The Vice-Chamberlain of Her Majesty's Household-- reported Her Majesty's Answer to the Address, as follows :
I have received your address praying that the Double Taxation Relief (Taxes on Income) (Austria) Order 1993, the Double Taxation Relief (Taxes on Income) (Indonesia) Order 1993, the Double Taxation Relief (Taxes on Income) (Uzbekistan) Order 1993, and the Double Taxation Relief (Air Transport) (Saudi Arabia) Order 1993 be made in the form of drafts laid before your House.
I will willingly comply with your request.
The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : There are frequent contacts between the Government and the engineering industry. The best incentives for increased investment are low inflation, low interest rates and a growing economy, all of which are in place.
Mr. Henderson : Will the Minister confirm that in his talks with the engineering industry its representatives have told him of the industry's deep commitment to an investment-led recovery, which would not only help companies that want to retool British industry but bring stable growth and help the companies that want to compete in export markets to invest? In that connection, will he also confirm that the industry sees deregulation of health and safety as at best an irrelevance and that what it wants are capital allowances to help companies throughout the industry and, specifically, investment grants to help companies in the small business sector to invest in new technology?
Mr. McLoughlin : When we talk to industry we are continually told of the requirement to bring some deregulation to some of the forms and regulations with which it has to comply. I wholly agree with what the hon. Gentleman says about investment ; in his region there has been more than £3 billion worth of inward investment,
Column 268which was attracted by a Conservative Government. It would never have been attracted by a Labour Government committed to the social contract.
Mr. Ward : On the subject of investment in small businesses, does my hon. Friend agree that it is important not only that the investment be used productively, but that debts can be collected promptly? Will my hon. Friend do all in his power to ensure that all Government Departments pay their bills promptly, especially to small businesses?
Mr. McLoughlin : I can certainly give my hon. Friend the assurance that he seeks. Indeed, the Chancellor of the Exchequer announced in the Budget some time ago that the Government were consulting on the whole question of small business debts. Moreover, in the previous Budget a commitment was given that all Government contractors and subcontractors would be paid within an acceptable timescale.
Mr. Cousins : Does the Minister realise that 90 per cent. of small engineering companies employ fewer than 20 people and have special difficulty in meeting the exacting new standards on zero defects and quality control? Why have the Government decided to scrap in April their cash help to small engineering companies to meet those quality control standards?
Mr. McLoughlin : The simple fact is that what industry and small businesses want are fewer regulations. They understand that quality is important for attracting their customers--and that is exactly what they are doing.
The Minister for Energy (Mr. Tim Eggar) : In 1993 approximately 1,400 MW of large-scale hydro-generating capacity were operational. A further 270 MW were available from other renewable energy sources, mainly under the non-fossil fuel obligation.
Mr. Evans : I thank my hon. Friend for that reply. Is he really convinced that enough is being done to encourage a variety of renewable energy products? Is the non-fossil fuel obligation really encouraging diversity in the renewable energy industry?
Mr. Eggar : I know that that is a matter of widespread concern. The whole House shares a commitment to increasing the proportion of our electricity generated from renewable sources. None the less, concern has been expressed about, among other things, the proportion of wind farms that may be established under the non-fossil fuel obligation. I shall consider that issue and I welcome the inquiry that the Select Committee on Welsh Affairs is making on the subject.
Mr. Clapham : Is the Minister aware of the study conducted before Christmas by the Association for the Conservation of Energy which showed that burning gas in the home was about 60 per cent. efficient, while burning electricity generated by gas in the home was only 40 per cent. efficient? Does the Minister agree that that is a waste and that there is a need to reconsider the energy sector and prepare a new framework for energy before it is too late?
Mr. Eggar : The Government's energy policy was clearly laid out in the White Paper following the coal review. It is important to increase the efficient use of energy and it is also important that we meet out Rio targets through, for example, increasing the proportion of electricity generated from renewable sources. The hon. Gentleman will be the first to recognise that electricity generated from gas is much more environmentally friendly than electricity generated by coal.
