Mr. Barry Sheerman (Huddersfield) : On a point of order, Madam Speaker. Given the great interest in today's three debates, and given the special circumstances, which the House will understand, is it possible to place a time limit on speeches today ?
Mr. Jim Cousins (Newcastle upon Tyne, Central) : On a different point of order, Madam Speaker. Overnight, we have heard the worrying news of many redundancies at Devonport dockyard. Have you been given any indication of a statement on that disturbing news, which has some bearing on our first debate ?
That this House recognises that it is only through the competitiveness of the United Kingdom that wealth is generated, and calls for a flexible business-friendly environment which encourages aggressive exporting, investment and innovation at home and abroad, unencumbered by excessive regulation, high social wage costs and statutory minimum wages.
I am pleased to have this opportunity to air my views on an issue which concerns us all. The publishing of the White Paper on competitiveness just before the recess was extremely useful. Even if the White Paper had not been published, however, I should still have chosen this subject.
All hon. Members will agree that competitive industry and a competitive business base in the United Kingdom are crucial to produce wealth and to generate the profits and money necessary to achieve the sort of society that all of us wish to see.
Most hon. Members present will be relieved to hear that I have no intention of going through the White Paper in great detail. [ Hon. Members-- : "Shame."] It is kind of hon. Members to suggest that I might go through it in great detail, but I know that some hon. Members want to concentrate on specific aspects and it is only fair to give them the opportunity to voice their views. If I were to cover the White Paper in great detail, I would take up all of this five-hour debate. My voice would probably give up long before then. I was fascinated by the reaction to the White Paper. I was delighted that the Confederation of British Industry,
Column 870the Engineering Employers Federation, the Institute of Directors, small businesses and even trade unions were pleased with it and welcomed it for its thorough analysis, for its wide variety of recommendations on the work that the Government plan to undertake and for pointing businesses, employers and employees in the right direction to a more competitive economy.
I was fascinated by the fact that the Opposition did not like the White Paper--probably, I suspect, because it did not recommend throwing public money at businesses, having a development bank or picking winners.
The White Paper makes it clear what each player involved in the game of producing wealth and generating goods and services can do. It encapsulates a broad cultural theme--the need to change, much of which has already been done. I do not wish to rehearse all the events of the 1980s, but the changes in industrial relations, the increase in the number of small businesses, the return to management of control of their businesses, the welcome new emphasis on exporting and the improvements in quality control are already under way.
In terms of quality control, the importance of businesses acquiring BS5750 status cannot be overstressed. The improvement in production and production methods that the standard brings about--this may sound double Dutch to some --is crucial to businesses being accepted both in the United Kingdom and abroad. Businesses should also be aware of the international standard 9000.
I know that there are worries about BS5750. I am aware that it requires continual management and the concentration of employees on the systems that have been set up. There is a danger if 5750 becomes set in concrete. It must be recognised that it should be an evolving standard and process. We must ensure that businesses continue to
Mr. Michael Trend (Windsor and Maidenhead) : Does my hon. Friend accept that for smaller firms BS5750 puts a great burden on their resources and time ? Many such firms feel that it is essential to get 5750 status because so many firms that they supply insist on the standard. In some instances, however, it has become a pointless and damaging exercise for small firms.
Mrs. Lait : I am grateful to my hon. Friend for that intervention, because it reflects some of the worries that have been voiced to me. They go to the core of the changes that are being considered in the context of 5750 systems. I can assure my hon. Friend, however, that some extremely small businesses find the standard a key to their success and have found the resources to concentrate on it. Several small companies in my constituency that employ only a few people have made 5750 the key to their management systems.
Mr. Peter Butler (Milton Keynes, North-East) : My hon. Friend may be interested to know that experience shows that companies without 5750 talk different languages and cannot communicate between themselves easily. Companies with 5750--it is sponsored by the British Standards Institution, which is based in my constituency and with which I am negotiating in seeking 5750 for myself, so as to be the first Member so accredited--can communicate between themselves and, therefore, become more effective. Whether firms are small or large, the need for them to communicate and to become more effective is exactly the same.
