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House of Commons

Wednesday 11 May 1994

The House met at half-past Two o'clock


[ Madam Speaker-- -- in the Chair ]


Greater Manchester (Light Rapid Transit System) Bill [

Lords ].

Considered ; Bill, as amended, to be read the Third time .

Commons Registration (East Sussex) Bill [

Lords ]. Read a Second time, and committed .

Church of Scotland (Properties and Investments) Order Confirmation Bill.

Read the Third time, and passed .

Oral Answers to Questions


Subsidence (Insurance) --

1. Mr. Illsley : To ask the President of the Board of Trade what representations he has received from British Coal regarding the refusal of insurance companies to insure properties previously affected by coal mining subsidence.

The Minister for Energy (Mr. Tim Eggar) : British Coal has confirmed that from time to time it has been approached by individuals saying that they are unable to get insurance because their property has suffered subsidence damage. In such cases, British Coal has, in general, offered to contact the insurance company to spell out the extent of its remedial obligations in respect of any subsidence damage arising from coal mining.

Mr. Illsley : I thank the Minister for that reply. He and I debated the matter on the Adjournment recently, but since that time I have been made aware of two further cases in which insurance cover has been refused-- one in respect of subsidence damage that occurred 30 years ago and the other where the damage needed repairing by means of decoration only. Will he maintain pressure on the insurance companies, through the Association of British Insurers, to ensure that they are aware that such properties are usually sound properties and a good insurable risk ?

Mr. Eggar : I will certainly undertake to continue to do that. Of, course, as we know, almost all those properties are in any case covered by the Coal Mining Subsidence Act 1991.

Mr. David Shaw : Is my hon. Friend aware that I recently had a constituency case in which insurance was not so much refused as charged at a much higher rate than it otherwise should have been? In normal circumstances,

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my constituent would have been able to get a much reduced rate. Is my hon. Friend further aware that there is therefore considerable concern that the coal mines in my constituency, which have been there for some years, have caused a problem in that regard?

Mr. Eggar : I understand the problem, and I think it fair to say that, when examined in detail, most cases arise from a

misunderstanding by the insurance companies of the provisions of the 1991 Act. If my hon. Friend lets me have details, I will see what I can do to pursue the case.

Mr. Nigel Griffiths : But why is not the Minister getting tough on insurance companies that run seminars about exploiting the loopholes and avoid meeting the legitimate claims of customers ?

Mr. Eggar : The hon. Gentleman loves going for the cheap headline. He would have done both his hon. Friend the Member for Barnsley, Central (Mr. Illsley) and me a bit more courtesy if he had been present to listen to the detailed Adjournment debate on the subject.

Small Businesses --

2. Mr. Streeter : To ask the President of the Board of Trade if he will make a statement on measures he plans to assist small businesses.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : The Government recognise the crucial role played by small firms in the United Kingdom economy. The Government help small firms by keeping inflation and interest rates low and by reducing legislative and administrative burdens. They also provide direct assistance where appropriate and are currently establishing a network of Business Links to provide high-quality business support across the country.

Mr. Streeter : I thank my hon. Friend for his reply. Is he aware that many businesses in the west country are well served by the low interest rates, low inflation and freedom from the job-destroying social chapter that the Government have brought about ? Does he agree that what many small businesses now want is the early introduction of the Deregulation and Contracting Out Bill to blast away much of the red tape that is ruining their lives ? Is not it a great pity that Opposition Members continue to delay and oppose that measure ?

Mr. McLoughlin : I am grateful to my hon. Friend ; I entirely agree with him. The House debated the Bill yesterday, and I hope that it will complete its stages tomorrow.

Mrs. Mahon : One traditional small business is the British pub. What will the Minister do to stop what is happening to it ? What will he do to stop cheap imports, investigate the leases that are doing so much damage and prevent rents from going through the roof ? Pubs are an endangered species, and the Minister is responsible.

Mr. McLoughlin : In fact, the brewing industry has invested a tremendous amount in new pubs--as the hon. Lady would see if she visited a few.

