consequences of the Government's policy of adopting a more free market approach is that there is a price to be paid in having a less coherent overall strategy. That is a perfectly legitimate position for the Government to take. I guess that they will argue, and the Secretary of State for Wales is busy writing books, about the global economy. I well understand that there are real challenges in the global economy and all that that means.

I had the privilege of being the guest of the Hong Kong Government for five days in the autumn of last year, and I was astonished at the economic momentum that the Pacific basin has now acquired. There is no doubt that it is easier to do business where tax has a ceiling rate of 15 per cent. The Government must recognise, as I am sure they do, that that puts our manufacturing industry in particular at a severe disadvantage, which we must take account of.

Mr. Dicks : The hon. Gentleman makes a valid point about the Pacific rim, but does he agree that the Government--of both parties over the years- -take a short-term view of where the export interest is? France, Germany and Japan, again in GATT, which I know well, are anticipating gas coming in from new gas fields in 10 years' time. We are still thinking about a job for tomorrow : the rest are seeing it way into the future.

Mr. Kirkwood : The hon. Gentleman tempts me into party political territory.

Mr. Dicks : I did not mean to.

Mr. Kirkwood : He is right. The system that we have evolved, rightly or wrongly, is short-term in a party political sense. If we had coalition government, proportional representation and single-member seats, with all that that brings, we would have a better chance of achieving that. That is true in Germany. I will not develop that thought because of the risk of rupturing the sense of cross-party co-operation in this important debate.

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The Government should look at the longer term. We should try to steer them in the direction of getting a more coherent, long-term approach. That would be welcome to hon. Members on both sides of the House.

An important part, too, of refining things in future in a positive way would be an attempt to focus more on manufacturing industry. I perfectly understand that, in their 14 years of office, the Government have paid considerable attention to the service sector. The hon. Member for Newark rightly adverted to the fact that we are the fifth biggest exporter of goods and services. However, the emphasis is probably on service, and that was argued by the Government in their political prospectus. I do not argue against that. We have expertise in the service sector.

From my experience as a Scottish Member, I know that Edinburgh has a good financial base, which does Scotland and the rest of the country a great service. I think that we have ignored the pressures that manufacturing industry has been under in the past few years. That is particularly true, as the hon. Member for Newark mentioned, of the way in which it affects small businesees. When I talk about small businesses, in terms of the Borders of Scotland, I am talking about firms of 10, 12 or perhaps 20 employees at the most. The United Kingdom has a good system for dealing with bigger companies. The ICIs, the GECs and the rest have a sensible method for dealing with the problems they face. But smaller firms struggle. If we are in a new global economy and are trying to help our export effort, we must pay more attention to manufacturing and try to concentrate as much as we can the scarce available resources in the direction of small businesses.

Mr. Bernard Jenkin (Colchester, North) : The Opposition are fond of saying that we must pay more heed to manufacturing. Throughout the 1980s, Secretaries of State for Trade and Industry paid due heed to the needs of manufacturers. Of course we all know that we must do all we can for the manufacturing industry. When the hon. Gentleman says that we must pay more heed to manufacturing, what does he mean? That is never explained. For the hon. Gentleman just to make that point and then go on to his next point is part of the vacuous argument that we need to do away with.

Mr. Kirkwood : I am grateful to the hon. Gentleman, as he anticipates the next paragraph of my speech, which refers to an extremely good report on smaller businesses by Professor Bolton in the 1970s. A whole series of recommendations are gathering dust on civil servants' shelves. If the hon. Gentleman is asking me what I would like to do, I would specifically start with recommendation 1. It is a bit out of date, because it was done years ago, and would have to be brought up to date.

The Government should look at the report of the Bolton royal commission into the needs of small businesses. Royal commissions may be a little out of fashion, it might take too long, and there might be a quicker way of doing it, but that is precisely the kind of thing that we should be doing.

Mr. Jenkin : What was the recommendation? If the report is so old and out of date, we can be forgiven for not recalling its recommendations in detail.

Mr. Kirkwood : The hon. Gentleman should go to the Library and read it.

