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Mr. Caborn : I welcome the White Paper, but it is unfortunate that there was an absence of Treasury involvement. Will the President of the Board of Trade make representations to his colleagues on the Treasury Bench for time to be made available for a full debate on the competitiveness of British industry, the backcloth being both the White Paper and the Select Committee report on the same subject ?
Mr. Heseltine : I welcome the opportunity to debate the competitiveness White Paper, and the Government ensured that such a debate took place the other day. Conspicuously absent from that debate was any Labour Member.
Mr. Oppenheim : Has my right hon. Friend seen the recent report by the Institute of Economic and Social Research ? It showed that whereas UK manufacturing productivity lagged badly behind Germany in the 1970s, we out -performed Germany's growth in the 1980s ; and that whereas we lagged behind other G7 members in the 1960s and 1970s, we were ahead of most of them in the 1980s. Does not that show that our supply side reforms in the 1980s helped to close the gap with our competitors ? The period that we were in real danger of becoming a skivvy economy with Mickey Mouse jobs was not under this Government but under Labour.
Mr. Heseltine : My hon. Friend is absolutely right to point to the lesson that, in productivity, we significantly caught up our European competitors during the 1980s, as a direct consequence of the supply side reforms that the Government introduced. My hon. Friend is also right to refer to the fact that we still have not yet achieved the productivity levels of some of our European competitors, and we must achieve that if we are to be truly competitive.
Mr. Heseltine : The hon. Gentleman will know that we do not approve of predatory pricing policies, and if they offend the law, we are under a responsibility to examine them, but he would not expect me to make specific comments about the matters to which he referred unless they had been properly considered and reflected on.
Mr. Butcher : I congratulate my right hon. Friend on the depth and, indeed, the width of his White Paper on competitiveness, which has been warmly welcomed by broad sectors of industry, but might not a bit be missing ? The White Paper is silent on the supply and price of capital to the capital-intensive small and medium-sized manufacturing sector. Given the growing worldwide shortage of risk capital, making Britain the most attractive place for mobile international risk capital would in turn help our manufacturing and small firms sector. Will he make representations to the Treasury on that so that we may be competitive in that regard as well ?
Mr. Heseltine : I know of the interest that my hon. Friend takes in the matter. He will know that the White Paper referred to those issues-- indeed, specifically to inquiries that are now being conducted in the Treasury as part of its normal responsibilities and budget-forming judgment. The White Paper did not avoid the issues. My right hon. Friend the Minister for Industry referred to page 99 and following pages. Perhaps my hon. Friend will have a glance at that important part of the White Paper when he has a moment during the long recess.
Mr. Barry Jones : Would it run counter to the White Paper if Railtrack were allowed to push up the costs of transporting by rail the coil and the raw materials for British Rail plc ? Will he look at that matter ? Does he agree that, unless Railtrack holds back, British Steel plc may find it hard to keep open some of its smaller plants ?
Mr. Heseltine : The hon. Gentleman will know that the prime responsibility for Railtrack falls to my right hon. Friend the Secretary of State for Transport. My Department is always interested in matters of competitiveness, but not, however, in those that are hypothetical and put in a scare technique method, long in advance of the risks having materialised.
Mrs. Gorman : Will my right hon. Friend join me in congratulating the competitive Ford workers in my constituency who yesterday helped to secure Ford's investment decision to place its largest industrial research plant at Dunton ? Ford UK placed it there because of the Ford workers in my constituency and because labour relations in Britain are now so attractive that we are the most competitive country in the whole of the Ford spectrum for that massive investment.
Mr. Heseltine : I am delighted to support my hon. Friend's welcome for that important decision. I had the pleasure, just this week, of discussing with the chief executive officer of Ford the long-term plans for his company. He stressed to me that there were considerable opportunities for the United Kingdom, provided that we can achieve the competitive standards that would then attract his board to back the United Kingdom as a base in Europe.
Mr. Robin Cook : Is the President aware that yesterday's report from the Organisation for Economic Co-operation and Development put Britain bottom in Europe for rights at work, with a mark of zero out of 10 ? If he is aware of that, will he confirm that that report could find no evidence that the social chapter had destroyed jobs in any of the countries that applied it ? But it did find that Britain spent less on training than any other major European country. In the light of that report, will not even this Government now recognise that the key to competitiveness is a secure, skilled work force, and that we will not build the best work force in Europe on the basis of the worst rights in Europe and the poorest training in Europe ?
