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Mr. Sheerman : On a point of order, Mr. Deputy Speaker. You will know that the Speaker has been looking into the way in which private Members' business is handled in the House. There was an appeal for fairness from the Opposition Dispatch Box this morning, so that two important motions would have a fair share of the debate. Not only has the Minister for Social Security and Disabled People just voted in the Lobby, but his Parliamentary Private Secretary led the debate with an hour-long speech to stop us getting on to the disabled persons-- [Interruption.]
Mr. Deputy Speaker : Order. That is not a point of order for me. Madam Speaker is dealing with the matter to which the hon. Member referred and has already dealt with another point of order on the subject this morning. I later repeated her decision.
Mr. Dennis Skinner (Bolsover) : On a point of order, Mr. Deputy Speaker. Will you consider having a further look--perhaps you could pass the word on to Madam Speaker--possibly a Speaker's Conference, with a view to trying to get a little sense into the situation, especially as we had many debates about the disabled just before the recess but could not get a Bill through, although Government Members and the Prime Minister have been on the Normandy beaches talking to crippled veterans and
Mr. Max Madden (Bradford, West) : On a point of order, Mr. Deputy Speaker. We are all well aware of the difficulties that you face today. Motions 2 and 3 on the Order Paper are on the same subject, which is of great concern to Members on both sides of the House. Clearly it is impossible for us to move the closure on a motion, but in fairness to the hon. Members who tabled motions 2 and 3, would it not be fair to ensure that there is some limited discussion on those motions ? They deal with a subject which gives rise to considerable and understandable emotion. Could you say, perhaps, that the present debate should finish at two o'clock so as to enable proper discussion of the remaining two motions ?
Mr. Michael Bates (Langbaurgh) : On a point of order, Mr. Deputy Speaker. I seek your guidance. Will it be possible for there to be some investigation of the conduct of Opposition Members this morning ? It seems to Conservative Members that there has been an honest attempt to move the debate along fairly and firmly, but that it has been interrupted and delayed by a 47-minute speech from the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), by bogus points of order and by the hon. Member for Bolsover (Mr. Skinner) walking into the Chamber and wasting 15 minutes on
Mr. Tristan Garel-Jones (Watford) : Further to the point of order from the hon. Member for Bolsover (Mr. Skinner), Mr. Deputy Speaker, regarding a possible Speaker's Conference on private Members' Bills, may I avail myself of the opportunity to ask you to let Madam Speaker know that many of us in the House believe that no private Member's Bill should be introduced which requires a money resolution ?
Mr. Roger Berry (Kingswood) : On a point of order, Mr. Deputy Speaker. A few weeks ago, an equally important private Member's motion was carried unanimously in the House calling on the Government to provide time to complete the Civil Rights (Disabled Persons) Bill. Has the Minister responsible, who did not oppose that motion on that day, indicated whether he wishes to make a statement as to when the Government
Ms Liz Lynne (Rochdale) : On a point of order, Mr. Deputy Speaker. I seek your advice. Is there any way in which the Civil Rights (Disabled Persons) Bill can be debated in the House without Ministers trying to talk it out ? As a relatively new hon. Member, I seek your advice on whether private Members' Bills from Back-Bench hon. Members can be given time for a proper debate instead of having this disgraceful behaviour from Ministers.
Sir Michael Grylls (Surrey, North-West) : We have been taking part today in a fascinating debate of huge importance and I congratulate my hon. Friend the Member for Hastings and Rye (Mrs. Lait) on introducing it. There could not be a more important subject to our country, as I should have thought the Opposition would agree, than the competitiveness of British commerce and industry because that is the basis for the number of jobs that we shall have in the future. I must confess that I feel great sympathy for the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), whose speech I listened to with great care and which I found very interesting. He struck me as being a little like a general who is right out in front and looks around to find no army behind him. This is a hugely important debate and, while there is the odd infantryman lying around now, there was nobody behind the hon. Member for Newcastle upon Tyne, Central for the whole morning. Nobody from the Labour party took any interest whatever in the crucial subject of whether our business can compete in the world today.
