House of Commons Hansard Debates for 10 May 1995

Mr. Needham: My hon. Friend draws our attention to the capital goods sector, our share of which to non-OECD countries has increased from 5 per cent. two years ago to 7 per cent. last year. Wherever one looks, the success story of British manufacturing is there to be seen. Of course, we had to get over the 1960s and 1970s when we had to live with the results of Labour Governments, and it took some time to do so. Our good results are now coming through.

Mr. Bell: The Minister mentioned the 1960s and 1970s, but he might have also mentioned the 1980s. In that regard he might have read an interview with Sir Denys Henderson, the chairman of ICI in The Times on 17 April. He made it clear that in the 1980s his relationship with the Government had lapsed because, in his words, it was the Government's view that manufacturing industry did not matter. Is it not true that because of the policy pursued in the 1980s we had a deficit on our manufactured trade last year of £10.7 billion. The Minister does all that he can for exports, which we welcome, but he never tells the House that our imports have risen higher than our exports. As he mentioned the Chancellor of the Exchequer in his opening remarks, I remind him that the Government's only policy seems to be whether to raise interest rates, and even that depends on local election results.

Mr. Needham: The hon. Gentleman is a fair and reasonable opponent, although he always likes to reflect on the negative rather than the positive. He must accept that the legacy that was inherited in the 1980s meant that it took some time to set things right. Between 1974 and 1979, UK productivity rose by less than 1 per cent., in Germany it rose 4.5 per cent., in France it rose 5 per cent., in Italy it rose 5.5 per cent. and in Japan it rose 5.9 per cent. Between 1979 and 1993 our productivity has risen, on average, 4.1 per cent.--more than three times the amount that it rose under the last Labour Government. After Japan, we have had the highest increase in manufacturing productivity of any country in the Organisation for Economic Co-operation and Development. That is a magnificent achievement. The facts can be seen in the figures that I quoted on car exports. The hon. Gentleman should give some credit to the Government and to the people of this country for that.

Ministerial Visits

12. Sir Michael Neubert: To ask the President of the Board of Trade on how many occasions since his appointment a car parking space has been provided for him when visiting static exhibitions in London in his official capacity. [21953]

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Mr. Heseltine: It is not possible, without incurring disproportionate costs, to research my many visits to exhibitions in the past three years to see where a car parking space has been provided.

Sir Michael Neubert: Would my right hon. Friend accept that I do not begrudge him an official car parking space, which is one of the last great luxuries in life? Would he also accept that traffic is congested and parking is in short supply in Olympia and Earls Court in west London, where the main exhibition centres are currently situated, and that not the least argument in favour of the proposed new major international exhibition centre in the royal docks is that, in addition to ease of access, ample parking space would be available? As such a centre would not only assist in the regeneration of east London but enhance the potential of our capital city as a national asset, will my right hon. Friend do all in his power to support that proposal?

Mr. Heseltine: I thank my hon. Friend for his generosity in allowing me the privilege of a parking space. I can reassure him that I have just visited the potential site of the exhibition centre in the London Docklands development corporation area. It is for the scheme's promoters to propose appropriate financial arrangements and to secure the necessary planning undertakings. If they are successful, no one will be more pleased than me.

Libya

13. Mr. Dalyell: To ask the President of the Board of Trade what was the value of the trade with Libya for any convenient years in the 1960s, 1970s and 1980s, at adjusted or current prices; and what is the value in the last financial year. [21954]

The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor): In 1966, UK imports from Libya were worth £61 million while exports were worth £29 million. In 1974, imports were worth £386 million and exports £64 million. In 1984, imports were worth £165 million and exports £246 million. In the financial year ended March 1995, imports were worth £153 million and exports £185 million.