Mr. Heseltine : The key to competitiveness is running an economy that enables our companies to win and attract people to base their investment here. The hon. Gentleman would do far better to recognise that the most important aspect of the job market is the fact that this country's economy is generating jobs faster than are the economies of most of its European competitors, because its climate is working economically and helping it to lead Europe out of recession. That is the Government's important achievement, and nothing that the hon. Gentleman says by way of selective quotation will undermine it.
Mr. Heseltine rose
Column 309The Green Paper was published on 30 June and responses are invited by 30 September. I have therefore understandably received relatively few responses to the document to date.
Mr. Marshall : At a time when the Post Office is facing increased international competition, and when the German and Dutch Post Offices are being privatised, would not it be entirely wrong to handicap British industry by denying it the advantages of privatisation and access to the capital markets ?
Mr. Heseltine : My hon. Friend would not expect me to make any premature decisions. We are consulting widely on the future of the Royal Mail, and we have published an excellent Green Paper. Although the Green Paper expressed preference for the Government's proposal, we will listen carefully to what all right hon. and hon. Members, and people outside the House, have to say before we reach a final decision.
Mr. Barnes : Is not it pretty disgraceful that the chairman of the Post Office should jump on board the privatisation proposal in the Green Paper in the way that he has ? Nearly all the chief executives and other officials who have been involved in the privatisation of gas, electricity and other utilities have responded similarly, rather than by recognising their public responsibility to operate public services. Has not that something to do with the Government's policy on monetarism and the private market ?
Mr. Heseltine : That is one of the most preposterous statements that I have heard from an Opposition long famed for making preposterous statements. Every Tom, Dick and Harry in the trade union movement seems to be entitled to have his view paraded in the House as though it were the ultimate document ; when the chairman comments, what he says is regarded as an insult and an abuse. I do not understand what democracy means to Opposition Members.
Mr. Dunn : In running scare stories about the future of sub-post offices, are not the Labour party and its socialist allies the Liberal Democrats in great danger of crying wolf just once too often, given that the future of the sub-post offices has been secured in the Green Paper ?
Mr. Heseltine : My hon. Friend enables me to make the same point that my hon. Friend the Member for Hendon, South (Mr. Marshall) made a few moments ago. The proposals for the sub-post offices have been warmly welcomed by representatives of the owners of those post offices, which shows once again that the Government have got it right and the Labour party has got it wrong.
Mr. Cousins : Will the President of the Board of Trade admit that 40 per cent. of the business of sub-post offices consists of the payment of cash benefits, and that a secure system for such payment is long overdue ? Will he give the House and the sub-post offices a guarantee that they will not be charged for access to any new technology that may be introduced for secure payment and that banks and supermarkets will not be allowed access to that system, thus destroying the livelihood of those running sub-post offices ?
Column 310banking services. The issue is whether they should be allowed to provide wider banking services. Nothing so characterises the difference between the Government and the Labour party as the fact that Labour wants to stop people from doing things, while we want to expand their opportunities.
Mr. Jenkin : Would my right hon. Friend care to comment on local authorities that are already launching an anti-privatisation campaign--for instance, my local authority in Colchester, which is controlled by a Lib- Lab alliance ? Are not those local authorities wasting their time in running unnecessary scare stories and should they not concentrate their efforts on keeping their council tax down ?
Mr. Heseltine : That would be extremely attractive to local tax payers. My hon. Friend will appreciate, however, that I shall have to listen extremely carefully to all the representations and judge them on their merits before recommending to my colleagues the way in which we should proceed as the Green Paper consultation period comes to an end.
Mr. Sainsbury : My right hon. Friend has no plans at present to meet the TUC. I had a discussion with the TUC in the run-up to the competitiveness White Paper. We are always ready for a constructive exchange of views with the TUC.
Mr. Chisholm : Why does not the Minister accept the recommendations of the Select Committee report on competitiveness in relation to a training levy, encouragement of research and development and restraint of dividend payments ? Will the Minister reply to the question asked by my hon. Friend the Member for Livingston (Mr. Cook) about yesterday's OECD report on training, which showed a dramatic decline in the 1990s in this country so that expenditure is now a quarter of that in Germany ? Will the Minister respond to a recent report, sponsored by his own Department, which pointed out that the top 200 international companies spend three times as much on R and D as on dividend payments whereas the top 362 companies in this country spend twice as much on dividend payments as on R and D ? What will he do about those problems ?
Mr. Sainsbury : I am sure that the hon. Gentleman has studied carefully the White Paper on competitiveness and we welcome the interest, even from the Opposition, in this important subject. The hon. Gentleman will recognise that the White Paper responds significantly to the recommendations of the Select Committee report and gives particular emphasis to the importance of training and education. It includes a wide range of new initiatives costing £300 million further to strengthen and build on what we have already done to improve our standards of training and to raise the quality of education--measures which were opposed consistently by the Opposition parties.
