2. Mr. Gunnell: To ask the President of the Board of Trade what is the total Government funding for the Invest in Britain Bureau for (a) 1992- 93, (b) 1993-94 and (c) 1994-95; and how much of that sum in each year was made available in total to the regional development organisations.
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): The totals for my Department's programme expenditure on inward investment in those three years are £7.8 million, £8.8 million and £10.6 million respectively. Those include grants to regional development organisations of £5 million, £6 million and £7.2 million.
Mr. Gunnell: In setting the 1995-96 budgets, will the President of the Board of Trade recognise the excellent partnership between the Invest in Britain Bureau and the regional development organisations? Does he agree that investment successes, such as the recent attraction of a Korean company to north Yorkshire, are due to companies seeing themselves as entering the European Union and that pandering to the sceptics is potentially damaging to our continued inward investment success?
Mr. Heseltine: The House should have no doubt at all that the remarkable success in attracting inward investment into the United Kingdom is due to the UK being seen as the most effective place to trade, invest and manufacture in the European Union and the Government are determined to keep it that way. That is why we are so opposed to the Labour party policy of introducing the social chapter.
Mrs. Peacock: I welcome the figures given by my right hon. Friend on the Invest in Britain Bureau. Does he have figures for investment by British companies in British industry? Is he aware that in my part of west Yorkshire, millions of pounds have been invested in manufacturing, new jobs and new technology since 1983?
Mr. Heseltine: My hon. Friend is absolutely right. The figures could be easily provided and are in the public domain. The latest forecast by the Confederation of British Industry showed growing intentions to invest further, which is much to be welcomed. There has also been very widespread investment by British companies overseas.
Mr. Wigley: Will the President of the Board of Trade clarify whether the figures that he mentioned include any contribution to the Welsh Development Agency in view of the work that that agency does? If his figures did not include any such contribution, is he confident that the WDA is receiving adequate resources for its important
Column 328work, which is of general benefit not only to Wales but to the UK despite cuts in its budget and the fact that it now has to fund its activities by selling off its assets?
Mr. Heseltine: Everyone is aware of the remarkable success of the WDA under this Government and the inward investment that it has attracted. The Invest in Britain Bureau acts as an umbrella organisation across the entire United Kingdom. Although the regional development organisations are specifically located in England, there is an interplay between the Secretaries of State for Northern Ireland, for Scotland and for Wales and myself: put the whole lot together and we are attracting a far and away more advantageous share of inward investment than any of the other European Union members.
3. Mr. Clifton-Brown: To ask the President of the Board of Trade if he will take steps to ensure that British Gas will continue to maintain its free gas care services for the elderly, disabled and blind.
The Parliamentary Under-Secretary of State for Industry and Energy (Mr. Charles Wardle): British Gas has made it clear that it will nocut the services that it offers to the elderly or disabled, and that it will not introduce charges for such services. The forthcoming Gas Bill will provide that all suppliers make special services available to those groups of customers.
Mr. Clifton-Brown: Does my hon. Friend agree that there has been a 15 per cent. cut in the price of gas in real terms since privatisation, even after allowing for the recent increase in VAT, and that customers have therefore had an extremely good deal from British Gas? In those circumstances, the interests of those in society who are less able to look after themselves--the old, the disabled and the blind--should be fully protected. Will my hon. Friend do all that he can to ensure that those interests are fully protected both now and, above all, under the new Gas Bill? When the industry is deregulated such services will come under further pressure.
Mr. Wardle: My hon. Friend is right about the fall in gas prices; he will also know that the standing charge has fallen by 28 per cent. in real terms since privatisation. British Gas is not cutting special services. It was made clear in the consultation document last May that all suppliers of gas would have to offer such special services, and that obligation will be written into the Bill which will be published shortly.
Mr. Jones: Why can the Minister not guarantee that British Gas will continue to offer the sort of free service currently available to the blind and disabled? We have heard rumours that under the new regime the company will charge blind people up to £25 for the privilege of having their meters read. Can the Minister guarantee that there will be no additional charges for disabled or blind people?
Column 329Gas provides the special services to about 1 million customers, at a cost of about £30 million, and that the company has no intention of charging for them.