3. Mr. Bellingham : To ask the President of the Board of Trade what representations he has received since he announced his conclusions on the Monopolies and Mergers Commission inquiry into the supply of gas.
Mr. Eggar : There has been a widespread welcome for the decision of my right hon. Friend the President of the Board of Trade to abolish the monopoly and introduce competition to supply all parts of the gas market from 1996.
Mr. Bellingham : Has my hon. Friend noticed that over the past few years the real price of gas has fallen? Has he also noticed that Eastern Electricity has announced that it will reduce its prices to customers? Does he agree that that is extremely good news for all people who are concerned about VAT on household fuel and that that would not have happened had it not been for privatisation?
Mr. Eggar : I very much agree with my hon. Friend. In fact, gas prices have fallen in real terms since privatisation by 22 per cent. Even after the full implementation of the VAT decision, we shall see a real- terms decrease in bills for gas domestic consumers of about 7 per cent.--a considerable achievement. I welcome the decision by the electricity companies to increase competitiveness. Indeed, in my constituency, I shall be opening the headquarters of Eastern Electricity for the supply of gas to customers throughout its area. Competition is good for all consumers.
Mr. Salmond : Does the Minister accept that the reorganisation of British Gas in Scotland will cost more than 1,000 jobs? Does he accept that, in addition to the loss of jobs through the setting up of five new business units, if those units are not headquartered in Scotland, there will be a loss of management control? Why is it that in the British Gas company, as in the House, Scotland supplies the bulk of the energy, but has none of the power?
Mr. Eggar : Why is it that the hon. Gentleman always looks backwards? Why does not he campaign for competitors to British Gas to come in and open up their headquarters in Scotland and in the north-east?
Mr. Nigel Griffiths : Does the Minister realise that millions of senior citizens and other low-income consumers deeply resent the standing charges on gas, on electricity and on telecoms? Does he appreciate their concerns and will he consider doing something about it?
Mr. Eggar : Why has not the hon. Gentleman got to his feet to welcome the recent reduction in prices announced by BT and the subsequent price reductions by Mercury? Why has he not welcomed my announcement about the reductions in British Gas prices? Why has he not welcomed the fact that the decision of my right hon. Friend
rease competition in the gas market may lead to competitors looking carefully at the level of standing charges? Mr. Malcolm Bruce : Does the Minister accept that Liberal Democrats very much welcome the Government's conversion to opening up the gas market to greater competition, which we called for at the time of the privatisation of gas. [Laughter.] Indeed we did. Is he aware of the statement by the Director General of Ofgas to the Select Committee on Trade and Industry in the past week that, as the differential in distributing gas does not vary by more than 2 per cent. anywhere in the United Kingdom, the introduction of competition should lead to further downward pressure on gas prices? Is he satisfied that under those circumstances, a relaxation of the price formula of British Gas is necessary?
Mr. Eggar : I am very satisfied with the decision made by the Director-General, as the hon. Gentleman would expect. The hon. Gentleman's selective quoting of the position that the Liberal Democrats may have taken at one time or another is becoming a laughing matter.
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : I met the Post Office chairman on 18 January and discussed a number of issues relating to the Post Office review.
"has agreed targets with the DTI"
for hundreds of local post office closures and conversions? Does not that reveal grubby collusion between the Government and the Post Office to run down the post office network and to privatise by the back door?
Mr. Heseltine : The only grubby collusion is the technique that the hon. Gentleman uses to make in this House allegations that have no foundation. He will know that the vast majority of organisations in Post Office Counters are private sector organisations over which the Government have no control.
Mr. Alexander : Was my right hon. Friend able to tell the chairman of the Post Office that privatisation would not be wholly welcomed among Conservative Members, particularly those whose constituencies contain rural areas? Was he further able to discuss with the chairman the increased commercial freedom that he seeks to enable him to operate the Post Office as a normal business and to keep the dead hand of the Treasury away from its operations?
