Queen's consent, on behalf of the Crown, signified.
Read the Third time, and passed, without amendment.
Mr. Battle: Will not the future prospects for exporting from Leeds and other areas be jeopardised by the Department's proposals to fragment the regional DTI teams into Business Links, effectively reducing export advice and back-up? As the Barnsley Business Links already appears to be in financial difficulties and is laying off staff, will not the Department's proposals to strip down the regional DTI offices take effect at the price of exports and local jobs?
Mr. Needham: To ask a question on the Order Paper about ECGD and export insurance in Leeds and then follow it up by talking about Business Links shows the hon. Gentleman's lack of understanding and knowledge about exports. What the Government are offering through Business Links throughout the country is a service to exporters that will match anything offered by any of our competitors anywhere in the world. If the hon. Gentleman would come with me some day to see some of the Business Links he might have more idea of what he is talking about.
Mr. Riddick: Is my right hon. Friend aware that manufacturing companies in Leeds and in Yorkshire as a whole are more than playing their part in Britain's current superb exporting performance? ECGD funding can be helpful, but is not the most crucial factor in winning markets overseas that British companies should maximise their productivity and competitiveness, and that the British Government should not foist unnecessary rules and costs on to those companies? That is why we must stay well clear of the social chapter.
Column 134remarkable export success story. Our manufacturing record is now better than that of France, Japan or Germany. Perhaps Opposition Members might like to congratulate us on that.
Mr. Needham: NCM is a short-term reinsurance cover for business, and has nothing to do with companies investing either in the former Soviet Union or anywhere else. Once again, the ignorance of Opposition Members is palpable to all.
The Parliamentary Under-Secretary of State for Industry and Energy (Mr. Charles Wardle): The Department continues to work with all local partners, including Inward, the regional development organisation, encouraging them to develop sites and premises of the quality and variety that will attract foreign-owned companies in the future.
Mr. Hawkins: I thank my hon. Friend for that answer. Will he take all the steps that he can to ensure that companies are told about the excellent opportunities that exist based on the high-tech abilities of the work force in the Fylde coast area of Lancashire, including Blackpool, based on the success of companies such as British Aerospace, ICI, British Nuclear Fuels and many others in the area and based on the computer skills of the civil servants in the local Information Technology Services Agency? Will he continue, with his colleagues, to work with the Fylde Partnership and other organisations doing their best to bring inward investment to my constituency and the surrounding area?
Mr. Wardle: My hon. Friend is right to emphasise those points. He will know that the Fylde Partnership is doing a great deal to attract new technology to the area. The Government office is of course in regular contact. I know that my hon. Friend has invited the regional director to visit him in Blackpool for discussions, and I hope that he will encourage Blackpool borough council to join Inward. By way of background, he might like to know that the Invest in Britain bureau lists 30 projects, four of which are in Lancashire, with 2,100 jobs in the north-west. With my hon. Friend's help, no doubt more emphasis will be placed on Blackpool.
Lancashire--high-technology, high-skilled areas--are losing jobs as a result of the defence reductions? We need to project Lancashire as a highly skilled area and attract the right type of investment, using those skills to create jobs for the future.
Column 135Lancashire includes Burnley, Preston, Pendle and Fylde, but there is scope for additional areas to be nominated by 1 March. Representations will be considered carefully.
Mr. Mans: In connection with inward investment into Lancashire, when do the Government propose to rejoin the future large aircraft consortium? When is it likely that we will start to contribute money to that project, bearing in mind its importance to Lancashire and the north-west generally?
3. Mr. Gunnell: To ask the President of the Board of Trade how many subsidiary companies with headquarters in the United States have received regional selective assistance since June 1979; and how many have since ceased operation in the United Kingdom.
The Minister for Energy and Industry (Mr. Tim Eggar): Since June 1979, 644 United States-owned subsidiary companies have received offers of regional selective assistance in Great Britain in relation to more than 900 projects. Of these, 167 projects did not proceed and 49 were not fully completed.
Mr. Gunnell: I thank the Minister for that information. I recognise that successful inward investment owes much to regional selective assistance and to the work of regional development organisations and the support of local authorities, but has the Minister analysed why some projects were not completed and others were unsuccessful? Has he made any comparison between our figures for incomplete investments and the corresponding figures for failures in continental Europe? If his theories about the social chapter are to be supported, one must show that on the continent there is a greater proportion of failures than in the United Kingdom.