Having concentrated for some time on the need to improve standards in business, I think it important to set the need for greater competitiveness in the United Kingdom in its proper context, which is global market competition. Our businesses do not function solely within the UK. We are not functioning only in the European Union or the European continent. Equally, we are not functioning only in the Commonwealth. The reality is that we are in a global market. Our competitors come from countries that we have not taken much account of in the past. They are coming from Asia and are known commonly as the Asia tigers. They, even more than the United States and Japan, are the countries and the companies that we need to be looking to, not merely to compete with and sell to, but to learn lessons from. We must not look within Europe alone to provide the standards of business within the United Kingdom. We must focus on customers in the huge world market to which I have drawn attention. They are customers who are used to wide choice and to high quality, and those are the keys to our competitiveness.
We need to ensure that, as a country, our companies are on top of the demand for new goods and new technologies. We must adapt to meet changes. I am sure that many hon. Members, bearing in mind some of the battles that have taken place over the past 15 years, will realise that the reluctance to adapt and to meet changes has been one of our greatest problems. There have been difficulties in persuading the nation of the need to change and adapt. It is a battle which we cannot afford to lose. It must be recognised that if the battle is lost, we shall never be able to compete in the world market. As part of the adaptation to meet changes, we must ensure that businesses are free.
It is interesting that we are still talking about manufacturing industry. Various organisations commented on the White Paper and many of them said, "It is good to see the Government focusing on a manufacturing policy and an industrial policy." Over many years, I have been bothered by the artificial division between services and manufacturing. We have, for example, a successful computer hardware exporting operation. That is regarded as manufacturing industry. The software to go with it is an equally successful operation. It might be said that it is more successful than the hardware operation because much of it is home generated. It is regarded as being part of the service industry.
We must re-examine the definition of services, which includes education services. In Hastings, for example, English language schools are a large part of the local economy. They are earning good export money. They are still regarded as services. Sport is an export. Rubbish and cleaning services--known in the colloquialism of statisticians as sanitary services- -are earning us export money. Another relevant sector is posts and telecommunications. I do not wish to be too controversial, but it must be recognised that British Telecom has done brilliantly in exporting its services. One of the reasons for wishing to make changes to the Post Office is to ensure that it, too, can do the same.
We must get away from artificial distinctions between manufacturing and services, which, in the past, have led to the psychological impact of some jobs being classified as
Column 872real and others not--if someone is in manufacturing he has a real job ; if someone else is in services, he cannot have a real job. We must concentrate on removing these artificial distinctions. After all, services accounted for 17 per cent. of world trade in 1992, as against 15.6 per cent. in 1984. That shows us how important services are and how crucial they will be to the development of our economy. I do not subscribe
Mr. Jim Cousins (Newcastle upon Tyne, Central) : I am following the hon. Lady's argument closely and with a great measure of agreement. Does she feel that the report that came out yesterday about the condition of London and the significance of London in Britain's service trading, and the way that its position is being undermined by neglect, is a source of great concern ?
Mrs. Lait : I shall talk about the City in due course. I shall argue that, given the City's importance in world financial markets, without wishing to be complacent, we will continue to dominate world financial services. London will, therefore, continue to be a crucial player in world markets.
In the United Kingdom, the service industry is worth £12.6 billion. Its value has increased by 121 per cent. since 1982. That explains, perhaps, why over the past decade there has been criticism that we have concentrated too much on services and not sufficiently on manufacturing. I see these operations as one seamless whole. I hope very much that we shall begin to change our attitudes and, hence, the classification of different industries so that we can recognise their important roles.
It is in the service industries--the information and knowledge industries, for example--where the Asian economies have become so dominant. That has happened because they have flexible economies. They do not have the rigidities of the European continent and of the European Community. We have taken the lead within the Union in trying to free up our economies. It is an interesting fact that the results of the European elections may strengthen our elbow in continuing to lobby for that.