Column 271that money is subject to public expenditure rules. The dilemma that the Post Office faces is that overseas Governments are privatising their post offices, enabling them to compete with ours. The judgment that the House must make is how we can enable the Post Office to use its resources to fight as a major British industrial
organisation--which it is--in a competitive world that is growing tougher all the time.
Mr. Robin Cook : Does not the President appreciate that the Post Office is a success story and that everything that the Government are doing is putting that success story at risk? Is he aware that the delay that he has caused over the review is causing confusion to management ; that the Treasury demand for an even bigger share of the profits is robbing management of the money for investment ; and that, as a result, the Dutch public post office is now picking up business in Britain? When will the Government start backing British business instead of creating openings for foreign business?
Mr. Heseltine : If that is an example of the new thinking of the Labour party, I can understand why the hon. Member for Dagenham (Mr. Gould) has announced his resignation from the House. Of course the Post Office is a success story. The issue is how we enable it to be more successful. How do we enable it to face the fact that the Dutch are privatising their post office to enable it to compete here?
Mr. French : May I congratulate my right hon. Friend on the care and thoroughness with which he is conducting his review of the Post Office? He is quite right to resist quick solutions. It is more important that the eventual answer should be the right one. In reaching his decision, however, will he bear fully in mind the formidable international competition that the Post Office faces?
Mr. Heseltine : I am well aware of the growing international competition--and, indeed, the competition from a range of other service providers in this country--which has been eating into the Post Office's market in recent years. We are certainly concerned to ensure the health of the rural post office network and have been looking, and will continue to look, at a number of ways in which we can open up the increasing market for rural post offices. I was delighted that we were recently able to take the decision to enable them to sell fishing licences.
Given that the Prime Minister has recently gone on record stating his commitment to growth in the nuclear industry, how can a review of the nuclear industry carried out by the Government be anything other than a charade and a sham? Even if he cannot announce when we will have the review or what its terms of reference will be--all promised for last year--will the Minister at least tell us whether the Government will examine whether the industry is economically viable and environmentally
Column 272acceptable and deal with the question of waste as well as the functioning of the industry? May we have some idea whether it will be a proper review, or will we have to go to the courts to get an independent adjudication, as Greenpeace and Lancashire county council did over THORP?
Mr. Eggar : I am always willing to accept praise from whatever source. I fully understand the hon. Gentleman's concern. I hope that it will not be too long before we can make an announcement including the terms of the review and the way in which it will be conducted. The way in which the hon. Gentleman enumerated the various different factors itself illustrates that it is most important to spend time getting the terms of reference absolutely right and to try to satisfy as many of the numerous interested parties as possible.
Mr. Whittingdale : Will my hon. Friend join me in welcoming the fact that work has started in the past week on a visitor centre at Bradwell power station in my constituency? Does he agree that such centres have a valuable role in spreading the message that nuclear power is one of the safest, most economic and most environmentally friendly forms of generation available?
Mr. Eggar : I do agree-- [Laughter.] It is necessary for the full facts about the benefits of nuclear power to be made available to the public. It is unfortunate that Labour Members simply laugh at the idea that members of the public should be fully briefed on all the facts in an objective way.
Mr. Campbell-Savours : Could Ministers help me with a little research on these matters? Could they ask their civil servants to research reports that there was an outbreak of leukaemia in West Cumbria during the second world war--40 years before the Sellafield plant opened?
The Minister for Trade (Mr. Richard Needham) : The GATT agreement will lead to the phasing out of the multi-fibre arrangement over 10 years, which will be largely balanced by improved GATT rules to deal with unfair trading practices, better intellectual property rights and lower tariffs in many export markets.
Mr. Riddick : Have there been any developments since my Adjournment debate two weeks ago on the continuing punitive levels of duty being levied on British textiles by some countries, especially India, Pakistan and Indonesia, which makes it almost impossible for our companies to export to those countries? Could I ask the Minister and, indeed, the European Commission to continue to apply pressure to those countries to reduce their tariffs? At the same time, I welcome the GATT deal, which is very good news for most British exporters.