Sir Michael Grylls : My hon. Friend took the words out of mouth ; I was about to refer to the Liberal Democrats. What my hon. Friend has said is absolutely true. It is extraordinary that a party which seems to have increasing pretensions to being an important party did not even bother to turn up.
Ms Lynne : On a point of order, Mr. Deputy Speaker. May I point out to the hon. Member for Eastbourne (Mr. Waterson) that I was in the House for the speech of the hon. Member for Stratford-on-Avon (Mr. Howarth) when he was talking about disabled people's rights ?
Sir Michael Grylls : That was only about half an hour ago and it is now nearly half-past one. Throughout the vast morning when this hugely important subject was being debated, no Liberal Democrat was present. However, let us now move quickly away from that matter.
Mr. Madden : The hon. Gentleman has been dealing with the interest in the debate, and clearly the bulk of the contributions this morning have been made from the Conservative Benches. Will he consult the sponsor of the motion--the hon. Member for Hastings and Rye (Mrs. Lait), who is placed conveniently next to him--to see whether, in view of the extensive debate that has taken place, she would be willing for the debate on her motion to conclude at two o'clock, which would enable a brief debate to take place on motions Nos. 2 and 3 ?
Sir Michael Grylls : It is a great pleasure to liaise with my hon. Friend the Member for Hastings and Rye at any time of the day or night, if the House happens to be sitting then. You would shut me up swiftly, Mr. Deputy Speaker, if I tried to intervene to say what should or should not be
Column 924in order or how the procedures of the House should be undertaken, because that is your prerogative and it would be impertinent of me to trespass on it.
One of the central arguments of the hon. Member for Newcastle upon Tyne, Central was his criticism of the excessive dividends that British public companies tend to pay. It is true that in the past two years dividends have increased, but the hon. Member must accept that it is a case of pluses and minuses. He did not respond to my intervention when I asked whether a future Labour Government would legislate to control dividends. I assume that his refusal to reply means that they would not intervene.
The hon. Member for Newcastle upon Tyne, Central must consider the pluses and minuses. Of course one can criticise the level of dividend payments in Britain and in the United States, which are higher than those paid in Germany and Japan, but that is partly due to our effective capital markets, certainly for public companies. Those markets represent some of the most efficient markets for raising money for investment of any countries. There are large gaps in those markets, but they work efficiently for large quoted companies.It is important that those who put their money into the stock exchange, either as direct investors through their own shares or through pension funds or however, get a proper return on their money. I do not think that there is much to be gained by debating whether there should be a certain level of dividend payments. The important thing is whether companies can effectively raise capital to invest or renew their capital, which is necessary in times of high inflation but not so important now that we are lucky enough to have a low inflation rate.
Mr. Skinner : The hon. Gentleman has a cheek to talk about people being absent from the Chamber when he has 10 extra jobs. He moonlights for 10 other companies, as well as being a member of Ian Greer Associates. He makes money hand over fist. He may talk about restrictions on dividends, but why does he not have the guts to declare now how much money he is making on the side from those four directorships, five advisorships and one consultancy as well as from being a member of Ian Greer Associates ? When he tells us all that, we shall be better informed and then he might be able to turn up for work as often as I do.
Sir Michael Grylls : Unlike the hon. Member, I have been here for the majority of the morning although I have other responsibilities. I believe that that is a great advantage to the contributions that I can make to the House. If one asks a busy person to do something, he generally succeeds in doing it.
The hon. Member asked a question, but he does not even have the courtesy to look at me when I reply. I do not believe that we need to take his intervention too seriously, but if the burden of his point--it is not strictly about the motion--is that he would like to have a House of Commons full of people with no other occupation outside politics, he should say so.
Sir Michael Grylls : I fear that I was seduced down an avenue into which I should not have gone. To give way to the hon. Member for Bolsover is a normal politeness ; the fact that he misused and abused that privilege in Parliament is something on which the House must make its own judgment.
