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That there be laid before this House a Return of the Accounts of the Contingencies Fund, 1993-94, showing:--

(1) The Receipts and Payments in connection with the Fund in the year ended the 31st day of March 1994.

The Distribution of the Capital of the Fund at the commencement and close of the year; with the Report of the Comptroller and Auditor General thereon.-- [Mr. Burns.]

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Oral Answers to Questions


Post Office

1. Mr. Raynsford: To ask the President of the Board of Trade what steps he has taken to assess the opinion of the public on the future of the Post Office.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): The Government issued aGreen Paper on the future of postal services in June last year.

Mr. Raynsford: As the President of the Board of Trade appears a little coy on this issue, may I remind him of the implacable opposition of the British people to the privatisation of postal services? May I also remind him that the people of Greenwich are equally opposed to the back- door privatisation of their post office by Post Office Counters, which is trying to close the Crown post office and to hand it to a franchisee, probably operating from the back of a supermarket?

Mr. Heseltine: The hon. Gentleman will know that the unions tried to organise a strike on the issue on Monday. I am pleased to tell the House that that strike was even more of a failure than the one a few weeks ago.

Mr. Dover: Does my right hon. Friend agree that the main difficulty is that the public still believe that he has it in mind to privatise Post Office Counters, whereas our only proposal is to privatise Royal Mail?

Mr. Heseltine: My hon. Friend is right. More than 19,000 post offices are in the private sector and only a relatively small number--a few hundred--are Crown post offices. The proposals that the Government considered were related to the privatisation of Royal Mail.

Regional Electricity Companies

2. Mr. Tony Banks: To ask the President of the Board of Trade what consultations he has had with the Director General of Electricity Supply about the pay and perks of directors and executives of the South Wales, Northern and Eastern regional electricity companies.

The Minister for Energy and Industry (Mr. Tim Eggar): My right hon. Friend has had no such discussions. The regulator has no responsibility for these matters.

Mr. Tony Banks: Is it not a fact that the chairman of the South Wales electricity company has received a 68 per cent. rise in pay, that the chairman of Northern Electric has received a 46 per cent. rise and that the chairman of Eastern Electricity has received a 110 per cent. rise? When will it dawn on Ministers that the British public are scandalised by the way in which the bosses of privatised monopolies are making vast sums, beyond the dreams of avarice, out of consumers? The bosses are up to their ankles in the trough and they went in head first. When will Ministers realise that this scandal must be dealt with, that the responsibility is theirs and that they must take action?

Mr. Eggar: My right hon. Friend the Prime Minister has made it absolutely clear that we are awaiting the

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consideration of the Greenbury committee. The committee will consider these issues, among others. The Government have made it clear that if, after receipt of the recommendations, it is felt appropriate to legislate, we shall certainly consider doing so.

Mr. Batiste: Is not the real point that, as Professor Littlechild demonstrated so clearly this week, the regulator has all the powers necessary to look after the interests of the British consumer? His new intervention is good news for the British consumer, who will get even lower electricity prices as a consequence of the privatisation programme.

Mr. Eggar: I very much agree with my hon. Friend. The right hon. Member for Copeland (Dr. Cunningham) in the debate only 10 days ago criticised the regulator because, allegedly, he was not taking enough account of the interests of consumers. Following the regulator's announcement yesterday, the right hon. Gentleman attacked him for not taking account of the interests of the shareholders.

Dr. John Cunningham: Is it not strange that, after the extraordinary events of the past 48 hours, the President of the Board of Trade is not making a statement about them and about the consequences of the regulator's announcement? Far from attacking Professor Littlechild, as the Minister wrongly claimed, I welcomed his belated action yesterday. Is it not clear from his announcement that electricity consumers have been massively overcharged and fleeced of perhaps billions of pounds over the past four or five years? What action do Ministers intend to take to ensure that the regulator acts now to reduce electricity prices further? Is it not clear that electricity shares are overpriced exactly because consumers have been overcharged?

