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House of Commons

Friday 28 October 1994

The House met at half-past Nine o'clock

PRAYERS

[ Madam Speaker-- in the Chair ]

Inward Investment

Motion made, and Question proposed, That this House do now adjourn.-- [Dr. Liam Fox.]

9.34 am

The Minister for Energy and Industry (Mr. Tim Eggar): This is the first ever full debate in the House on inward investment. That is somewhat surprising as inward investment is one of the Government's and this country's greatest success stories. That is a bold statement. Let me substantiate it.

Over 30 per cent. of all foreign direct investment in the European Union has come to the United Kingdom. Ninety-eight of the "Fortune" top 100 companies have chosen to locate in the UK. No less than 43 per cent. of all United States investment in the European Union made by more than 3,500 companies is situated here in the United Kingdom. We have consistently attracted the major Japanese consumer, electronics and vehicle manufacturers. One thousand German companies have established facilities in Britain. Many of them are here to take advantage of Britain's more competitive environment. Nearly 50 per cent. of Korean investment in the European Union has been located in the United Kingdom. Since 1979, the Invest in Britain Bureau has registered more than 4,000 inward investment projects with more than 600,000 associated jobs. In the last financial year alone, almost 100,000 jobs were created by, or linked to, inward investment. That has led to some spectacular export achievements. For example, over 35 per cent. of all personal computers in Europe and over 55 per cent. of Europe's workstations are now manufactured in Scotland. In addition, we are now a net exporter of televisions.

The hon. Member for Middlesbrough (Mr. Bell) may have some difficulty challenging those statistics, not least because the most significant recent inward investment, that of Samsung from Korea, will provide jobs to many hundreds, and perhaps thousands, of his constituents. Indeed, the statistics might not be very convenient from the Opposition's point of view. However, all those foreign business men cannot be wrong. Let me be slightly more specific than I have been in simply quoting the statistics. I shall list some of the major inward investment successes of the past decade.

I noticed my hon. Friend the Member for Derbyshire, South (Mrs. Currie) in the Chamber. She will be aware that Toyota has invested £700 million in its car plant at Burnaston. That has created 3,000 new jobs. Fujitsu of Japan invested £400 million in a semi-conductor factory in County Durham. Nissan currently employs more than 4,200 people at Washington, County Durham. MBNA of the United States invested £42.3 million at Chester in its

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new credit card undertaking. That has created 200 jobs. Yamazaki Mazak, the No. 1 CNC machine tool company in the world, invested £40 million in Worcester, employing 280 people in the constituency of my hon. Friend the Member for Worcester (Mr. Luff).

Oracle Systems of the United States announced in April this year that it was investing £50 million in its computer software factory at Thames Valley park east of Reading. Robert Bosch of Germany has invested £100 million in a new factory near Cardiff to produce car alternators. That has created 800 jobs. Sony of Japan has expanded its Bridgend factory, which produces colour televisions. It is spending £147 million and creating another 1,400 jobs.

NEC of Japan announced only last month its decision to invest £530 million in its wafer fabrication plant in Livingston, bringing the total number of employees to 1,370. Of course, there is not a word of criticism from the hon. Member for Livingston (Mr. Cook) about that inward investment from Japan. Black and Decker now has the largest power tool plant in the world, which happens to be located in the constituency of the right hon. Member for Sedgefield (Mr. Blair), the Leader of the Opposition. Again, there is not a word of criticism of that. In June, Honda of Japan announced its decision to invest £330 million in its plant in Swindon. Tatung of Taiwan has expanded its Telford plant and it currently employs about 500 staff. I have already referred to Samsung's significant announcement last week. Inward investment has had a significant impact along the length and breadth of this country. Hardly a town or county anywhere in the United Kingdom has not benefited either directly or indirectly from inward investment. I am delighted that, for the first time, London now has an inward investment agency, the London First Centre, for which the Government have provided a grant of £500,000 this year. Before that centre is fully established, it is handling more than 100 inquiries, many of them in the manufacturing sector.

That impressive, unparalleled list of success stories is a testimony to the excellent and continuing work of the Invest in Britain Bureau and of our overseas posts. I pay tribute to the work of the Foreign and Commonwealth Office on behalf not only of the promotion of exports but of inward investment.

We should not forget, as we consider more recent inward investments, companies that have been established in this country for many years. I refer to well-known companies such as Ford, Vauxhall, IBM, Nestle , and Proctor and Gamble. Many British citizens might be surprised to hear of their being examples of foreign companies investing in the United Kingdom, because many such companies are regarded as for ever having been British.

