|Previous Section||Home Page|
Column 419little nitty-gritty details. People who live in the real world know that the nitty-gritty details make the difference between profit and loss, success and failure.
As an illustration of the importance of the nitty-gritty details, I shall lift a story that was told by the President of the Board of Trade to a group of industrialists in Birmingham slightly more than a year ago. He told a story about a Japanese mission from a steel firm in Japan, which visited a similarly equipped British firm that was not making as much money.
When the Japanese left, they presented a list of 50 items that they suggested could be considered for introduction into that British plant. There were such items as, "When you test the metal quality, do you have to swing the glass door open wide ? Why do you not simply open it enough to insert the sampling rod ? When you take a sample, you take a nine-inch sample. Why cannot you simply take a couple of inches ? That is all you need." The attention to the nitty-gritty will make the difference between success and failure.
It is tempting to quote whole sections of the competitiveness White Paper to illustrate what is being done to help exports. However, I sum it up by saying that there have been great, beneficial changes, which will help our exporters to export more, and that the DTI is to be congratulated.
I shall discuss one or two aspects and make a couple of observations. They will be predicated on the basis that if one does not show, one does not sell. The idea that we merely have to make a product and the world will beat a pathway to our door has long gone. I was, therefore, delighted to hear about the use of those private sector export promoters--last time I heard, it was 70 ; now I understand that it is 90--who will help to strengthen the promotion work in our 80 major markets.
I also feel that those private sector export promoters will achieve a couple of extra pluses. The first concerns additionality, which has been, in my view, inexplicably ignored by the Overseas Development Administration in the past in assessing overseas aid projects. I say, "inexplicably", because UK manufacturers have produced
well-documented examples of how, having got an aid project, they have done further work and obtained further orders that have commercially stood on their own feet.
The second plus is that, although those private sector export promoters come from large companies and will be working with the Overseas Projects Board to target overseas ventures, the small business men--the small UK supplier and subcontractor--will be able to ride in on the back of that main contractor, and thus gain an opportunity to enter markets that they would not have been able to afford to enter if they had been left to themselves.
That leads me to my next argument, about the conspicuous failure by the majority of our trade associations effectively to serve their members in the manner of their overseas counterparts. Opposition Members have briefly mentioned that. I know that they are hard words, but in the tough international market of today, the time for niceties has long gone. Some trade associations provide effective liaison with Government and support for overseas activities, but they are in the minority. We must create a position in which those aims of
Column 420effective Government liaison, of dissemination of information to the members and support for export activities are the norm and not the exception.
Lord Devlin, as long ago as the 1970s, carried out an appraisal of trade associations, and reached an opinion on three counts. First, he decided that a trade association that did not have an income of about £500,000 in today's terms could not effectively carry out its task. Secondly, he said that there should be one trade association per industrial sector. Thirdly, he said that industry would probably have to take the lead in rationalising a sprawling and often incoherent structure.
The position has not seriously changed since. There have been a few mergers. I pay tribute to what has happened in the chemical and electrical industries. They are progressive and encouraging examples. In far too many sectors, I regret to say, the reverse has occurred--there has been a proliferation of trade associations, bringing with them an inverse proportion of effectiveness in achieving the three aims that I mentioned.
In addressing myself to the reform of trade associations, I make an argument of sheer practicality. If Government are to listen effectively to industry, it is impossible for each of the DTI's industrial units and the Ministers involved to communicate and liaise with every trade association that operates in any specific sector. It is simply physically not possible, partly because there are not enough hours in the day.
Moreover, how do the Government--the Ministers, the departmental officials- -know the coherent message issuing from that sector ? They may visit and speak to 20 industrial trade associations and receive 20 different messages. If the Government, in the shape of the DTI, are listening, as they are now listening, it is essential that an amalgamation takes place or that umbrella organisations for each sector are set up, so that one coherent voice may speak.
