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House of Commons

Wednesday 20 July 1994

The House met at half-past Two o'clock


[ Madam Speaker-- -- in the Chair ]


Greater Nottingham Light Rapid Transit Bill


That in the case of the Greater Nottingham Light Rapid Transit Bill, Standing Order 208 (Notice of Consideration of Lords Amendments) be suspended and that the Lords Amendments be now considered.--[ The Deputy Chairman of Ways and Means. ]

Lords amendments accordingly considered

Clause 57 --

Noise insulation

Lords amendment : No. 88, in page 44, line 26, at end insert "(c) The following provisions of this section are without prejudice to this subsection".

Amendment made to the Lords amendment : after "subsection" insert

"and in particular, but without prejudice to the generality of the foregoing, an application for a grant to which provision is required to be made by this subsection shall not be invalid by reason of the fact that it is not made on the date specified in accordance with subsection (4)(d) below if it is made during a period beginning with the opening to the public of the part of the LRT system to which the application relates and ending five years thereafter".

Lords amendment, as amended, agreed to.

Subsequent Lords amendments agreed to.

Oral Answers to Questions


Regional Development --

1. Mr. Bates : To ask the President of the Board of Trade if he will make a statement on the work of the regional development organisations.

17. Mrs. Lait : To ask the President of the Board of Trade if he will make a statement on the work of the regional development organisations.

The President of the Board of Trade and Secretary of State for Trade and Industry ( Mr Heseltine ) : The regional development organisations make a significant contribution to the overall success of the United Kingdom in attracting inward investment. In 1992-93, the last year for which figures are available, they were significantly involved in attracting 54 investment projects by foreign firms to the United Kingdom, involving some 6,000 jobs.

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The work of the regional development organisations will be further strengthened by my recent appointment of a senior business man as head of the Invest in Britain Bureau.

Mr. Bates : I thank my right hon. Friend for that answer. Will he join me in thanking the Northern Development Company in particular, which has succeeded in attracting some £3.5 billion-worth of inward investment to the north-east, creating or safeguarding some 35,000 jobs ? Will he compare its successful efforts at industrial regeneration with the record of the National Enterprise Board, which made 100 investments, 35 of which went bust and 37 were sold at a loss to the taxpayer ?

Mr. Heseltine : My hon. Friend is wise to remind the House of the disastrous experience of the National Enterprise Board, but he is also right to point out that the north-east has been particularly successful in attracting inward investment to this country, a significant amount of which I have had the privilege of seeing.

Mrs. Lait : My right hon. Friend will be aware that the north-east shares with areas in the south-east the problem of endemic long-term unemployment. When he considers the regional development map in due course, will he bear in mind the fact that the causes of that regional endemic unemployment will not have been solved because we will not have the new roads ? Will he ensure that the Department is generous in the timing of a new map ?

Mr. Heseltine : I understand my hon. Friend's concern. We are obliged to review the map from time to time and we will do so, but against a statistically accurate background. I know that my hon. Friend will share my pleasure at seeing the overall levels of unemployment now falling consistently month by month.

Mr. Wigley : Does the President of the Board accept that, despite the recent difficulties of the Welsh Development Agency, in the period from 1976 until now it has performed a remarkable job ? It now needs every support, not only from the Welsh Office but from the Minister's Department and the Treasury, to maximise inward investment into Wales and the UK generally and to help self-regenerative growth within the area ?

Mr. Heseltine : The hon. Gentleman is right to point to the great success that the Welsh Development Agency has had, but he will remember that it has enjoyed that success against the background of fiscal policies that have made this country extremely attractive to inward investment. The most constructive thing that he and his party could do is support the Government's determination to avoid the on-costs of the social chapter, which would undermine Welsh competitiveness.

Mr. Gunnell : Will the President of the Board of Trade acknowledge the good work done by the Yorkshire and Humberside development corporation, particularly in south Humberside, where he will recall opening the Kimberly -Clark plant ? Will he guarantee that, whatever boundary changes the local government review comes up with, the Yorkshire and Humberside development corporation will still have responsibility for attracting inward investment to south Humberside and Scunthorpe, where it has had so many successes ?

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Mr. Heseltine : I am grateful to the hon. Gentleman for pointing out the considerable success that Government policy has had in attracting inward investment to this country. I assure him that we will continue with those policies. Indeed, we are increasing our efforts to support them.

Mr. Streeter : Is my right hon. Friend aware that the number of overseas companies that have decided in the past six months to invest in Devon and Cornwall has risen sharply compared to previous years, thanks largely to the efforts of the Devon and Cornwall development bureau ? Does he agree, however, that that is not just a reflection of growing confidence in the UK economy but a new recognition that the south-west, with its skilled work force and improving communications, is now firmly open for business ?