We must consider the Italian Government under Mr. Berlusconi and whatever one might think of the politics of the anti-Maastrichters in France, they have at least brought to that debate a more sensible and balanced view of how the French economy needs to be opened up. Who becomes the President of the Commission is crucial. I was delighted to see my right hon. Friend the Prime Minister supporting so strongly our candidate, as he has been the key in the Community in terms of mergers and competition policy.
We have said on many occasions that the Community should be opened up and made more flexible through social and labour policies. The Organisation for Economic Co-operation and Development report and the charges and counter- charges about the statutory minimum wage are timely.
I have read all the OECD report and it contains only two references to the statutory minimum wage, although much of the report implies criticism of it. The OECD report states that Europe is motivated to protect people from the vicissitudes of economic life. The European Community has tried to protect them through social welfare and the effect has been to rigidify the economies' ability to change. No Conservative Member would disagree with that sentiment. I have no desire to rehearse the arguments about
Column 873social wage costs and the statutory minimum wage. However, it is worth bringing to the attention of the House the references in the OECD report to the problems that have arisen as a result of a very tight social wage structure and the statutory minimum wage.
Mrs. Lait : That was a key issue in one of the last bouts of civil unrest in France. Most of us were horrified to see the effects of that, as it probably reminded many of us of our problems in the 1970s which were caused by rigid social wage policies.
The OECD recognises that the statutory minimum wage is a barrier to employment. It can support a statutory minimum wage only if there is a clear policy decision to reduce poverty, when a statutory minimum wage system should relate only to prices and not to average earnings and should differentiate between age and regions so that it is flexible. That must be contrary to the Opposition's concept of a statutory minimum wage.
Mr. Roger Berry (Kingswood) : If the problem in the 1970s was one of rigid wages, why was the growth rate in the 1970s far higher than it has been since 1979 when the Government have pursued precisely the opposite policy ?
Mrs. Lait : We do not have a statutory wage policy, but, if my memory is correct, I recall that on many occasions the Labour party attempted to have a statutory wage policy, but that was broken time and again by the trade unions. Most of us remember the horrors of the winter of 1978 which were the result of having a statutory wage policy.
I do not want to spend too much time on the statutory minimum wage. I simply wanted to demolish the arguments about its being a way of making our economy competitive in the world.
We need more changes in the European Union, because we must break down the rigidities in the employment market which are leading to barriers to employment. We are excluding people from the employment market because of the rigidities in the system.
Mr. Martyn Jones (Clwyd, South-West) : If the United Kingdom is so much more flexible and less rigid than the European Union, why has our economic growth lagged behind that of all the other European Union nations since 1979 except for Denmark and Greece ?
The Minister for Industry (Mr. Tim Sainsbury) : May I remind my hon. Friend and the House that the 1980s were the only post-war decade in which our economy grew faster than those of Germany, France and Italy ?
Mr. Nigel Waterson (Eastbourne) : Before my hon. Friend leaves her point about rigidities in the labour market, did she hear the comments on the radio this morning of one of the Labour leadership contenders, the right hon. Member for Derby, South (Mrs. Beckett), who
Column 874indicated in fairly clear terms that, as leader of the Labour party, she would be looking to restore rights of secondary picketing in this country ? That would be a serious backward step for trade union relations and for the economy generally.
Mr. John Sykes (Scarborough) : I should like to join this bandwagon. Is my hon. Friend aware that the Transport and General Workers Union, the biggest dinosaur of them all, has this morning thrown its weight behind the right hon. Member for Derby, South (Mrs. Beckett) ?
Mr. Cousins : The hon. Lady should have taken careful note of the comments of my right hon. Friend the Member for Derby, South (Mrs. Beckett) about her commitment to positive rights at work. Does the idea of staff, employees and managers having positive rights at work have any echo of sympathy in the hon. Lady ?
Mrs. Lait : Every employee, of whatever status, already has rights at work. One of the strengths of the development in the United Kingdom economy is that those rights at work are beginning to devolve down from company level to working level. Therefore, people can enter into direct discussions with their employers about those rights at work, payments and benefits which match the conditions of the company and the local economy. That is crucial to the flexible economy that we need in this country. That is underpinned by a legal system which ensures that everyone has direct legal rights.