The present position is not only unfair : it is inefficient and is damaging our national interest. The advantages of a coherent voice are obvious. I shall not explain how better liaison can be promoted, and overseas campaigns, trade fairs and projects can be helped. A greater role must be taken in promoting that industrial competitiveness, which must go wider than the usual provision of legal services, economic data and lobbying. If trade associations do not put their own houses in order, I appeal to trade association members to say that they want one coherent voice per sector. At the beginning of my speech, I commented on the shape and form of Government help, and I shall give a specific example involving the nuclear review. I shall not rehearse the advantages of nuclear energy, except to say that it is cleaner, does not produce acid rain or CO and is very safe--tempting as it would be to list all its advantages. Government help can be given in a positive and effective way with a time-constrained report to reinforce the exports that already flow from nuclear-related companies. Two years ago, those exports were just £230 million ; last year, they were £300 million. As my right hon. Friend the Minister said, there is a chance of our selling a nuclear power station to Taiwan.
Our safety features have great international attraction. The export potential for our nuclear industry is huge. There are about 427 plants throughout the world, and 50 plants under construction. As time goes by, each plant will want
Column 421to extend its life cycle. This country has the greatest experience in the world in extending the life cycles of nuclear plants, which will eventually be shut down and decommissioned. I shall not go into detail about the importance of encouraging British Nuclear Fuels. A long-drawn-out review will be damaging, especially to our nuclear exports.
At long last, we have a plan for manufacturing at a better quality and with better unit costs, so that we can export more. It suggests how we can draw together all the components of this country to compete. On that, the Department of Trade and Industry is to be congratulated.
Mr. Michael Stephen (Shoreham) : The subject of today's debate is one of the most important, if not the most important, that we ever discuss in the House. It is nothing more or less than the question of how Britain is to earn its living in the world, not only for the rest of this decade, but well into the 21st century. It deals with how we are to generate the wealth with which to pay pensions, educate our children, finance the health service and provide all the other essential public and private services that we have come to expect in a modern, civilised country.
Gone are the days when we could export simple manufactured goods with ease. The competition from the newly industrialised world is too strong. Many of those countries are now capable of making the goods at least as well as, and much cheaper than, we can. I nevertheless pay tribute to those British companies that continue to survive in that market by sheer skill and determination.
Our future lies in exporting the high-technology goods and services at which we excel. There is one sphere in which excel over most other countries, and that is nuclear power generation. I wish to concentrate my remarks on that subject. I am surprised and pleased that the matter has already been mentioned by my right hon. Friend the Member for Bridgwater (Mr. King), the hon. Member for Linlithgow (Mr. Dalyell) and my hon. Friend the Member for Hertfordshire, South-West (Mr. Page), for all of whom I have much respect. I have no nuclear power stations in my constituency, and I have no financial interest in the nuclear industry, but I believe that it is in the national interest that we release the export potential of our nuclear industry. There are companies in the nuclear industry in Britain that are at the leading edge of world technology. Last year, I visited the site in Suffolk where Nuclear Electric is building the Sizewell B power station, which is nearly completed, and which will be Britain's first pressurised water reactor. I was impressed by the immense technical skill and knowledge of all the people engaged in the project and the world- beating quality of the project management team.
Nuclear Electric has built at Sizewell the world's safest and most technically advanced nuclear power station and it has been built to British safety standards, which are the highest in the world. Perhaps just as remarkable, it has been built well ahead of time and well within the budget. That remarkable achievement has not gone unnoticed around the world.
As the House has already been told, Nuclear Electric has been invited to tender for a nuclear power station in Taiwan, in co-operation with the American Westinghouse company. If successful, that will be good, not only for the
Column 422growing trade relationship between this country and Taiwan--which I welcome in itself--but for manufacturing industry in Britain. It will create 5,000 jobs for British engineers for at least five years and will be good news for Britain's hard-pressed engineering industry. It will generate export orders of about £700 million. It will also provide a shop window for the skill and expertise, not only of Nuclear Electric, but of the hundreds of British subcontractors and suppliers, and the professional consultants engaged.