That matter goes to the core of the Government's attitude. Once overseas companies come to the United Kingdom, they are not foreign companies; they are British companies that happen to have foreign owners, and we shall fight for those companies in international forums as hard as we fight for directly British-owned companies. We will have no criticism from Opposition Members or from trade unions in particular, which demeans the value of jobs in the United Kingdom because those jobs happen to be created by companies that are domiciled overseas.

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We should not forget that investment is not just a one-way street. We are part of an increasingly global economy. We cannot afford simply to assume that the world and its businesses will come to the United Kingdom. We must accept also that many of our most succesful companies will want to invest overseas. By value, we are the world's largest overseas investor after the United States of America. Just think of British companies that are world leaders: British Airways, British Gas, National Power, PowerGen and Thames Water, to name but a few. What have all those companies in common? It is no accident that prominent among British outward investors are companies that have only recently been freed from the shackles of state control as a result of our successful privatisation programme.

We should not forget that the United Kingdom is the second biggest investor overall in the United States and the biggest investor in the manufacturing sector there, with investment valued at more than $40 billion. Indeed, some of the great trade names in the United States are under British ownership-- everything from the Jolly Green Giant to Smith and Wesson.

Investing in the United Kingdom is popular, as we have seen from the statistics, because of the advantages that we offer. Above all, we offer a Government who are committed to creating a commercial environment in which business can flourish and grow. We have one of the lowest rates of corporation tax in the European Union. Our personal tax rates are low, thereby allowing people to work hard to progress and to look after their families. We have no foreign exchange controls. Our labour costs are highly competitive--in some cases, they are half those of Germany. We have an able and willing work force who are ready to learn new skills, to adapt to new production processes and to work flexible hours with rostering, which allows production 24 hours a day, seven days a week.

Only last Monday, I visited Fiat's New Holland tractor plant at Basildon-- another example of successful inward investment. That factory had a very successful year in 1994. I asked management why that plant was so competitive. The answer was unequivocal: good labour relations and a flexible work force. Let me spell it out--average overtime at the plant this year has been 40 per cent. I talked to several people working on the production line and asked them whether they welcomed that overtime. Unequivocally, they said yes. They welcomed the opportunity to work long hours, to bring benefits to themselves and to their families. Of course, if we had been part of the social contract, they would have not been able to work those hours. They would have been limited to a maximum of 48 hours a week. Many of them were doing between 55 and 65 hours a week, week in, week out.

Mr. Denis MacShane (Rotherham) indicated dissent .

Mr. Eggar: The hon. Member for Rotherham (Mr. MacShane) shakes his head. He wants to deprive individuals of the ability to choose the number of hours that they work. Oh no, the hon. Gentleman knows best. He will determine the standard of living of those workers in Basildon. He will not give them the opportunity to decide for themselves. However, it is much more serious than that. The hon. Gentleman would deprive that plant of its ability to compete worldwide. He would deprive that plant of its overriding competitive advantage over any

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other plant within the New Holland group-- that is, its flexibility, its responsiveness and the commitment of the work force and of management to maintain that competitiveness.

The hon. Gentleman sits back and smiles. I just hope that potential overseas investors in the United Kingdom do not pay too much attention to his smiles, because they send one message to them: that, if the Labour party ever formed a Government, they would deprive Britain of a major competitive advantage that the Government have given British business men by sticking strongly to our views and being prepared to do so against opposition from other European Union countries.

There is more, of course, and the Opposition do not like it. United Kingdom strike rates in the past two years were the lowest in Europe since records began 100 years ago. Ours is the only western European economy in which unemployment is falling. All that has been achieved against a backdrop of falling inflation. Britain recognises that price stability is essential to encourage businesses to plan and to invest. That is why the Government are determined to keep inflation low, and it is why underlying inflation is at its lowest for 25 years and has been under 3 per cent. for 12 consecutive months. One of the great strengths of our inward investment record is the breadth of the companies that have chosen to establish not only manufacturing but their research and development facilities in the United Kingdom, and we attach great importance to that. Companies that have recently either come here and established research and development facilities or expanded existing facilities included Canon, Sony and Pfizer. Indeed, more than 100 Japanese companies have research and development facilities of different sizes in the United Kingdom. They have come here because the United Kingdom has long been renowned for scientific innovation and the quality of its research. The Government have actively sought to assist companies in identifying suitable research areas, partners and sites, and we have helped inward investors and foreign companies to forge links with British research institutions. It is vital to the continuing competitiveness of the United Kingdom economy that we work closely with foreign companies and with our great research institutions to the benefit of us all.