Mr. Eggar: The facts speak for themselves. No less than 43 per cent. of all United States investment in the European Union has been made in the United Kingdom. That investment, which has mainly been made with the aid of regional selective assistance, has led to the creation of 100,000 extra jobs since 1979 and has safeguarded 60,000 jobs. That is a record of considerable success. The hon. Gentleman has a long record of working constructively on inward construction projects. I pay tribute to him because such work is very much a partnership. He will recognise that a great deal of work is going on. In particular, we place emphasis on the need for proper aftercare of companies that have made an investment. We need to work closely with them, monitor their experience and see whether we can improve the quality of our services. We also need to use them as ambassadors for other sources of inward investment for the future.
Column 136terms of economic activity, competition and transfer of technology made by American investment into Britain not only in the past 15 years but in the past 100 years?
Mr. Eggar: I thank my right hon. Friend for his first remarks. Britain's commitment to inward investment, as he rightly says, goes back many decades. It is extremely important to the economic success of the United Kingdom. The single most important factor is that an inward- investing company, whether it be American, Japanese, Korean or whatever, knows that once it has invested in the United Kingdom it will be treated by the British Government as a UK company and will be fully supported by us. There is no doubt that the rejuvenation in the past decade or so, particularly in the manufacturing sector, has largely been due to our success in attracting inward investment from established investors and from new ones.
Mr. Bell: Since it is still the season of good will, may I add the Opposition's congratulations on the right hon. Gentleman's elevation to the Privy Council? Will he confirm that the selective regional assistance packages that we offer are no greater than those offered by our European competitors through grants, financial incentives and soft loans? May I also congratulate the President of the Board of Trade on having seen off the former Chief Secretary to the Treasury, who did not believe in selective regional assistance and thought that it distorted the free market? Finally, can the Minister now reply to my hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) and congratulate local authorities, which play their full part, on putting together selective regional assistance packages?
Mr. Eggar: I welcome the peace and good will that appears to have broken out at this Question Time. I hope that it will be sustained during the coming months. Yes, I willingly pay tribute to the many local authorities that have taken a very constructive attitude to attracting inward investment, especially in the past few years. I also pay tribute to the training and enterprise councils, which have also come to the party, and to the private sector, which has helped. It is a co-operative partnership, which is working increasingly well and being increasingly successful.
4. Mr. Fabricant: To ask the President of the Board of Trade what surveys he has conducted into the educational background of overseas customers of British manufactured goods and services; and if he will make a statement.
The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor): We have not conducted any such surveys, but we arkeen that overseas business men should develop a network of relations with the United Kingdom through education and training opportunities.
Mr. Fabricant: Before I came to this place, was I the only exporter to find that many customers had been educated and trained in the United Kingdom? Does my hon. Friend agree that the provision of education and training for overseas visitors in the United Kingdom, by organisations such as the British Council and others, is not charity but an investment for British trade and industry?
Column 137has a series of programmes with the British Council and the Foreign Office to encourage people to come to this country for education and training. I urge British companies to do more, so that they assist the familiarisation process with British goods, which will eventually lead to further export opportunities.
Mr. Campbell-Savours: If that is now so, what have the Government to say about the Foreign Office decision in the early 1980s to cut the very grants that are used to fund the education of overseas students coming to the United Kingdom? In so far as many Opposition Members thoroughly agree with the hon. Member for Mid-Staffordshire (Mr. Fabricant) on that issue, will the Government review that decision? Wherever one goes abroad, people in our overseas embassies repeatedly tell us that the restoration of those grants is critical to trade with the United Kingdom.
Mr. Taylor: The simple answer is that the number of overseas students in British universities and colleges of higher education is higher than it was when the grant changes were made. The reason for that is that the value to other people of the good education that they can get in this country is self-evident and it is not merely put down to cost.
Mr. Ian Bruce: Does my hon. Friend agree that it is the quality of British education and its representation around the world that sells it, not subsidies? What is his Department doing to ensure that British educational exports, of both products and services, receive the full backing that they need through our embassy and consulate network?
Mr. Taylor: We have established a whole network of overseas technical advisers in embassies and they are doing an excellent job, especially in the technical field, in ensuring that the advantages of British education and products are known. The export value of educational services is about £4 billion a year, which shows how important and successful that sector is to British performance overall.
Mr. Kennedy: I thank the Minister for that reply. Given the welcome nature of the structural funding available to the three areas in question, including the Scottish highlands and islands, does he agree that one of the implementation difficulties that seems to arise is that smaller business people rarely have the back-up required to make an application? They do not have the complex range and detail of professional services that are required, so the bulk of the funding understandably goes to local authorities, enterprise companies and so on, which have greater expertise at their disposal. Will the Minister and
Column 138his officials see whether more help can be given specifically to smaller business people so that they can get as much advantage from the funds as the bigger concerns?
