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House of Commons

Wednesday 9 March 1994

The House met at half-past Nine o'clock


[ Madam Speaker-- -- in the Chair ]


British Railways (No. 2) Order Confirmation Bill

Mr. Secretary Lang presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to British Railways (No. 2) : And the same was read the First time ; and ordered to be read a Second time upon Tuesday 15 March, and to be printed. [Bill 65.]

British Railways (No. 3) Order Confirmation Bill

Mr. Secretary Lang presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to British Railways (No. 3) : And the same was read the First time ; and ordered to be read a Second time upon Tuesday 15 March, and to be printed. [Bill 66.]

Oral Answers to Questions


Manufacturing Investment --

1. Mr. Cran : To ask the President of the Board of Trade what was the average investment per employee per annum in manufacturing in the period from 1987 to 1991.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : During the period 1987-91, investment per employee in manufacturing averaged £2,700.

Mr. Cran : Despite progress, does my right hon. Friend agree with the aims of the National Manufacturing Council for the need to double investment in the next few years ? Does he further agree that there has never been any excuse for investment such as our competitors achieve, because of the increased level of profitability that this country has had under this Conservative Government and the previous one ?

Mr. Heseltine : I very much welcome the work of the National Manufacturing Council of the CBI and am much encouraged by the ambitious targets that it has set. I agree that the present economic statistics are as favourable as I can remember.

Mr. Cousins : Does not the President of the Board of Trade realise that the figures for investment per employee depend on the number of employees ? Is he saying, therefore, that the 600 Pirelli workers in the cable factory

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at Eastleigh, who lost their jobs last year because there was no house building to support their cable production, were part of a cunning plan to improve British statistics ?

Mr. Heseltine : The hon. Gentleman will know that a major change is going on as British industry achieves higher levels of productivity. He would serve his country far better if he recognised the need to do that, and stopped making ridiculous party political points out of the exercise.

Mr. Jenkin : In promoting investment, may I congratulate my right hon. Friend on his speech last week in which he complained of Euro- sclerosis ? Is not Euro-sclerosis bad for British investment ? Will he join me in congratulating our right hon. Friend the Foreign Secretary on maintaining the blocking minority in the Council of Ministers to stop damaging legislation coming

Madam Speaker : Order. That does not relate one jot to the main question. The President will reply to the first part of the question, please.

Mr. Heseltine : I am extremely grateful to my hon. Friend for his reference to the Stockton lecture that I gave last week. It is vital that the whole of the Community addresses the issue of

competitiveness. From that we will all gain.

Small Firms (Interest Rates) --

2. Mr. Hain : To ask the President of the Board of Trade what is the average rate of interest on loans from financial institutions to small firms and the average period for repayment.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : The most recent Bank of England study shows that the average margin over base rates is slightly under 3 per cent. for businesses with a turnover of less than £10 million. For term loans, 26 per cent. were repayable over a period of up to five years, and the remainder over longer periods with 15 per cent. repayable over periods exceeding 20 years.

Mr. Hain : It is difficult to reconcile the daily experience of small firms with the Minister's answer, because they are being strangled by short-term loans at prohibitively high interest rates that do not appear to bear any relation to the base rate. Why do not the Government establish new joint ventures with the financial institutions and the banks to provide long-term, low-cost finance, like our more successful competitor countries ? Or is he happy to perpetuate the curse of the British economy--short- termism ?

Mr. McLoughlin : The hon. Gentleman prepared his supplementary question before he heard the answer. What we have seen, and what the answer shows, is that many of the long-term loans are taken out on favourable conditions. We currently have the lowest base rate for some 20 years--5.5 per cent. That is welcomed by British industry.

Mr. Anthony Coombs : While one recognises the present very low base rates and low rates of inflation, which can only be good for investment intentions for small and other companies, does my hon. Friend recognise that there is a demand among smaller companies for longer-term, non-equity finance ? In that regard, will he

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accept our congratulations on the new venture capital trusts and ensure that those trusts look at amounts below £2 million, which will be relevant for smaller firms ?

Mr. McLoughlin : I am grateful to my hon. Friend. He rightly points out some of the schemes that have been taken forward--and, indeed, some that were announced by my right hon. and learned Friend the Chancellor of the Exchequer in his recent Budget statement.

Mr. Malcolm Bruce : Will the Minister acknowledge that as businesses benefit from the recovery, their ability to repay loans can be inhibited, because they are being squeezed by large companies by which they are owed money but which are slow in repaying it ? What progress are the Government making towards presenting firm--as opposed to general--proposals to ensure that companies are not prevented from paying their debts because their customers do not pay them ?