There is another factor. It is well known that industry in the United Kingdom is not burdened by unnecessary rules and regulations. It is well known that where problems have been created for one reason or another, the Government will do everything that they can to sweep away those rules and regulations. It is also well known that the Government believe that it is business men who know best how to run their businesses, and that working practices should be settled between employers and employees without the heavy-handed intervention of local or central Government.

All those factors have been crucial to the commercial decisions of foreign investors when they come to set up their businesses in the United Kingdom. However, there is another important reason why they have come to the United Kingdom. They are confident that they will be welcomed here because the Government's policy over the past 15 years has been clear and consistent. We want foreign investors to come to the United Kingdom and we shall do what we can in what is an increasingly competitive world to ensure that they locate here.

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Sometimes, our assistance to foreign investors requires the judicious use of financial incentives such as regional selective assistance to tip the balance in our favour. Of course, the whole RSA discretionary procedure is preferable to the indiscriminate handouts that were exemplified by regional development grants.

It is not only the creation of the right climate for inward investment that has brought about success. We need support for companies that can genuinely show that they will introduce long-term, quality employment to this country. Companies such as Nissan have not only created valuable employment directly but helped to transform the United Kingdom auto supplies sector. Compare that with the inward-looking, let-us-prop-up-anything-anywhere policies of the previous Labour Government. People should not forget that that Government devoted all their skills--that is, the skills of the previous Member for Bradford, South, the late Bob Cryer--to supporting failing companies, rather than encouraging successful ones. We have made every effort to ensure that the process of setting up in the United Kingdom is as easy as possible, and that investors have quick access to the best advice that is available internationally. That commitment continues. It does not stop at the point at which investors have established their operations in the United Kingdom. We have built up an after-care programme that is designed to ensure that investors are fully satisfied with their operations in the United Kingdom, and that they are taking the best advantage of the benefits that the United Kingdom has to offer with regard to additional services for expansion, changes in manufacturing processes and so on, in response to market changes.

In other words, we want to see businesses flourish and prosper, and we shall do all that we properly can to help them succeed. They will continue to flourish and prosper as long as the United Kingdom Government follow the policies that have brought about our great success over the past 10 years. Central to those policies is our membership of the European Union.

There are some who claim that membership of the European Union has brought no tangible benefits to this country. The success of our inward investment programme is strong evidence to the contrary. Inward investment has created jobs, boosted our exports and spread best practice around our manufacturing industries. Much of that inward investment would not have come to the United Kingdom if we were not whole-heartedly committed to membership of the European Union. Foreign companies know that, by investing in Britain, they have access to the European single market and, with it, the 340 million consumers who form the largest single market in the world. By coming to Britain, inward investors get the best of both worlds: access to the single market and a competitive commercial environment, while at the same time they are exempted from the clinging aspects of the social charter. Does anyone seriously suggest that we should have been as successful as we have been in inward investment without our membership of the European Union and without access to that single market? I do not think that any business man in the United Kingdom who has been associated with major inward investment decisions would suggest that for a moment.

Being in Europe does not mean accepting without question every measure that is proposed by our partners or by the Commission. As I said, the opt-out from the

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social charter proves that. The Commission's view is clear. It was Jacques Delors who remarked that the social charter opt-out makes Britain a paradise for foreign investment. Outside Europe, we should not be a paradise; we should be an irrelevance. Not all of our advantages flow from membership of the Union, but many of them in terms of the market do. Our inward investors know that they will also benefit from the transformation in the British supply side over the past 15 years.

Apart from the labour flexibility that I mentioned, inward investors also want access to our excellent academic institutions. They want to operate in a country that speaks English, and they want to enjoy the support of a Government who are committed to the success of business.

One of the most influential magazines on inward investment, Corporate Location , revealed last week the results of a major survey that showed that Britain is now the world's favourite location for inward investment over the next two years. Would that remain the case if we did not provide inward investors with access to the single market? Of course, it would not.

I have been speaking for almost half an hour. We had a Neanderthal wing of the Labour party shaking its head. [Interruption.] My hon. Friend the Member for Derbyshire, South should save her sympathy for someone else. There was no dissent as I listed the successes of our inward investment programme. We must ask about Labour's policies.

