House of Commons Hansard Debates for 23 Nov 1994

Dr. Moonie: Surely the Minister is aware that the bid has considerable repercussions for other parts of the defence sector and that there must be a question mark over whether a successful company like VSEL should be taken over by either of the potential bidders. My hon. Friends and I find it incredible that his Department is prepared to make no recommendation whatever to the Office of Fair Trading, nor to say that it will refer both bids to the Monopolies and Mergers Commission if the need arises. Is not there a role for the Government, other than holding their jackets?

Mr. Evans: The hon. Gentleman's question shows a remarkable lack of understanding of the process of considering these matters. The Director General of Fair Trading makes a recommendation to the President, rather than the other way round. Once that recommendation has

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been made, the matter will fall for decision within the purview of my right hon. Friend the President, but not until that time.

Manufacturing Industry

11. Mr. Pawsey: To ask the President of the Board of Trade what is the estimated size of the United Kingdom manufacturing industry measured by its contribution to the gross national product in the current year; and what it was in 1991.

Mr. Heseltine: The share of manufacturing in GDP was 21.9 per cent. in 1991 and 21.7 per cent. in 1993. Since 1991, manufacturing output has increased by 5.7 per cent.

Mr. Pawsey: I thank my right hon. Friend for that helpful reply. Notwithstanding earlier comments made in the Chamber, will he join me in congratulating GEC-Alstom on its outstanding success in winning overseas orders, often in the face of intense competition? Will he further congratulate GEC on the quality of its management, its well-trained and well-motivated work force and the quality of the products that are made in my constituency of Rugby?

Mr. Heseltine: My hon. Friend is right to draw the House's attention to the excellent products that are made in his constituency. He will understand if I do not go too far down the road that he invites me to take because, in the context of the dialogue in the House this afternoon, I should not want to indicate that I am in any way prejudiced in matters that might come to my attention.

Dr. Cunningham: Instead of comparing 1991 with 1993, why does not the right hon. Gentleman tell the House about the contribution of manufacturing industry and its decline over the past 15 years? Why does not he admit that, in 1979, manufacturing industry contributed 28.5 per cent. to our gross national product whereas, by last year, its contribution had fallen to 21.7 per cent.--a fall of almost 25 per cent.--while at the same time the manufacturing industries of our competitors in Germany, Japan and the United States of America were all growing? That is a measure of the failure of his policies.

Mr. Heseltine: When the right hon. Gentleman has had time to do some more homework, he will find that manufacturing, as a share of the economy in this country, has been falling for the past 40 years. He will also find that it has been falling consistently in our competitor economies. If he really wants to understand what is happening in some of the world's most successful economies, I should tell him that in Hong Kong manufacturing now makes up only 15 per cent. of the economy. The right hon. Gentleman must understand that the arcane ideas that one can fossilise an economy of yesterday's industries are totally out of date.

Sir Michael Grylls: Does my right hon. Friend not find it strange that the Opposition are incapable of paying compliments to people who work in British industry? I understand that the British machine tool industry has announced that it has achieved an 18 per cent. increase in

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its exports and that we shall have a favourable balance of trade in machine tools. Should not the Opposition be pleased about that, rather than attacking us?

Mr. Heseltine: My hon. Friend is right that Opposition Members do not give the support to British industry and British commerce that they deserve. In order to help them on their way, perhaps they will join my right hon. and hon. Friends and I in welcoming today's excellent news for Humberside--that, as a result of a £10 million grant from my Department, Courtaulds has announced that approximately £100 million will be invested to develop a new textile fabric based on tensel, which is one of the most exiting innovations that has taken place in that industry for many years.

Telecommunications

12. Ms Church: To ask the President of the Board of Trade what assessment he has made of the validity of the asymmetry principle in relation to telecommunications policy.

Mr. Ian Taylor: There is no asymmetry, as explained in the Command Paper on creating super-highways in the United Kingdom, which was published yesterday.

Ms Church: Does the Minister agree that the decision that was announced yesterday means that it will be difficult for British Telecom and Mercury to carry out the Government's proposals on competitiveness and investment? How will they be able to compete internationally, how will they be able to invest the £15 billion that they will want to invest and how will they lead Britain into the 21st century in that sector?

Mr. Taylor: BT, Mercury and the other public telephony operators are allowed into the household to supply video on demand, home shopping and home banking. They are allowed to take all services into small business and all services of a fibre-optic nature into institutions of health and education. They are not restrained. I was delighted to welcome yesterday BT's statement that it will continue massive investment in those sectors.