Mr. Fabricant : When my right hon. Friend meets representatives of the TUC, will he point out to them that the infrastructure of the United Kingdom is important for our balance of trade ? Is my right hon. Friend aware that the chairman of British Steel is now saying that, because of what has happened today, last week and the week before, he will now have to reconsider the means by which steel is transported in the United Kingdom ? It is not just the passengers who are being affected by the rail strike but freight.
Mr. Sainsbury : My hon. Friend makes an obvious point clearly and strongly. It is extraordinary that it is a point not appreciated by the Labour party, which has consistently failed to condemn the unnecessary dispute.
Mr. Hardy : A few minutes ago, the President of the Board of Trade said that British industry should continue efforts to catch up with our European competitors. Is he aware that many industries, not least the engineering steel industry, have not only caught up with, but have surpassed, their European competitors, but that has done them little good in the face of unfair competition ? Quite a few months ago, the Minister told the House that he had secured a guarantee that the unfair competition would be monitored. What has been the result of that monitoring and when will industry and the trade unions be aware that the monitoring has taken place ?
Mr. Sainsbury : I am happy to join the hon. Gentleman in paying tribute to the achievements of the privatised British steel industry. He will surely recognise that the improvement from over 13 man hours to produce a tonne of steel to under four hours, which is the latest figure, is as a result of the productivity gains achieved by the private sector management. I share with the hon. Gentleman concern about achieving a level playing field. We are making progress, as I told the House earlier, and the Commission has made it clear that it is prepared to open proceedings against any companies that breach the agreement reached on 17 December.
Mr. Batiste : If the TUC genuinely wants competitiveness and wants British business to win, would not the best thing it could do today be to tell its union members that industrial action in pursuit of inflationary wage demands is undermining everything that British industry will need in the years ahead to fight in an increasingly competitive world environment ?
Mr. Sainsbury : My hon. Friend makes an eminently sensible suggestion. I can only add that another useful and sensible thing that it could do to help the competitiveness of British industry and its own influence would be to sever its links with the Labour party.
Mr. Clapham : In the light of the OECD report published yesterday, which cited trade unions, consultation and collective bargaining as being good for labour market efficiency, will the Minister be urging on business the extension of trade union rights and trade union recognition as a way of improving British competitiveness ?
Mr. Heseltine : Since 1986, Post Office Counters Ltd. has been run as a separate business, negotiating arm's-length contracts with clients and suppliers. On this basis, the company has been consistently profitable.
Mr. McFall : The Minister will know that the Post Office directly subsidises 10,000 post offices to the tune of £30 million a year and that those post offices are to be found in rural and small urban areas. Given that they are the areas that will suffer any losses, will the cross- subsidy be maintained in future ? If not, will not it mean an accelerated death for rural and small urban post offices ?
Mr. Heseltine : The House knows by now that we have made clear the value that we place on the maintenance of the network of sub-post offices. If we had not been able to satisfy the sub-post offices of our good intentions, they would not have welcomed our proposals in the way that they have.
14. Mr. Bill Michie : To ask the President of the Board of Trade if he will estimate the amount of money owed by his Department to suppliers in 1992 and 1993 which remained unpaid after 30 days from the presentation of invoices.
Mr. Neil Hamilton : The information in the form requested by the hon. Gentleman could be made available only at disproportionate cost. However, the Department's annual surveys of its payment performance showed that in 1991-92, 80 per cent. of invoices were paid either within 30 days or within the agreed credit period. The corresponding figures for 1992-93 and 1993-94 were 90.5 and 90 per cent. respectively.
Mr. Michie : Talking about disproportionate cost, what about the firms that are struggling because they have not been paid ? Why does not the President of the Board of Trade ensure that his Department pays its bills promptly or within 30 days instead of setting a bad example to other firms which are also dragging their feet paying suppliers ? Is not this just another case of, "Physician, heal thyself" ?
Mr. Hamilton : I have just told the hon. Gentleman that there has been a substantial improvement--from 80 to 90 per cent.--in the Department's practice in paying its bills within 30 days or according to the period set out in the contract. We hope to do better still, but the hon. Gentleman should recognise that there is not unanimity, even in the small business sector, about the argument for making compulsory the payment of debts within 30 days or any other period because many people fear that such legislation could be used by big companies against small companies.
Mr. Forman : While the figures that my hon. Friend has just given clearly show the good example being set by his Department, which is very important, does he agree that options are open to firms of all sizes--for example, the granting of discounts for cash--that encourage prompt payment, and we do not necessarily have to have recourse to unwieldy law ?