Mr. Nicholas Winterton : Industry as a whole is immensely grateful to the Government for the steps that they have taken in respect of Business Links and other measures. More export credit is now available to smaller

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businesses, for instance. Is my hon. Friend aware, however, of the press release issued today by the Engineering Employers Federation ? He certainly should be, as one of his colleagues from the Department was present for the federation's breakfast-time briefing. According to the federation, industry believes that moves such as a further improvement in export credit and 100 per cent. capital allowances would benefit industry immensely, giving it the fillip that it needs so desperately in order to contribute further to the improvement of the British economy.

Mr. McLoughlin : I am grateful to my hon. Friend for what he said about Business Links. He has been fortunate, in that one of the first Business Links in the country serves his own constituency. I am glad that he recognises the important role that such links will play in providing for the competitiveness of the United Kingdom. It is, I think, no secret that my right hon. Friend the President of the Board of Trade intends to publish a White Paper on competitiveness in the near future.

Mr. Fatchett : The Forum of Private Business estimates that small firms are owed £50,000 million in late payments, and every survey of small firms suggests that late payment is their key problem. When will the Government act, and introduce a statutory right to interest on late payment ? Why is theirs the only major political party that does not support such a measure ? Is it simply because they are so in hock to large companies and other contributors to their funds that they cannot help small business ?

Mr. McLoughlin : That is absolute rubbish. We issued a consultation paper last November ; the hon. Gentleman just needs to wait a little while.

Mr. Butcher : Does my hon. Friend agree that, in so far as small manufacturing businesses are capital intensive--in contrast to small service industries--the abolition of capital gains tax would have a particularly beneficial effect on the unquoted manufacturing sector ? As a Minister in the sponsoring Department, and as one who cares passionately about these matters, will my hon. Friend ask the Department's economists to investigate ? There is now a growing suspicion that the abolition of capital gains tax could provide the biggest job creation programme that the country has seen in 20 years.

Mr. McLoughlin : I am grateful to my hon. Friend. I am always willing to consider the points that he makes, but he will appreciate that his question is a matter for my right hon. and learned Friend the Chancellor of the Exchequer. It will probably be one of the first of many Budget submissions to my right hon. and learned Friend.

Gas Industry --

4. Mr. Tony Lloyd : To ask the President of the Board of Trade when he last met the Director General of Ofgas to discuss consumer protection.

Mr. Eggar : On Monday.

Mr. Lloyd : Has the Minister had an opportunity to discuss with Ofgas the British Gas meter replacement programme, about which I have asked him before ? Specifically, will he confirm that Ofgas has now agreed that British Gas can complete the programme by 1996, a year later than originally planned ? Can he justify an

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arrangement that will mean consumers paying more for gas that they do not actually receive, and the loss of jobs in the meter manufacturing industry ?

Mr. Eggar : I am aware of the hon. Gentleman's concern. I have not had a chance to discuss the matter with the director general, but, prompted by the hon. Gentleman's question, I will be sure to do so.

Mr. Dunn : Will my hon. Friend confirm that gas consumers will be protected from any real increase in gas prices, at least until 1997 ?

Mr. Eggar : The price cap that currently applies to British Gas--RPI minus 4--will continue to apply. My hon. Friend will have had a chance to study the consultation document, and will know of the ways in which we are trying to deal with the various transitional issues surrounding, in particular, the elderly and disabled.

Mr. O'Neill : After the general election in 1997 or 1998, will the Minister still be in a position to guarantee that there will be no losers ? He will be aware that the regulator, the managing director of Alliance Gas and the director of the Gas Consumers Council have all said that there will be losers as a consequence of what was announced this week. Can the Minister guarantee that they are wrong, and that no one will have to pay higher gas prices--particularly the lower paid and disadvantaged, who, as everyone agrees, will be most vulnerable ?