Column 273maximum pressure is brought to bear on Indonesia, India and Pakistan by the Commission. Indeed, my right hon. Friend the Minister for Industry went to Athens to exert that pressure only last weekend. There was a preliminary meeting between the Commission and the Indonesians on 1 February and another meeting is being arranged with India and Pakistan on 4 February. As I said to my hon. Friend, the deadline for the GATT proposals to be agreed is 15 February and I have nothing further to report at this stage, except that we are continuing to exert maximum pressure on those countries.
Mr. Cryer : Does the Minister realise that in six days' time there must be some definite negotiations because British jobs are at stake? Does he accept that a group of textile employers said at a meeting I attended that they regarded the GATT deal that the Government had entered into as selling the textile industry down the river? In Bradford, 11,000 direct jobs in the textile industry are at stake and real pressure, including the threat of retaliatory action, must be exerted against the 100 per cent. tariffs for British textiles that are exported. The Government negotiated entry by those other countries into the United Kingdom market, which is extremely unfair and disadvantages textile workers here.
Mr. Needham : The hon. Gentleman, as so often happens with Labour Members, welcomes the GATT agreement in the general and then attacks it in the particular. Indeed, they have a policy : if I contradict myself, so what? The Government, through the Commission, fully understand the concerns expressed by the woollen industry. As I said to my hon. Friend the Member for Colne Valley (Mr. Riddick) in the Adjournment debate, we will continue to put all the pressure we can on the Commission and the countries involved. Certainly, if we do not achieve our objectives, there is action that we can take under the multi-fibre arrangement, which still has some 10 years to run, either from 1 January 1995 or 1 January 1996, to apply pressure to those countries to come round to a more sensible arrangement.
Mr. Waller : May I emphasise to my hon. Friend yet again that there is genuine concern in the House and throughout the textile industry about the enormous tariffs of 80 or 100 per cent., referred to by my hon. Friend the Member for Colne Valley, which are applied by Indonesia, Pakistan and India? Before the GATT agreement is ratified in Marrakesh in mid-April, will he ensure that no stone is left unturned in emphasising to our European Union negotiators that the jobs that will be lost in this country if we must fight this lack of free trade will never be regained?
Mr. Needham : I give, as I have already given, an undertaking that the Government will do everything that they can to ensure that we continue negotiating up to the last minute of the last hour. I should say to my hon. Friend that in Indonesia the tariff limits on wool cloth, woollens and other textiles are 40 per cent. We are talking about getting duties down to a maximum of 35 per cent. The real problems occur in India, with 85 per cent. tariffs, and Pakistan, with 125 per cent. As I have said, we will do everything that we can to reach a satisfactory conclusion for our industry.
Column 274labour have to be faced? Will the Minister look again at the exchanges between the Leader of Opposition and the Prime Minister on 16 December, when the GATT agreement was announced to the House? Is not it a fact that child labour is turning out textiles in many countries and is not it also the case that there are no health or safety provisions for other workers in those countries? Should not we build new platforms, after the Marrakesh final act in April, which prohibit forced labour, which give protection to workers and which are against discrimination?
Mr. Needham : If there are breaches of United Nations conventions on issues such as child labour, the Government and other European, OECD and G7 countries will make sure that they are taken into consideration in our trading arrangements.
However, I think that the hon. Gentleman, once again, is trying to get it both ways. The whole point of GATT and free trade is to open up world trade and particularly to allow goods and services from the developing world to come into the developed world without the high barriers which existed in the past. GATT sets out to do that and the hon. Gentleman and his hon. Friends have welcomed it, although I am never quite sure how real that welcome is.
Mr. Clifton-Brown : Will my hon. Friend confirm that the Council of Ministers yesterday announced the abolition of 6,000 quotas and, in particular, that quotas applying to the Baltic states would be abolished in the new year? However, none of those quotas included the textile industry. Will my hon. Friend urge his colleagues on the Council of Ministers to move to the next step of textile quotas?