I wish to underscore the importance of the White Paper. As my hon. Friend the Member for Havant (Mr. Willetts) said in his excellent speech an hour ago, the White Paper was bold because it underlined many of the weaknesses and challenges in the British industrial and commercial economy. There would have been no point in carrying out a public relations exercise saying how wonderful everything is. In my experience of this place, it is somewhat unusual because it portrays the British industrial economy honestly, warts and all. Anyone who studies the economies of the leading industrial nations in the world will know that they all have pluses and minuses : some are stronger in one area while some are stronger in others.
My hon. Friend the Member for Havant quoted Professor Michael Porter from Harvard university, who made an excellent point in his textbook on competitiveness. The view of that great expert on competitiveness throughout the world is that the most successful companies are those that operate in a deregulated economy. That reinforces the fact that we should support the Government in their deregulation initiative and face up to measures that will simplify life for businesses. If a firm wants to expand and has the money to do so, it must not be tripped up by unnecessary regulations. Too often, businesses that want to expand their factories because they are doing well are told by planners that they cannot do so because it would be too complicated. If planners and those involved in statutory procedures would be a little more positive, it would help our competitiveness enormously.
Huge improvements have been made in some areas, but we tend to remember the bad events and forget the good ones. Many positive measures have been taken to relieve business of excessive taxation--for example, simplifying and improving the loan guarantee scheme for firms that wish to raise money to expand but do not have adequate security to do so have been hugely important. Since the Government enhanced and improved that scheme in the last Budget, the number of firms applying for loans has doubled month on month, which is a good sign that people are not only taking up the scheme but finding it a positive advantage.
The abolition of inheritance tax for quoted companies is also important. One may ask why companies should not pay some tax when a business is passed on from one generation to another. Too often, however, when an owner- manager has died or retired, the business has had to be sold to pay the high inheritance taxes and that unit of competition has then disappeared. That is the damage done by high capital taxation. Almost any capital taxation
Column 926distorts business decisions and damages the independent small companies which are likely to be set up in this country.
The abolition of inheritance tax on non-quoted companies by the former Chancellor of the Exchequer, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), was one of the most important steps taken in the Government's whole lifetime. It has enabled companies to be passed on intact from one generation to another and to grow in the hands of each generation of owner-managers. The Government should be congratulated on having done that. We have to keep up the work on deregulation. We have to keep up the work on tax reform. Tax reform is needed. Capital gains tax is outdated. It distorts business decisions and stops the proper flow of capital going in the direction that it should.
Mr. Jimmy Hood (Clydesdale) : The hon. Gentleman talks about abolishing capital gains tax. Would he mind telling the House what he would replace it with ? Would he increase value added tax on fuel ? Would he increase direct taxation and shift the burden from the rich to the poor further than it has been shifted ? Is that what the hon. Gentleman would do ?
Sir Michael Grylls : I understand the hon. Gentleman's argument. I am not trying to make a Budget, so I do not have to balance my books. I am simply saying that capital taxes are distorting and damaging. As I am sure the hon. Gentleman knows, capital gains tax raises only a few hundred million pounds--a relatively small amount. If capital gains tax were abolished, the advantage that would flow to the country is that new jobs and new wealth would be created. The new wealth would be put into productive hands and create jobs. I say to the hon. Member for Clydesdale (Mr. Hood) that we must get rid of that prejudice--because that is what it is. To some extent, a few years ago, I was enticed by the idea that capital gains tax had a degree of fairness, so I understand the feeling, but it is far too damaging to allow that type of prejudice to stay in our minds because it distorts business decisions and restricts the creation of wealth and therefore of jobs.
I welcome the White Paper and I welcome the fact that it is radical, open and honest. I am sure that the Government will continue to pursue the initiatives in the White Paper, especially in relation to financing and deregulation, and I look forward to participating in another debate on this important subject in a year's time or a few years' time. We can then see all the extra progress that the Government have made in making the British economy more competitive.
Mr. Michael Trend (Windsor and Maidenhead) : There has been much to admire in this morning's debate, although I fear that one cannot admire the guerrilla tactics of the Opposition some moments ago. I enormously admired the way in which my hon. Friend the Member for Hastings and Rye (Mrs. Lait) brought up the subject. I also admire the way in which my hon. Friend the Member for Havant (Mr. Willetts) managed to get in an advertisement for his new pamphlet, which, even at £10, remains excellent value.