Mr. Wardle: The hon. Gentleman highlighted the progress in his constituency as part of the highlands and islands objective 1 grant. I understand that £16 million of objective 1 grants have been approved for 208 projects. He will know from his constituency that some of them are fairly small sums, but he makes a perfectly valid point, which should be considered by the monitoring committees. If he approaches the appropriate Government office, I am sure that it will take the point on board and that the monitoring committees will want to think about it.
Mr. Salmond: Has the Minister analysed how the cuts in local authority finance in Scotland will impact on the ability of the highlands and islands and the north-east of Scotland to take advantage of objective 1 and objective 5b status? Would not it be ironic, if somewhat familiar, if benefits from Europe were undermined by the policies of the London Government?
Mr. Wardle: I am sorry that the hon. Gentleman takes such a sour approach to the good news for Scotland. I hope that he bears in mind the fact that the six-year allocation of structural funds from 1994 to 1999 for the highlands and islands will amount to £263 million. That must be good news.
Mrs. Anne Campbell: Does the Minister recognise, however, that the squeeze on local authority spending may lead to an inability to take up European funds, particularly given the need for matching grants?
Mr. Eggar: I visited the New Holland Ford facility, the largest agricultural equipment plant in the UK, last October. In addition to a tour of the plant, I had a very useful meeting with senior management from New Holland Ford and its parent company, Fiat.
Mr. Amess: Following my right hon. Friend's visit to Basildon, will he join me in congratulating the work force and management of the Fiat tractor plant on their success in increasing sales of their products throughout the United Kingdom? Following his discussions, does he agree that the pay and employment opportunities of the work force would have been adversely affected if our right hon. Friend the Prime Minister had not achieved the opt-out provisions in the Maastricht treaty?
Mr. Eggar: I join my hon. Friend in congratulating the plant's management and work force. It has been a major success story. Production is up by some 30 per cent. on three years ago, despite the fact that the overall market has fallen by some 26 per cent. in the same period.
Column 139[Interruption.] The Opposition seem to find it funny that my hon. Friend jokes at their expense because of their stance on the social chapter. Let me spell it out to them--
Mr. Eggar: May I emphasise to my hon. Friend, Madam Speaker, the message that we both received from the work force? It was that it is working on average 55 to 65 hours a week, which involves about 20 hours' overtime. The work force does that voluntarily and I am sure that my hon. Friend will not miss the opportunity to make it clear to these people that, if the Labour party were in power, they could not work that amount of overtime but would be limited to 48 hours a week.
Mr. Purchase: Does the Minister accept that it is illegal for horses to work more than eight hours a day? Although he claims that it is a great thing for people to work 60 hours a week, does he not accept that high skills and good investment in our plant represent a far better way to proceed in the last part of the 20th century and into the 21st century than keeping people at work for 60 hours a week?
Mr. Needham: My Department now has in place a wide range of measures to promote trade with the ASEAN countries, including the appointment of six export promoters, who work with our embassies and the Department to provide first-hand advice and assistance to British companies exporting to ASEAN.
Mr. Lidington: I am encouraged by that answer. Does my right hon. Friend agree that it is very important to encourage not just established major British exporters, but small and medium-sized companies, which might feel daunted at the prospect of exporting to south-east Asia, to take advantage of those attractive markets?
Mr. Needham: My hon. Friend is right. For that reason, we are concentrating our efforts on small and medium-sized companies securing orders from ASEAN through the Business Links, the appointment of regional export advisers throughout the country, the provision of export promoters and the large number of additional missions that we are organising. The success of that policy is shown by the fact that, so far this year, our exports to ASEAN countries are up 26 per cent. and their exports to us, one of the most dynamic regions of the world, are up by 5.6 per cent.
Mr. Beggs: What progress are Northern Ireland companies making in developing exports to ASEAN? When might we expect investment to begin from the Investment Forum, which was successfully initiated in Belfast by the Prime Minister?
Column 140of State for Northern Ireland. On the first part of the hon. Gentleman's question, I can reassure him and the people of Ulster that companies from Northern Ireland are already enormously successful in ASEAN. For example Mivan is building 3,000 apartments in Thailand; Mackies of Belfast, which was almost on its back three years ago, is now successfully exporting to Indonesia and Malaysia; Shorts has won many orders in that part of the world; and Randox Laboratories has also been successful in the region.