Mr. James Hill: My hon. Friend will be aware that the gas companies are very capable of helping in the regions, especially in connection with the arts, culture, the support of orchestras, and so on. Clearly there is much good will in the British Gas corporation, but will my hon. Friend ask it again to dispense with the myth that heavy penalties may fall on the elderly, the disabled and the blind?
Mr. Wardle: I am happy to confirm yet again that there will be no such penalties. It is also worth adding that safety remains of paramount importance to British Gas. The company has recently spent more than £1,000 million on replacing pipelines in the interests of safety, and routinely spends £100 million a year on safety checks and measures.
Mr. Nigel Griffiths: But Michael Alexander, the director of public gas supply, has said that he cannot guarantee the special services unless there is a level playing field. Paragraph 6.11 of the Minister's discussion document says that obligations to elderly and disabled gas customers are a matter for debate; the document also says that it may be unnecessary to retain prescribed levels of service. If the Minister thinks that he can pretend otherwise, he is a nitwit.
Mr. Wardle: The hon. Gentleman is in more than usually excited and excitable form. I hope that he will bear in mind what the consultation document says--that a condition of the licence that gas suppliers will need before they can supply domestic consumers is that they must offer such special services. So who is the nitwit?
Mr. Rathbone: My hon. Friend's answer illustrates the Government's success in helping small businesses to start up. Can he give an indication of the numbers employed in those firms and what benefit those firms had in establishing themselves from our membership of the European Union?
Mr. Taylor: Last year was the first for about four years in which there was a net increase in the number of firms, with a rise of about 24,000. That suggests that we have a strengthening economy, which is one of the best factors for encouraging small businesses to perform. Membership of the EU is also important in terms of widening the home market. The Department of Trade and Industry continues to give considerable attention and support to small companies, particularly those involved in high technology. We have launched and adapted the Smart and Spur schemes, which are targeted at smaller companies bringing forward new ideas and technology.
Column 33055,000 small firms in 1993, and one in three small firms goes to the wall every three years. Is there not still a finance gap which means that small firms are not getting long-term finance, a skills gap which means they are not getting the core skills, and a government gap because there is no proper statutory definition of a small firm? Will the Minister promise the House and the small business community that we shall have that definition?
Mr. Taylor: I am not sure that small firms are particularly interested in statutory definitions--they are interested in success. The hon. Gentleman's own definition shows that two out of three firms do survive, and it is important to remember that starting up a business is a risk. The Government must get the economic climate right, and that is what we are doing. We must also target innovative schemes, providing support through business links and special loan facilities where the normal banking arrangements perhaps cannot function, and we must encourage companies to tackle the new high-tech challenges with entrepreneurial spirit. I think that the Government have a good record, and the hon. Gentleman might reconsider the tone of his question.
Mr. Harris: The economy of west Cornwall is absolutely dependent on small firms. While I welcome and agree with what my hon. Friend said, does he recognise that many small firms are coming under increased pressure as a result of the current revaluation? Will he have discussions with the Department of the Environment and with the Inland Revenue, which carried out the revaluations, and look at the basis of them? I can assure my hon. Friend that they are imposing a tremendous burden on small firms, despite the transitional relief that the Government have introduced.
Mr. Taylor: My hon. Friend knows that my right hon. Friend the Secretary of State for the Environment has taken that into account. The Government realise that revaluations can be difficult, and therefore transitional arrangements were brought in. I can assure my hon. Friend that the Government office for the south-west is alive to the difficulties faced by companies in that region and has targeted particular help to them. Some of that help has been targeted through European Union structural funds. I believe that those schemes are now bearing fruit. Any company in the south- west that is concerned about the schemes should contact the Government director, who will provide further information.
6. Mr. Wareing: To ask the President of the Board of Trade how many successful takeover bids have been notified to him in the last five years; and what information he has on the number of takeovers in Germany during the same period.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans): There is no requirement for takeover bids to be notified and we keep no records of successful bids. Over the last five years, around 1,000 mergers qualified for investigation under the Fair Trading Act 1973, while more than 7,000 mergers were notified to the German competition authorities.