Mr. McLoughlin : As the hon. Gentleman will know, we are currently consulting about the problem of late debt payments. Overall, our information suggests that the position may not be as bad as it was, but I accept that it is a serious issue. Once our consultations are concluded, we shall announce our considered opinion.

Animal Traps --

3. Mr. Tony Banks : To ask the President of the Board of Trade how many animal traps were exported from the United Kingdom in each of the last three years.

The Minister for Trade (Mr. Richard Needham) : The information requested is not available from official sources.

Mr. Banks : May I remind the Minister that in this country we still manufacture snares--which slaughter large numbers of wild animals--and leg traps ? I know that the Minister is an animal lover ; is it not inconsistent that leg traps, whose use is illegal in this country, should be exported, and will he close that loophole ?

Mr. Needham : I hear what the hon. Gentleman says. He will know, however, that the Department of Trade and Industry is not responsible for the design of animal traps, which is the responsibility of the Ministry of Agriculture, Fisheries and Food, and that the Department of the Environment is responsible for United Kingdom policy within the European Union. I shall pass on the hon. Gentleman's comments to my right hon. Friends in those Departments.

Mr. Bill Walker : Does my hon. Friend agree that, in many parts of the world, rodents and other pests cost countries immense amounts of money, and also have a tremendous impact on food sources ? Is it not good, therefore, that British manufacturers are supplying equipment to deal with the problem ?

Mr. Needham : I hear what my hon. Friend says. I understand, however, that there are no significant exports of such traps from this country.

Gas Industry --

4. Mr. Tony Lloyd : To ask the President of the Board of Trade if he will make a statement on the regulation of the gas industry.

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The Minister for Energy (Mr. Tim Eggar) : Together with the Office of Gas Supply, I will shortly issue a consultation paper on the future regulation of the gas industry.

Mr. Lloyd : Is the Minister aware that, for a little more than 10 years, British Gas has operated a domestic meter replacement programme, which has undoubtedly been in the interests of the domestic consumer ? Will he assure the House that, as that programme has begun to slip, he will take steps to ensure that the consumer interest is served, and British Gas returns to the programme that it originally promised ?

Mr. Eggar : I am aware of the hon. Gentleman's concern, which relates particularly to a factory in his constituency. As he knows, this is a matter for British Gas and Ofgas, and I understand that discussions are in progress.

Mr. Ian Bruce : How has regulation of the gas industry compared with the days of public ownership, in terms of the delivery of better service and lower prices ? Can anything be learned from our other denationalised industries ?

Mr. Eggar : Since privatisation, domestic gas prices have fallen by more than 23 per cent. and industrial prices by more than 30 per cent. in real terms.

Mr. Bennett : Is the Minister fully committed to ensuring that the Energy Saving Trust works effectively ? If so, what steps will he take to ensure that the gas industry contributes financially to the trust, so that it can save energy, rather than allowing it to go on being wasted as it is now ?

Mr. Eggar : I understand the importance that is attached to energy efficiency. The achievement of carbon savings by that means is one of our Rio commitments. Discussions are in progress with all interested parties.

Mr. Robin Cook : Is the Minister aware of the widespread disappointment that three of British Gas's five new business headquarters are located in the south-east, and that the furthest north is in Nottingham ? Can he think of any reason, for business purposes, why British Gas should not put one of its headquarters in the region from which the gas comes, or where the majority of consumers are ? Will he press British Gas--if it does not wish to become South-East Gas--to distribute its new area headquarters in the north, Scotland and Wales, to provide a regional identity that matches some of its loyal customers in those regions ?

Mr. Eggar : Coming from the party that set up many of the nationalised industries, all of which had their headquarters in London, that is pure humbug.

Manufacturing Industry --

5. Mr. Milburn : To ask the President of the Board of Trade if he will make a statement on his plans to assist manufacturing industry in the regions.

Mr. Heseltine : All United Kingdom manufacturers will benefit from the underlying strength of the economy and the best set of economic indicators for many years. Our

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new initiatives for integrated regional offices and business links will help to ensure that manufacturers in the regions can take full advantage of this.

Mr. Milburn : Are not the 200,000 British manufacturing jobs that have been lost since the last general election a sign not of success but of Government failure ? When will the Secretary of State take positive action to stem the haemorrhage of skills, talent and enterprise from regions such as the north, or is he content, as usual, merely to sit back and see the country's future being poured down the drain ?

Mr. Heseltine : The hon. Gentleman does not understand that most of the jobs have been lost because of the drive for efficiency and improved productivity on which the future of those companies depends. There is no choice but to make our industries competitive. If right hon. and hon. Gentlemen wish to see this country's economy cut to ribbons, all they have to do is say that we should overman it and have levels of productivity that are not world-competitive.