I am sure that the advent of peace has given the business spirit of the people of Ulster an uplift. I have no doubt that those business people will become ever more successful in south-east Asia. I shall do my best to take those people with me whenever I go to that region.
Mr. John Marshall: Does my right hon. Friend agree that the growth of our exports to ASEAN is due in part to the buoyancy of the ASEAN economies? Does he further agree that that buoyancy exists because those economies are deregulated and do not suffer from the obligations and restrictions that the Labour party would impose on the British economy?
Mr. Needham: My hon. Friend is right that ASEAN represents the most successful, most buoyant and fastest-growing economies in the world because they are capitalist to the core. They know what is important in trying to help the poorest of their people to get work and to improve their living standards. It would be a great help to British businesses if many more Opposition Members went to those countries to see those economies for themselves.
8. Mrs. Mahon: To ask the President of the Board of Trade when he expects to receive the report of the Director General of Fair Trading into the proposed merger of the Halifax and the Leeds Permanent building societies.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans): My right hon. Friend the President of the Board of Trade announced on 21 December that he had decided not to refer the proposed merger of the Halifax and Leeds Permanent building societies to the Monopolies and Mergers Commission. That decision was in accordance with the advice of the Director General of Fair Trading.
Mrs. Mahon: The Minister will be aware that the Halifax employs more than 3,000 people in my constituency and that the Leeds Permanent employs more than 1,000 people in Leeds. What steps will he take to ensure that promises to myself and my hon. Friend the Member for Leeds, Central (Mr. Fatchett) that those jobs would be retained are kept? Will he further ensure that the strength of the proposed merger will not in any way disadvantage customers?
Mr. Evans: I think that the hon. Lady knows that the making of decisions about employment is a commercial matter, but that the parties have given reassurances--as she said--that any reductions necessary will be brought about only through voluntary redundancy and natural wastage.
However, I remind the hon. Lady that the decision that is made by my right hon. Friend the President of the Board of Trade relates merely to those factors concerning
Column 141this matter which relate to the Fair Trading Act 1973. The decision on merger is a matter for the members of the building societies themselves. The hon. Lady also knows that, according to the Building Societies Act 1986, the Building Societies Commission will ensure that all the requisite information is given to members when the voting process is undertaken, and that, in the case of investing members, the decision must be passed by a majority of 75 per cent. of the people who participate.
Sir Donald Thompson: I thank my hon. Friend for those answers. Does he agree with me that the people of Yorkshire welcome the building of a huge financial institution by the merging of the Halifax and Leeds Permanent building societies, which will be able to compete, not only in the United Kingdom but throughout Europe?
Mr. Evans: I am grateful to my hon. Friend for those remarks. I am aware that the Director General of Fair Trading has received several representations in the period since the merger was announced, many of which were along the lines that have been outlined by my hon. Friend, drawing on the great financial tradition that exists in Yorkshire, Leeds and Halifax.
Dr. John Cunningham: Is not it surprising and questionable that a merger of such significance, involving £90 billion worth of assets and creating one of the largest financial institutions in Europe, with more than 25 per cent. of the domestic mortgage market and estimated dealings with about 45 per cent. of households in the country, should be nodded through, and the announcement made the day after the House had risen for the Christmas recess?
The merger may well have great attractions--as the hon. Gentleman said--and I am not saying that it will prove to be a bad thing, but it is of such a significance and scale that the employees and customers of the two societies were entitled to expect the most thorough and rigorous examination of all the aspects of it. They did not get it.
Mr. Evans: All the relevant factors were considered in the most thorough detail. I find the right hon. Gentleman's remarks somewhat surprising, especially in the context that he would have been the first to complain if staff and the societies had been kept waiting inexorably for a decision once the President of the Board of Trade was in a position to reach a proper decision. My right hon. Friend received the papers from the Director General of Fair Trading and gave at least six days' consideration to the recommendation that was made by the director general.
Finally, the right hon. Gentleman is among the first to suggest that the observations made by the Director General of Fair Trading do not receive sufficient attention by the Department of Trade and Industry. I find it surprising that on this occasion he should challenge the very recommendation that the President of the Board of Trade has decided to endorse.
Column 142exports? It was called the brain drain. Why? We had a 98 per cent. rate of tax, 27 per cent. inflation, and rats as big as cats running round Leicester square. Is not it a fact that the current Government have put the "Great" back into Britain through record exports?
Mr. Taylor: My hon. Friend shows admirable precision and clarity about the dangers of a possible Labour Government. Indeed, in expressing things so clearly, he is becoming the Newt Gingrich of British politics.