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Mr. Jenkin : Tell us.

Mr. Kirkwood : All I am saying is that Governments in previous incarnations paid more attention to the needs of small businesses in the manufacturing sector. The hon. Gentleman asked me what I would recommend, and that is precisely what I would recommend. I do not have time to go into the report's recommendations in detail, but I shall refer to some of them in passing.

I am sure that we all get representations from our constituency saying that the Government have a duty rigorously to monitor the practices of other countries to ensure that they are staying within the rules. There is evidence that some of the rules in the single European market and in GATT are being flouted and side deals are being done in a way that is prejudicial to the interests of our exporters.

Mr. Oliver Heald (Hertfordshire, North) : Would the hon. Gentleman like to pay tribute to the Department of Trade and Industry for setting up the new compliance unit, which will do exactly what he is suggesting?

Mr. Kirkwood : I was going to do just that. As a Member of Parliament representing a textile area, I was concerned until recently about the breaches committed by China, which was flooding the market with shipments of cashmere garments way over the quotas established under the bilateral deal under GATT. We went to the DTI and, with its assistance, got a mechanism put in place that gave us some assurance that such breaches would be dealt with in future. I think that such breaches are still happening, and I noticed with great interest that the United States took the step of retaliating against China because of the way in which it was dumping, indirectly through places such as Honduras, a lot of Chinese cashmere textiles. The compliance unit has done a great deal in that direction, but that is only one example, and it had to be specifically requested. The DTI had to go to Europe and get the system put in place. The Government are in a good position to monitor such practices rigorously, and we have to do that through our relations within the European Union.

Probably more than anything else, exporters want from the Government an economic framework that will give them confidence that there will be some economic stability. It is easy to have wish lists and for Opposition parties to ask for them. However, it is important that the Government eliminate uncertainty as much as possible. In that context, I notice that the pound has been rising steadily ; that will have consequences and implications for exporters if it gets out of hand. Although interest rates are lower than they have been for some time, some businesses in my constituency are paying 4 per cent. over base rate, which means that they face relatively high interest rates. That needs urgent attention. The exchange rate has to be set in a way that makes our products more competitive.

Mr. Jenkin : Will the hon. Gentleman give way?

Mr. Kirkwood : I have given way enough, and I have a long speech to make.

An independent central bank that can monitor some of those matters would be in exporters' interests, and I believe that that is being considered. The Government can also help exporters by setting out the rules of trade clearly. The single European market is a great improvement, giving us an opportunity of which I hope our exporters will take advantage. Is enough being done to maximise the

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opportunity provided by the single market and to police the rules as practised by other countries? My constituency experience leads me to say that we need to open the French and German markets, because efforts are being made in those countries to make it difficult for our exporters to prevail and prosper.

Will the Parliamentary Secretary say something about GATT? Obviously, he will have a direct interest in the agriculture section of GATT, which is important. However, it is also important--if he cannot do anything today, perhaps he will refer the point to his right hon. and hon. Friends in the DTI--that we know more about what exactly has been done to strengthen the textile rules and disciplines within GATT. They have not been properly clarified.

I have been unable to find out what the detailed textile agreement amounts to. Strengthened rules and disciplines are vital to the industry. It would have been sensible to argue for a review period within the phase-out of the multi-fibre arrangement, but that suggestion might not have found favour with other countries within the European Union in negotiating GATT. We must find out what access to third-country markets GATT gives our textile industry. Will the Minister also say something about how the Government are coping with eastern Europe? The emerging countries of eastern Europe are in a difficult position, and we in the European Union must give them assistance. However, that assistance must be balanced by the fact that, if they get preferential treatment on access, both in agriculture and textiles, once their industries are sorted out that will have severe implications for our industries. I accept that a balance must be struck, and it would be helpful if the Minister could tell us what the Government's thinking is, and useful if he could do it today.