As officials and Ministers in the Treasury and the Department of Trade and Industry knew of Professor Littlechild's intention to consider a price review before the sale of PowerGen and National Power shares, is not that inside information, as defined in part V of the Criminal Justice Act 1993? As we saw yesterday, beyond question the matter was price-sensitive. In withholding that information, are not Ministers and officials guilty of either absolute negligence or complete dishonesty in their handling of this affair?

Mr. Eggar: What is absolutely clear is that the Labour party opposed privatisation, and therefore opposed the benefits to consumers which have already flowed from privatisation, including a reduction in real terms in electricity prices of 9 per cent. over the past two years. The right hon. Gentleman says that the consumers have been ripped off. He seems to have forgotten the record of the previous Labour Government, when real electricity prices rose by 22 per cent. between 1974 and 1979.

With regard to the right hon. Gentleman's outrageous allegation towards the end of his long question, may I refer him to the article in The Guardian on Saturday, which made it very clear that he had written to the regulator asking for a reduction in prices ahead of 1 April? Did he say to the stock exchange-- [Interruption.] This is very relevant. The right hon. Gentleman has accused my right hon. Friends and me of misleading the public who have bought Generating Company shares. The right hon. Gentleman did not refer the letter that he wrote to the regulator to the stock exchange, nor did he give any

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indication in that letter, as I understand it, that there was any expectation that the political pressure that the right hon. Gentleman was trying to bring to bear on the regulator would have any impact on the Genco sales.

Mr. Anthony Coombs: When considering the pay of directors of regional electricity companies and, indeed, companies as a whole, does my hon. Friend agree that those matters are not for the Government but for the shareholders who own the companies? To make that system effective, will my hon. Friend consider the possibility of shareholders having, by law, to vote every year on the pay and perks of their directors, just as they presently have to vote for the reappointment of auditors?

Mr. Eggar: My hon. Friend has made an interesting suggestion, and it may be one of the things that the Greenbury committee will consider.

Post Office

3. Mrs. Roche: To ask the President of the Board of Trade how many post offices now have agency status.

The Parliamentary Under-Secretary of State for Industry and Energy (Mr. Richard Page): A total of 18,960

Mrs. Roche: Given that more than 1,300 people in my constituency have signed a petition opposing the change to agency status at Muswell Hill post office and that the senior area manager in charge of that post office has told me that he does not know of one person who supports the change, why are the Government foisting that change on my constituents and on people up and down the country?

Mr. Page: Any proposal to change from Crown to agency status is the decision of Post Office Counters. May I give the hon. Lady a little hope for the future? When such a conversion takes place, an independent survey is made immediately and in 99 per cent. of cases the public have deemed themselves generally satisfied with the move.

Mr. McLoughlin: May I welcome my hon. Friend to his new post? He is absolutely right to say that conversions of Crown post offices have been generally accepted. Will he confirm that one of the usual benefits of the conversion policy is that post offices under agency status open longer and give a far better service to the public? Will he not be distracted by the synthetic strike action which failed miserably this week?

Mr. Page: I thank my hon. Friend for those kind words. He is right; Monday's strike was a miserable flop. Only 75 Crown post offices shut, while 740 stayed open--and of course, the 18,960 agency post offices were still there to provide service to the customer. Moreover, the proof of the pudding is in the eating: when conversions take place, we find that the level of trade increases.

Manufacturing Industry

4. Mr. Ronnie Campbell: To ask the President of the Board of Trade what proportion of gross domestic product was invested in manufacturing industry in 1993.

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Mr. Heseltine: Manufacturing investment was 2.3 per cent of gross domestic product in 1993 and 10.2 per cent. of manufacturing output, when measured at constant prices.

Mr. Campbell: But is it not true that, in the past 15 years, 40 per cent. of jobs in manufacturing industry have been lost? There was the loss of the pits, the loss of the shipyards and the loss of the steelworks--and the Government do not even know that they have done it.