Column 927I enormously admired the speech of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), who made effective arguments that have sympathy throughout the House, in a way that no Opposition Member sought to do.
I shall speak about the first phrase of the motion :
"To call attention to the need for the United Kingdom to be competitive"
because that begs an important question and it needs broader consideration. Often, in discussion of the subject, people speak about the historical, cultural and social factors that are important, but those are not gone into in much depth. Yet I believe that those go to the heart of the matter.
We should ask ourselves what competition is. A fairly straightforward definition in "Johnson's",
"The action of endeavouring to gain what another endeavours to gain at the same time"
is the definition that begs the questions. In one sense, competition, as Bentham put it, was the way in which traders brought reduction in prices to purchasers, but there have been other usages of the word which betray characteristically English attitudes towards competition.
For a long time, there was an idea in our culture--I think that it persists --that competition was somehow ungentlemanly. It was to do with trade, which many people, of course, despised. There was suspicion of the examination system, which was the competition gateway. I am reminded that, in the past century, in the Indian civil service, people who had had to exert themselves to obtain work by engaging in the examination system were known as
"competition-wallahs" and disregarded for that.
Why, though, did Britain, which had such pre-eminence in the field in the 19th century, decline ? In an earlier intervention, I mentioned Gottfried Bruder, whose evidence to the Select Committee was second to none. He said :
"Britain's early and long-held lead in industrialisation, the inventiveness and individualism of her people, their capacity for organisation, discipline and improvisation, virtues all of which were amply displayed for instance in the success of Empire, their wide knowledge of the world and high international repute, as well as a broad home market combined with a widely spread international trading base, make the industrial decline"
"a seemingly inexplicable phenomenon."
I would argue that, in the past century and in much of this one, we have not been competitive. Because we had imperial preference, our traders were not as competitive as other countries quickly became. That phenomenon has been widely studied, particularly in a splendid book, which I will not bother the House with at the moment, by Mr. Martin Weiner, "English Culture and the Decline of the Industrial Spirit 1850-1980". Thought on the matter suggests that there was an English spirit abroad that denigrated and found trade distasteful--not in the milieu for finance, of course, as that was not at all different from the traditional world of the aristocracy and the then middle classes, who regarded it as a clean activity, done in a fashionable location. The roots of our present debate over the split between a financial culture and an industrial culture can be found to a certain extent in the past.
Much has changed in recent years, but there is still considerable room for further change. I give as an instance of that the status, say, of engineers, who are at the centre of our competitiveness in our industries. An engineer in Germany or Italy is somebody who is widely respected in
Column 928the community and is always introduced as an engineer, in the way in which one would say, "Here is a doctor." In this country, an engineer is the person one sends for when one's washing machine breaks down. The status of engineers is a key measure of how seriously we take the manufacturing industry.
Many of our university graduates, I fear to say, come out of university having done extremely well in arts and sciences and choose to go into one of the professions or the City rather than industry. Although the situation has improved, it must improve much more before we are in the same position as Germany. A good arts graduate coming out of university today would still be very tempted to go into, say, the civil service, the cream of which, of course, are the Clerks of the House of Commons. If one put all that superb egg-head power together and applied it to British industry, no doubt the country would be 10 times more prosperous.
There was also a sense in the past that there was something almost immoral about competitiveness, that the mammon gospel of competitiveness was not somehow in accordance with the Christian message. A characteristically pragmatic English view was put on that by Arthur Hugh Clough in his new 10 commandments, "The Latest Decalogue", when he said :
"Thou shalt not covet ; but tradition
approves all forms of competition."
I come to a third usage of the word, in which competition is placed in opposition to co-operation. That is particularly found in the ideologies of the Left, where they pretend that competition and co-operation are two sides of the same coin, and that they cannot work together, as we would think. It is particularly true of Bertrand Russell, who said that one could have one or the other. Yet that is not the case. We believe very strongly that the ideological bias against competition still exists in the left of British politics. I shall give one example of that--education and training.