Exporters tell me that they need, in addition to stability and economic certainty, the amount of investment in infrastructure that enables them to compete on equal terms with their opposite numbers, particularly on the continent of Europe. That means having sensible road, rail, air and sea links. That is particularly important for areas such as mine in Scotland, which are that much more remote from the central points of the market within Europe. The key to the European markets for us will be how effective the new channel tunnel, which I welcome, will be in making it easier for my exporters to deliver their goods to the markets they want to serve.

I support what the hon. Member for Newark said about export credit guarantees. The recent improvements are extremely welcome, but they do not go far enough. The Treasury must be put under pressure--I hope that the DTI and the Ministry of Agriculture will continue to do that--to acknowledge and recognise the points made by the hon. Member for Newark. It is difficult for businesses exporting to some of the areas that are not covered to get the export credit guarantees they need.

One of the representations that I most often receive from exporters in my constituency is that they need better assistance for marketing from the Government. That is particularly apposite for agricultural produce. Much has been done, but much more could be done. Scotland is operating a Scottish quality food mark--proposed by the Scottish Office--which is entirely welcome and working well.

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Mr. Soames : Perhaps the hon. Gentleman will allow me to comment on that important point, because I may not be able to do so when I wind up.

I pay tribute to the outstanding work done in Scotland on agricultural quality assurance, which serves as a role model for many other parts of that industry. I was pleased to assist at the launch of a quality assurance scheme for trout farming in Glasgow, and was hugely impressed by the work done there. I am sure that the hon. Gentleman will take back to Scotland our appreciation of that work, from which we are doing our best to learn.

Mr. Kirkwood : I am grateful for the Minister's helpful intervention, and I will certainly do as he says.

The hon. Member for Newark mentioned exhibition and trade fair costs. Arrangements in place through local enterprise companies and Scottish Enterprise allow firms to play a larger part in international trade fairs, but more could be done--particularly for agriculture. The quality of Scottish agricultural products should be promoted more vigorously and robustly. The industry has its own part to play in that, but the Government could do more.

The Bolton report referred also to the need for better customer orientation, design technology and training, and for a different attitude towards exporting in manufacturing industry in particular. I pay tribute to the work done by Scottish Enterprise in the Scottish export assistance scheme. Although it runs well, it, too, could be improved. It allows 50 per cent. of planned export marketing costs to be covered over two years, up to a ceiling of £30,000. However, firms that participate in that scheme are required to pay a 5 per cent. royalty, up to ceiling of twice the assistance they receive. That penalises successful companies, and the scheme should be re-examined.

Mr. Paul Marland (Gloucestershire, West) : In trying to be helpful and to understand what the hon. Gentleman is recommending, perhaps I could ask him to be more specific about the Bolton recommendations that he would like the Government to implement. We are anxious to know the right way forward. If the hon. Gentleman would spend more time speaking about the Bolton report, it would be helpful.

Mr. Kirkwood : I described some of the report's recommendations, such as export assistance schemes of the kind that Scottish Enterprise has developed, which could be further improved and developed. The Scottish export assistance scheme could be enhanced by reducing the amount that must be reimbursed by companies that successfully participate. If the amount on which the royalty is payable were reduced from twice the amount of support extended to one and a half times, or even to only the amount provided, that would encourage more firms to enter the scheme.

South-east Scotland has an export initiative covering the Borders that helps small firms in the way that Bolton recommended. Scottish Borders Enterprise established a scheme that provides support, encouragement and intelligence to help Borders companies with their export activities.

Is it not the case that schemes available to exporters in other countries offer preferential treatment? In Canada, for example, firms in British Columbia can obtain financial support that effectively provides working capital if they win access to export orders--provided that they can prove

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their manufacturing capacity and financial solvency, and that their customers are creditworthy. That flexible, one- stop shop approach on attractive financial terms could be adopted in this country. I will conclude with one or two references specific to my constituency. I appreciate that the Minister does not have responsibility for agriculture or for trade and industry north of the border, but the consideration currently being given by the European Union to objective 5b status and funding is crucial to exporters in that region. That is particularly so in terms of infrastructure support and development. The Scottish Office has given stout assistance in trying to achieve eligibility for objective 5b status, and the Government should do all they can to help. I hope that the Minister will relay that sentiment to the appropriate Scottish Office division.