Mr. Heseltine: The hon. Gentleman is trying to imply that the overmanning that had done so much to hurt British industry could somehow be sustained. He should allow us enormous credit for the fact that Britain is now manufacturing at far higher productivity rates and is therefore far more competitive than it was. Investment forecasts for manufacturing industry next year are seen to be rising significantly.

Mr. Budgen: Does my right hon. Friend agree that among the factors that influence investment in manufacturing industry are the levels of manufacturing output and of interest rates? As manufacturing output fell significantly in January, the most recent month for which figures have been recorded, is it not a great relief to my right hon. Friend that we are no longer in the exchange rate mechanism, and are not being forced to raise our interest rates today, along with the countries that had the misfortune to remain in the ERM, which will crucify their domestic economies because of their loyalty to the European dream?

Mr. Heseltine: My hon. Friend has very strong views on that subject, and I admire his ingenuity in trying to exploit them in the context of the question. But that is not relevant to our position today, because the outlook for British manufacturing investment for next year is extremely encouraging.

Mr. Wilson: Do not the appalling figures for manufacturing output released this morning give the lie to the over-inflated hype that we hear from the Government about the success of manufacturing and about the recovery? Is it not extraordinary that, when exports are doing relatively well, factory output is falling? What does that tell us about domestic demand? Is it not true that all the claims about economic recovery are fragile and that the real economy, as represented by this morning's figures, has little to do with the world of the Chancellor of the Exchequer and of the Governor of the Bank of England?

Mr. Heseltine: The hon. Gentleman does not live in the real world. The figures announced today show that output in January was 4.3 per cent. higher than output a year ago, and that productivity in the fourth quarter of last year was 5.9 per cent. higher than that of a year ago. The latest CBI forecasts show an 8.4 per cent. growth in manufacturing investment this year, and those by the National Institute of Economic and Social Research show an increase of 9.3 per cent. When will Opposition Members recognise success when they see it?

Sir Donald Thompson: Is it not obvious to my right hon. Friend and to the rest of the House that, as unemployment is falling, manufacturing industry and other industries are improving?

Mr. Heseltine: My hon. Friend is right. Employment is increasing both in manufacturing industry and in the

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service industries, and one of the most exciting things that is happening is that British manufacturing exports are rising significantly throughout the world. All the forecasts suggest a better year this year, and an even better one next year.

Post Office

5. Mr. Gordon Prentice: To ask the President of the Board of Trade what discussions he has had with the Post Office concerning proposals to employ additional part-time staff to replace full-time staff.

Mr. Eggar: My right hon. Friend has had no such discussions. Staffing levels and working patterns within the Post Office are a matter for Post Office management, not the Government. I understand that the Royal Mail wholly refutes the allegations of target cuts in full-time postal jobs made in recent press reports.

Mr. Prentice: Is not the accelerating casualisation of the work force of the Post Office directly attributable to the uncertainty about the future of the organisation and to the Government's unwillingness to make plain what they intend to do about the Post Office in the future? Should not the Government give the Post Office commercial freedom to expand its business and to create new full-time jobs instead of allowing it to twist in the wind with no clear idea of where its future lies?

Mr. Eggar: The hon. Gentleman appears to be totally unaware that the Post Office employs 115,000 full-time staff, that it is committed to improving the standards of services delivered both to households and to businesses, and that it has a fine record which is second to none in the world.

Sir Peter Emery: In considering staff matters, will my hon. Friend look at the problems of staffing in contracted-out post offices in relation to motor vehicle licences? However much we may welcome the new sub- postmasters, something is very wrong when many of them cannot issue vehicle licences. A constituent of mine had to motor 60 miles to get a licence, and that is nonsense.

Mr. Eggar: I shall look into my hon. Friend's specific concern. As a matter of general policy, we are encouraging Post Office Counters and sub- post offices in particular to expand their business opportunities and to improve the width and breadth of the services which they can offer to constituents.