The hon. Lady should understand that the success of the revolution in optic fibres has been achieved partly through competition, and that has been established by giving the cable companies a secure period in which to invest and to lay cables. We are now halfway through the cycle, and I have no intention of uprooting the investors before they have even had a chance of obtaining a proper return.

Exports

13. Mr. Nigel Evans: To ask the President of the Board of Trade what support he is giving to north-west industries wishing to export to former Soviet Union countries.

Mr. Jonathan Evans: North-west companies wishing to export to former Soviet Union countries are eligible for the full range of nationally available services provided by my Department and overseas posts. That national support includes the use of export promoters, subsidised attendance for businesses at trade fairs and on sponsored missions and the provision of a wide range of other intelligence gathering and promotional activities.

Mr. Nigel Evans: I thank my hon. Friend for that answer.

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On a recent visit to Russia, I spoke with our ambassador and was delighted to see the efforts that staff are putting into assisting British companies to export to Russia. Will my hon. Friend congratulate a company in the north-west called Thwaites Brewery, which recently exported some of its excellent product to Russia, and will he say what proactive action the Government are taking to ensure that more companies in the north-west and other regions know about the potential of countries such as Russia?

Mr. Jonathan Evans: I am happy to accept my hon. Friend's invitation. Being someone who is aware of the products of the Daniel Thwaites Brewery, I am sure that consumers in Russia will have the opportunity of taking advantage of the produce of that company on many occasions in future. I congratulate the brewery on its export success this year.

A number of north-western companies have been engaged in trade missions that have been supported by the DTI this year. I am aware of three north- west companies that are due to participate in another mission undertaken by the British Baltic chamber of commerce early next year. Five export promoters have been seconded from industry and are working with the DTI actively to support overseas trade, particularly within the former Soviet Union.

Mr. McAvoy: When considering what support he can offer companies in the north-west, what weight has the Minister given to the difficulties suffered by small and medium-sized businesses caused by the late payment of debt? In the light of that, why will not the Government introduce a statutory right to interest for late payment of debt?

Mr. Evans: The Department is keen to do all that it can to encourage businesses of all sizes. That is why it has been actively engaged in the activities that I have outlined. If the hon. Gentleman is unaware of the specific action undertaken by the Department, it is important to say that the various schemes run, not just by the DTI but by the Foreign Office and the Export Credits Guarantee Department, are explained in a helpful publication that my right hon. Friend the President of the Board of Trade has placed in the House of Commons Library. It is entitled "Overseas Trade Services--Central and Eastern Europe and the former Soviet Union" and I invite the hon. Gentleman to read it.

Ms Gillan: Will my hon. Friend accept my congratulations--to add to those from businesses in the north-west and throughout the country--on the DTI's excellent initiative in appointing export promoters? Does he agree that those export promoters have contributed in no small way to the golden, export-led recovery? Will he give our businesses a firm assurance that the posts of export promoters will remain firmly within the DTI?

Mr. Evans: I can certainly say that it is our intention that they will remain so. I am grateful to my hon. Friend for paying tribute to the work undertaken by export promoters. I am aware that Mr. Robin Forrest, who is responsible for the north-west area, has visited a number of companies in the region.

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Holiday Safety

14. Mr. Etherington: To ask the President of the Board of Trade what further discussions his Department has had with representatives of the major package holiday operators about the need to maintain and inspect safety levels at foreign holiday destinations.

Mr. Ian Taylor: I have had no such discussions and none have been requested. All major tour operators in the UK observe guidance drawn up by the International Federation of Tour Operators, and endorsed by the Association of British Travel Agents.

Mr. Etherington: The Minister must surely be aware of the growing concern about the lack of adequate safety standards in holiday resorts in Spain and Tenerife. This year alone there have been three deaths in Spain due to faulty heating appliances, which have led to carbon monoxide poisoning. Will he therefore ask the major tour operators why they continue to send people to places with inadequate standards? If he does not receive a satisfactory answer will he do something about it in the same way as Dick Spring did when one of his constituents in Ireland was killed in similar circumstances? Will the Minister ask the Foreign Secretary to display the same zeal as that displayed by Mr. Spring?

Mr. Taylor: The hon. Member should be aware that the tragic cases in Spain, which he mentioned, led to a joint Foreign Office and Irish Foreign Office initiative because two of the couples were, I think, of joint nationality. The hon. Gentleman should not try to distinguish between the Irish effort and the British effort. There are problems related to carbon monoxide poisoning and travel firms are well aware of them. As the campaign in the UK shows, the problem does not occur only during holidays--there are between 30 and 40 known deaths from the same problem in the United Kingdom each year and we are talking with travel agency groups about that. They are not irresponsible, but are doing their utmost to check reports of faulty installations, which often involve cheap methods.