Other possibilities exist ; a technical agreement has already been signed with Korea--South Korea, I hasten to add. Many countries of the Pacific rim are interested. The annual growth in energy demand in that part of the world is, I understand, about 10 per cent. and many of those countries are looking to the nuclear industry to satisfy their future demand, not only because it is an effective way of generating electricity, but because they, like us, are conscious of the need to reduce the carbon dioxide and other noxious emissions that we are told are so damaging to the environment of our planet. If we are to release the export potential of Britain's nuclear industry, we must do two things. First, we must grant companies the commercial freedom they need. Secondly, we must do our best to establish a solid home base and a viable home market to support the export efforts of that industry.
With regard to commercial freedom, Nuclear Electric, BNFL and Scottish Nuclear are nationalised industries and it was not easy for Nuclear Electric to reach the point where it could even bid for the Taiwan contract. Protracted negotiations had to take place with the politicians and civil servants who control the destiny of any nationalised industry, and that has added to Nuclear Electric's burdens and increased the disadvantages to which its commercial competitors from other countries have not been subject.
Such problems are inevitable with nationalised industries, because, in any commercial project, there will always be risk, and Governments have to underwrite the risks if the company involved is nationalised. As we all know, public resources are scarce and any Treasury, be it Conservative or Labour, would be reluctant to take those risks. To succeed in a highly competitive market such as nuclear technology, one must be able to offer speed and flexibility, not only in financing, but in the contractual terms that one is able to offer. That cannot be done by a nationalised industry. We must therefore set our nuclear industry companies free from the restrictions of nationalisation as soon as possible.
There will be difficulties, because, while in public ownership, the industry has accumulated large decommissioning obligations, but the difficulties are not insuperable and, if satisfactory arrangements can be made, a significant sum of money could be obtained from the sale of those companies--money which can then be used for hospitals, schools, roads and the like.
The family silver would still exist, working for us better than ever before ; the industry would pay taxes on its earnings, employ British workers, efficiently generate electricity and earn foreign currency for Britain. We have seen how denationalisation has transformed British Airways, turning it, it is said, into the world's favourite airline--and it probably is. It is certainly much more efficient and profitable, and a better managed company,
Column 423than it ever was when nationalised. Much the same can be said of British Telecom, British Gas, British Steel and many others. Let us be clear, however, that there will be no question of compromising safety standards. The Health and Safety Executive will still have the power to require compliance with the highest safety standards and the maintenance of a good safety record is also in the commercial interests of the company, because a plant that has to be closed on safety grounds generates no electricity and no revenue. We must also create a firm home base, from which our nuclear industry can conduct its export activities. The economic benefits of nuclear generation will have to be debated some other day--they have often been debated in the House before. Suffice it to say that we lag behind France, Japan and the United States in our appreciation of the benefits of nuclear electricity.
I fear that there is a political, and sometimes an emotional, reluctance to accept the role that nuclear generation can play. That reluctance is much more evident among Opposition Members than among Conservatives, but it spills over into the thinking of Government and of our people and it puts our nuclear industry at a competitive disadvantage.
Nuclear Electric has already shown that it can build Sizewell B and there is no reason in principle why we should not decide without further delay that we wish it to build Sizewell C. That would enable us to put to work the engineers and project managers engaged on this massive project before their teams have to be dispersed. It would also create jobs for about 10,000 people.
The measures that I have outlined will enable the nuclear industry to plan with confidence for the future and to take its place as one of Britain's most important export earners.
Mr. Jacques Arnold (Gravesham) : I am delighted that we are holding this important debate on exports. There has already been considerable export growth, due in no small measure to Ministers at the Department of Trade and Industry, the Foreign Office and throughout the Government, and the missions that they have led abroad. Significantly, they take with them teams of leaders of British industry and of our great export sectors to foreign markets, prising open the doors and getting business for Britain. Export figures show what is being achieved, but much still needs to be done.
On his recent first visit to Brazil, my right hon. Friend the Foreign Secretary took with him some leaders of business. I have heard from Brazil that the visit had a great impact there. Earlier, the Minister for Trade spoke with great enthusiasm about the work that he and his teams have done in India and other countries in south-east Asia.
