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Column 328investment by more than a third. The United Kingdom is second only to the United States in attracting overseas investment.
Mr. Hughes: Does the President recognise the tendency of British companies, after they have made profits as a result of the efforts of their work force, to invest those profits abroad? Will he also recognise that it follows that Britain now has a record of investment that is about the lowest in the industrialised world? Bearing in mind the persisting high level of unemployment, what will the Government do about that position?
Mr. Heseltine: The first thing that I would advise the hon. Gentleman to do is return to his constituency and explain that unemployment has decreased by 430 in the past 12 months. Then perhaps he will move on to Electrotech Ltd., which has announced the creation of another 200 new jobs in the next three years. After that, he can go to British Steel at Llanwern, which has announced the creation of 150 jobs. After that-- [Interruption.] I know that Opposition Members cannot take that, because things are going too well for them. After that, the hon. Gentleman can go on to Castle Leisure in his constituency, which has announced the creation of 80 new jobs. By the time that he has finished that journey, there will probably be some more good news.
Sir Cranley Onslow: Does my right hon. Friend agree that the biggest possible deterrent to profitable investment anywhere in the United Kingdom would be the imposition of the provisions of the social chapter?
Mr. Heseltine: I am in absolute agreement with my right hon. Friend that, if the Labour party ever had the chance to introduce the social chapter, that would be the biggest single accelerator of unemployment that one could impose on our manufacturing base.
Mr. O'Neill: Does the President of the Board of Trade recall that, when ICI was under threat from Lord Hanson, the whole House held that company's commitment to investment in high regard? On 24 February, Bryan Bullock, the ICI power services manager, said:
"The UK's largest industrial consumers for whom electricity is a feedstock cannot wait indefinitely for competition to emerge and will emigrate overseas".
Does the President agree with that statement? How long must we wait for Littlechild to change his mind about that issue? Is the President prepared to intervene to defend the major energy consumers in the UK and to give them the fair crack of the whip internationally that they have not had previously because of the regulator's indifference to their concerns?
Mr. Heseltine: The hon. Gentleman is fully aware that we recently changed the law to provide companies such as ICI with the opportunity to generate their own on-site electricity. I believe that ICI has already taken advantage of that new flexibility.
This is a question about Britain's interests in investment and in our major companies. ICI, whose officer the hon. Gentleman has quoted, is one of Britain's jewels in the crown. It invests across the world, earns profits across the world and carries the flag of British industry into every corner of the world economy.
Column 329highly successful British pharmaceutical industry, to ensure that it remains firmly anchored in this country as one of the jewels in the crown to which he referred?
Mr. Heseltine: My hon. Friend will realise that we give every encouragement to the pharmaceutical industry, which is one of Britain's leading industries. There is massive investment in that industry, and we are pioneering new drugs which are extremely important for our future.
Mr. Clapham: I am rather surprised at the Minister's answer, particularly in view of the public concern, of which he must be aware, and in the light of the Prime Minister's acceptance of Labour's position that something must be done about boardroom excesses. The Minister must also be aware that it was revealed recently that 77 directors of the private electricity companies had awarded themselves £72 million in share options. In the light of that, does he agree that it is in the public interest for the Government to regulate to control boardroom excesses?
Mr. Evans: My right hon. Friend the Prime Minister has made it absolutely clear that the Government are prepared to give legislative backing to any proposals from the Greenbury committee which require such back-up. We are prepared to examine that issue.
However, the hon. Gentleman seems to suggest that share options as a whole should be opposed. We believe that well-devised share option schemes help to motivate key staff and to reward high performance. I welcome proposals from institutional investors to ensure that share options are linked to realistic measures of management performance. The hon. Gentleman should also know that listed companies are required to give the stock exchange full details of their share option schemes.
Sir Anthony Grant: Does my hon. Friend agree that, rather than having share options, it would be much more motivating, stimulating and sensible if executive bonuses were linked to movements of the FT Index, so that executives shared the losses as well as the profits, as do shareholders? Is that not precisely what British Gas is proposing?
Mr. Evans: The Government primarily take the view that companies should decide the pay levels of their staff. My hon. Friend will be aware that the Greenbury committee has said that it is drawing up a code of conduct on that subject. I know that the committee is prepared to examine a wide variety of possible forthcoming proposals.
Dr. John Cunningham: The abuse of share options is widespread among privatised monopoly utilities such as gas, water and electricity. The Government have a Bill about the gas industry before the House, but why does it contain no proposals to end those abuses in the interest of the consumer? Would it not be better for the President of the Board of Trade, instead of pouring out his energy
Column 330wastefully in the bluff and bluster that we have just heard, to expend it more efficiently in taking the action which people the length and breadth of the country want to end the abuses? The opportunity exists now. Why do not the Government take it, or is it once again the Prime Minister expressing distaste for something but doing nothing about it?