Mr. Needham : I agree with what my hon. Friend said about quotas, although I must express considerable disappointment about the way in which the toy quota was finally settled. Quotas on textiles come within the phasing-out arrangements of the multi-fibre arrangement. That is one of the weapons in our armoury to ensure that what is happening in Indonesia, Pakistan and India comes out more favourably for the British woollen industry.
Mr. Steinberg : Is the Minister aware that the National Rivers Authority has instructed British Coal to continue pumping mined water from the closed pits in the Durham coalfield? Is he further aware that if pumping were to cease it could be calamitous for the River Wear in particular, where the pollution would be horrendous? Will the Minister give myself, my constituents and all the people who live in the Durham area a commitment that he will instruct British Coal before privatisation to continue to pump? Will he also instruct the body that takes over after privatisation to keep pumping until it is 100 per cent. certain that pollution will not occur?
Column 275and others brought a delegation to see me. I assure him that, while the matter is the responsibility of the NRA as the regulatory body, the responsibilities that currently rest with British Coal will be transferred to the coal authority following the enactment of the Coal Industry Bill. I am sure that the coal authority and the NRA will co- operate, in the same way as co-operation exists at present between British Coal and the NRA.
Mr. Churchill : While congratulating Malcolm Edwards and R. J. Budge on their recent purchase of certain redundant pits from British Coal, and while sending my best wishes to the miners in the pits involved, may I ask my hon. Friend to say when the hard-pressed electricity consumer may expect to see passed on the 30 per cent. reduction in the cost of the generator's principal source of energy? What are the Government doing to ensure that those vast reductions in fuel costs are passed on to the consumer?
Mr. Eggar : My hon. Friend is right to draw attention to the interest of the private sector in British Coal pits. Opposition Members do not seem to realise that no fewer than eight pits are in negotiation or are controlled by the private sector. Clipstone, Betws, Trentham, Coventry, Rossington, Markham Main, Calverton and Wearmouth are all under discussion. Why do not the Opposition welcome the success of the private sector in its negotiations with British Coal? As for my hon. Friend's specific question, that is a matter for the Director General of Electricity Supply, who is in discussion with both the generators and the electricity supply companies.
Mr. Beith : Is the Minister aware of the huge anger and sense of betrayal of more than 1,000 miners who work at Ellington in my constituency at the fact that, only weeks after it announced a plan to keep the colliery in operation with a reduced work force, British Coal has announced its closure? When he meets the chairman of British Coal, will he do everything in his power to ensure that, at a time when there is genuine private interest in taking over that colliery, the pit is kept in a condition in which it can be taken over by someone else and the machinery essential for that is kept in the pit?
Mr. Eggar : I am aware, of course, of the understandably strong feelings in south-east Northumberland about the proposals announced by British Coal. The chairman of British Coal has made it clear that if a decision were made to close Ellington--we cannot prejudge that because there is a modified colliery review procedure--the pit would be kept on a care and maintenance basis until the main privatisation took place. He has given me an undertaking that the equipment at Ellington and the other pits that were the subject of consideration last week under the general review procedure will not be removed from the pits unless it is essential to do so for safety reasons or because the reserves of a pit for closure are reallocated to adjacent mines. That is a major step forward.
Mr. Batiste : Has my hon. Friend had an opportunity to pass on to my right hon. Friend the Secretary of State for the Environment the real concerns expressed by hon. Members on both sides of the House during the Coal Industry Bill Second Reading debate? We expressed concern that the guidelines in mineral planning guidance 3, and the consultation process that takes place under them,
Column 276should provide for a much tougher regime to prevent unsuitable applications for opencast mining in green-field sites from proceeding.
Mr. Eggar : I am aware of the strong feeling on the matter. It is the responsibility of my right hon. Friend the Secretary of State for the Environment. Consultations are being held on MPG3. I personally brought to the attention of the Department my hon. Friend's speech in the Second Reading debate on the Coal Industry Bill.