I should like to stress the fact that we should look to Latin America, too, and open our eyes to the fact that the continent has returned to democracy, with the one sad exception of Cuba. It has also returned to free trade. We should note, for instance, that Latin American countries have unilaterally cut their tariffs. In 1985, when the process began, they charged an average 56 per cent. import tariff. By 1992, the last year for which I have figures, those tariffs had been cut to 16 per cent. That provides terrific
Column 424opportunities which we must grab ahead of our competitors from France, Italy, Germany, Japan and the United States.
Hence, I welcome the Government's recent appointment of a director general of export promotion, Ray Mingay, and the establishment and bringing together of the export promotion divisions and the department known as XEA, which covers Latin America. Above all, I welcome the appointment of export promoters of high quality. They have come to us from the private sector, and they bring with them their expertise and dynamism. I know the ones appointed for Colombia and Brazil ; I know of their experience and of what they have already achieved--it is most encouraging.
We should not forget that trade is a two-way process. That is why I particularly welcome the recent GATT agreement and the fact that, for the first time, it included agriculture. That is essential for the third world and invaluable for the countries of Latin America and Africa, because now, by their own efforts, they can earn foreign exchange and with it their self -respect.
If today we were discussing overseas aid--as we did
yesterday--perhaps there would be a few more Labour Members on the Opposition Benches, whining about the fact that, as they see it, we do not give enough aid to the poor unfortunates over whom our hearts should bleed. I say that if we give them a chance to export their goods to us, they will not have to come here with their begging bowls ; they will come here with their self-respect, having earned an income for themselves. That is why it is so desperately important that we ensure that the GATT agreement is properly implemented. GATT has tended to concentrate on tariffs and the blocking of non-tariff barriers. What we need is transparency that will enable us to see the obstacles to international trade and then squeeze them out of existence.
I am uneasy about the fashionable new talk, especially in left-wing circles, about so-called social dumping, about which I questioned the hon. Member for Middlesbrough (Mr. Bell). It is supposed to describe the ruining of their environment by third world countries in their effort to manufacture products, and those countries' exploitation of their workers. That, at any rate, is the claim. I would certainly welcome an examination of the despoliation of the environment and the exploitation of workers in the context of goods imported from China, produced in massive slave labour camps in that communist republic. That indeed represents a humanitarian scandal, so let us deal with Chinese products first. Likewise, let us deal with the widespread instances of child slave labour in certain countries and sectors. We need to come down hard on them. It worries me that the idea of social dumping may be used to create new tariff barriers that will destroy the third world's competitive advantages.
A few months ago, we all saw on the television what was represented as the Colombian coal industry--children wheeling barrows along rickety wooden planks. We were told that the coal produced in this way in Colombia competes with coal from our own mines. Not true. Colombian coal is produced from vast seams, stretching out in straight lines for 4 km. Massive machinery is brought in to strip out the coal seams, and the coal is carried on conveyor belts to bulk carriers. That is why the Colombian coal industry, for instance, is competitive against our own coal. It is not because they have children running around with little, rickety, wooden wheelbarrows
Column 425or because of the exploitation of children. That industry is providing for Colombia a source of massive foreign exchange, which gives it a chance to turn away from the ghastly drug trade which has plagued it and brought to it death and misery.
Another example is the cellulose or softwood industry of Brazil. We hear allegations of massive destruction of the tropical rain forests. Let us understand that the overwhelming bulk of the softwood produced in Brazil comes from the south of Brazil in the states of Parana and Santa Catarina. In those states, they have been producing softwoods for years and years. Indeed, they clear entire forests, but they had planted those forests in the first place and they replant them because they are good at the husbandry of the forests. They produce the softwood and the pulp, cellulose, which we in Britain need to import.