Column 331ease with which takeovers can take place in this country a basic reason for the short-termism and the lack of investment in British industry? What are the Government's proposals to deal with this? For example, they could restrict the voting rights of shareholders or--more importantly, so far as I am concerned--they could set up supervisory boards on which workers could have a say. What happened to the Dorrell inquiry set up by the Government?
Mr. Evans: The hon. Gentleman's perception of the distinction between the German and British systems is incorrect. Under German rules, all takeovers must be notified. In Britain, some 2 per cent. of qualifying mergers which are considered by the competition authorities result either in the bid being blocked or in undertakings being required, compared with only 0.5 per cent. of those examined in Germany.
Mr. Duncan Smith: Does my hon. Friend agree that one of the features of a free market is that the Government do their level best to keep out of the natural coming together and breaking apart of businesses unless a monopoly is being created? The Opposition should be exposed: they believe that the Government should be involved in every one of the mechanisms, thus distorting the market.
Mr. Evans: My hon. Friend is right that the mere fact that a bid may be hostile is not a reason to refer it. The Government's view is that competition is the primary factor that should be the subject of examination. Of course, where necessary, the public interest also has to be considered by my right hon. Friend the President of the Board of Trade.
Dr. Moonie: Is the Minister aware of growing anxiety in the medical research community about the takeover of Wellcome by Glaxo? Has he sought any assurances from Sir Richard Sykes about the level of research in both companies following any proposed merger? What advice will the Department give to the European Union when the bid is submitted to it for reference?
Mr. Evans: I shall not pre-empt the outcome of the issue, which may be considered by the appropriate competition authorities. I am sure that in those circumstances the hon. Gentleman will make his representations clearly. The Government have a record that is second to none on support for the medical research community.
Mr. Batiste: Will my hon. Friend confirm that many of Britain's most successful companies today are the result of takeovers and bids in the past? Does he agree that that is an integral part of the dynamism of a successful market economy? Does not the original question to my hon. Friend demonstrate how little the Labour party understands about market economics?
7. Mr. Gapes: To ask the President of the Board of Trade what plans he has to provide assistance to the London borough of Redbridge and include it in initiatives to help the regeneration of east London.
Mr. Gapes: Does the Minister know where the London borough of Redbridge is? From his answer, it appears that he has no idea. Is he aware that all the surrounding boroughs in east London are included either in the initiatives by the President of the Board of Trade for the east Thames corridor or in the Lea valley programmes? My borough of Redbridge has received not a penny from single regeneration budget projects. Is it not about time the Minister recognised that in my constituency one in seven males are unemployed and 11.2 per cent. of the population are unemployed compared with the national average of 8.5 per cent.? Why do we not get support in Redbridge when we need it?
Mr. Wardle: The answer to the hon. Gentleman's first question is yes, I do know where it is, but I wonder whether he does, and also whether he realises that the London borough of Redbridge submitted five outline bids for the first round of the single regeneration budget but chose not to put any of them in as final bids.
Mr. Evennett: Does my hon. Friend agree that the Thames gateway provides tremendous opportunities for Redbridge and other boroughs north of the Thames and for boroughs such as mine in Bexley, south of the Thames? Does he agree that co-operation and enthusiasm from the Opposition as well as from business men and Government is needed to get the project off the ground?
Mr. Wardle: My hon. Friend is right. I am sure that he agrees that it is a pity that the hon. Member for Ilford, South (Mr. Gapes) did not sing the praises of the London East training and enterprise council and its schemes, which provide help to Redbridge through a local office which also covers Waltham Forest. The hon. Gentleman should also, perhaps, have talked about the merits of the London business link network, which is developing as it should.
9. Mr. Jim Marshall: To ask the President of the Board of Trade what advice his Department has given the Office of Electricity Regulation on mergers and acquisitions of regional electricity companies.
Mr. Marshall: I thank the Minister for that curt and short reply. Does he agree that the recent bid for Northern Electric highlights the weakness of the Government's position in terms of seeking to foster regional electricity companies that are responsive to local need and intent on fostering a regional identity? If he accepts that, how does he intend to ensure continued ministerial and
Column 333parliamentary control over electricity policy? Will he refer the matter to the Monopolies and Mergers Commission as a number of his hon. Friends are urging him to do?