Mr. Hain: The Minister must know that the switch from full-time to part-time staff has come about because of the cost-cutting that has been forced on the Post Office as a result of the Government's dithering over its future and their failure to give the Post Office commercial freedom. Will he come clean on the fact that one of the results of that will be a decline in the number of second deliveries? There has been a contraction in second deliveries, but, as more part-timers are employed by the Post Office, the Government's long-term objectives of getting a once-over-the- ground service and sacrificing second deliveries will be the result.

Mr. Eggar: The hon. Gentleman appears to be unaware that the reason why fewer letters are delivered on the second delivery is that the Royal Mail has so improved

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its service that the vast majority of letters are delivered on the first delivery. If there are no letters left, it is hardly surprising if few are delivered.

Madam Speaker: Mr. Dykes.

Mr. Dykes: May I thank my hon. Friend--

Madam Speaker: Order. I was calling the hon. Gentleman to ask Question 6.

Machine Tool Exports

6. Mr. Dykes: To ask the President of the Board of Trade what assessment he has made of the development of United Kingdom machine tool exports in recent months.

Mr. Eggar: I am not sure whether to apologise to my hon. Friend or not.

The Department takes a continual interest in the export performance of industry. Export sales of machine tools at current prices in the fourth quarter of 1994 were almost double the level achieved in the same period in 1993. In the first three quarters of 1994, the machine tool industry ran an estimated balance of payments surplus of £40 million.

Mr. Dykes: With your indulgence, Madam Speaker, I shall try to ask a question about the Post Office on another occasion.

I thank my hon. Friend for his answer. Does he agree that, after years of battering and decline, the machine tool industry has now significantly turned the corner and is producing much improved figures? Would he say that that was due to the recent devaluation of the pound or to reinvestment?

Mr. Eggar: It is due to the first-class commitment by management in the machine tool industry towards identifying significant new export opportunities and to a considerable commitment by the work force to additional training. The industry has a record of which Members on both sides of the House should be proud.

Mr. Barry Jones: On the vital subject of manufacturing, can the Minister tell us why the Chancellor of the Exchequer believed that Consett steel works was producing steel?

Mr. Eggar: The Chancellor is extremely proud of the fine record of manufacturing industry in the United Kingdom. He is also extremely proud of the record of inward investment in the north-east of England. The hon. Gentleman knows perfectly well that my right hon. and learned Friend is proud of the introduction of Nissan, Samsung and many other allied companies.


7. Mrs. Angela Knight: To ask the President of the Board of Trade what representations he has received on the relative costs of telecommunications services in the member states of the European Union.

The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor): Studies for my Department and by other bodies shothat United Kingdom telecommunications costs are among the lowest in Europe. The UK is pressing for rapid liberalisation of European telecommunications to bring down costs throughout the Union and to stimulate multi-media communications.

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Mrs. Knight: As low telecommunications costs are an essential element in ensuring that business is competitive, when does my hon. Friend expect liberalisation to take place throughout the European Union and does he expect that British Telecom will benefit from that?

Mr. Taylor: I am delighted to confirm that the Telecoms Council last November set a date of 1 January 1998 for complete liberalisation of voice telephony and infrastructure, and Commissioner Bangemann has confirmed that that is the date by which liberalisation must have taken place, not the date from which it should commence. That is tremendously good news for European industry, but it is especially good news for industry in this country competing in the newly liberalised markets, given the experience of competitive telecommunications and falling costs that we have had for many years.

Mr. Wigley: Does the Minister accept that one of the important considerations affecting costs in the sector is the extent to which fibre- optic linking will be made available, not only in the industrial cities and conurbations, but throughout all areas in these islands? Will he give an assurance that, in developing policy, he will bear that in mind and ensure terms and conditions of agreement with contracting companies which place an obligation on providing services to rural as well as to industrial areas?

Mr. Taylor: I agree entirely with the hon. Gentleman that we must ensure that access to the super-highway covers the whole country and not just parts of it. We are considering licensing those parts of the country that are not yet covered by the cable industry, but the most interesting way to take that service to the really rural areas is probably through alternative technologies, such as use of the radio spectrum. I am studying the outlying parts of Wales with the Secretary of State for Wales to find out how quickly we can produce proposals on the use of the radio spectrum to bring together the rural communities.