Mrs. Lait: Is my hon. Friend aware of the Rytlewski case in my constituency, in which a young girl fell to her death from a low window in Spain? Are there any proposals for the compulsory insurance of all travel companies or compulsory registration with the Association of British Travel Agents? Are any discussions being held in the Council of Ministers to promote standard safety procedures throughout the Community?

Mr. Taylor: I am very sorry to hear of the tragic case of my hon. Friend's constituent. Travel companies take out policies and inspect all the hotels that they list in their brochures. They also have guidance covering fire safety, swimming pools and public hygiene--and buildings too, I think.

The European Union has made several attempts to draw up a common system of regulation, particularly for fire safety in hotels. I am not aware of the point that my hon. Friend has made. The difficulty is always that we must ensure that the regulations move up to the highest, not the lowest, common denominator. I shall have to look again at my hon. Friend's suggestion.

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Shipbuilding Industry

15. Mr. Hutton: To ask the President of the Board of Trade if he will make a statement about state aid to the shipbuilding industry.

Mr. Heseltine: The European Community's seventh directive on shipbuilding regulates state aids to shipbuilding within the Community in 1994 and is likely to be extended to cover 1995. The Government support the OECD shipbuilding agreement which provides for the elimination of shipbuilding subsidies, on a multilateral basis, from 1 January 1996.

Mr. Hutton: I thank the President for that answer. What will be the subsidy for 1995 under the shipbuilding intervention fund scheme? Has he given any consideration to extending the period applying to guaranteed loans under the home shipbuilding loan guarantee scheme?

Mr. Heseltine: I cannot give the hon. Gentleman the answer that he requests. We expect the European Commission to announce the rate of subsidy; for 1994 it is 9 per cent. The moment I have updated information I shall make it available to the House.

Mr. Gallie: Given the pleas of Opposition Members in respect of the referral of both bids for VSEL to the Monopolies and Mergers Commission, can my right hon. Friend advise me on how on earth the British Aerospace bid can be referred to the MMC, as it has no shipbuilding interests at present?

Mr. Heseltine: I know that my hon. Friend will understand if I do not get drawn on that matter.

Mr. Beggs: The president must be aware of just how difficult it is for any United Kingdom shipyard to win orders or successfully tender bits for new business against European yards. The obvious conclusion is that some hidden subsidy or support is given to shipyards in Europe--support that British yards, and Harland and Wolff in Northern Ireland, cannot obtain. That is damaging their chances of gaining new business-- [Interruption.]

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Madam Speaker: Order. Is everybody sitting comfortably? [Laughter.]

Mr. Beggs: Now that that cargo has docked, I shall proceed. I call upon the President of the Board of Trade to endeavour to establish whether hidden subsidies are being given to European yards, and to secure a level playing field for our own industry to compete on.

Mr. Heseltine: I am sympathetic to the hon. Gentleman's point. If there is any evidence of the sort of hidden subsidies to which he refers, I shall take it extremely seriously and seek to have them withdrawn.

It is important, however, to realise that the situation is not as bleak as the hon. Gentleman suggests. Vosper Thornycroft's turnover is up 22 per cent., and more than 90 per cent. of its business is in exports--a commendable achievement.

Trade Balance

16. Mr. Grocott: To ask the President of the Board of Trade what is the most recent figure for the balance of trade in manufactured goods.

Mr. Needham: In the latest three months the trade deficit in manufactured goods was £1.5 billion, down from £2.2. billion in the previous three months.

Mr. Grocott: That was a poor answer to a question I did not ask. Can the Minister confirm that our £8 billion deficit in 1993 was the clearest possible illustration of how our industrial base, especially in the west midlands, has been vandalised by the Government? Does the Minister share my nostalgia for those heady days in the 1970s under Labour when the surplus in manufactured goods rose to £5.8 billion? Will he confirm that not in his wildest dreams would he expect either the jobs or the apprenticeships that existed under Labour ever to come back under this Government?

Mr. Needham: Let us just recall those heady days in the 1970s, shall we--the strikes, the appalling productivity and the trade union restrictive practices? The hon. Gentleman obviously does not recall that in 1979 it took 13 man hours to make a tonne of steel, whereas British steel now does it in four hours. Obviously he does not know, or did not bother to find out, that since 1981 the export volume of British manufactured goods has increased faster than those of France, Germany, Italy or Japan. Instead of knocking that the hon. Gentleman should look at the facts.

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