Mr. Evans: My right hon. Friend the President of the Board of Trade will give careful consideration to all aspects of the specific case raised by the hon. Gentleman before announcing his decision in due course. I make it clear to the hon. Gentleman that when the Director General of Fair Trading gives his advice to the President of the Board of Trade, he takes account of all relevant factors including any views that may be forthcoming from the Director General of Electricity Supply.
Mr. Brooke: Before we become immersed in a series of possibly irrelevant issues, does my hon. Friend agree that if the bidder for Northern Electric was within the European Union the only consideration to which the bid would be subject would be competition? If a British bidder is involved, would it not be sensible for the same conditions to apply here?
Mr. Evans: My right hon. Friend will understand that the decision will be taken in accordance with the statute and with the practice followed by the President of the Board of Trade in relation to all such matters. My right hon. Friend will understand that it would be inappropriate for me to comment further at this stage.
Mr. Beggs: What assessment has been made of the likely impact of the acquisitions and mergers of regional electricity companies on the ultimate price that industrial users of electricity have to pay? Does the Minister agree that highly priced electricity is most likely to damage our existing industries and that it threatens our ability to attract inward investment?
Mr. Evans: The hon. Gentleman will be aware that one factor to be taken into account by the President of the Board of Trade in the case in question will be the views of the Director General of Electricity Supply. The hon. Gentleman should recognise that the regulator is given specific powers in this area.
Dr. John Cunningham: Is the Minister clear that the powers of the regulator will be sufficient to safeguard consumers' interests if a succesful bid takes place, whether for Northern Electric or for any other regional electricity company? Is he satisfied that sufficiently effective and transparent accounting procedures will be put in place to ensure that any new owner of a regional electricity company will not be able to drain finance out of it for other purposes? Is his Department now satisfied that there is no question of insider dealing being involved in the Trafalgar House bid for Northern Electric?
Column 334given to the regulator. Those powers were given by the Government to protect the interests of consumers and the right hon. Gentleman would be well advised to recall that.
Mr. John Marshall: Does my hon. Friend agree that if regional electricity companies were immune from takeover they would have less incentive to become more efficient? Will he confirm that Trafalgar House has said that if it acquires Northern Electric consumers will receive a 30 quid bonus? Should we not consider the consumers rather than the esoteric views put forward by the right hon. Member for Copeland (Dr. Cunningham)?
Mr. Evans: I am well aware of the views expressed by my hon. Friend, which are among a range of views expressed to the President of the Board of Trade on this. My hon. Friend will understand, however, why I shall not comment further on whether those views will ultimately prevail.
10. Mr. Hood: To ask the President of the Board of Trade what steps he has taken or intends to take to protect local authorities from the effects of coal privatisation in relation to opencast mining sites; and if he will make a statement.
Mr. Hood: The Minister will know that the Dalquhandy opencast site in the Clydesdale constituency is the largest in Europe and that the cost of restoration will be at least £15 million. Having had a ministerial meeting with representatives of the council, he is also aware that the Government refuse to acknowledge that the Coal Industry Act 1994 transfers liability for that restoration directly from the Government to the local authority without consulting the local authority during the process of the Act or the restructuring agreement negotiated with the new co-owners. Will the Minister, first, answer the eight questions that he promised to answer when we met on 12 January and, secondly, even at this late stage underwrite the terrific cost, which could not be borne by the local authority? That cost would bang up the local authority and devastate the local community.
Mr. Wardle: The hon. Gentleman has raised a number of questions in correspondence and at a meeting with my right hon. Friend the Minister of State. I assure him that those matters are being dealt with. The Coal Industry Act 1994 gives the Department of Trade and Industry powers to ensure full continuity from British Coal to the successor companies, which have the same rights and obligations as British Coal. Planning consent and the enforcement of planning conditions remain matters for the planning authorities. With regard to the hon. Gentleman's concern about the ability to meet obligations for opencast sites, the Department checked carefully the financial status of the successor companies as part of the bid process.
Column 335non-operational land such as Ellerbeck, an opencast mine near Chorley, which will enable the environment to be improved?