Mr. Heseltine : My hon. Friend makes a remarkable and eloquent point on behalf of the south-west. I have visited his part of the country recently. The transformation that has taken place since I was last a Member of Parliament for that area is remarkable.

Mr. Beggs : The President of the Board of Trade will be aware of the excellent work done by Scottish Enterprise. Recently, jointly with a constituent of mine in manufacturing, it had identified major possible small hydro projects in Vietnam. Unfortunately, no overseas aid was available. Would the President welcome greater influence over the distribution of overseas aid in his Department ?

Mr. Heseltine : I should certainly welcome any increased influence if it were available, but that does not mean to say that I shall be allowed to get it.

Mr. Bell : We welcome the presence of the President of the Board of Trade today and congratulate him on keeping his post. It must be the first Government reshuffle that prepares for opposition.

However, the Opposition heard nothing but smugness and self-satisfaction from the Dispatch Box in response to the hon. Member for Langbaurgh (Mr. Bates). The hon. Member could have referred to the inward investment of Dupont on Teesside. It bought the ICI fibre business to close it down and move to France, and 520 jobs were lost. Eight hundred and twenty jobs were lost at Pontypool by the same firm. When we speak about the north-east of England, Swan Hunter has just been, or will be, closed down. How is that for smugness and self-satisfaction ?

Mr. Heseltine : The hon. Gentleman is playing the traditional Labour party game--singling out an example of something that has gone wrong in order to generalise, to the maximum damage of the British economy. Unemployment is decreasing in the north-east, as it is in the economy at large. Instead of trying to find ways of explaining that away, the hon. Member should get to his feet and praise it.

Gas Interconnector --

2. Lady Olga Maitland : To ask the President of the Board of Trade what is his policy on constructing an interconnector for gas between Britain and the continent of Europe ; and if he will make a statement.

The Minister for Energy (Mr. Tim Eggar) : We want freer trade in gas throughout Europe. I believe that a

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private sector gas interconnector between the United Kingdom and Belgium will play a major role in achieving that.

Lady Olga Maitland : I thank my hon. Friend for that reply. Is he aware that the private sector is keen to finance its own pipeline to the continent ? Does he agree that it is about time that the European Community moved towards a single market on energy ?

Mr. Eggar : I completely agree with my hon. Friend. There is no suggestion of Government funding contributing to the building of the interconnector, although I recently met my Belgian counterpart to begin negotiations on a treaty between the UK and Belgium to cover the interconnector.

As for my hon. Friend's comments about the European Commission, I do think that the Union needs to move towards a single market in energy, in the same way as we have moved towards a single market in goods and services.

Mr. Salmond : If the Minister believes in a free market in gas throughout Europe, why is his Department preventing other Norwegian fields from going through the Frigg delivery system and landing at St. Fergus in my constituency ? Does not that reveal an inconsistency in his approach, or is he just against St. Fergus as a landfall point for gas ?

Mr. Eggar : The hon. Gentleman knows perfectly well that I am committed to the continuation of St. Fergus as a major terminal for gas, whether it be from Norway or from other sources. I recently had representations from the chairman of the Banff and Buchan Conservative association, urging that Britannia gas should arrive at St. Fergus.

As for the discussions that are going on with the Norwegians, those are difficult matters, which are important for the future of the UK gas industry, and doubtless we shall resume the discussions when we hear next from the Norwegians.

Sir John Hannam : Does my hon. Friend accept that the introduction of full competition in the gas supplied to the domestic consumer could result in a drop in prices of about 10 or 11 per cent. to them ? Will he therefore introduce a full liberalisation of the gas market to domestic consumers, and allow independent companies to come in and compete with British Gas ?

Mr. Eggar : I am well aware of the point that my hon. Friend makes. As he knows, my right hon. Friend the President of the Board of Trade announced that legislation would be brought forward, subject to the availability of parliamentary time, in order to introduce competition.

Mr. O'Neill : I want to return to the Minister's answer to the hon. Member for Banff and Buchan (Mr. Salmond) on the subject of Norwegian gas. Are we going to have to wait until Norway is in the European Community before the matter is resolved ? Will it be resolved on the basis of Britain being in a minority of one once again ?

Mr. Eggar : I am surprised at the hon. Gentleman--I am not surprised at the Scottish nationalist Member. We are in negotiations with the Norwegians and want to support Britain's best interests. I find it extraordinary that

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the official Opposition should urge a collapse on our part to agree to whatever requests the Norwegians make. That is not looking after Britain's best interests.