Mr. Evans: Many in the House will find it strange and inconsistent on the part of the Opposition that, although they attack the whole concept of the share options, they tabled an amendment to the Finance Bill, the effect of which would have been to grant unlimited tax relief to company directors on fees paid for tax advice on the best time to exercise share options--a proposal that "Accountancy Age" said had tax planners in Britain licking their lips with anticipation.
Mr. Heseltine: A number of steps have been taken recently to strengthen the United Kingdom's inward investment promotion. These include the appointment of a new chief executive and moves to set up a computerised database to improve the presentation of all relevant information to prospective investors. Currently, proposals for upgrading the United Kingdom overseas marketing efforts and an "aftercare" programme for existing investors are being developed.
Lady Olga Maitland: I thank my right hon. Friend for his reply. Is he aware that 40 per cent. of Japanese inward investment into Europe and 43 per cent. of American investment into Europe comes into Britain? Does he agree that that is because Britain has more to offer than any other European country?
Mr. Heseltine: My hon. Friend is absolutely right, and we can add to the figures she gave the results now coming from Korea and Taiwan and the flow of companies coming here from Europe itself. It may interest the House, as this is such an important part of the reconstruction and rebirth of our manufacturing base, if I say that, in 1993-94, the Invest in Britain Bureau recorded 428 inward investment decisions, creating or safeguarding 99,000 jobs. If one takes the figures from 1979-80 to 1993-94, the IBB recorded more than 4,000 projects with more than 600,000 associated jobs.
Mr. Beggs: Can the President of the Board of Trade assure the House that Northern Ireland gets equal promotion with other regions of the United Kingdom when inward investment is being attracted, or is it left to the Secretary of State for Northern Ireland, Ministers, the Industrial Development Board or perhaps the present Minister for Trade, who did an excellent job when he was a Minister in the Northern Ireland Office?
Column 331inward investment, the hon. Gentleman will be as aware as the rest of the House that Northern Ireland receives more than its proportionate share.
Mr. Bell: The President of the Board of Trade did not mention the fact that most of the multinationals that have come to our country have created works councils under the social protocol. We now have more multinationals with works councils than any other European country. I am grateful to the President of the Board of Trade, who, when he visited Samsung, recognised the work of Hartlepool council and Stockton council in getting Samsung to our area and the significant effort made by the work force, but can he not tell us now that he has made better arrangements with the Treasury for more regional assisted schemes? Will there be better infrastructure, and how will we meet the competition from Europe to get more regional development flowing our way?
Mr. Heseltine: I do not think that the hon. Gentleman could have heard what I or my hon. Friend the Under-Secretary of State for Corporate Affairs said. Britain is getting far in excess of any proportional share of inward investment flowing into the European Union. It is coming here because overseas investors see Britain as one of the most competitive places in Europe in which to invest. One of the reasons for that is that we do not have the social chapter which the Opposition would impose.
Dr. Twinn: In continuing his successful campaign to bring inward investment into Britain, will my right hon. Friend highlight the excellent location to be found in north London, Edmonton and Enfield, which is made even more excellent by the good help in the real terms of economic assistance given by him and by his Government?
Mr. Eggar: The Invest in Britain Bureau is providing £1.27 million in grant in the current year for the Yorkshire and Humberside development agency for the encouragement of inward investment in the whole of Yorkshire and Humberside--which, of course, includes York. It is important that local authorities such as York work in close partnership with the YHDA.
Mr. Bayley: Is the Minister aware that the Swiss-based multi- national company ABB Rail Vehicles Ltd. is one of the companies that have invested heavily in the British economy during the last few years? It has invested £50 million in the York carriage works. That investment, however, is likely to be written off by the company because of the Government's failure to ensure continuity in orders for new trains for British Rail.
What kind of advertisement for inward investment in the United Kingdom is provided when changes in Government policy mean that investors lose their money? What do the Government intend to do to ensure that
Column 332British Rail places an order for trains to keep the York works open, and to maintain a viable rolling stock manufacturing industry in our country?
Mr. Eggar: I suppose that it would have been too much to expect the hon. Gentleman to draw attention to the successes of investment in the York area--for example, the decision by Samsung Heavy Industries to invest in manufacturing industries at Flaxby. It is the first time that a Korean company has done so.
The hon. Gentleman mentioned ABB. British Rail has invested heavily: some £4 billion has been invested in rolling stock since 1979, and over the past 10 years nearly 4,000 new locomotives and vehicles have entered service. The public sector has made a considerable commitment to investment in rolling stock, and ABB must compete for the contracts that are available.