Mr. O'Neill: The Minister has yet to give concrete assurances. Companies which have acquired mining rights in the UK--Budge and, in Scotland, Mining (Scotland) Ltd.--are narrowly based companies which do not have great resources. As they have been given massive responsibilities for opencasting, there must be some arrangement whereby local authorities are protected. The Minister has not yet come forward with such an arrangement. It is one thing to sweep the matter aside in the privatisation process and hand it over to the Coal Authority, but as the Coal Authority has no teeth and little inclination, local authorities will have to pick up the tab if anything goes wrong. Does the Minister accept that he has a lot of work to do, and quickly?
Mr. Wardle: The Act makes the operators' obligations clear. The key point is that all purchasers of British Coal's mines were subjected to a thorough scrutiny of financial viability. The new Coal Authority is required to check the financial strength of companies to which it envisages issuing licences in exactly the same fashion.
Mr. Ian Taylor: The Government have made their opposition to continued subsidies to steel producers very clear both to the Commission and to other member states. We have done this at Council meetings and in correspondence. Our lobbying will continue.
Mr. Jones: Does the Minister agree that the strip mills of Llanwern, Port Talbot and the sister plant at Shotton in my constituency are performing magnificently in producing the required products? What will happen, however, when the current excellent trading conditions for steel end? What will he do at the heart of Europe to ensure that member states cease cheating by employing subsidies against the best interests of British steel and British plant? So far, it seems to the Opposition that the Government are unable and unwilling to act.
Mr. Taylor: There is an inconsistency in the hon. Gentleman's question: the credit he has paid to the current production and capabilities of the steel mills in Wales compares with the policies of the Labour Government in the 1970s, when those mills performed extremely badly. I have already told the hon. Gentleman that Ministers are taking up problems with steel subsidies in the rest of the European Coal and Steel Community at every opportunity. Yesterday, in Brussels, I met Commissioner van Miert and raised that very issue with him. An important balance must be obtained. We will do no good, however, just by screaming from the sidelines. We must ensure that we have an overall package to persuade other member countries that they should reduce their subsidies
Column 336so that long-term competition in the industry, as shown by the excellent performance of British steel, will prevail. That will be achieved only through argument.
Mr. Nicholls: Does my hon. Friend agree that the extreme difficulty that Her Majesty's Government have already encountered in trying to persuade our European Union partners not to subsidise steel illegally would be made even more difficult if we went into a federal Europe as advocated by the Labour party, where we would have no chance of success?
Mr. Taylor: My hon. Friend has particular views on the subject of Europe. As a Department of Trade and Industry Minister, my interest is in looking after British manufacturing. British manufacturers would find it impossible to compete in world markets if they did not perform strongly in their own home market--the European Union of 370 million people. Without strong institutions in the European Union, we would never be able to ensure that competition policies were properly put in place in other countries as they are in this one.
Mr. Wilson: Does the issue not go to the heart of Tory troubles on Europe? We have Ministers making different statements by the hour on their attitudes towards Europe, while the Prime Minister is a Euro-sceptic on a Monday, Wednesday and Friday and pro-European on a Tuesday, Thursday and Saturday. What we need is action rather than words; yet when we need tough action in Europe, we throw away our ability to wield that influence in defence of our national industries because of the barbed messages that come out of the Government every hour and every day of the week.
Mr. Taylor: The hon. Gentleman should pay more attention to the excellent work of Under-Secretaries of State, who are fighting for Britain day after day in the Councils of Europe. There I was yesterday, face to face with Commissioner van Miert, saying that we want a strong Commission to enforce competition policy throughout the European Union. That is the consistent line that we take and I enjoy doing just that. I am delighted to say that a Belgian socialist has an acute understanding of why it is essential to have competition policy throughout the Union. Perhaps if the hon. Gentleman compared notes with Commissioner van Miert, he might understand the subject better himself.
Mr. Ian Bruce: Does my hon. Friend agree that the subsidies currently given to the European nationalised steel industries are a disgrace, as are the subsidies paid to state monopolies in telecommunications? Does my hon. Friend further agree that those state monopolies in other European countries are gaining some support from the thought that even the Leader of the Opposition cannot remove clause IV from the socialist constitution on the basis that the Opposition still believe that one must subsidise industries to make them efficient?