Mr. Quentin Davies : Will my right hon. Friend continue with his splendid set of policies, which have played an important part in the spectacular resurgence of British manufacturing in the past two years, and which have led to an increase of 1 per cent. in manufacturing output in the month of January alone ?

Mr. Heseltine : In the spirit of your instructions, Madam Speaker, the answer is yes.

Dr. Bray : Does the President of the Board of Trade realise that, as the recovery gathers momentum, the new jobs will occur in the areas of high service employment, not in the manufacturing areas of Scotland, Wales and the north ? Does he not realise, therefore, that special incentives are needed for manufacturing industry in those regions ?

Mr. Heseltine : I do not believe in the overly simple generalisations in which the hon. Gentleman dressed his question. Large parts of our manufacturing industry are extremely competitive today and stand poised to seek the upturn in world trade which is evidently on its way.

Mr. Nicholas Winterton : Although I recognise the immensely improved economic climate that has been brought about as a result of the Government's policy for manufacturing industry--not least the base rate, interest rates and the establishment of business link, one of which is, I am pleased to say, in Macclesfield--will my right hon. Friend accept that the reintroduction of capital allowances would be of immediate benefit to manufacturing industry and would perhaps bring investment based on success, which this country needs ?

Mr. Heseltine : I appreciate my hon. Friend's kind remarks about business link, and I am delighted that Macclesfield is one of the first centres to have such a facility. He will remember, however, that manufacturing output in the fourth quarter of 1993 was 2.2 per cent. higher than a year ago, and that continued opportunity exists without any change to the fiscal arrangements, which must be a matter for my right hon. and learned Friend the Chancellor of the Exchequer.

Mr. Ieuan Wyn Jones : I am sure that the President of the Board of Trade is aware that, for many purposes, the

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Department of Trade and Industry and the Welsh Office have a dual role in attracting inward investment to Wales. I am also sure that he, as a good European, will accept that many regional authorities in Europe are playing an increasing role in attracting inward investment. Does he agree that the Welsh Office should have the lead role in attracting that investment to Wales ?

Mr. Heseltine : The hon. Gentleman is well aware of the remarkable achievements that have taken place in Wales as a result of the activities of the Welsh Office and the Welsh Development Agency in the past 10 years. I should have thought that he would support and build on them, without looking for structural change.

Mr. Nigel Evans : Does my right hon. Friend agree that what most assists manufacturing industries in the regions is long-term low inflation, which we now have, low interest rates--we now have the lowest since 1972-- and the fact that we have the lowest level of strikes since 1891 ? Does he agree that those three trends would be reversed if the Labour party ever got back into power ?

Mr. Heseltine : My hon. Friend has little to worry about, because it is evident from Labour Members' questions that there is not the slightest chance of that party ever getting back into power. The fact is that the economic circumstances are now as good as any that I can remember. We must all back British industry in its quest for increasing world markets, enjoying the fact that exports are at an all-time record level.

Mr. Beggs : Will the President of the Board of Trade examine closely the opportunity to keep our highly skilled engineers in the shipbuilding industry at work by making available for ship conversion the small element of assistance that is available in other European Union countries ?

Mr. Heseltine : The hon. Gentleman will understand that that is a complex issue. Broadly, the policy of Her Majesty's Government is to seek to eliminate those subsidies, not to increase the numbers available. However, we must always consider what specific effects they may have on British shipyards. Recently, my right hon. Friend the Minister for Industry was able to announce that we were able to give temporary help to Swan Hunter in the difficult circumstances it faced.

Mr. Batiste : Does my right hon. Friend agree that the biggest threat to manufacturing industry in Britain would be the danger of the high social costs that would follow the implementation of the social chapter, and that it would make so much of our industry uncompetitive in world markets ? What representations has my right hon. Friend received from industry on that subject ?

Mr. Heseltine : I am most grateful to my hon. Friend for raising the question of the social chapter. It so happens that, by coincidence, I have a press release from the CBI which addresses that point specifically in terms of the Labour party's policy on the social chapter. It says that it

"ignores the rest of the world, ignores the whole purpose of the single market, and ignores the unemployed."

That, of course, is why people ignore the Labour party.

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Industries (Leicester) --

7. Mr. Janner : To ask the President of the Board of Trade whether he will take steps to assist the traditional industries of Leicester.