Of course, such states have a worrying competitive advantage because if one plants vast plantations of softwood in Scandinavia, for instance, it takes 25 years for a tree to reach maturity. However, if one plants that tree in the fertile and appropriate areas of the third world, such as those areas of Brazil to which I referred, for instance, they will be fully grown for cropping in five years. It is obvious that such areas will have a competitive price advantage, but let us not allow the people who support barriers to trade to come up with a load of twaddle that, somehow, those countries are despoiling the environment or using child slave labour and, therefore, we should have non-tariff barriers against them. Brazil and other countries that are alleged to be in the third world and which are involved in such production have addressed those important points so that they can achieve continuity of production. There are many other cases of claims of child slave labour, such as in the textiles industry. Third world countries have difficulty when they go to the Geneva offices. Along comes the European Commission, which in so many instances is an organisation in support of barriers to trade, with vast legal teams of experts. They charge into Geneva and easily out-manoeuvre the negotiators and the defenders of trade from the third world countries, who cannot compete with the legal and technical expertise which is brought to bear in such forums. Those teams scour their export competitors in the third world for evidence of social malpractices, they artfully argue them from the specific to the general and then they create massive tariff barriers. Yesterday, my right hon. Friend the Member for Eddisbury (Mr. Goodlad), the Minister of State, Foreign and Commonwealth Office, made an outstanding speech in which he stressed the importance of trade for the third world and how valuable it is to create conditions in which the third world can earn its living, rather than relying, demeaningly, on the begging bowl to be filled by the countries of Europe and north America.
It is a valuable debate and it is significant that, at 7.53 pm, Conservative Member after Conservative Member of Parliament is wishing to put the case, not only for Britain's trade, but for the world's trade. I only feel sorry for, I would say, our hon. Friend the Member for Middlesbrough--I say that with good heart--who, for much of the debate, has been the sole Labour Member present. I note that he has been joined, somewhat belatedly, by a colleague.
Export success leads to jobs and to improving standards of living. That is why I back so strongly the work of my right hon. and hon. Friends the Ministers in their work in developing British exports. 7.53 pm
Mr. Michael Fabricant (Mid-Staffordshire) : It is a great privilege to take part in the debate. It is quite a hard act to follow some of the hon. Members who have spoken. My hon. Friend the Member for Gloucestershire, West (Mr. Marland) spoke about the recycling of material, especially iron, which is not to be referred to as waste. My hon. Friend the Member for Shoreham (Mr. Stephen) talked about nuclear energy and boasts--perhaps he does not know this--in Shoreham the prototype power station for the power station subsequently built in Battersea. Also, of course, my hon. Friend the Member for Gravesham (Mr. Arnold) spoke so eloquently about south America. Of course, he was born and brought up in Brazil.
Mr. Fabricant : Brazilian Portuguese. Such ignorance! Having heard from my right hon. Friend the Minister that the Labour party has few credentials on which to speak about the subject, I was going to set out-- and I shall set out--my own credentials.
Some years ago, when I started off in business, I founded a company which subsequently set up radio stations in some 50 countries worldwide ; one of those countries that purchased equipment from me was Brazil, so I hasten to add that it was a slip of the tongue when I said Spanish instead of Portuguese.
I was involved with manufacturing in Cornwall and the pre-installation of equipment in Sussex. In my last few years with the company, I was deputy chairman with special responsibility for overseas sales. As I said, we established radio station equipment in more than 50 countries worldwide, from Radio 4 and Capital Radio in London to radio stations as far afield as Rikisutvarpid in Iceland, Radio Botswana in Gabarone and Radio Moscow. They all have radio stations which I helped to set up.
It frustrates me when I visit exciting British companies that have not considered exporting their products and services. I must confess that I visited a firm in Lichfield last Friday that manufactures--I will not name the company--and designs computer control equipment for use in brewing and in the pharmaceutical industry.
Mr. Fabricant : I will not name the company, as my hon. Friend urges me to do, because it would embarrass the management of that company. I was impressed with their technology, but I was equally disappointed that they had made no attempt to export any of it.
Column 427When I was in the United States, both as a doctoral student and later as a salesman for Britain, I was impressed by a comment of Woodrow Wilson, although he made it in 1912, some years before I was there :
"Business underlies everything in our national life, including our spiritual life."
Wilson's comments are as true today as they were when he said them. As a small island, we clearly cannot afford not to focus on sales abroad. For the past four elections, the British people have chosen a Government who recognise and value wealth creation through the success of British business.
My purpose today is twofold. First, it is important that we acknowledge our success over the past 15 years in boosting our exports, and pull apart the myths and fallacies expounded by those who oppose simply for the sake of opposition. Secondly, I wish to focus on ways in which we can increase our exports still further, especially by opening up a new frontier in Russia and eastern Europe. We must not allow the Germans to make all the running.