Mr. Quentin Davies: Does my hon. Friend accept that he deserves considerable congratulation, as the breakthrough in

telecommunications will be of great benefit to the British telecommunications industry, as he rightly said, and to consumers throughout the European Union? Will he be emboldened by that success to press forward, together with his colleagues, to ensure that we extend the single market to energy and the airline industry, and go for complete airline deregulation in very short order as well?

Mr. Taylor: It is always good to have the support of my hon. Friends in this matter. I also had the support of the other Ministers at the G7 conference the weekend before last when it was made clear in the conclusions that British policies had set the agenda. There is no doubt that within the European Union we should extend the benefits of the competitive market to energy and the airline industry. That will require us to stiffen the resolve of the European Commission and to ensure that, once member states agree regulations, the European Court of Justice has adequate powers to take action if countries do not obey the rules to which their political leaders have agreed.

Mr. Nigel Griffiths: Does not the Minister realise that many domestic households in this country have fewer phones than households in our competitor countries because of the very high connection charges, which are

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higher in Britain than in Sweden, Australia, Italy, the Netherlands, Norway, Austria, Belgium, Portugal, Luxembourg, the United States, France, Germany and Canada?

Mr. Taylor: The point about telephones is that the overall costs in this country are among the lowest in the European Union. They are slightly above those in Sweden, which has also liberalised. The key condition for telecommunications is liberalisation and Opposition Members should remember that, given the amount of opposition with which they met our telecommunications policies over the years. We have a proud record in telecommunications and it has given us, through the alternative infrastructure of the cable industry, access to even cheaper connection and standing charges, as will have been seen from the policy announced by Nynex Communications only last week, when it cut the cost of telephony by 25 per cent.

Sir Michael Grylls: Does my hon. Friend agree that the transformation of a sleepy British Telecommunications and a nationalised Cable and Wireless--as it was--into world-class companies that are winning orders and being very successful throughout the world is a huge tribute to the success of the privatisation programme and the fact that they are able to compete and win business in Europe? We must continue pressing to open the market, so that those very successful and now private companies can win more and more orders.

Mr. Taylor: Britain now has 150 public telephone operator licensees, having started with just one in the early 1980s. BT has therefore had to face competition in the domestic market and, increasingly, in the local loop from the cable industry. It is therefore a more successful company. Whenever I go to other countries and talk to their telecommunication industry leaders and Ministers, they want BT to join partnerships with them. I am delighted at the success of both BT and Cable and Wireless in helping British exports and making use of their new-found competitive instincts.

Chemical Industry

8. Mr. Watson: To ask the President of the Board of Trade what steps his Department is taking to increase the participation of women in the chemical industry.

Mr. Page: The continuing competitiveness of the chemical industry depends on it attracting and retaining high-quality employees, both male and female. My Department is in regular contact with the Royal Society of Chemistry, the Chemical Industries Association and the Office of Science and Technology's development unit for women, in order to promote the role of women within the chemical industry.

Mr. Watson: The Minister's response betrays the fact that he is totally unaware of figures provided by the Chemical Industries Association, which show that, of some 280,000 workers within the industry, only a third are women. Is he further aware that a working party established by member companies of the CIA and trade unions in the industry have unearthed considerable evidence of job segregation, which prevents women from reaching many of the more influential and better-paid jobs in the industry? On International Women's Day, how does

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he intend to stop that waste of talent and ensure that women's skills are utilised fully throughout the chemical industry?

Mr. Page: I accept that the industry starts from a low base, but I do not accept the doom and gloom scenario that the hon. Gentleman advances. For example, the Chemical Industries Association has produced an equal opportunities self-assessment pack, which enables chemical companies to implement equal opportunities. In 1992-93, 36 per cent. of first degree graduates in chemistry were female. That is a step in the right direction.