Mr. Eggar : I share the hon. Gentleman's certainty that I shall be on the Government Benches in 1998 and will be the Minister for Energy at that time. The Opposition are scaremongering. In 1985, during a debate on the privatisation of British Gas, the Opposition Front-Bench spokesman said :

"There is no evidence that the Bill"

the privatisation Bill

"will improve efficiency, provide a better service or produce cheaper gas." --[ Official Report , 10 December 1985 ; Vol. 88, c.780.]

The Opposition were wrong then and they are wrong now. They were scaremongering then and they are scaremongering now. They should be more responsible.

Sir Peter Emery : It is right that the consultative document should work to help the Government to obtain greater competition in the industry, but will my hon. Friend deal with the fears that have been whipped up by the Liberal Democrats, particularly in the west country, where they are saying that the west country will have appreciably higher gas prices than the rest of the country ? I should like to hear my hon. Friend's view on that.

Mr. Eggar : There is a lot of scaremongering by the Liberal Democrats as well as by the Labour party on this issue. It is true that, on certain assumptions, there may be an increase of about 17p per week for the average consumer in the far south-west as a result of transportation charges. However, competitors of British Gas believe that they will be able to reduce prices to the average gas consumer by about 70p a week. In other words, rather than being worse off, the average south-west gas consumer, will be considerably better off as a result of competition.

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Post Office --

5. Ms Hoey : To ask the President of the Board of Trade if he will give the Post Office more commercial freedom.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : This is one of the issues being considered in the Post Office review.

Ms Hoey : It is about time that we had the results of that review. Why is the President of the Board of Trade conducting such a vendetta against the Post Office ? Why are not the Government prepared to give it the commercial freedom that would make it an even more profitable business than it already is ? What does the right hon. Gentleman have to say about the recent Post Office survey in which 77 per cent. of those asked wanted to keep letters, counters and parcels together as one business and wanted that business to be given commercial freedom ?

Mr. Heseltine : The hon. Lady will have read the Select Committee report, as have I, and will have welcomed the fact that it unanimously advocates change. The Government are deeply aware of the significance and importance of the Post Office and we wish to give the Select Committee report and a wide range of other representations proper consideration. As soon as we have concluded our review, we will make our results public.

Sir Donald Thompson : Is my right hon. Friend aware that the Post Office is begging for privatisation ? Will he explain the advantages that privatisation would bring to small and rural post offices ?

Mr. Heseltine : My hon. Friend and the House will know that 19,000 of the 20,000 post offices in this country are already in the private sector, so they have considerable opportunities to trade commercially. They are interested in acquiring further opportunities and the Government are considering that. All these matters would be better considered when the Government respond to the review that we are now conducting.

Mr. Robin Cook : Did the President of the Board of Trade see Monday's report to the effect that the chief executive of the Post Office has had talks about privatisation with Warburg in the City ? As there is no Bill before the House dealing with the privatisation of the Post Office and as there has not even been a statement to the House about the Government's intentions for the Post Office, who gave the Post Office authority to have talks about privatisation ? Was it the right hon. Gentleman ? [Interruption.] The House will note the contempt in which its procedures are held by Conservative Members. As no statement has been made about the Post Office review in the two years since it was set up, will the President take some time off from his canvassing work among his Back Benchers to tell the rest of us whether the Post Office will remain where it belongs, providing a public service in the public sector ?

Mr. Heseltine : There we have it--we are begged by the hon. Member for Vauxhall (Ms Hoey) to let the Post Office be more commercial and urged by a Labour-chaired Select Committee unanimous report to make it more commercial, yet the official spokesman for the Labour party will not

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even let the chief executive use the word. That is the best example of socialist suppression and totalitarian attitudes that I have ever heard.

Sir Anthony Grant : Did my right hon. Friend note that the all-party Select Committee report unanimously observed that if the Post Office is to meet increasing overseas competition, it is essential that it should have commercial freedom ? The report left open the question whether privatisation or any other method should be used to achieve that objective.