I well recall taking part in a trade and industry debate at a Conservative party conference in Brighton some five or six years ago, and saying to a highly sceptical audience that cracks were appearing in the Soviet empire and that I could foresee a time when a Russia, unbridled by socialism, might even join the European Economic Community, as it was then known. Oh, happy days.
It is so important to remember all the tremendous export achievements of British industry over the past few years. Who would have thought that we would become a net exporter of television sets ? Who would have thought 15 years ago that we would rise to the top of the G7 league table for manufacturing productivity ? Who would have foreseen that, since the early 1980s, our manufacturing exports would increase by more than two thirds and that output would rise by 30 per cent. over the past 10 years ? Who would have believed, given the years of ruin by Labour in the seventies--the years of Red Robbo, of lame duck, bankrupt and strike-ridden motor manufacturers--that we are on course to become a net exporter of cars by the mid-1990s ? That is all despite the fact that the Labour party still tacitly supports the rail strike, which damages not only commuters, but our exports. We must not forget that it affects freight transportation, too. Who on earth would have considered, even in his wildest dreams, that we would be so successful in exporting our political policies ? From Angola to New Zealand, Governments are following the example of sound Conservative policies such as privatisation, deregulation, lower taxes and value for money. Despite its jealousy of the purity of its own language, I have even seen the headline in Le Figaro : "Le Privatisation." Even that favourite social democratic golden calf, Sweden, has seen the light at last and is adopting the British approach, the Conservative approach. What a remarkable contrast with the Opposition's policies.
The Liberal Democrats' only big policy export is proportional misrepresentation, which overseas Governments are trying to cast off even quicker than the president of the Liberal Democrats can run to a betting shop. As for Labour, what can we say ? Just when we thought it was safe to go back in the sea, Beckett's "Jaws" returns. In the scramble for the top of the greasy Labour pole, we know that the leadership contenders want to
Column 428export only that old British disease-- industrial strife, union rule, subsidies and taxpayers' money down the plughole.
I want to return to a more important matter--the success of British industry. Over the past few years, the efforts of the Board of Trade have been instrumental in securing British success overseas. I well recall, only a few years ago, being in Kampala and witnessing the machinations of French, German and Japanese exporters. Hand in glove with their own Governments, they were able to bend GATT rules and offer loans on capital projects on far more preferable terms than those available from the United Kingdom.
The hon. Member for Middlesbrough (Mr. Bell) alluded to that earlier today. Even if a contract could be secured, German firms enjoyed advantageous terms from HERMES, while our own ECGD provided inadequate cover for British exporters. That has changed. Since the last Budget, the President of the Board of Trade has ensured that British firms can compete on an equal footing with France, Germany and Japan.
The DTI campaign to help businesses make more of the single market provides vital information and practical advice--I received some before I was elected to the House--to British companies striving to take up the opportunities that the single market offers. Given that so many member countries of the EU flout single market rules--the French subsidies for Air France and Italy's aid for its steel industry being prime examples--the establishment of the single market compliance unit is an excellent and necessary step.
Too often, EC countries, in their zeal for federalism and the social chapter, seem to forget that single market rules are to be obeyed. We can no longer tolerate a Community in which many members shriek, "Do as I say, don't do as I do."
The Government deserve credit for preventing further EC steel restructuring grants for a number of European companies. I have the privilege of serving on European Standing Committee B, which has been considering that very problem. Other measures have also been beneficial, such as the overseas visits of Ministers. We heard earlier of the activities of my right hon. Friend the Minister for Trade. His visits with key business men are an excellent step forward and will do much to promote good will.
No longer must British business men be subjected, as I have been, to namby- pamby diplomats in our high commissions and embassies overseas, unwilling to get their hands dirty by discussing trade. There is a new ethos. More than 80--perhaps 90, as we heard today--business men have been seconded to the DTI to provide expert advice, and there is a growing cross- fertilisation between the DTI and the Foreign Office. As with the first Elizabethan era, our diplomatic stations overseas are now more aware than ever that their role is to promote trade first and practise diplomacy second--and about time, too.