Mr. Cousins : We are now quite clear : the hon. Lady is advocating a positive right for staff to discuss matters concerning the enterprise and the business with their employers. The hon. Lady is saying that that positive right should be included in law. That is very commendable.
Mrs. Lait : I like the hon. Gentleman's attempt to put words into my mouth, but that was not what I said. The direction in which our economy is moving, a direction of which I approve, is one in which employees and employers have a direct relationship in terms of remuneration and benefits. That must be the key to the flexible economy that we need to compete in the world. It is the world that we need to compete in, not the European Community. While the European Community as a whole is becoming increasingly uncompetitive, the United Kingdom is becoming increasingly competitive in the world. That is the direction in which we should be going.
Mr. Butler : I am afraid that my hon. Friend may inadvertently have been slightly misled by my hon. Friend the Member for Eastbourne (Mr. Waterson). I listened for several minutes to the interview with the right hon. Member for Derby, South (Mrs. Beckett) when she spoke about secondary picketing. I heard the right hon. Lady asked about four times what her view was, and the most that she would say was that her view was very well known ; she would not actually say what it was.
Column 875I had to turn off after the fourth attempt to obtain an answer. Perhaps she subsequently answered. I suspect that my hon. Friend the Member for Eastbourne has thrown an extremely red herring into the water. I do not think that the right hon. Lady has a view on secondary picketing, and I would not wish her to be unfairly castigated for the possession of a view that she does not hold.
I should like to make progress, because I would hate to be accused of filibustering. I have a large part of my speech still to make and it is about time I moved on to the further changes that are required in the European Union in order to make our companies more flexible. That matter was encapsulated by a paper that I received from the Chemical Industries Association Ltd., a body for which I worked in the early 1980s. The chemical industry is one of our most successful industries, both internationally and within the European Community. The association is exceedingly worried about the need for the European Union to look much more strategically at international requirements for company structures.
We need within the European Union a better understanding of global markets, how very large companies need to play in global markets, what constitutes mergers and monopolies, and when there should be interference in company changes. We need to consider cross-border transactions, shareholdings, deals on plant sales and so on which are crucial to the development of the chemical industry. Also, the European Union has not yet got the legal structure right in respect of co-operative joint ventures. They need to be streamlined and made much speedier and much more responsive to changes in world demand, which the chemical industry can be, as can many other successful international players in the industrial world.
Mr. Cousins : Is the hon. Lady saying that she supports the principle of European companies organised on a similar basis in respect of shareholders and stakeholders right across Europe ? If so, how does she support the opt-out from so many aspects that the present Government, whom she supports, have carried out ?
Mrs. Lait : The hon. Gentleman is trying to develop the concept of European companies. I am not entirely convinced that the body of law that is required for that is easily created. In the middle of the 1980s, great efforts went into trying to create European companies with the necessary legal requirements, and the idea fell upon the differences in national legal terms. We have to ensure that the European Union is capable of reacting flexibly to the requirements of the international industries that we need in order to be competitive throughout the world.
Mr. Butler : Does my hon. Friend accept that, contrary to the intervention by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), there is a significant difference between a company which operates in more than one European country operating similar systems throughout its operations for the benefit of itself and its employees and that company being required under the social chapter to operate totally ineffectual but very expensive
Column 876regulations and compliance systems which do nothing for the company, its employees or its competitiveness ? The Labour party is unable to distinguish between those two models, but does my hon. Friend accept that that is a clear and proper distinction ?