Mr. Nigel Waterson (Eastbourne): My hon. Friend has only two minutes left.

Mr. Eggar: If I listed Labour's policies, I am sure that I should not be speaking for as long as two minutes. To coin a familiar phrase, the Labour party would be tough on inward investors and tough on the causes on inward investment. The Labour party has no real commitment to the success of business. It would rather strangle companies with the disastrous implications of the social chapter, which Opposition Members so readily embrace. We have seen evidence of that already this morning.

Do not let us delude ourselves. International companies would not be willing to locate in the United Kingdom and create thousands of skilled jobs if the United Kingdom allowed itself to be held back by the anti- business attitudes that are so endemic in the Labour party, by its belief in the social chapter or by its commitment to minimum wage policies. Such policies are enthusiastically espoused by the Labour party, but they would do so much damage to our

competitiveness.

Mr. John Gunnell (Morley and Leeds, South): Will the Minister give way?

Mr. Eggar: No, I will not give way. I shall think about it in a minute or two.

Much as the new leader of the Labour party would like us to believe that there is a new Labour party as well as a new leader of the Labour party and would like to deceive the country into thinking that his party embraces the logic of open, free and competitive markets, we need to do only a very little digging to realise what his party really stands for.

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Only two years ago, when the hon. Member for Livingston was the leading Opposition spokesman on trade and industry, he pointed out at a Tribune rally that opinion polls showed that 31 per cent. of British people thought that

"more socialist planning would be the best way to solve Britain's economic problems".

He picked out that statistic. That is all right, but then he made his intentions absolutely clear. He said:

"How many people have they heard making the case for socialist planning of the economy? If we can almost get a majority without even trying, just think what we can do if we are confident and really give it a push."--

"it", of course, being socialist planning.

That quotation is not my invention. It comes from an excellent paper that I can recommend to hon. Members on both sides of the House. It comes from Fabian Review , volume 105, No. 3, from an article written by the hon. Member for Birmingham, Selly Oak (Dr. Jones), in which she quoted her hon. Friend. No Opposition Member denies-- [Interruption.] The hon. Member for Middlesbrough wants to know when the hon. Member for Livingston said that. What he means is, "Oh dear, our marketing experts have not picked that up. I had better get the references. In any case, now that my hon. Friend the Member for Livingston has moved on to foreign affairs"-- because he is a little dangerous and wayward when he speaks on the real world and the real economy--"perhaps we shall be able to rewrite or modify the quotation. Perhaps the wizards down at Walworth road will be able to rephrase it."

I have given the hon. Member for Middlesbrough the reference. There is no doubt about it. He ought to refer to the hon. Member for Selly Oak. She wrote the article. Presumably she checked that the quotation from the hon. Member for Livingston was accurate.

Mr. Stuart Bell (Middlesbrough): On a point of order, Madam Deputy Speaker. We know that the Minister is erroneous in most of his speech, but he could do my hon. Friend the Member for Birmingham, Ladywood (Ms Short) the courtesy of ceasing referring to her as the hon. Member for Birmingham, Selly Oak.

Madam Deputy Speaker (Dame Janet Fookes): I am sure that that point is taken.

Mr. Eggar: I am not sure whether the hon. Member for Middlesbrough knows the members of his own party. Would the hon. Gentleman like to withdraw the assertion on a point of order?

Mr. Bell: The remarks seemed to be those of my hon. Friend the Member for Ladywood. It may be that my hon. Friend the Member for Selly Oak made similar remarks.

Mr. Eggar: Now I see. The hon. Gentleman was prepared to dismiss the remarks if they were those of the hon. Member for Ladywood. She is one extreme of the Labour party, so she can be dismissed. Then it turns out that they were the remarks of the hon. Member for Selly Oak. The hon. Gentleman has now succeeded in offending two hon. Ladies in his party. There is a certain amount of sexism around here. I thought that the new Labour party

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was all about equality between the sexes and promoting the role of women--something of which I am sure you are in favour, Madam Deputy Speaker.

In one intervention--indeed, his only intervention so far during the debate --the hon. Member for Middlesbrough has knocked a couple of women aside. But that is the real voice of the Labour party. That is the north-east of the Labour party speaking, just as it was the real voice of the Labour party speaking when the hon. Member for Livingston, who was then the main Opposition spokesman on trade and industry, extolled the virtues of socialist planning.