Mr. McLoughlin : I recently conducted the annual review of city challenge, which is available in the hon. and learned Gentleman's constituency. A decision on future progress will be made shortly. The first business link in the country opened in Leicester on 27 September, with some £725,000 funding from the Department of Trade and Industry. Combined with the other measures that we are taking, we are doing a considerable amount in Leicester.

Mr. Janner : What would the Minister say to Mr. Charles Bradshaw, the managing director of a major clothing company in my constituency, who complains that the Government have allowed numerous manufacturing companies in Leicestershire to go to the wall, that Leicestershire's industry has suffered enormously and that they are looking to the Government for real help in reviving manufacturing industry ? What help in reviving manufacturing industry and getting it off its knees are the Government intending to give ?

Mr. McLoughlin : I can only say that if the person to whom the hon. and learned Member is referring is complaining, he is probably disappointed with the representation that he is getting in the House--a disappointment with the Opposition which is shared by Conservative Members.

Mr. Burns : Is my hon. Friend aware that Marconi Radar of Chelmsford has a manufacturing base in Leicester, and does he accept that the damage done to GEC Marconi in Leicester by the Opposition parties and by certain newspapers will only have been

redeemed--hopefully--by the comments of my hon. Friend the Member for Wiltshire, North (Mr. Needham) on the "Today" programme the other day ? Will he congratulate our hon. Friend on seeking to redress the imbalance caused by the Opposition parties ?

Mr. McLoughlin : That does not need an answer from me. I am always happy to congratulate my hon. Friend.

Mr. Jim Marshall : Is the Minister aware that there are 30,000 jobs in Leicester and the surrounding county in the traditional industries of clothing and textiles and that, if the multi-fibre arrangement is phased out by 2005, many of those jobs will disappear ? Would he estimate how many jobs will be left in 10 years' time ?

Mr. McLoughlin : We all recognise the importance of the traditional industries in Leicester, to which the hon. Gentleman referred. May I point out to him that, in the Leicester travel-to-work area in January 1986, unemployment was 9.7 per cent. and that the latest figure is 8.8 per cent.- -a reduction of more than 10 per cent ? I should have thought that the hon. Gentleman would welcome that.

Company Donations (Political Parties) --

8. Ms Primarolo : To ask the President of the Board of Trade if he will publish a list of donations given by companies employing members of his deregulation task forces to political parties.

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The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : That information is not known to my Departmentor to me. The implication behind the question shows the essentially puerile approach of the hon. Lady and her party to the serious need to reduce business costs as a means of reducing unemployment.

Ms Primarolo : Did the Minister make an assessment of health and safety records, or of the breaching of any regulations by those companies before he appointed them ? Did he ask consumer groups for their views of the companies, or was he concerned only to know how much the companies had donated to the Tory party ?

Mr. Hamilton : I was concerned to know only how to improve the competitiveness of British industry by getting rid of redundant regulations and making more cost effective those that are necessary, and hence reducing unemployment. Unfortunately, the hon. Lady is more interested in playing party games.

Mr. Peter Bottomley : Will my hon. Friend consider a list of donations by trade unions to members of the Opposition Front-Bench team, and will he consider whether it would make them worth employing for the deregulation task forces ?

Mr. Hamilton : The difference between us and the Labour party is that it, as a wholly owned subsidiary of the trade union movement, is concerned to load extra costs on British business and to destroy jobs, whereas we are concerned to listen to the voice of experience in British business, to reduce those costs and to promote employment.

Dr. Lynne Jones : Is the Minister satisfied that he gets good value for the millions of pounds that his Department spends on company investigations, bearing in mind that, although there have been 82 published reports, only four directors, and no company auditors, have been disbarred ? Is he concerned about the fact that, to investigate companies, his Department has often been known to hire accountants from companies that are themselves the subject of investigations, and that-- [Hon. Members :-- "Too long."]--partners from companies that have been criticised by his Department often sit on the disciplinary panels

Madam Speaker : Order. I have brought to the attention of the House several times lately the fact that Question Time is not a time for debate. We are dealing with direct questions. Will the Minister respond ?

Mr. Hamilton : In deciding whether to pursue prosecutions against those who have breached company law, we follow the normal rules by which all parties in government have always operated. We take proper legal advice, and we believe in acting by due process of law.

Food Retailing (Regulation) --

9. Mr. David Nicholson : To ask the President of the Board of Trade if he will make a statement on progress in removing regulatory burdens, other than opening hours, on food retailing businesses.

Mr. Neil Hamilton : A review has been completed of controls on a number of foodstuffs covered by European

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Community hygiene directives. Departments are also looking at the problems caused to retailers by food temperature controls, and at the scope afforded by the EC general hygiene directive to simplify existing domestic regulations.