Mr. Hawkins: Does my hon. Friend recognise that I am the son of a lady research chemist, and that the lady whom my mother once succeeded in a job as a research chemist in the 1950s, our right hon. and noble Friend Baroness Thatcher, has made the most significant contribution to Britain and the world of any research chemist ever?

Mr. Page: I had often wondered what made my hon. Friend so special, and now I know.

News in that direction is encouraging. The proportion of women studying chemical engineering is rising: in 1988, the figure was some 17 per cent. and in 1993 it had risen to 22 per cent. Again, figures are going in the right direction.

Departmental Offices

9. Mr. Ernie Ross: To ask the President of the Board of Trade what steps he is taking to offer flexitime and parental leave in offices run by his Department.

Mr. Ian Taylor: Flexible working hours arrangements already operate extensively throughout the DTI and its agencies. All such arrangements are set up locally.

Mr. Ross: Does the Minister agree that the development of the executive agencies is putting the availability of flexitime and parental leave at risk? Given that both flexitime and parental leave are important to encourage, maintain and help women back to work, will he outline to the House his proposals to ensure that both parental leave and flexitime are safeguarded within those agencies?

Mr. Taylor: Given that the DTI is setting the lead with its "Investors in People" programme, which will make extremely good commitments to all DTI employees, I have no doubt that the various agencies will make their own local arrangements. Throughout the civil service, flexitime is increasing because that is what employees want. We are also safeguarding parental leave. If the hon. Gentleman has a constituency example that is causing him concern, I hope that he will write to me. Overall, we find that the reactions of staff to how they are treated within the agencies and the DTI are encouraging.

Mr. Harry Greenway: What measures is my hon. Friend's Department taking to encourage and allow people to work at home, as part of the flexi- arrangements that he has described?

Mr. Taylor: One specific way is that, as we roll out new technology, and as Under-Secretary of State for Trade and Technology, I am encouraging tele-working. There is no doubt that the ability to access from home the

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same computers, and in the same real time, as those used in the office, will be an interesting way of proceeding to avoid people having to commute every day simply to gain access to office information and material and to make a contribution.

Solent Routes

10. Mr. Barry Field: To ask the President of the Board of Trade who will be conducting the inquiry into the Solent routes following the Monopolies and Mergers Commission report; and when he expects to make an announcement.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans): The Director General of Fair Trading will review the cross-Solent ferry services market this year, as announced in 1992 on publication of the Monopolies and Mergers Commission report. I understand that the director general is to seek the opinions of interested parties shortly and will announce his findings in due course.

Mr. Field: Following the escape from Parkhurst prison, my hon. Friend and the nation now appreciate just how difficult it is to leave the Isle of Wight. Although the majority of my constituents appreciate the tremendous improvement that has taken place in the quality of service on the cross-Solent ferry routes, nevertheless anxieties remain about the high prices.

I should like my hon. Friend to be able to reassure me that the next, and second, inquiry will consider costs carefully, especially as the first inquiry concluded that the ferry routes to the Isle of Wight are the most expensive in the whole of the world, yet reached no conclusion.

Mr. Evans: My hon. Friend has always given special attention to that issue, and I recognise that. He must be aware that the MMC's report concluded three years ago that, although there was a monopoly position on the Isle of Wight in favour of Wightlink, it did not operate against the public interest in terms of profits or fares, and that that restricts the power of the President of the Board of Trade to take remedial action. We do not have legal power to act unless there is an adverse finding by the MMC.

In that context, the then Secretary of State announced that the position continued to require monitoring, and for that reason the position would be reviewed three years later. That review is to take place, and I am sure that the opinions outlined yet again by my hon. Friend will be expressed to the director general.


11. Mr. Roy Hughes: To ask the President of the Board of Trade what steps he is taking to help ensure that profit-making British companies invest in the United Kingdom.

Mr. Heseltine: The Government have pursued, and will continue to pursue, the policies that have turned the United Kingdom into an attractive place for investment, whether by British or overseas companies. Since 1979, the volume of investment in plant and machinery has increased by more than a half, and total business

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