[Interruption.] Oh dear, the hon. Member for Middlesbrough had not even worked out that the hon. Member for Selly Oak had been a Member of Parliament for the past two and a half years. I should have thought that he would be delighted. This is bizarre. If the hon. Gentleman shows the same quality of research when he talks about trade and industry as when he analyses the membership of his parliamentary party, God help us.

We have had a little fun and a bit of knockabout, but behind it is a critical point. Large numbers of international companies have invested in the United Kingdom to the enormous benefit of our economy and employment because the Government have set out deliberately to create a climate in which inward investors know that they will be welcome and will be supported by the Government.

What do the Opposition want to do? At a time when NEC has created 500 jobs in the constituency of the hon. Member for Livingston, when Black and Decker has located all its manufacturing in Europe in the constituency of the hon. Member for Sedgefield, when the hon. Member for Middlesbrough knows full well that many hundreds of his constituents will be given employment by Samsung, the Labour party is making a great call to international investors. It is saying, "We, the main party of opposition in the United Kingdom, believe in socialist planning." I hope that that message gets across. I look forward to hearing what the hon. Member for Middlesbrough's version of socialist planning is all about. I am sure that he will have discussed the matter at considerable length with the hon. Member for Livingston.

10.8 am

Mr. Stuart Bell (Middlesbrough): My first advice to the Minister is that he should keep taking the tablets. They obviously do him a world of good. He is in fine form and fine fettle this morning. We welcome his speech. [Interruption.] The hon. Member for Chelmsford (Mr. Burns), who is now in the Whips Office, says that it was a fine speech. We certainly give him credit for that.

It was interesting to imagine that the ragged-trousered philanthropist was alive and well in Basildon when the Minister visited a Fiat factory and talked to the work force. He was told that working a 48 or 60-hour a week was a fine way of earning a living. That simply reflects the other side of the coin.

Where work is concerned, many years of Conservative government have resulted in a three-layer society--those people in work with highly paid jobs, who have to work for 48, 50 and 60 hours a week, those in lower-paid jobs, who have to work extremely hard, and those with no jobs at all.

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The Minister was talking about inward investment, but uncertainty, vulnerability and insecurity are building up throughout the country. Opinion polls often ask, "What is your greatest worry?" The answer is, "That I will lose my job." The Minister therefore should not take too much credit for being part of a team who created such uncertainty from one end of the country to the other.

The Minister also referred to Neanderthal man, and we wondered who he was talking about. We all plead not guilty to being Neanderthal today. His evidence from the Fiat factory was anecdotal. Lord Howe visited the factory floor before the 1979 election and was told, "We want lower taxes." The Government thought that they were obliging by reducing the rate of income tax, increasing value added tax and increasing the burden on each worker. Anecdotal evidence might be helpful to the Minister, but it is certainly not a basis for building a policy, and I intend to go through various aspects of that policy. The Minister mentioned rules and regulations, but he was forgetting who created them. There are four times as many now as there were in 1979, and Conservative Governments are responsible for that fourfold increase. In 1979, the President of the Board of Trade made a name for himself by getting rid of quangos, but he may have to start all over again and get rid of all the quangos created during the Conservative years.

As for the Labour party having an anti-business approach, the Minister will remember that the late John Smith made the best speech at the Confederation of British Industry conference last year. He got more applause than was ever given to a Conservative Minister. Also, there were more Labour Members of Parliament at that conference than ever before, and as many Labour Front -Bench spokesmen as Ministers of the Crown.

The Minister says that unemployment is falling here compared with other European countries, but that is due to the benefits of devaluation, which was forced on the Government in 1992. We accept that the rate is falling, and we want that decrease to continue, but it is not a good criterion for comparing our economy with those of other European countries where the exchange rates are stable, which are part of an exchange rate mechanism and which are tackling the unemployment problem in their own way and achieving results. The Minister for Energy and Industry made a fine Friday morning speech. Lloyd George made his name with Friday morning speeches, and I wish the hon. Gentleman well on the same route.

Since there have been many references to Samsung this morning, I must say that, as a Cleveland Member of Parliament, I welcome that inward investment. Since it is a Friday morning and we can wander a little from the subject, although not too far, I might say that the fact that Samsung has chosen the Wynyard estate in Cleveland has some interesting historical parallels.