Mr. Nicholson : Has my hon. Friend had the opportunity to study the horrifying material in the book by Christopher Booker, a man of Somerset ? Will he act on that material ? If he opens the book at random, on page 145 he will see how a local government official went into a shop--not, alas, in my constituency--said, "I have the power to close businesses like this down," and then visited the shop, a bakery, three times during the following six months. Will he act to help shops in my constituency that, again at random, have come to my attention, such as those in North Curry and Kingston St. Mary ?

Mr. Hamilton : As I appear in the book, I hope that my hon. Friend was not referring to me as part of the horrifying material. We should all be grateful to Mr. Christopher Booker for the publicity that he has given to some of the horrors of over-regulation and excessive zeal by some enforcement officers. I assure my hon. Friend that that is one of the items well to the fore in the deregulation initiative.

Ms Coffey : Is the Minister aware of the considerable concern in the north-west about the impact of out-of-town shopping centres on existing town centres ? Will he talk to his colleagues in the Department of the Environment with a view to changing planning law to make impact on existing retail businesses a planning consideration when deciding on new applications ? If he cannot do that, will he assure retail businesses in the north-west that they will not go totally out of business and lose thousands of jobs simply because of the present inadequacy of the planning laws ?

Mr. Hamilton : As an act of kindness, I shall show my right hon. Friend the Secretary of State for the Environment the hon. Lady's question.

Mr. Clifton-Brown : Will my hon. Friend congratulate the Prime Minister on his achievement at the last Edinburgh summit, which means that 75 per cent. of all EC legislation must be tested for employment measures ? Will he urge the Community to take that further so that it can create more employment ?

Mr. Hamilton : I shall do precisely that in Brussels tomorrow. It is vital that Europe does not continue to export jobs to other parts of the world as a result of failing to cost the impact of the regulations that it has sometimes unthinkingly issued in the past. As for the future, we shall provide a systematic mechanism for costing the impact of regulations. I hope that it will produce better regulations.

Mr. Foulkes : Is the Minister aware that there has been a dramatic increase in the number of illnesses caused by food poisoning and that it is vital that food safety is not imperilled by deregulation ? Will he give us an absolute guarantee that safety in this matter is paramount ?

Mr. Hamilton : I agree that there is a sensible point of view to be taken on this question. In our deregulation initiative, the costs for business will not necessarily be the deciding factor in the decision whether to allow a

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regulation to continue or to be introduced. It is always a question of balance. As the hon. Gentleman knows, losing one's balance can sometimes get one into trouble.

Exports --

11. Mr. Spring : To ask the President of the Board of Trade what has been the change in United Kingdom exports over the past year ; and if he will make a statement.

Mr. Needham : In the first 11 months of 1993, export volume was over 3 per cent. higher than in the same period a year earlier. Exports to non- EC countries, particularly south-east Asia, have risen rapidly--11 per cent. higher in 1993 than in 1992--and UK exporters are well placed to expand volumes when European demand picks up.

Mr. Spring : My hon. Friend will be aware that much of our increased trade is with the booming economies of Asia. But is he aware that a trade mission from the Suffolk chamber of trade and commerce is currently in Malaysia and Singapore ? Will my hon. Friend join me in congratulating that mission on securing orders which will boost employment in the county of Suffolk ?

Mr. Needham : I echo what my hon. Friend says. The chamber of commerce mission there has been very successful. Despite the efforts of Mr. Andrew Neil and others, it has achieved more orders than last year.

Mr. Purchase : The House will welcome the export efforts of our major companies, but, despite their heroic efforts in difficult circumstances, the United Kingdom's balance of payments problem remains acute. That can be put down to the policies of the Government.

Mr. Needham : The balance of payments percentage figures are lower now than at any time since 1982.

Mrs. Browning : Is my hon. Friend aware that there is extreme concern in my constituency among manufacturing industries ? The chairman of one such company came to see me last week to say that his company has two £500,000 orders waiting to be signed in Malaysia. Will my hon. Friend use his best offices to ensure that the damage caused by the editor of The Sunday Times is put right as soon as possible ?

Mr. Needham : I agree with my hon. Friend. If I may, Madam Speaker, I should like to thank the general secretary of the Trades Union Congress, who has written to me to

"express the concern of trade unions about the damaging consequences for jobs in British industry if the current restriction on the involvement of British companies in public work projects imposed by the Government of Malaysia is not lifted . . . We therefore support the government's efforts to restore good trading relations and we are confident that our trade union colleagues in Malaysia take a similar view."

I only wish that the editor of The Sunday Times , and the Murdoch press in general, would show as much responsibility as the general secretary of the TUC has shown.

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