Several industries have expressed concern about the need for the United Kingdom to ensure that our civil servants are seconded at a high enough level within the European Commission to be influential, that we take up our complete quota of them, and that the system rewards them rather than penalises them for working in Brussels. I express an heretical thought : France and Germany exchange civil servants so that they grow up through the system knowing one another terribly well and can always telephone Franc ois or Helmut, so we should do exactly the same and set up such agreements with other European Union countries. I have no strong feeling about which countries they should be
Mr. Butler rose
Mr. Butler : I would not wish to put my hon. Friend under pressure in any context whatsoever. I hope that she will recall that as our relationship develops slowly but positively over the years ahead. She happens, though, to have released from the closet, as it were, a hobby horse of mine. Never mind exchanging civil servants ; would it not be an excellent idea throughout Europe to have a mutual exchange of, for example, health inspectors, abattoir inspectors, veterinary inspectors and compliance inspectors ? It is not that one believes for one moment that the Italians, Greeks, Spanish or French administer rules any less rigorously than we do, but, to reassure those who are more sceptical than my hon. Friend and I are about such matters that that is, indeed, the case, would not such an exchange have very positive benefits ?
Mrs. Lait : There would indeed be an exceedingly positive benefits. I should like to see people's reactions when reciprocal inspectors from Greece and Spain appear in our environmental health departments.
There is another issue in respect of which the Department of Trade and Industry can help directly. Many industries complain that it is difficult for them to take part as advisers on European Union committees. Such committees are legion and they take enormous time, but they are crucial in developing the common European standards that we need in order to complete the single market. Many industrialists say that their counterparts in other countries are helped financially in terms of fares and so on to take part in those committees, whereas our companies must cover the cost from their own income. For a small business in a high-tech sector, that can produce
Column 877great strains, but such participation is necessary to ensure that industry's survival. It would help if my right hon. Friend the Minister could tell me whether that idea has floated across desks at the DTI.
I have spoken at great length about greater flexibility within the European Union, and I should now like briefly to go back to the subject of employment and talk about the need to get away from rigid working hours.
In some of the recent BBC strikes, we have seen some of the consequences of old-fashioned rigidities. Those strikes were often castigated because they exposed practices such as soft shoes for studio staff and macs for political reporters. We see exactly the same problems in Germany, where, interestingly, the post office is being privatised, but part of the privatisation is to buy out some of the perks of the German postie, which include lemonade when the temperature is above 80 deg F and tea and coffee when it is below 14 deg F--let me try to keep within the same temperature system. Silly rigidities are limiting employment opportunities and ensuring that our economies still have some way to go before they are sufficiently flexible to meet the challenges from Asia.
We cannot afford to be a fortress Europe. We will be besieged by goods from outside, and eventually we will be starved into defeat. That is one reason why the single market is so crucial and why the United Kingdom pressed so hard for it. Of course, as a consequence of developing a single market, we have seen a fall out in the United Kingdom, as we have had to reconcile our traditional cultural and legal patterns of work which, in some respects, has caused great pain.
In some areas, we are way ahead--for instance, on copyright. But in our constituencies, we have all had to deal with the dissatisfaction that has been brought about by excessive regulation, for example, as we move towards the single market.
I welcome the Deregulation and Contracting Out Bill. I hope that the constitutional device included in it and recommended to another place by the House of Commons goes through that place without any problems, because it chills me to think of the consequences of having to deal with every single part of deregulation and re-regulation through primary and secondary legislation in this House. We need to be able to move forward.
I must tell the House that some of the regulatory madness continues. CMR in my constituency is a small chemical company which recycles chemicals--most people would approve of that. The company has discovered that regulations that came into effect on 6 May require the companies to have bonds for the chemicals that are used, in case there is an accident, which would require cleaning up by one of the waste authorities.
When the regulations came into effect, the bonds did not exist ; insurance companies were not prepared to provide them and banks had not even heard of the regulations, as far as I could find out. We are, therefore, left with a situation where there is no good mechanism for companies to be able to comply with regulations after they come into place. I deplore that. When regulations are still required, and it is agreed that they are required, there should be more thought about how they are implemented.
I also have the pleasure of having a division of Philips in my constituency. Many hon. Members will know that I regularly talk about the weakness of the Hastings economy, but Philips is one of my outstandingly good examples because it has gone from the threat of complete
Column 878closure to being the centre of the Philips kettle-making division for world markets. However, one of the issues that Philips must deal with is one that many of us, especially those who have bought electrical goods over the years, have regularly complained about-- the absence of a plug at the end of the lead and the fact that we must buy one separately.