The estate was the seat of the Londonderry family. The Londonderrys understood the significance of Seaham for the embarkation of coal destined for London in the last century--it cut the cost of sending coal to Sunderland for shipment. They built the harbour there and established their family home. A century and a half later, the coal owners were bought out by a pitman's son.

Among the many achievements of Sir John Hall--whether in regard to the Gateshead Metro centre, Newcastle United football club, getting Mr. Kevin Keegan

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from the golf courses of Spain or even Mr. Andy Cole from a London football club--the most striking is that a pitman's son bought the coal owners' family seat.

In Cleveland, we welcome that investment, because we need it after 15 years of Conservative government, during which one steel mill has gone, although the other is still there, 80-odd foundries have closed, our coal mines have closed, the chemical and petrochemical industries have been reduced, our shipyards have closed and we have lost many jobs. They have been lost to people in work, and to their children who were seeking work. Ayresome park, the local football stadium, could be filled three times over with the unemployed. There are many reasons why Samsung and other such companies have chosen our shores for their investment and the Minister touched on some. Notwithstanding the vicissitudes of the past few years--two recessions, both Government-induced--we remain a manufacturing nation in the eyes of the world. No matter how often the Government placed the emphasis on services--they did so in the 1980s with Lord Lawson--or attacked the industrial base of the trade unions by trying to make manufacturing more difficult, the outside world still looked upon us as the pioneers of the industrial revolution and as a country worthy of investment.

That has been the case under Labour as well as Conservative Governments. The hon. Member for Orpington (Mr. Horam) will remember from his years as a member of a Labour Government that we had such inward investment, and that it was as successful as inward investment under the Conservatives.

The Minister suggested that the Labour party somehow criticised that inward investment. He said that the trade unions had also done so. Opposition Members have always taken the view that successful industries abroad should export their capital here, rather than their unemployment, and that they should manufacture here rather than simply export their products to this country. It is better to build locally than to import nationally, as I have no doubt the hon. Member for Derbyshire, South (Mrs. Currie) will point out when she speaks, should she catch your eye, Madam Deputy Speaker. It is better to build a strong local economy out of which a strong national economy will grow.

At the turn of the century, we made warships for the nations of the far east on the River Tyne. Now, on a 200-acre site at Wynyard in the Durham landscape, we shall be making 1 million computer monitors, 1.3 million microwave ovens, 250,000 facsimile machines, 150,000 personal computers, and 3 million monitor tubes, eight-inch semi-conductor wavers and colour televisions. They are not all for the same household, the same family, or even the same country--many are for export. They are a clear reflection of the different age in which we live. We have turned swords not into ploughshares, but into computers and modern technology.

Mr. John Horam (Orpington): The hon. Gentleman is going on at great length about manufacturing, and was making some points about the last Labour Government. He will remember that, despite some inward investment, that Government ceased to arrest the decline of United Kingdom manufacturing as a proportion of world trade. Conservative Governments during the past 15 years have done precisely that. For the first time in 50 or 60 years, United Kingdom manufacturing has ceased to decline as

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a proportion of world trade and has stabilised. Purely on the manufacturing front, that is an achievement that Labour Governments never managed.

Mr. Bell: I welcome the hon. Gentleman's intervention, but he should have mentioned that manufacturing declined consistently until the last two years of Conservative government. We had 13 or 14 years of decline. He says that we have now arrested that decline, but he should look at what our competitors are doing.

The French have not only arrested the decline, but improved their share of world trade. If we compare ourselves to the French in manufacturing, we will find that we are behind them. The Government do not like that comparison, but I am making it. We are still losing ground compared to our competitors. It would not be acceptable to us simply to stand still after 15 years in government.

The hon. Member for Orpington (Mr. Horam) referred to a number of issues, such as wage rates and the social chapter. The President of the Board of Trade was in Seoul recently when the announcement was made, and he added his own political spice when he said that Samsung had been attracted to the United Kingdom by our competitive wage rates, without the social chapter. He did not say, of course, that Samsung had been in the United Kingdom for 10 years before the social chapter was ever dreamed of. He did not say that the company's sales had gone up by 100 per cent. before Maastricht and the social chapter were ever debated.

In fact, the reasons given by the President to the Seoul correspondent of the Financial Times , John Burton, were more appropriate and exact. The right hon. Gentleman explained that the reasons why the United Kingdom had been selected included labour productivity, infrastructure, the Koreans' familiarity with the English language, and the previous success of Korean operations in the United Kingdom.