Mr. Skinner : Is the Minister aware that there is a suggestion among the British Association of Colliery Management people-- [Interruption.] I will say it again. Is the Minister aware that there are people in BACM--the senior management of British Coal--who are saying that by March they could be down to six or eight pits only? Will he confirm that that is correct? Will he acknowledge that, in the past 18 months, the man who is sitting at his side--the President of the Board of Trade, who aspires to be the next leader of the Tory party--had the gall to talk about saving pits? He conned Parliament. He conned these tinpot Tories who talked a good fight but were no good in the ring. What is more, he conned the British people. At the same time, the Government are allowing subsidy for nuclear power and the French interconnector link. They ought to be ashamed of themselves.
Mr. Eggar : I think that the Liberal Democrats sitting behind the hon. Gentleman wound him up too much. It does the coal mining community and the country no good to use the scaremongering tactics which are such a feature of the hon. Gentleman's approach. Why does not he welcome the fact that Clipstone, Betws, Trentham, Coventry, Rossington, Markham Main, Calverton and Wearmouth, and perhaps other mines, are pursued for privatisation by private sector companies that want to make a success where British Coal has failed?
Mr. John Marshall : Does my hon. Friend accept that many people recognise that privatisation is the only hope for a competitive cost structure in the coal industry and that only a competitive cost structure can guarantee the long-term future of employment in that industry?
Mr. O'Neill : On the question of a competitive cost structure, will the Minister tell the House why Manton colliery, which produces coal at prices lower than the world spot market price, is going to be closed? Does not that show that the Government have no concern for the coal industry and that the promised subsidies last year, which have saved no jobs whatsoever, were a complete sham and a distortion of the truth?
Mr. David Evans : Does my hon. Friend agree that the privatisation of the coal industry is the best thing for the miners and for the production of coal? From 1974 to 1979 the lot opposite closed 10 times more pits than we have closed in 14 years.
The Minister for Industry (Mr. Tim Sainsbury) : The aerospace industry in the north-west benefits from a positive business environment, Government support for military and civil exports, specific Department of Trade and Industry programmes to help the industry and substantial orders from the Ministry of Defence as a customer.
Mr. Lewis : I put a similar question and the Minister gave a similar answer a month ago. What happened? In that month, British Aerospace at Lostock has shed another 300 jobs. Since the Conservative party came to power in 1979, about 5,000 jobs have been lost at that plant. When will the Minister really do something instead of coming here and talking bull?
Mr. Sainsbury : I welcome the hon. Gentleman's recognition of the consistency of my answers. I suppose that if I changed them, I would be accused of making a U-turn. Naturally, we all regret the job losses, but I think that the hon. Gentleman is aware that the change in the requirements for defence equipment underlies those losses and I am sure that we all welcome the reasons for that change. The problems that that change is causing the aerospace industry are widespread. They are worldwide and do not affect merely this country.
If I can give the hon. Gentleman two examples, between 1989 and 1993, the United States aerospace industry is reckoned to have lost one third of all its jobs ; and the German industry, Deutsche Aerospace, recently announced 16,000 job losses. We regret the job losses at Lostock, but it is inevitable that changes in defence requirements will lead to changes in the requirements for staff.
Mr. Hawkins : My right hon. Friend will be aware that many of my constituents work for British Aerospace at Warton. Does he agree that, during the past decade, the aerospace industry has made a consistent and positive contribution to the United Kingdom balance of payments--£2.3 billion last year. In contrast to the negative comments by Opposition Members, the British aerospace industry is a continuing success and will go to even greater strengths once the European fighter aircraft 2000 is built by many of my constituents.
Mr. Sainsbury : I am happy to join my hon. Friend in paying tribute to the industry's considerable achievements, especially in exports. The industry is uniquely helped by the Government and has received more than £1.5 billion of Government support since 1979.
Mr. Eastham : Now that the Minister has expressed regret at the massive loss of jobs in the aerospace industry, what positive measures is his Department taking to give some positive encouragement to the aircraft industry for the development of the C130 large aircraft?