Mr. Heseltine : My hon. Friend played a distinguished part in the Select Committees's unanimous report, which I have read and to which we shall respond. The open-minded approach of hon. Members of all political parties to that report contrasts with the clam-like attitude of the spokesman for the Opposition.

Nuclear Energy Review --

6. Mr. Rooker : To ask the President of the Board of Trade when he expects to announce the terms of reference for the nuclear energy review.

Mr. Eggar : I shall announce the terms of reference in due course.

Mr. Rooker : When the Minister reverses the lethargy in his Department on this issue, will he be able to tell us whether the terms of the review will allow for the early closure of the out-of-date Magnox stations ? As one who is not anti-nuclear in principle, may I ask whether the terms of the review rule in or rule out the construction of any new nuclear power stations ?

Mr. Eggar : The review will seek to address such issues. I have taken careful note of the hon. Gentleman's stance on the matter.

Mr. King : Will my hon. Friend undertake to ensure that the nuclear power review takes full account of the remarkable improvements in performance achieved by our nuclear industry, not least the world-ranking performance of Hinkley Point advanced gas-cooled reactor ?

Mr. Eggar : I agree that Nuclear Electric has improved output and reduced costs considerably in the past couple of years. A major tribute should be paid to the senior management and work force of Nuclear Electric, who are committed to making a success of nuclear power in this country.

Mr. Llew Smith : Does the Minister accept that the review was started in secrecy because of the links between the nuclear industry and the military and because of the Government's determination that the industry should be shrouded in secrecy ?

Mr. Eggar : The hon. Gentleman probably asks me more questions on this issue than all the other hon. Members put together. He is presumably busy trying to prove conspiracy theories of that sort, but he is wrong.

Mr. Beith : Will the review take into account the full costs of insurance of nuclear power stations and the full costs of decommissioning ? Will it ensure that those are not offset by subsidies or other devices that make it unclear whether nuclear power is viable ?

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Mr. Eggar : I understand the right hon. Gentleman's desire to ensure clarity in costing, which I am sure will be one of the matters with which the review will want to deal.

Dr. Michael Clark : Does my hon. Friend recall that at the beginning of last year, at the time of the coal review, he said that the nuclear review would take place in 1993 ? We are nearly halfway through 1994, yet we are still waiting for its terms of reference. Does he realise that the nuclear industry, its employees, plant and technology depend heavily on the review ?

Mr. Eggar : I understand my hon. Friend's impatience and I assure him that I will bear those factors in mind.

Arms Sales (Indonesia) --

7. Mr. Heppell : To ask the President of the Board of Trade what recent representations he has received regarding the sale of Hawk trainer jets to Indonesia by British Aerospace.

The Minister for Trade (Mr. Richard Needham) : I have received a number of written representations from Members of Parliament and others about the sale of Hawk trainers to Indonesia.

Mr. Heppell : Does the Minister agree that, with 200,000 people reported dead in East Timor and with John Pilger reporting that Hawk jets are being used for aggression against East Timor, there is now a case for stopping any licensing of arms sales to Indonesia ?

Mr. Needham : I have never seen a report from any reputable organisation which suggested a figure of 200,000. The maximum number that I saw in the United Nations report from the 1970s was some 80, 000. I am not going to argue with the hon. Gentleman about the horrendous numbers of people killed in the 1970s, but if he believes that the problems of East Timor--which are, in any event, entirely different now from what they were 20 years ago--will be solved by an arms embargo, he is entirely mistaken. Furthermore, I note that as there are no aerospace companies or aerospace employees in his constituency

Mr. Heppell : There are.

Mr. Needham : If there are, it is even worse. I note that he is only too happy to salve his conscience by putting at risk the jobs of people in the aerospace industry.

Mr. Bill Walker : Does my hon. Friend agree that the Hawk trainer is the finest of its kind anywhere in the world, which is why it was bought by the United States and many other countries ? If the Hawk were denied to Indonesia, would not the Indonesians buy an inferior aircraft and would not that mean that we would be exporting jobs to whatever country supplied that inferior aircraft ?