Mr. Waller: The information that my hon. Friend has given about inward investment in Yorkshire and Humberside is welcome. Is it not worrying, however, that the level of high-technology investment by small and medium-sized enterprises that are British-owned is still lower than that of many of their competitors? Will my hon. Friend seek a fiscal and financial environment in which such enterprises are encouraged to invest in the most high-tech equipment to a greater extent?
Mr. Eggar: We are considering all possible ways of encouraging growth in small and medium-sized enterprises. We recognise the critical importance of providing a climate in which established small companies in particular can grow into medium-sized companies, which often means taking advantage of modern technology, new investment opportunities and so on. Business Links can play an important role in that. We are constantly examining issues such as that raised by my hon. Friend; I hope that he will feel free to discuss the matter with us if he wishes.
15. Ms Estelle Morris: To ask the President of the Board of Trade what measures his Department is taking to encourage more women to pursue careers in engineering-based and technology-based industries.
Mr. Page: My Department promotes a number of national and regional schemes to encourage women, as well as men, to pursue careers in engineering-based and technology-based industries. Some, such as Insight, Women Into Science and Engineering and Women Into Information Technology, are aimed specifically at girls and women.
Ms Morris: The Minister's answer does not address the question with the urgency that it deserves. Is he aware that, in the last decade, although the number of women gaining engineering degrees has doubled to 15 per cent., the number of chartered engineers who are women has remained at 1 per cent? What action will his Department take to ensure that the skills of women graduating in engineering are not lost to British industry, and that women are encouraged to seek professional engineering status?
Column 333promoting 50-odd schemes around the country in an attempt to bring about a greater knowledge of engineering, and in particular the change in attitudes that is at the core of advancement. The Insight Programme, which is being run by the Engineering Training Authority, gives some 500 lower-sixth-form girls a week in universities, and is being supported by British firms.
Mr. Thurnham: I add my warm congratulations to my hon. Friend. Does he agree that there is considerable untapped potential for women in engineering? Is he aware that, when I came to the House, my wife took over the running of the engineering business that I started in 1972 and that is now successfully employing more than 500 people?
Mr. Page: I thank my hon. Friend for his kind words. As the House knows, some 45 per cent. of the work force is made up by women, and it is only right that they should take their proper place in the professions. My hon. Friend may take comfort from the fact that the proportion of women in management and professional occupations has risen from 25 per cent. in 1984 to some 30 per cent. in 1993.
Mr. Ian Taylor: Since 1990, the Department has answered thousands of inquiries about the impact of the sanctions legislation on trade with Iraq, particularly about the humanitarian trade, which is permitted by the United Nations.
Mr. Miller: What action will the Minister take, given the allegations that the French intend to open up trade links with Iraq? Does he not think that that will be a breach of United Nations sanctions?
Mr. Taylor: We are discussing, with our people at the United Nations, the common observance of sanctions policy by all member states. We are aware of reports that certain countries have decided to open up early talks about what might happen after any sanctions are lifted on goods other than humanitarian. We do not, of course, want British industry to be disadvantaged, but that is not itself a justification for Britain not honouring the sanctions policy, and I can assure the hon. Gentleman that we are continuing to have talks to ensure that other countries observe those standards as well.
Mr. John Marshall: Does my hon. Friend agree that Iraq is one of the most evil regimes--if not the most evil--in the world and it would be quite wrong for this country to vote for the lifting of sanctions against that wicked man?
Mr. Taylor: The character of the Iraqi regime is, without question, diabolical, and I do not think that there is any attempt, certainly not by the DTI, to alter our impression. Our repulsion at what is going on in Iraq is very high. On a day-to-day basis, however, Trade Ministers must deal with many issues and we are aware that certain other countries do not have the same upright attitude to sanctions policy. We are in discussion with the Foreign Office, and with the United Nations, on those matters. We are not unaware of the stories coming to us.
Mr. Maclennan: Does the Minister acknowledge that, although the excellence of Dounreay's work is recognised, its safety record, its environmental acceptability, has rested for many years on an integrated management structure? Is he aware that the new structure proposed for the site--a Government division supervising a partly privatised operation, a partly contractorised operation, with possibly as many as three major contractors on-site--is giving rise to some concern about the direction of the site, about its coherence, about its mission? Will he visit that site and bring his new enthusiasm for efficiency, effectiveness and excellence to bear upon the problems and give the leadership which, at the present time, is lacking?
Mr. Page: The hon. Gentleman overwhelms me and I would be only too delighted to come and visit Dounreay in the fulness of time. The further introduction of contractors at Dounreay is currently being considered by the UKAEA. One of the options is the appointment of a managing contractor, but at the moment no decision has been made. Safety, which must obviously be paramount at a site like Dounreay, will still be subject to the nuclear site licensing.
18. Mr. Terry Davis: To ask the President of the Board of Trade what representations his Department has received favouring the contracting out of functions of Companies House; and if he will make a statement.