I want to discuss how we can boost our exports still further. So far, I have concentrated on the success of our British exports. We should be proud that Marks and Spencer shirts are worn all over the world and that Cadbury- Schweppes is a global household name. Are hon. Members aware that Marks and Spencer is building a second store in Paris because demand has outstripped its first ? Are hon. Members aware that it is not just good value clothing that Parisiennes seek ? The quality and freshness of the food available at Marks and Spencer outstrip that
Column 429available from comparable French stores. So let them not mock the English cuisine. There are also things we should not do.
We should not fall into the trap of comparing ourselves with Japan and Germany and demand subsidies, as the Opposition always do. The Japanese Ministry of International Trade and Industry had a smaller budget in 1990 than the pro rata budget of the DTI. Most of German industry is no longer subsidised, either. Our research and development programmes are first- class, and it is no wonder that the pharmaceutical industry had a trade surplus of £1.3 billion in 1993--a great success story. Nor must we forget the trade surplus of £4.2 billion that the chemical industry earned, or the fact that 70 per cent. of the turnover from the aerospace industry is exported. We should not allow industrial taxation to climb. We now have a favourable climate for industry that must not be allowed to slip. Taxes and other costs on businesses must be reduced at every opportunity. Of course, wage costs must be kept to a minimum. We should not allow the pound to be chained to any artificial mechanism. Every time the pound has been allowed to float freely, most notably between 1933 and 1938, and between 1981 and 1989, industry prospered. In all other periods, industry suffered. As the late Lord Ridley stated in his memoirs :
"During all these periods, the pound was managed in some way or another-- the Gold Standard, the Bretton Woods agreement, and later shadowing the deutschmark and finally the exchange rate mechanism. All these devices were designed to keep the pound higher than the market would otherwise have it. As a result, our companies' ability to sell profitably was markedly reduced."
As a great Baroness once said, "You can't buck the market." We should all be aware of that.
An over-valued pound gives the opportunity for high-cost economies such as Japan and Germany to import a huge quantity of goods into Britain and to weaken our industry by eating into our markets. Benjamin Franklin said :
"No nation was ever ruined by trade."
We should take that into account when we consider how to boost our exports.
Quite rightly, the Government focus on the European Community and the Pacific, but I believe that the next great frontier for British trade must be Russia and its neighbouring states. Russia alone has a market of 150 million people, many of whom are highly educated. In our quest to open up markets in Japan, we must not neglect the markets in eastern Europe, in central Asia, in the Caucasus and in the Russian Federation. Why should we allow Germany to use her proximity to the Czech Republic and Hungary to make all the running and turn those countries into its own economic fiefdoms ? British Petroleum has made significant inroads into Azerbaijan. We need to encourage our motor manufacturers, our pharmaceutical companies and our service industries to look at trade in eastern Europe and Asia. Encouragement of joint ventures with Russian or eastern European firms is one way of getting a foothold, but we can also support other, less obvious activities to encourage overseas trade. We must make sure that the single market works for not only us but the countries of eastern Europe that are struggling to free their economies from years of socialist central planning.
Column 430Franco Racca, executive director of LICA Development Capital Ltd, and a former strategic adviser to Fiat, made a good point when he said :
"It is in the West's interests to help Russia . . . the preferred approach must involve barter, and most projects must find western joint ventures and managers. Rather than western Government and agencies lending money, they should underwrite private sector joint ventures and set the industrial priorities, by sector and region. The West must realise that the Common Market goes all the way to the Urals as an essential fact ; it is that barter replaces currency in Russia as the principal medium of exchange".
We could supply Russia with food, manufacturing machinery, management and distribution systems in return for minerals--which Russia has in abundance- -oil, diamonds, gold and titanium. We have a model for that barter approach. The largest ever export order was the Al-Yamamah project in Saudi Arabia, headed by British Aerospace. In return for the Saudis supplying 500,000 barrels of oil a day, with some money as well, BAe supplies Tornados, Hawks, ground facilities and training, as well as minefield clearers from Vosper Thorneycroft. Britain could gain from increased trade and increased military security.