Mr. Needham : My hon. Friend is right about the Hawk, but it is not only a question of selling the Hawk to Indonesia. The points made by people such as the hon. Member for Nottingham, East (Mr. Heppell) put at risk sales of the Hawk not only to Indonesia but to other countries. I wonder whether the hon. Member for Livingston (Mr. Cook) would also be prepared to put at risk the most successful training aircraft and the jobs that go with it in this country.

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Mr. Robin Cook : The Minister will appreciate the fact that this is a major humanitarian issue, whether the number of casualties was 80, 000 or 200,000. He will be aware that Hawk aircraft have been observed on bombing runs in East Timor in most years since 1984. What assurances did he seek, before giving export licences, that the 24 Hawks that he approved last year would not be used in the same way ? Can he guarantee that we can believe those assurances ?

Mr. Needham : I do not know which Hawk aircraft the hon. Gentleman is referring to when he mentions bombing in East Timor since 1984 ; nor do I know where he got that information from. He will be aware--it has been stated in the House many times--that we have received specific assurances. I repeat my question : is he saying that he is not prepared to support the sale of these aircraft to Indonesia ? What criteria would he use for the sale of such aeroplanes to India ? He says that he wants an industrial strategy, but, at the same time, he seeks to undermine the most advanced aerospace industry in western Europe.

Mr. Sumberg : Is not it absolutely typical that the Opposition constantly ask the Government to do more for companies such as British Aerospace but still complain when they do ? Is not that absolute hypocrisy and double standards ?

Mr. Needham : Yes.

Shipbuilding --

8. Mr. Byers : To ask the President of the Board of Trade what steps he is taking to assist the shipbuilding industry.

The Minister for Industry (Mr. Tim Sainsbury) : We provide the industry with assistance from the shipbuilding intervention fund and the home credit guarantee scheme.

Mr. Byers : Is the Minister aware that it is exactly a year ago this week that the Swan Hunter shipyard on Tyneside went into receivership and that, since then, more than 1,300 jobs have been lost ? Does he accept that, if shipbuilding is to survive on Tyneside, we need a new owner for Swan Hunter to take the yard out of receivership ? Can he say today that the Government would welcome a new owner for Swan Hunter and can he give an assurance that the Government would give all possible assistance to a new owner to secure new shipbuilding orders on Tyneside, especially in the export market ?

Mr. Sainsbury : I am happy to confirm something that I should have thought the hon. Gentleman would know. The Government have been seeking for the whole year to assist the receiver to obtain a buyer for the yard and we seek to assist the yard now, as we have done consistently, to obtain further export orders.

Mr. John Marshall : Does my right hon. Friend agree that the main hope for shipbuilding areas may well come from attracting new companies such as Nissan rather than propping up high-cost, inefficient industries as happened in the case of British Shipbuilders ? How much Government money was poured into British Shipbuilders ? Was not it a great deal more than was given to Nissan to create long-term jobs in Sunderland ?

Mr. Sainsbury : I am sure that my hon. Friend knows that in public ownership British Shipbuilders was not

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competitive, and absorbed a great deal of the taxpayers' money, without using it effectively. He is right to draw attention to the benefits of inward investment, which the Government have strongly encouraged, but which the Labour party has at times positively discouraged. I return to what I said earlier to the hon. Member for Wallsend (Mr. Byers) : we wish to see a new owner for Swan Hunter, and we shall continue to assist the receiver to find one.

Mrs. Ewing : When considering the overall pattern of the shipbuilding industry within the United Kingdom, does the Minister attach any weight to the effect on our offshore construction yards ? We should look at what is happening in Italy, with the building of the Spirit of Columbus. That is extremely important for our offshore construction yards. Is it possible for the Government to consider how we can balance the needs of the shipbuilding industry with those of the offshore oil and gas industries ? That is an important question in terms of the money contributed by the Department of Trade and Industry.