Many hon. Members have spoken today about training, but it really is a motherhood subject. Everybody approves of training, but what matters is how one does it. If we are to have a people who are more competitive and able to get away from the mental attitudes of the past, and compete more vigorously in the world markets, it must begin in the education system.
Where does Labour stand on this ? Its attitude is nowhere more evident than in its lack of enthusiasm for competition. In the past 10 years, pressure on the examination system has come mainly from left-wing dominated unions and has been to try to get everybody to win prizes. It is viewed as disgraceful that some people should do better than others. Streaming in schools and especially in the big comprehensives has meant that there has been no encouragement for pupils to be competitive, one against the other. The idea in school sports that there should be no team or individual competitive spirit has been encouraged.
Rather than picking winners in education, Labour has encouraged a bland similarity throughout the system. It is against the assessment of teachers, which is a form of competition within the profession, and it does not approve of the competitive grading of schools. That distrust of league tables is at the heart of a profoundly uncompetitive attitude.
As I have said, some of the damage to our country stems from the attitude that competition is ungentlemanly and might be immoral. Some people on the Labour side of the
Column 929debate think that competition is ideologically wrong and politically incorrect. If we are to be more competitive we must stick to the Government's policies as outlined in the White Paper. In the world markets that are currently developing a new order of competition is coming into existence. I have the pleasure to be taking part in an Industry and Parliament Trust placement scheme with GKN which works successfully at the centre of the automotive industry. It has plants all over the world manufacturing constant velocity joints of which the company has a large share of the world market. Increasingly, its factories will be more competitive with each other. Whether we can produce those joints more competitively than the factories in Germany, Spain or Italy will be enormously important.
The Japanese car factories that have been set up in Britain are not British in any sense of the word, but they are producing jobs for us, which is what we want. Jobs are the reason for our need to be competitive in world markets. That is why education and training, business, exporting, turning away from high social on-costs and open markets matter. Our people will judge us on our success in increasing performance, and that can only be done by a party that understands how competition will develop in new world markets.
This is a wide-ranging subject and I fear that I have not been able to speak on it as expansively as I should have wished. I commend the Government's policy on competitiveness and congratulate my right hon. Friend the Secretary of State on his White Paper. I again congratulate my hon. Friend the Member for Hastings and Rye on the way in which she brought the subject to the House.
The Minister for Industry (Mr. Tim Sainsbury) : We have had an interesting, high-quality and wide-ranging debate. I am sorry that not all my hon. Friends who wanted to contribute could be called. I am also rather sorry that I have much less time to respond to the debate than the time that the Opposition spokesman took for his speech.
I warmly congratulate my hon. Friend the Member for Hastings and Rye (Mrs. Lait) on her success in the ballot and most of all on her choice of subject. Competitiveness is the foundation on which our future prosperity has to be built and my hon. Friend was right to remind the House and the members of the Government, whichever Department we are in, that we must not forget it. I also congratulate her on the able way in which she moved the motion and on the many telling points that she made.
I congratulate all my hon. Friends on not only the quality of their speeches but the knowledge that they have displayed and the interest that they take in businesses, especially those in their constituencies.
I should like to reinforce what has been said about why competitiveness is so important. Business and industry are the main creators of wealth in our economy. They are the drivers of our economy, which is why I agree with my hon. Friend the Member for Norwich, North (Mr. Thompson) that there is no more important subject than business and industry for the House to debate. I am happy to agree with the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) that the subject is important. Business and industry are the foundations on which our other achievements are built--schools, hospitals, improvements in living standards and a better quality of life. We all wish
Column 930for those things and business and industry generate the wealth to pay for such improvements in our lives. The competitiveness of business and industry is essential, therefore, for our future prosperity and vital if Britain is to be able to satisfy the social and economic aspirations of its citizens.