Mr. Jonathan Evans: My Department has received representations on the future of Companies House from both supporters and opponents of contracting out. The majority regard Companies House as having made significant improvements over recent years, but there is scope for further improvement. The contracting-out programme provides a framework in which to achieve that.
Mr. Davis: Is it not a fact that on that, as on so many other matters, most respondents disagree with the Government's proposals? How much did it cost the Government to find out what the rest of us have known all along--that most of the customers of Companies House are satisfied with its services and do not want to see them contracted out?
Mr. Evans: The hon. Gentleman would do well to exercise a little more caution before swallowing whole the line from the trade unions in this matter. The trade unions had claimed that the SRU report, which is in the Library, had come to a conclusion which was different from that announced by the Government. An examination of the report, which I am sure the hon. Gentleman has carried out, shows that the Government's policy is consistent with what is contained in the report.
Mr. Ian Taylor: The new World Trade Organisation is the custodian of the multilateral trading system, which brings great benefits to the United Kingdom in terms of economic wealth, jobs and consumer choice. We intend to encourage it to develop effectively.
Mr. Taylor: It is important to bring China into a modern multilateral organisation such as the World Trade Organisation. I am in regular talks with the Commissioner who is responsible for European negotiations with China, Sir Leon Brittan, and the prospects look encouraging. The key matter is that China must come in on acceptable terms, otherwise it could destabilise the whole organisation. We have the same sort of worries about China outside the organisation as the Americans, particularly in the matter of piracy of intellectual property and in connection with the music industry, which is a great contributor to our external trade performance.
Mr. MacShane: Can the Minister give some guidance on whom the Government will back as the new director general of the World Trade Organisation? The Minister will know that Mr. Salinas of Mexico dropped out after being linked, via his brother, to the murder of an important politician. The European Union is backing Mr. Raimondi of Italy, who is a strong advocate of social links in world trade. What is Britain's line on the next director general?
Mr. Taylor: It is a jolly good job that the hon. Gentleman is not responsible for our discussions because he has named the wrong Italian, but never mind. Mr. Ruggiero, the Italian, is the solidly backed candidate of the European Union and we have never demurred from that. At the last count on an official trawl, he had 59 votes and Mr. Kim, whom I have met, who has been to see me, and who is an impressive candidate, had only 28 votes. President Salinas had about 27 votes and has backed out.
We are urging all other nations to rally round a clear leader, because it is most important for the World Trade Organisation to get its act together quickly. It can do that credibly only if it has an effective director general. We do not wish to see any uncertainty beyond 15 March, when Mr. Sutherland ceases his temporary period in office.
Column 336Mr. Ian Taylor: The Department of Trade and Industry works with industry and other Government Departments to identify those practical applications of satellite data. The British National Space Centre has sponsored a first round of jointly funded demonstrator programmes with industrial users, including predictions of sugar beet yield, monitoring environmentally sensitive areas, studying coastal zone erosions, identification of offshore oil drilling sites and locations of fishing grounds. I am pleased to announce that an invitation to bid for a second round of demonstrators was announced last week.
Mr. Whittingdale: Does my hon. Friend agree that British industry plays a part in space technology of the kind that is involved in earth observation satellites? Can he assure the House that British industry is getting a fair deal from our membership of the European Space Agency?
Mr. Taylor: I am delighted to say that the British space industry is one of the most effective in Europe. It is involved in several joint ventures, such as Matra Marconi Space, with the French. It is a big employer in the United Kingdom and makes a considerable contribution to our balance of payments. It is important for the European Space Agency to devise much more efficient programmes because it currently depends too much on juste retort.
If we could get a much more efficient system of allocating contracts, I am sure that British industry would do even better. It is certainly being backed by the Government's participation in ESA programmes through the Department of Trade and Industry and, I am delighted to say, in earth observation, with other Departments such as the Department of Transport.
Mrs. Anne Campbell: Will the Minister acknowledge the importance of liaison with our European partners in the European Space Agency? Does he realise that Britain can achieve little by itself in that important subject, and that much more can be achieved, especially in monitoring the environment, if we co-ordinate and liaise with our European partners?
Mr. Taylor: I have no doubt about that. We are firmly committed to the European Space Agency. We contribute considerable sums of money to it. However, it needs to be much more efficient in the way in which it exercises its affairs and allocates its programmes, and in its allocation of the science budget, which is the responsibility of the Particle Physics and Astronomy Research Council.
We have said that we do not want to reduce the scope of the science budget, but that we wish it to be delivered more efficiently. In relation to each of those matters, I am sure that, at the ministerial conference, where I shall be representing this country, we shall achieve much more progress with the ESA and, therefore, much better value from the considerable use that Britain makes of information coming from satellites in space.
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