The development of the A1 and A7 and of Eyemouth harbour are sensible infrastructure projects that could be financed in a non-inflationary way, and would help exporters in the Borders.

Mr. Soames : As the hon. Gentleman knows, I spend a good deal of time in that part of the world, and I have long held that Scotland has the best road system in Britain. How would the improvements that he suggests, per pound invested, significantly help the export efforts of Borders companies?

Mr. Kirkwood : The next time that the Minister visits Kelso, I will invite some people to discuss that matter with him over tea at the Ednam House hotel--for which I will pay, if not for the fishing. If the Minister uses the west coast route, travels up the A6, then turns north-east at Carlisle and uses the A7 south of Hawick, he would find himself on a road that he, as an objective man, would consider sub-standard for the requirements of a modern exporting economy. The textile industry sends all its production to the top of the M6 motorway. I appreciate, however, that developing the A1 dualling competes for the scarce resources available for all trunk roads. Last Friday marked the 25th anniversary of the Waverley rail route closing. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) was on the last night sleeper to run on that line, and played a part in preventing a host of protesters from being incarcerated after they demonstrated against the closure in those bygone days. There is no railway station left in the Borders region, so it must rely on the road network. I am sure that the Minister can be persuaded that longer-term assistance is needed to improve roads in that region.

Much has been done, but more could and should be done in the long term, with particular emphasis on smaller manufacturing businesses. We should examine the constructive incremental steps that could be taken. If the matter were attended to in the way that I suggest, small manufacturers could contribute even more to this country's export efforts than they have been able to do in the recent past. 10.39 am

Mr. Paul Marland (Gloucestershire, West) : This is an important debate, as other hon. Members have said, because there is no doubt that exporting creates wealth for this country--as does adding value at home and supplying our own markets. The Government have rightly said--and

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deeply believe--that farmers, retailers and manufacturers must work together to increase our share of the European and international food markets.

We have heard some interesting suggestions from my hon. Friend the Member for Newark (Mr. Alexander)--and, to be fair, other hon. Members--about what can be done to encourage small firms to export. There is absolutely no doubt that, in many respects, our small firms are the wealth creators of the future. In my view, they will certainly be the ones to sort out our unemployment difficulties and we must do all that we can to smooth the way for them. That is why I was interested to hear more about the Bolton report. I am grateful to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for referring to that report : it is a document which I shall read with considerable interest myself.

I approach the debate from a slightly different perspective. I hold the view that we should do more to fill our own market with raw materials and added value products and to prevent the importation of food and drink products into Britain by supplying them from our own manufacture. Most food products are highly price sensitive and competition to fill demand for foodstuffs is to be found not only Europe-wide but worldwide. If a few pence can be shaved off the price of an article in a supermarket or shop, housewives, who are canny buyers, will descend on it, recognising that it represents good value.

Within Europe, it is vital that we achieve the same terms and conditions as our partners for production, transportation and processing. We need a level playing field. I know that people do not like that expression, but it is highly illustrative. We need to ensure that we can supply our own markets and go into the markets of our competitors--or, rather, our partners--and it is therefore most important to ensure that the same rules apply throughout Europe and that everyone abides by them. It does not matter how many times we say that : we can go on repeating it. The manufacturers in my constituency with whom I come into contact are above all anxious that they should be subject to the same rules as those that exist elsewhere in Europe.

All too often, we hear that it is easier to do something elsewhere in Europe and that is because the rules that apply here do not apply elsewhere. Let me give an example. I have great respect for my neighbouring farmer. He is a man who embraces the latest technology and does his very best to make ends meet on the farm that he runs. He does a fine job. He recently took a holiday in Spain. Being interested in farming, he was naturally interested in what was going on in the Spanish countryside. He found a Spanish farmer spraying a crop. I cannot give the details of the crop because I do not know them, but my neighbour could tell from the smell what the spray was. When he went to see how the job was progressing, he discovered that the spray operator was wearing no protective clothing and no gloves to protect his hands from the concentrated spray and the tractor had no power take-off guard. In this country, that would have been illegal : if one does not have trained spray operators or a power take-off guard, one can be prosecuted. But it appears that that is not so in Spain.