That goes as much, if not more, for the disabled as for other members of society. I take the strongest objection to the synthetic indignation and the Opposition's time-wasting during this important debate. I am astonished that they do not seem to be aware that, as often as not, the first motion on the Order Paper on a day such as this takes up the whole of that day. I can think of no subject that more justifies filling the day and not all my hon. Friends who could have made valuable speeches were able to speak. In those circumstances, it is astonishing that there has been a total absence of speeches from Opposition Members, apart from that of the Opposition Front-Bench spokesman. They have nothing to say about business, industry and wealth creation. That is equalled only by the performance of the Liberal Democrats, who have not only had nothing to say, but have not been present for the vast majority of this important debate.
Mr. Berry : The Minister will be aware that work on the second Severn crossing has ceased because more than 700 workers were sacked yesterday as a result of taking 24-hour industrial action after a ballot. Those workers want the matter to be referred to the Advisory, Conciliation and Arbitration Service, but the management has refused. Will the Minister use his best endeavours to ensure that investment in infrastructure in Bristol continues and that the matter is referred to ACAS for settlement as a matter of urgency ?
Mr. Sainsbury : That intervention is an example of why I would be unwise, in the limited time available, to give way again. I want to respond to the important points made by those who have spoken in the debate.
I agree with my hon. Friend the Member for Hastings and Rye on the achievements of the 1980s--the progress on industrial relations, the gains of smaller and medium-sized companies and the improvement in managements' ability to manage, which is an important point. That is reflected in the new-found emphasis on exporting and quality. She rightly put the matter in the context of the global market in which we now compete. She and other hon. Members referred to the importance of service industries and the artificial distinctions that occur between the manufacturing sector and other industries.
As I have many language schools in my constituency, I was delighted to hear her reference to language schools. We all agree that London is a vital part of our economy and has a vital contribution to make. I have recently announced a grant in aid to the London First centre. My hon. Friend the hon. Member for Hastings and Rye drew attention to the disadvantages of an unstable macro economy, particularly in respect of investment. Unless we firmly control public spending, it is inevitable, as during the era to which my hon. Friend referred of Lord Healey, as he now is, that we shall be faced with macro-economic instability, which is damaging to our economy.
I was glad to hear what my hon. Friend said about improvements in export support. She referred to the roads to Hastings and my hon. Friend the Member for Norwich, North referred, rightly, to the importance of roads to
Column 931Norwich. I shall ensure that my right hon. Friend the Secretary of State for Transport is aware of what my hon. Friend the Member for Hastings and Rye said.
My hon. Friend brought her remarks to a close by saying that we must accept and welcome, rather than resist, change when it is necessary to improve competitiveness. I hope that we all agree about that.
My hon. Friend the Member for Meriden (Mr. Mills) referred, understandably- -he is a great expert on it--to the car industry. It is an industry transformed. It reflects all the benefits of the changes that we brought to the environment in which business operates during the 1980s, not least to inward investment. I was glad to hear the welcome that my hon. Friend expressed for the success that the BMW takeover of Rover is achieving. I noted what he said about trading standards officers. I shall ensure that his comments are followed up.
My hon. Friend the Member for Eastbourne (Mr. Waterson) made some cogent remarks about banks. I will ensure that my right hon. and learned Friend the Chancellor of the Exchequer is aware of them. My hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) talked about Devonport with great feeling. I know that we all regret the additional redundancies that have occurred there. I will ensure that my right hon. Friend the Secretary of State for Defence is made aware of what he had to say on the subject.
My hon. Friend the Member for Havant (Mr. Willetts) commented on the changes in structure that are occurring in manufacturing employment and how the transfer, for instance, of transport can mean that somebody is reclassified as being in the service industry. Service industries and manufacturing industries are interlinked. The success of service industries makes an important contribution to the success of manufacturing industries. I thank my hon. Friend for what he said about my visit--I much enjoyed it-- to his constituency. My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) spoke of the contribution that the disabled can make to our economy. I am sure that we all agree about that. I will ensure that my right hon. Friend with responsibility for the disabled is aware of what my hon. Friend said.
My hon. Friend the Member for Surrey, North-West (Sir M. Grylls)