Mr. Hamilton : As the Minister with responsibility for deregulation, I entirely agree with my hon. Friend that there may be market solutions to the problem that are better than centralised regulation. I am grateful to him for the interest that he takes in this matter and for his useful suggestions.
Mr. Purchase : Would not the President of the Board of Trade be doing British industry in general a service if he were to encourage all Government Departments to meet their responsibility to make early payment right across the place ? I am sure that he recognises that cash management problems, especially in small businesses, are extremely acute at the moment and likely to continue to be so. Therefore, will he have a word with colleagues in other Departments and ensure an evenness of policy ?
Of course the DTI is concerned to ensure that the payment practice of all UK companies and organisations that have to pay bills is improved. That is certainly the best practice that we should like to see, but whether it is best achieved by imposing regulation is very questionable. As I said a moment ago, there is by no means unanimity, even among small firms and their representative organisations, about the way forward. We believe that the package of measures outlined in the White Paper on competitiveness will be a useful step forward. We will keep it under review and we have said that in two years we shall examine how things have gone and if we are required to do more, there is no doubt that we shall do it.
Mr. Sainsbury : The Government keep the criteria relating to regional selective assistance under continuous review to ensure that we get the best value for money and that the RSA scheme makes an effective contribution to the competitiveness of British industry.
Mrs. Campbell : Does that mean that the Minister agrees with the DTI spokesperson who said that there was increasing emphasis on the quality of the jobs created, and is he therefore looking for excuses to cut regional selective assistance--yes or no ?
Mr. Sainsbury : I hope that, because of her interest in the subject, the hon. Lady will be aware that expenditure on regional selective assistance last year was substantially greater than expenditure the previous year. We expect expenditure this year to be further increased.
Mr. Hendry : I thank my right hon. Friend for that answer. Does he agree that the fact that exports, manufacturing output, productivity, retail sales and business confidence are up, while we are keeping down the social costs on business, the rate of strikes, interest rates and the rate of inflation, gives us the best opportunity for increased growth, new jobs and rising living standards for everyone ?
Mr. Needham : I agree with my hon. Friend, but the key needs are to ensure that that confidence is maintained and that business in this country realises how good the news is. It would be helpful if, from time to time, Opposition Members supported us in that aim.
Mr. Needham : We last had such a surplus at the end of the 1970s. [Hon. Members :-- "Oh!"] The fact is, however, that the proportion of manufactured goods as a percentage of the economy of this country is no lower than the proportion in France or in Italy. Our surplus on invisibles is growing. Our volume of manufactured trade and exports has stabilised since the mid-1980s ; the decline that continued remorselessly when the Labour party was in power has stopped.
Mr. Patrick Thompson : Is my right hon. Friend aware that engineering employers in East Anglia have recently reported a considerable improvement in export performance ? Is not that good news ? As our exports to the European Union are rising faster than our exports to countries outside the Union, is not it vital that, as a Government and as a country, we continue to work at the heart of Europe ?
Mr. Needham : Of course my hon. Friend is right. Furthermore, the manufacturing deficit continues to decline. The hon. Member for Livingston (Mr. Cook) used to be always on his feet saying that it was a danger and a disgrace that the deficit in manufactured goods was likely to increase, but now that it is falling he sits on his hands and looks at his feet.
Mr. Jamieson : Does not the Minister consider that reducing the budget of the NCC by £430,000 a year will seriously impair its ability to represent consumer interests ? Is that reduction being made because the NCC's recent report has embarrassed the Government ? For example, it showed that single pensioners in the south-west have to spend 9.1 per cent. of their income simply to pay their water bills.
Column 315funding was £452,000. The latest figure is £2.47 million which is an increase in real terms of 46.5 per cent. so we will shall take no lessons from the Opposition.
Mr. MacShane : If the President of the Board of Trade were to visit any of the steel plants in Rotherham, he would find a strong sense of partnership and co-operation between trade unions and managers, contributing to the success of the British steel industry. Does the Minister agree that the
Column 316demotion of the Chief Secretary to the Treasury--the most anti-partnership and right-wing Minister in the Cabinet- -to the Department of Employment shows that the partnership policies needed to make British industry a success have no chance at all until the next election ?
Mr. Sainsbury : If the hon. Gentleman were to visit any section of British industry, he would find now a much greater sense of partnership between management and work force ; they are not two sides, but one side of industry. That is, of course, a result of the reforms of industrial relations introduced by this Government, which were consistently opposed by the Labour party, which the hon. Gentleman supports. Those reforms have contributed substantially to the increase in productivity and to the improvement in the performance of British industry of which we should all be proud, rather than constantly denigrating it as the Labour party does.
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