Mr. Heald : Given the increasing spirit of European co-operation, does my hon. Friend think that it might be helpful if we lent some of our MAFF inspectors to the Spanish and perhaps also to the French and invited some of their inspectors here ? Then we could ascertain whether the level playing field for which we all hoped is a reality.

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Mr. Marland : That is not a bad suggestion. As my hon. Friend the Member for Newark remarked earlier, we recently conducted an inquiry into the preservation of fish stocks. We make great efforts in this country--as they do in Norway and elsewhere--to look after our sea fish stocks. It was put to us that Spain had seven fisheries inspectors

Mr. Alexander : Fifteen.

Mr. Marland : We were told that the Spanish had 15 fishery inspection officers, all of whom were based in Madrid. We thought it important to go and find out for ourselves precisely what the situation was. Admittedly, it was not quite as bad as we had been led to believe, but none the less that is a fine example of a case in which our European partners do not abide by the same rules as we do.

Mr. Soames : My hon. Friend is a farmer himself and therefore knows a great deal about the business. Of course I accept his strictures about the level playing field--as he knows well because we have discussed the matter regularly. We want our farm labourers and work force to be properly protected and my hon. Friend would be the first person to be furious if a tractor of his did not carry the right protective equipment. But others of our European partners, including Spain, are not wholly developed countries in the sense that we are and the example to which my hon. Friend referred does not represent a competitive factor that affects our trading position in the world. My hon. Friend knows that where the level playing field really matters is in real trade agreements. By building trade and prosperity across the single market, we shall ensure developments in those rather more backward countries, to the benefit of their citizens as well as ours.

Mr. Marland : I thank my hon. Friend for that intervention and accept what he says. Nevertheless, it is extremely irritating for a British farmer who is under the impression that we have all signed up to the treaties, that there is a level playing field and that we are living by the same rules, to go on holiday to Spain and find a Spanish farmer spraying crops with no protective clothing and no power take-off guard. I try to talk about such matters from a practical point of view.

Mr. Jenkin : Is not it also a fact that our Health and Safety Executive employs thousands of people all over the country who are engaged in checking not only agricultural businesses but all kinds of business, whereas the French equivalent employs only a few hundred people, who are all based in Paris and who do not travel around a great deal? Is not there a danger in constantly invoking the level playing field and allowing others --particularly European Community institutions--to do the same? By doing that, we simply give a pretext for endless Government intervention and regulation, which we, in our decency, always implement to the letter, but which other countries have absolutely no intention of implementing. Is not the level playing field a concept of which we should become a little more suspicious? Would not we be better off doing more of our own thing and making more of our own laws, with accountability to this House, rather than letting the institutions of the European Community dictate endlessly to us?

Mr. Marland : I undserstand my hon. Friend's point. That is why I responded so warmly to the suggestion of my

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hon. Friend the Member for Hertfordshire, North (Mr. Heald) that it might not be a bad idea for us to lend some of our inspectors to our Spanish friends and see how things developed from there.

My next point concerns slaughterhouses. I have two modern slaughterhouses in my constituency. One of them has spent considerable sums on upgrading its premises and the other is in the process of doing so. I have been on a very interesting tour of one of them and have corresponded with the other. On my tour, I was shown the way in which the operators--the men who cut up the animals--have to wash their hands. The House may think that that is a pretty straightforward operation. In an operating theatre, where human beings are being dealt with, it is, indeed, a straightforward operation : one uses elbow taps. We have such taps in the facilities--if I may call them that--in the Lobbies. But one is not allowed to use elbow taps in slaughterhouses--certainly not in Gloucestershire. One has to use a foot or knee tap, which is much more expensive to install and adds substantially to the cost of modernising a slaughterhouse. Yet I understand from an hon. Member who has a cottage in France that the farmer next door to him kills sheep on the farm, virtually with his own hands. When asked about the regulations governing hygiene and slaughter and the duty of care, that French farmer shrugged his shoulders, knocked the ash off his cigarette and said, "These rules are only for the English." There is some irritation among medium-sized slaughterers in this country about the derogation for small slaughterhouses, which now permits more animals to be slaughtered without the slaughterhouse having to be brought up to EC standards. That is contrary to what they were originally told.