Steel Industry --

3. Mrs. Helen Jackson : To ask the President of the Board of Trade what plans he has to meet the British Iron and Steel Producers Association to discuss prospects for the steel industry ; and if he will make a statement.

The Minister for Industry (Mr. Tim Sainsbury) : My right hon. Friend has no immediate plans to meet the British Iron and Steel Producers Association. I spoke after its annual general meeting on 3 December last year, since when I have had a number of meetings with the industry and my officials keep in regular contact with the association.

Mrs. Jackson : Is the Minister aware that the cost of electricity for major energy users using the electricity pooled price system continues to place a great burden on the major steel industry in this country ? Will he respond to the report that he received from Stephen Littlechild on the subject only yesterday or the day before, and say today that he will allow trading outside the pool system for major energy users such as steel workers in my constituency, so that they can carry on making the best special steel in Europe for many years to come ?

Mr. Sainsbury : I am sure that the hon. Lady knows that those are matters for the director general, who is reviewing the position. They are issues which my officials and I regularly discuss with the association to ensure that we and, if necessary, the director general are fully aware of its views.

Sir Michael Grylls : Will my right hon. Friend do all that he can in government and Europe to get rid of the remaining subsidies that so many European firms still give to their steel industries and which damage the British economy so much ? Will he continue to press for what is probably one of the most important European issues--to get the market in steel operating on a fair basis ?

Mr. Sainsbury : I agree with my hon. Friend that achieving a level playing field and getting rid of state subsidies is a prime objective and the best way to ensure that efficient British producers can benefit from a single market. It is an objective to which I have given a great deal of time and I can assure my hon. Friend that we will continue to press for progress. I think that progress is being made, albeit more slowly than we should like.

Electricity Supply Industry --

4. Mr. Loyden : To ask the President of the Board of Trade if he will make a statement on the regulation of the electricity supply industry.

Mr. Eggar : Effective regulation, together with the introduction of competition, is bringing considerable benefits to consumers. Domestic customers, for example, have seen a 7 per cent. reduction in prices, in real terms, over the past two financial years.

Mr. Loyden : Does the Minister agree that it is a scandal that about £12 million has been awarded by themselves to

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the chairmen of the electricity supply industry ? Does that show that the regulatory bodies act in the interests of the consumer or in the interests of the electricity companies ?

Mr. Eggar : My right hon. Friend the Prime Minister has made the Government's view on salary increases clear. On the subject of the future of electricity prices, the Director General of Electricity Supply is currently conducting a review of the distribution price mechanism. I understand that he is likely to report within the next two or three weeks.

Mr. Malcolm Bruce : Does the Minister accept that it is an expressed view of the Electricity Consumers Council that the benefits of privatisation have been passed on to the shareholders, but not in full to the consumers and that, in its view, electricity prices are at least 5 per cent. too high ? What action will the Government take to ensure that the benefits that they claim come from privatisation are passed to consumers in the form of lower prices ?

Mr. Eggar : I congratulate the hon. Gentleman on his new appointment. It is slightly unfortunate that he did not listen to my initial response. I made it clear that there had been a 7 per cent. reduction in real terms in prices for domestic consumers over the past two years as a direct result of privatisation.

Mr. Robin Cook : What will the Minister do when he is faced with a proposal from the electricity companies to sell the national grid ? Does he remember that when the Government sold all the electricity companies, they made £5 billion ? Is not he surprised that the electricity companies now expect to get back £4 billion of that just by selling the national grid ? Does not that suggest that the price of privatisation was a bad bargain ? Will he demand that the public, who built the national grid, get some of the money, or will the electricity companies make a windfall profit at the expense of a public already thoroughly fed up with paying for bigger boardroom salaries ?

Mr. Eggar : The hon. Gentleman is so blinded by socialist dogma that he will not recognise the considerable benefit to domestic consumers as a direct result of privatisation. There has been a 7 per cent. reduction in electricity prices in real terms and there are likely to be further reductions. There have also been significant reductions for all industrial consumers other than the very large ones.

On the hon. Gentleman's initial question about the national grid, unlike him I shall listen to the proposals made by the regional electricity companies, if they make any. I do not make up my mind until I have heard the facts.

Gas Consumers Council --

5. Mr. Cummings : To ask the President of the Board of Trade what evaluation he has made of the impact of the reduction in the Gas Consumers Council's budget in the months of April, May and June on its safety advisory services to senior citizens and others.

10. Mr. McKelvey : To ask the President of the Board of Trade what assessment he has made of how the reduction in the Gas Consumers Council's budget will affect its service to (a) people with disabilities and (b) others.