Mr. Hardy: The Minister might not agree, but were the hon. Member for Welwyn Hatfield (Mr. Evans) to emigrate, it would be no great loss. Would the Minister care to amplify his answer and tell the House the rate of imports in 1979 and last year, and the trade deficit in 1979 compared to that of last year?
Mr. Taylor: The hon. Gentleman would risk losing an item of national heritage in his wish to export my hon. Friend the Member for Welwyn Hatfield (Mr. Evans)--I certainly would not recommend that to the House. To answer the hon. Gentleman's question, imports rose in volume by 78 per cent. during the period that we are discussing. What is most interesting now is that the effects of the improvement in manufacturing productivity are now showing in manufacturing exports. Exports--which drive the economic recovery--were, in the third quarter of 1994, up 14 per cent. to the world and 19 per cent. to the EC. Rather than looking backwards, the hon. Gentleman should look forwards and welcome that tremendous economic performance.
Mr. Butcher: Almost unheralded and unnoted there has been an astonishing improvement in exports from the manufacturing sector, particularly the engineering sector, in the west midlands. Will my hon. Friend the Minister come and witness some of the improvements in Coventry, in companies such as GPT, Jaguar and Massey Ferguson? The most significant worldwide investment programme--investment in the new digital super- highways--is being led by GPT, which is currently exporting into 30 telecommunications networks around the world. Something dramatic is going on out there and we should recognise that.
Mr. Taylor: I strongly welcome my hon. Friend's comments. As he knows, I was in Coventry just before Christmas and know from first hand, being a Coventrian, the importance of industry to that city. Unlike Opposition Members, even The Guardian has caught up with the fact that high -tech industries lead our economic recovery, particularly in export markets. As the Minister with responsibility for technology, I am delighted about that--and not surprised because as I go around the companies I see how successful they are. Those companies all cite the fact that the stable economic background and low inflation in this country enable them to continue to be competitive in world markets.
Mr. Harvey: Do not the Government's claims on exports sit uncomfortably with the statistics of the Organisation for Economic Co- operation and Development which show that Britain has the slowest rate of growth in exports of any G7 country since 1979? Is not one of the main reasons for that the fact that
Column 143manufacturing investment as a proportion of GDP fell to an all-time low in the first half of 1994 and has continued falling in recent quarters?.
Mr. Taylor: The reality is that the volume of UK-manufactured exports grew faster than those of France, Germany and Japan for the bulk of the 1980s. We should be pleased to accept that figure. The export volume of manufacturers in the third quarter of 1994 was up by 12 per cent. Opposition parties should welcome those figures as they create jobs in their constituencies. Occasionally, Opposition Members should not only welcome the figures, but give credit where credit is due--to the Government's economic performance.
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): I am confident-- [Hon. Members:-- "Who he?"] And a happy new year to the Labour party, too. I am confident that overseas companies will continue to recognise that the Government's economic policies make the United Kingdom an attractive place to do business and that we will remain the preferred location in Europe for foreign investment. The prospects are excellent, but success has to be worked for. For that reason I have strengthened my Department's Invest in Britain bureau, including the appointment of a chief executive from the private sector.
Mr. Waterson: I thank my right hon. Friend for that answer. Does he agree that one of the attractions to inward investors is the fact that in France, for example, about 29 per cent. of total labour costs go on non- wage social costs, whereas the equivalent figure in this country is only 17 per cent.?
Mr. Heseltine: My hon. Friend is right to state the discrepancies and problems that would arise from Brussels if we did not possess the opt- out to the social contract. The problems in Brussels are ever present in the mind of the Labour party, the leader of which has had to go to Brussels to put the boot in to members of his own party who are trying to upstage his key proposals to modernise the Labour party--what a hope!
Mr. Stevenson: Is it not true that much of the so-called "investment" has been in the form of takeovers and asset swaps, some of which have turned out to be no more than asset strips? Is the President of the Board of Trade aware of the activities of the Dupont company, for example, which acquired much of the capacity of ICI and resulted in many plant closures and job losses?
Will the Minister inquire into that disgraceful situation involving a major American-based international company? Will he also ensure that the trade unions which represent the workers at the plant and which have been refused the information that they need in order to make representations on behalf of their members are given that information?
Column 144prospects that we have enjoyed in decades and Opposition Members carp and moan as though the results are nothing like as good as they are.
It is time that the Opposition recognised that we have moved back into a balance of payments surplus. That is a huge tribute to the policies of the Government. Why cannot the Labour party tell people the good news and encourage, as opposed to constantly undermine, the efforts of the United Kingdom?