Back in Azerbaijan, British Petroleum is involved in a joint venture with the British Council for Management and with English-language training of personnel. The British Council is targeting the East Asia and Pacific region and Latin America for special attention, and the council is active in 108 countries worldwide.
Germany spends three and a half times as much as Britain, and France spends seven times as much on their cultural equivalents. That is not altruism. In my experience, buyers who have been culturally exposed to Britain like what they see and their purchasing decisions nearly always reflect that.
It would be a false economy to cut back on the British Council, just as it would be a false economy to cut back on the BBC World Service or on the number of our embassies.
The prospects for British exports have never been brighter. We are moving back towards the realities of the first Elizabethan era, when we made use of every trading opportunity. GATT--as noted in a recent debate--will increase our trading opportunities still further. I have no doubt that eventually, and with a glorious inevitability, GATT will establish a global free market, so that we do not have to be dependent on Europe alone and will have the chance to embrace other trading blocs. Provided that the Government continue on their present path, provided that the European Community looks outward not inward, provided that we maintain our hard-won opt-outs from a single currency and the crippling social chapter, and provided that British industry continues to offer value for money, the scope for British business and economic success of the nation is unlimited. The high wage-cost, interventionist and regressive trade union policies of the Labour party would spell disaster, resulting in just one export--the brain drain of talent that we experienced in the 1970s--and economic ruin. We cannot allow that to happen.
Mrs. Cheryl Gillan (Chesham and Amersham) : It is always a great pleasure to follow my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant). I am sure that we all agree that he is a salesman not just for his
Column 431constituency but, as he said, for Britain. I congratulate my right hon. Friend the Minister for Trade on securing this debate. On examining Hansard , I discovered that we last debated this subject on 21 May 1993. The hon. Member for Middlesbrough (Mr. Bell) complained that he did not have the support of the four civil servants in the Box, now down to three. I felt sad for the hon. Gentleman during this debate because he has not even been supported by four of his party colleagues. The debate on 21 May 1993 proved a similar occasion. Then, only one Front Bencher spoke for the main Opposition party, and no Back Benchers spoke.
It is difficult to take Labour seriously when it cannot muster support on a debate on a subject that is so important for British industry and the wealth and health of our nation. In fact, I could not find on the parliamentary on-line information service a single supply day on which exports were chosen by Labour as the subject for debate. That is a bad record, and I hope that people outside the House will take note of it.
Earlier, I referred to the hon. Member for Middlesbrough as a friend, and I would not withdraw that remark. He spent most of his speech defending the hon. Member for Sedgefield (Mr. Blair). It was phrased in such a way as to suggest that there will be no contest and that the hon. Member for Sedgefield is already the leader of the Labour party. Again, many people in the House and outside it will note that assumption.
I tried to intervene on the speech of my right hon. Friend the Minister to pick up on his remarks about exporting education. I should like to draw attention to the only independent and excellent university of Buckingham in my county, which recently won the Queen's award for exports. That first- class establishment offers special, different and excellent education, and I thought that I should mark its contribution in this debate on exports.
Over the past two years, I have visited several companies in my constituency that make a great contribution to British exports. Blease Medical exports anaesthetic delivery equipment. That excellent company produces reliable equipment that is used throughout the world, and particularly in third world countries because of its reliability. Securon Ltd. in Winchmore Hill produces seat belts. In this country, direct demand for seat belts is low because they are installed as part of the car's manufacturing process. The seat belts that Securon manufacture are installed in many cars in foreign countries that were manufactured before seat belts as original equipment were a matter of course.
Boughton Engineering produces a wide range of engineering equipment and has a successful record of trading abroad. The last time that I visited Boughton, it was preparing certain vehicles for use in Bosnia by the United Nations and our armed forces. Finally, to link with remarks made by my hon. Friends the Members for Hertfordshire, South-West (Mr. Page) and for Shoreham (Mr. Stephen) about the nuclear industry, it would be remiss of me to contribute to a debate on exports without mentioning Amersham International, which is a success in terms of both our privatisation policies and exporting. The other nuclear company that I visited recently was AEA Technology. I am pleased that my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) is in his