At present, there is great confusion about whether the provision of a plug will be required by law. Of course, the question whether there will be a legal requirement to put a plug on the end of the lead, or whether it can be done as a gesture to the consumer, makes a big difference to companies such as Philips. If hon. Members have bought electrical equipment recently, they may have noticed that more and more such equipment has the plug attached, and that greatly reduces the irritability factor for the consumer. It would be helpful for producers to know whether they are legally required to produce a plug. That will come under regulation--then again, it may not. The package that was produced when the White Paper on competitiveness was published included a report on the regulation initiatives of the Health and Safety Executive. I and many of the companies that I have spoken to welcome the Health and Safety Executive approach. When I was working on the deregulation issue, I was interested to find that the HSE and Her Majesty's inspectorate of pollution were two of the least criticised bodies. I suppose that, because they are of such high quality, they were the first bodies to come out with ways of changing their approach.
I am impressed by the fact that, at long last, the HSE has decided to move towards goal setting and away from prescriptive targets. That is the best way forward, and it will make things much easier for companies.
I also welcome the fact that, after many years of problems, the HSE is beginning to focus much more clearly in a public way on risk assessment. Risk assessment is exceedingly emotive but little understood. I often describe it simply as assessing the risk brought about by Chernobyl : most of us probably got more radiation from watching television reports of Chernobyl than we ever did from Chernobyl itself. That is a simple way of putting over to people the meaning of risk assessment.
The problem is that we are beginning to create a society in which risk is being taken out, so that we become less and less able to assess risks to ourselves, our neighbours, our family and our friends. If the HSE can begin to focus on that in a more coherent and sensible way, I can only approve of it.
Mr. Butler : This is not only a problem within the HSE. Does my hon. Friend recall the recent case of the photographer who managed to step on to a slippery part of a breakwater, or some similar construction, and fall in the sea? He was the first person to injure himself on that particular piece of coast--I know that my hon. Friend represents a constituency which, at one time at least, was on the coast ; part of it may still be on the coast.
The photographer sued the local authority for not having put up warning notices. He was the first person in 90 years to fall in the sea and then receive damages against the local authority, which has now had to go to the expense of putting up notices.
Does my hon. Friend accept that no-risk compensation--the idea that any risk, however minimal, must be
Column 879guarded against and that the failure so to do renders one liable in the courts and under the HSE--is a widespread problem and needs a widespread response ?
I shall refer again to Her Majesty's inspectorate of pollution because an issue that arises time and again goes under the glamorous title of BATNEEC- -best available technology not entailing excessive cost. BATNEEC has led to endless arguments between HMIP, which tends to be in the middle, the DOE, the DTI and various other regulatory bodies and companies. I understand that HMIP has now provided a definition that is acceptable to all those bodies. That means that, at long last, some of that grey area which has produced so much argument may be resolved, and that will help in the whole of the deregulation issue.
There is still one remaining worry that business people have about HSE, HMIP and even--dare I say it--that other body, the environmental health officers.
Mr. Patrick Thompson (Norwich, North) : I am grateful to my hon. Friend for giving way ; earlier, I vowed not to intervene at any point in her speech. For a long time, I have been conducting a campaign against acronyms. My hon. Friend has used probably a dozen completely incomprehensible acronyms in the past five minutes. Her speech is excellent and fascinating, but may I, even at this late stage, ask her to join my campaign against acronyms ?
Mrs. Lait : The suggestion that we have a campaign against acronyms is sensible. However, I must tell my hon. Friend that when one is trying to say "best available technology not entailing excessive cost", BATNEEC comes more readily to the tongue.
Mr. Sainsbury : Perhaps I may remind my hon. Friend that if our hon. Friend the Member for Norwich, North (Mr. Thompson) were to launch a campaign against acronyms, he would be taking on not only the DOE but the whole Government as well. He might recall that when my hon. Friend the Member for Romford (Sir M. Neubert) moved from the Government Whips Office to the MOD, he said that he had moved from anonymity to acronymity.