Mr. Sainsbury : I assure the hon. Lady that the Minister for Energy and I keep in close contact about the possibilities of offshore construction for the oil industry, as well as for shipbuilding orders. If the hon. Lady has a specific point to make--about the Spirit of Columbus, for example--perhaps she would like to write to me about it.

Post Office --

9. Mr. Hicks : To ask the President of the Board of Trade whether he proposes to introduce any changes in the administration and operation of the Post Office ; and if he will make a statement.

Mr. Heseltine : That is being considered as part of the Post Office review.

Mr. Hicks : Does my right hon. Friend acknowledge, however, that in rural areas especially there is genuine apprehension about the possible introduction of fundamental changes that could adversely affect not only the sub-post office network but the Royal Mail delivery service, and in particular the uniform standard charge ? Is not it possible for the Department to come to some agreement with the Treasury to lift the existing Treasury constraints to give the Post Office the commercial freedom that we all acknowledge that it needs as we approach the 21st century, so that we do not have to go through with the suggested fundamental reorganisation ?

Mr. Heseltine : I know of my hon. Friend's concern, but he will also know of the Select Committee's unanimous report that there has to be change. However, I can assure him that the universality of delivery and the universal charge for the services of the Royal Mail are not under review. They are sacrosanct. I have made that clear before, and I have pleasure in repeating it now.

Mr. Hain : Why does not the President of the Board of Trade listen to the hon. Member for Cornwall, South-East (Mr. Hicks) and give the Post Office commercial freedom now ? He could do that right away. All the delay is allowing European competitors to come into the British market and clean up, which is against the interests of the Post Office. Why does not he allow the Post Office to invest its own money, instead of being restricted by arcane Treasury rules ? Why does not he allow it to enter joint ventures with

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other European operators to conquer the European mail market ? Surely his option of privatising the Post Office, whether in BP style or otherwise, will threaten the interests not only of the Post Office but of rural deliveries and post offices, so that all his hon. Friends will be swept aside at the next general election.

Mr. Heseltine : The hon. Gentleman must know that the principal foreign-owned organisation that is entering this country is the Dutch post office, and that the Dutch Government are about to float shares in the Dutch post office in order to ensure its freedom to operate in the commercial market. I will not anticipate the outcome of our review, but the hon. Gentleman and the whole House will understand that the concept of major state organisations trading with taxpayers' money, and therefore being able to undermine and undercut the private sector, represents an extremely unattractive prospect for the jobs of all the people who work in the companies that could be affected, many of whom live in the constituencies of Labour Members.

Mr. Dykes : Does my right hon. Friend agree that the abiding characteristic of the organisations in the long list of companies that we privatised during the excellent and successful privatisation programme under the previous Prime Minister, was that in public ownership they were by and large unsuccessful and loss-making ? In the present case that is not so, and as the Post Office is already so successful and profitable--no commercial criticism of its functioning has been made by anybody outside-- it will not need the upheaval that my right hon. Friend has in mind, provided that it can be freed from Treasury bondage.

Mr. Heseltine : My hon. Friend must not anticipate any changes that the Government may wish to decide on. However, I cannot agree that we privatised only unsuccessful loss-making organisations. For example, we privatised British Telecommunications, which was a profitable organisation. We privatised the electricity companies and the gas companies. What has happened as a result of the 1980s privatisation programme is that major nationalised industries serving a domestic market from a monopoly base have become competitive world-class companies, trading across the face of the earth to the greater benefit of the British economy.

Mr. Cousins : Does the President realise that this summer it will be 330 years since Britain was last invaded by the Dutch ? The Government may well be proposing to celebrate that event by taking a stiff gin--and who could blame them--but Admiral van Tromp's successors, as the President has recognised, are back, in the form of the Dutch post office. What plans does he have for our defence ?

Mr. Heseltine : It surprises me not one whit that the hon. Member draws for his philosophy and his practical proposals on the deep archives of history. My concern is tomorrow, not yesterday.

Regional Assistance, North-east --

10. Mr. Devlin : To ask the President of the Board of Trade what are the expected benefits to the north-east from regional assistance.

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