Mrs. Edwina Currie (Derbyshire, South): Is it not true that the social chapter did not apply in this country when Samsung came here 10 years ago, whereas large amounts of it applied--and have long applied--in the rest of Europe, and particularly in countries which could match the requirements of Samsung, such as Germany?

Mr. Bell: There has never been any evidence that Samsung came to this country because of less social provision. I also think--I sure that the hon. Lady is not wishing to do this--that it is a great insult to firms such as Samsung to say to them, "Come to our country: the wages are low, we have no minimum wage and we do not have proper social provision."

We in the north-east are not coolie labour, nor slave labour. We have a highly skilled work force in our area, to which the Minister has paid a certain respect in his statements. A firm such as Samsung would have some resentment at the suggestion that it was coming here because of social conditions and wages. The company has never said that in any statement which it has put out.

One of the reasons stated by the President of the Board of Trade why Samsung wished to come to our country was the previous success of the Korean operations in the United Kingdom. The President did cite, as I said earlier, that Samsung's choice was supportive of the United Kingdom's decision to opt out of the European Union

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social chapter so that it could offer competitive wage rates. But the right hon. Gentleman moved quickly, and did not hang around on that point. He said that Samsung found the United Kingdom an attractive place to invest because of our membership of the European Union. The Minister has referred to that, and I shall come back to it later.

The UK is also an attractive place to invest because of our selective regional assistance. I found it strange--as I am sure did the House and those who follow business--that, in July this year, when the President of the Board of Trade was telling the country how well we were doing with record levels of inward investment, he was being undermined by the former Chief Secretary to the Treasury, now the Secretary of State for Employment, who was writing to express his disappointment that the President of the Board of Trade, in his report on the fundamental expenditure review, had not gone far enough.

That was rather interesting because, at the time, the President said that almost 100,000 jobs had been created by or linked to inward investment in the United Kingdom. He said:

"These are tremendous figures. Thousands of people are at work today because of our success at attracting inward investment. But we will not rest on our laurels. We will need to keep on fighting for every project."

At the same time, the former Chief Secretary said:

"I see no strong case for retaining regional selective assistance".

The President added:

"Once again the United Kingdom has proved to be a favourite location for the inward investor".

The former Chief Secretary then said:

"I believe we need to distinguish carefully between enhancing business competitiveness and getting embroiled ourselves in a competition with foreign governments to pay market distorting subsidies . . . Much of our regional spending runs this risk".

Mr. Waterson: Was not the hon. Gentleman in the House 10 days ago, when my right hon. Friend the Secretary of State for Employment made it clear that he had never opposed selective regional assistance as such, but merely required that it be justified?

Mr. Bell: There are many ways of interpreting that, but I have quoted from the letter as it was printed, and the statements have never been denied.

I shall continue with my case, because the former Chief Secretary went further on the question of regional selective assistance. When the President of the Board of Trade was telling us in July that the number of projects was also at a record level--404 new or expanded operations--we also received the letter from the former Chief Secretary talking about market solutions.

We must give credit--and I do--to the President of the Board of Trade for the fact that, when he was negotiating through his Department to bring Samsung to these shores, he perceived no free market disciplines in the minds of the French or the Spanish, who were equally trying to get the business. They were offering a package of incentives, grants and soft loans to bring the business to their countries.

Turning to the intervention by the hon. Member for Eastbourne (Mr. Waterson), I shall again refer to the annexe to the letter of the former Chief Secretary to the Treasury. He said that he saw no strong case for retaining regional selective assistance. That was in the annexe of the letter, and has never been denied.

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That was not in the mind of the Secretary of State for Scotland this week when, at Scottish Question Time, he said that the regional selective assistance schemes should and did operate on a level basis across the whole of the United Kingdom, subject to standard criteria.

The Minister, who made a strong and interesting speech today, said on "The World At One" at the time of the Samsung announcement: "We have got to line in the real world and the real world is that major investment decisions of this kind inevitably involve a level of government assistance".

I was glad to see that the present Chief Secretary yesterday suggested that he would throw his weight behind the regional selective assistance schemes. He said that, in terms of inward investment, Britain was doing well and was

"attracting the lion's share of foreign investment into the European union- -far more than France and Germany combined."--[ Official Report , 27 October 1994; Vol. 248, c. 1000.]

We may be getting a hint from the Chief Secretary that he is supportive of the regional selective assistance schemes--much more supportive than the former Chief Secretary. But that gives us some difficulties.

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