There is substantial duplication of inspection when animals go for slaughter. A slaughterhouse in my constituency is spending between £28,000 and £30,000 a year on ante-mortem inspection. Its animals are often bought at the stock market in Gloucester, where the sale of stock is supervised not only by a vet but by the RSPCA and a local animal health officer. I question whether it is necessary to have so much inspection, which all costs money and makes it more expensive and more difficult for our slaughterers to compete with imports and more expensive for them to export.

As my hon. Friend the Minister said, we rightly react positively to health scares. We do not want our citizens to be poisoned by food produced in this country or injured on the farm because there is no power take-off guard on a tractor.

The Ministry of Agriculture, Fisheries and Food responded positively to the incidence of lead in cattle feed and of salmonella in eggs. Many would say that there was overkill because enormous numbers of laying hens were slaughtered, but what happened to the eggs? Some egg retailers simply imported eggs from abroad. Eggs from Poland were repacked here and labelled "Packed in England" to reassure buyers that they were salmonella-free. When we asked continuously why eggs could not be tested at the point of importation, we were told that they would have been consumed by the time that the results were known. There is no level playing field for many British producers.

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My hon. Friend the Member for Newark and I are members of the Select Committee on Agriculture, which is currently looking into the chicken industry, the vaccination of broiler chickens and how quickly vaccines are cleared by the Ministry so that they can be used on United Kingdom stock. My hon. Friend the Minister will be aware that the process is quite slow. In some cases, our producers are disadvantaged by not being allowed to use vaccines, but our friends in Europe use them and we import chicken meat that has been treated with vaccines which our farmers are not allowed to use. There are many examples of there not being a level playing field for exports and imports in Europe.

The United Kingdom imposes rigorous animal welfare standards, with which I do not argue, for pigs, battery cages for chickens and livestock transportation. The Ministry of Agriculture and my hon. Friend the Minister should get due recognition for their diligent and caring approach.

Farmers are concerned about the new ear tags for cattle. Today a cow's ear tag has five digits. It needs to be quite large so that farmers can read the numbers without too much difficulty, but under EC regulation it must have 15 digits. Can hon. Members imagine the size of the tag in the animal's ear if the farmer is going to be able to read it without difficulty? Many farmers, like Members of Parliament, are short-sighted and would have difficulty reading such a tag. Some attention should be paid to the fact that ear tags must not be too uncomfortable for animals.

Does better animal welfare increase sales? Do happy pigs encourage more housewives to buy their pork? I wonder. The RSPCA told the latest sitting of the Select Committee that free-range eggs and eggs produced by happy chickens will sell more than those produced in a battery. I am not sure about that and I do not have much respect for the way in which the RSPCA is treating many Members of Parliament, who are seeking to do what we can to improve the welfare of animals. I disapprove of its recent advertising, which showed some pretty repulsive sights.

Mr. Soames : I am grateful to my hon. Friend for raising the crucial point of animal welfare at transport. He and I wish to see our high standards applied across Europe and I endorse his point about the level playing field. Does he agree that the RSPCA should spend its time worrying not about what we think, because we have led animal welfare in Europe, but about what is happening in Spain, France, Italy and the southern Community states? It should devote its attention to that instead of sucking up to its supporters in big advertising campaigns which imply that animal welfare is bad in this country. It is of a high order and we need to see a dramatic improvement across Europe if there is to be a level playing field.

Mr. Marland : I am not terribly happy with that intervention. My hon. Friend has filched my next point.

Mr. Soames : Sorry.

Mr. Marland : That is all right, but he should be more careful in future.

I was going to mention ritual slaughter. There was an embarrassed silence in the Committee when that was mentioned. What does the RSPCA do to prevent ritual slaughter in this country and elsewhere? The answer is nothing. As my hon. Friend the Minister said, it spends too

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