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Mr. Eggar : The Gas Consumers Council has indicated that it will continue to be able to carry out all its functions including services to the disabled and to senior citizens.

Mr. Cummings : Is the Minister aware that, as a result of the cuts, the Gas Consumers Council will not be able to afford to reprint its leaflets on gas safety ? That is happening at a time when many elderly people have defective gas appliances. Is it not both a folly and a disgrace to remove those resources from the leading organisation responsible for informing customers of gas safety ?

Mr. Eggar : I am not aware of any proposals by the GCC to cut back on its literature, whether relating to safety or otherwise

Mr. Nigel Griffiths : It is a disgrace.

Mr. Eggar : Is the hon. Member for Edinburgh, South (Mr. Griffiths) really suggesting that the Government should not seek in any way to control expenditure on the GCC ? Is it alone to be exempted from expenditure restrictions ?

Mr. McKelvey : Does not the Minister understand that, of the £209, 000 savings, only £2,000 will be saved by the Department of Trade and Industry ? In fact, we have spent that £2,000 by asking these two questions. The other £207,000 will be savings for the gas people. Can we have a guarantee that that £207,000 will not go into the hip pocket of the chairman of British Gas ?

Mr. Eggar : At the end of the day, additional costs to British Gas effectively mean that consumers have to pay more for their gas. The Government have a duty to restrict expenditure, in an equal way, across the consumer bodies as a whole. There is no reason why the GCC should be exempted from that.

Mr. Nigel Griffiths : Why does not the Minister simply tell the House the truth ? If he speaks to Captain Ian Powe, who heads the GCC-- which the hon. Gentleman obviously has not done--Captain Powe will tell him that he is no longer able to reproduce the key gas safety leaflets for tenants, senior citizens and others advising them about the perils of gas and of not maintaining gas appliances.

Why will not the Minister be frank with the House and say that the Government have cut the GCC's budget by £209,000, that they have done so because the Treasury demanded it, that consumers will get a poorer deal and that old-age pensioners, tenants and others with gas supplies will now get a far poorer service ? Why does not the hon. Gentleman tell us the truth for once ?

Mr. Eggar : Scaremongering may come naturally to the hon. Gentleman, but it does not make a sensible contribution to an important discussion. My understanding is that the Gas Consumer Council is fully confident of being able to carry out all its functions.

Mr. Cummings : Not true.

Mr. Eggar : It is true. But, like other consumer councils, it is having to absorb a small reduction in its budget. It is right that it should have to restrict public expenditure as do similar bodies.

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Local Development, Cumbria --

6. Mr. Campbell-Savours : To ask the President of the Board of Trade when he next intends to discuss with representatives of the West Cumbria development agency the future of local development.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : My right hon. Friend the President of the Boarof Trade has no plans to meet West Cumbrian representatives in the near future. Officials in the Government office for the north-west are in regular and close contact with the West Cumbria development agency. As the Minister with responsibility for the north-west, I go there frequently and I should be happy to see those representatives if the hon. Gentleman were to request it.

Mr. Campbell-Savours : I raise the issue that I have raised repeatedly during the past 12 months in the House--the empty 500,000 sq ft former Volvo factory in Workington. What is happening in the Department ? What efforts are currently being made to try to find either a tenant or a new owner on the international market of footloose industry that is interested in coming to the United Kingdom ?

Mr. Hamilton : As the hon. Gentleman will know, the Government have shown willingness to help Cumbria in many respects in recent years. During the past three years, £12 million has been invested in projects designed to provide improved facilities for business and commerce alone, and that is part of a continuing programme spear-headed by English Partnerships.

Current Government investment in Cumbria for economic development runs at some £65 million per annum. Of course I hope that the site will be utilised in due course. With the economy on the up, I am sure that the prospects for that part of the region are much better than they have been for many years.

Sub-post Offices --

7. Mrs. Roche : To ask the President of the Board of Trade if he will make a statement about security of sub-post offices.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : Security in sub-post offices is an operationalmatter for the Post Office in conjunction with the individual sub-postmasters and sub- postmistresses who own them. The Post Office takes security throughout the post office network very seriously and keeps it under constant review.

Mrs. Roche : Given the alarming number of attacks on the staff of sub-post offices, including the recent tragic murder of a sub-postmaster on the Archway road in my constituency, will the Minister give an assurance that he will have urgent talks with the Post Office about the funding of vital security measures such as alarm systems and closed circuit television ?