Mr. Taylor: I shall leave the problem of clause IV to the private grief of the Labour party. In the European Union, it is important to attempt to achieve common rules and regulations. One can do that only with strong Community institutions--with a strong Commission making proposals about competition policy that are enforced and then backed up by the European Court. I remind the House that, if it were not for the European Court of Justice, it would not have been possible for us
Column 337to challenge the subsidy to Air France--as we are doing--and if it were not for a strong Commission, we would not have achieved the British Airways flights into Orly against the opposition of Air France. The European Union works for Britain when we enforce the rules, and that means working with the institutions.
Mr. Hardy: The Minister will recall that, 14 months ago, the Government proclaimed it a great triumph when the Council of Ministers said that it would carefully monitor that unfair trade. However, is the Minister aware that his recent written answer to me suggests that the Government have remarkably little knowledge of the results of the work of the monitors? When will the Government monitor the monitors to ensure that we can find out whether those practices are continuing or being stopped?
Mr. Taylor: The hon. Gentleman may wish us to monitor the monitors monitoring monitors. I simply want some action. We shall get action if we try to persuade other member countries of the long-term need to work towards non-subsidised industries. If the hon. Gentleman pays attention to the detail, he will realise that, in many cases, we have managed to persuade other countries, against internal political opposition, to transform the basis of the way in which they treat industries such as the steel industry. It is not an overnight success. All nations are confronted by domestic pressures, with industries that are declining. Nevertheless, the success of British steel is a sign of what could happen throughout the European Union, and domestic success is the best way for us to argue our case.
Mr. Jonathan Evans: In the competitive international market, a wide range of north-west manufacturing companies continue to win major orders. The latest economic survey by the north-west chambers of commerce provides evidence that the manufacturing and the service sectors in the region are experiencing good levels of business and are showing confidence about their prospects for 1995.
Mr. Orme: Is the Minister aware that the drastic reduction in the engineering industry in the north-west has had a catastrophic effect on the north-west as a whole, and that further redundancies are being announced at British Aerospace? What action will the Government take to offset that problem? Has the Minister considered the proposals made by the Engineering Employers Federation, which has suggested a policy of development, investment and expansion in the engineering industry?
Mr. Evans: The Government continue to engage in a wide range of steps to help the north-western economy. That economy would be helped if more hon. Members representing constituencies in the north-west spoke up for the north-west and drew attention to the fact that, even in a climate in which unemployment has decreased consistently for the past two years, the north-west has played its part, with unemployment decreasing by more than 40,000 in the past 12 months. I remind the right hon.
Column 338Gentleman that the number of people employed in his constituency has increased by more than 1,000 in the past two years.
Mr. Thurnham: Is my hon. Friend aware of the recent Lloyds bank survey, showing that north-west businesses are enjoying a record surge on order books and in profits? Does that not augur well for the future of manufacturing industry in the north-west?
Mr. Evans: I am well aware of the information to which my hon. Friend refers. Undoubtedly, he is one of the hon. Members who portrays a positive view of the north-west, which is so important for winning new inward investment to Britain and to the north-west region.
Mr. Eastham: The Minister has boasted about what he has done for the north-west. I bring to his notice the fact that, in the past 15 years, Trafford Park industrial estate, which was one of the biggest engineering estates in Europe, has become almost a ghost town. We are closing down all the rolling stock companies, cuts are being made in aerospace and the place is a complete disaster, because of the effects of the Government's policies.
Mr. Evans: I am aware of the Trafford Park manufacturing institute and its specific initiative in that district, and officials from the Department are in contact about the initiative in relation to developments in Trafford Park. Let me tell the hon. Gentleman something to set against the image that he chose to give of the north-west: manufacturing investment in the north-west in the five years between 1988 and 1992 amounted to £9.4 billion. The hon. Gentleman would do better to talk up the region than to talk it down.
Mr. Ian Taylor: Overall Government assistance has created 35,000 jobs since 1986. The Department of Trade and Industry will continue to encourage local business through the business links system, through support for inward investment, and through measures set out in the competitiveness White Paper.