Mr. McLoughlin : The whole House will wish me to express condolences to the family of the hon. Lady's constituent who was murdered. The Post Office pays for safes, alarm systems, including panic buttons, and counter security screens. The cost of additional security measures

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that are deemed necessary is a matter for the individual post office. I will closely consider what the hon. Lady has said in this case, but the facts are still under investigation.

Sir Anthony Grant : Is my hon. Friend aware that this is a serious matter, and that in my constituency a few years ago a

sub-postmistress was murdered in most tragic circumstances ? Is my hon. Friend further aware that many attacks are carried out, particularly in remote areas, by people who have first committed car crimes ? In one case, thieves towed away a safe using an agricultural vehicle. Will my hon. Friend tell the Home Office that we expect a much more robust attitude from it to the whole question of car crime ?

Mr. McLoughlin : I will certainly pass on my hon. Friend's concerns to my right hon. and learned Friend the Home Secretary. As my hon. Friend will know, the Government, in the Criminal Justice and Public Order Bill, have taken a number of measures which show their determination to crack down on crime and those who commit it.

Mr. Hain : In respect of the long-term security in the sub-post office network, the Minister will be aware that I am opposed to the privatisation proposals, which we will fight every inch of the way, but may I seriously appeal to him not to break up the Post Office ? If the Government are determined to privatise it, may I urge them to keep the Post Office together, as every other post office in the world has been kept together ? I realise that there is no accounting cross-subsidy, but there are considerable organisational cross-subsidies and a synergy between the different elements of the Post Office which must be maintained.

Mr. McLoughlin : The hon. Gentleman does not like the fact that my right hon. Friend the President of the Board of Trade has devised a scheme that is warmly welcomed by the people who run post offices. It is not surprising that the hon. Gentleman opposes our plans for privatisation in this case. He has never supported any of the others. If he had supported this, I would be very worried.

Japanese Investment --

8. Mr. Booth : To ask the President of the Board of Trade what assessment has been made of the contribution of Japanese investment in the British car industry in securing jobs.

The Minister for Trade (Mr. Richard Needham) : Japanese inward investment to the United Kingdom car industry has been very substantial, with total planned investment of more than £2 billion, creating more than 7,000 direct jobs. The wider benefits have also been significant, particularly among components suppliers.

Mr. Booth : Britain and the Government have enjoyed wide and considerable success in attracting Japanese investment, with nearly half of all that made in Europe in the last 10 years coming to this country--as is evidenced by the successful business men who have chosen Finchley in which to live. To what does my right hon. Friend ascribe that success ? Is it the Government's low corporate taxation, the welcome that we give such companies or the success of the DTI's efforts ? None of those would be offered by the Opposition.

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Mr. Needham : It can primarily be ascribed to a Conservative Government who welcome Japanese investment and who introduced the industrial relations reforms that mean that Japanese companies setting up in the United Kingdom can operate as productively and profitably as in Japan, and to the fact that Britain does not have a Labour Government.

Mr. Geoffrey Robinson : Putting to one side the Minister's juvenile remarks about the reasons for investment in Britain, is he aware that it is widely welcomed throughout the country ? The increasing level of local manufacture is also much welcomed. If the Minister can get down to industry and leave silly politics to one side, should not his next step be increasingly to concentrate design and development in the UK, which has many outstanding skills ready for exploitation ? What will the Minister do about that ?

Mr. Needham : I realise that the hon. Gentleman does not like political reality coming into his long and distinguished industrial career. However, he is right to say that we must maximise research and development facilities and our ability to design cars, which is formidable. He is also right to emphasise that we must give British industry the back-up and support to meet all its needs, which will ensure that the British automotive and components industries continue the success that they have enjoyed over the past few years. I assure the hon. Gentleman that, as long as we are in government, we will continue to do that.

Competitiveness --

9. Mr. Amess : To ask the President of the Board of Trade what further responses he has had from companies to his White Paper on competitiveness.

Mr. Heseltine : British businesses have been very positive about the White Paper on competitiveness. Its analysis has been accepted and its new initiatives welcomed.

Mr. Amess : Does my right hon. Friend agree that only by companies continuing to improve their competitiveness, as set out in the White Paper, will the United Kingdom economy continue to enjoy growth, will living standards continue to improve and will unemployment fall--as is happening throughout the country and in my constituency in particular ? Does my right hon. Friend agree that the politics of envy and unfairness as espoused by the socialists on the Opposition Benches would destroy the competitiveness of UK companies ?

Mr. Heseltine : I heard what my hon. Friend said. I wholly agree with the thrust of his observations, which is why one takes such satisfaction from the most favourable set of economic statistics that we have enjoyed for many a long year.

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