Mr. Dalyell: Is it not true that, partly because the present generation of decision makers in Libya were mostly educated at British universities and British technical colleges, not in the United States, British industry has been hit far harder than industry in America, let alone in Germany, Italy and Greece, which pay not a blind bit of notice to the sanctions? Will the Department ask two or three senior officials to look carefully at the film on Channel 4 which is to be screened for more than two hours tomorrow evening and which casts the gravest doubts on whether the Libyans were responsible for the Lockerbie crime? Are we not hurting British industry by looking at sanctions without a certain critical faculty?

Mr. Taylor: I know that the hon. Gentleman takes a deep and understandable interest in the Lockerbie tragedy, which has led to his asking many questions about Libya. Libya is, at best, a marginal market for us, so it is not possible to evaluate exactly the effect on British business of our observing the United Nations sanctions. However, our relations with Libya have been troubled over a period. I cannot comment on the film "The Maltese Double Cross", which is due to be shown tomorrow evening on Channel 4. Its editorial content must be the responsibility

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of the producer, but I have heard comments by others and, indeed, I saw comment in The Sunday Times , which cast doubt on the authenticity of the argument advanced. We will have to watch and judge, but at the moment the Government are upholding the UN sanctions that were imposed in 1992.

Insider Dealing

14. Mr. Mudie: To ask the President of the Board of Trade if he will make a statement on the outcome of meetings with the Securities and Investments Board on insider dealing. [21955]

Mr. Jonathan Evans: My Department has regular contacts with the Securities and Investments Board plc on a wide range of subjects, including, but not limited to, insider dealing.

Mr. Mudie: In the nine years since the insider trading legislation was enacted, fewer than 10 people have been convicted. As that crime is widespread, why have so few people been convicted? When can the small, ordinary investor expect Government action and protection? Are the Government, having indulged in a spot of insider dealing themselves over the sale of National Power, too ashamed to legislate?

Mr. Evans: Perhaps the hon. Gentleman, if he has an ounce of generosity in him, will recognise that the Government introduced that legislation. A Conservative Government attempted to legislate in 1973, but the Bill was overtaken by the election in 1974. Between 1974 and 1979, no such legislation was enacted by the Labour Government. The legislation was introduced by the Conservative Government in 1985. It was recognised at that time that tackling insider dealing is difficult and complex for evidential reasons as much as for anything else.

Mr. Mudie indicated assent .

Mr. Evans: I note that the hon. Gentleman accepts that. It was for that reason that the law was subsequently refined. The hon. Gentleman will know that, in 1993, further provisions were taken through the House by the Government, which became operable on 1 March 1994. The Government consider it appropriate that we should look at the way in which that legislation is working.

Mr. Jenkin: Does my hon. Friend agree that it would be a rather perverse way of judging the effectiveness of the criminal law if we based it on the number of criminal prosecutions? It would not be a very good advertisement for the criminal law if we said that the more murders there are, the more effective are our courts and criminal law. Does my hon. Friend agree also that a balance has to be struck between the flow of information between companies and the market and the restrictions that we place on that flow of information with insider dealing rules? Would it not be wrong for unrealistic share prices to be shown on screens in our dealing markets because the flow of information was too stifled?

Mr. Evans: My hon. Friend accurately describes some of the evidential difficulties in attempting to characterise certain behaviour as insider dealing. He shows that we must proceed in such cases on the basis of evidence of wrongdoing rather than party political prejudice.

Dr. John Cunningham: In view of the ease with which almost everyone under suspicion, including, most recently,

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Lord Archer, avoids even being charged with insider dealing, will the Minister confirm that, at recent meetings, the Securities and Investments Board has pressed his Department to change the law? Is it not obvious that such changes could mean civil rather than criminal sanctions, thus making it easier to surcharge wrongdoers, and that his Department is the Department that is objecting to and blocking such changes? Apart from the obvious protection of the old pals act, will the Minister tell the House why that is?

Mr. Evans: I can deal with the right hon. Gentleman's question very shortly: he should not believe everything that he reads in the newspapers.

Manufacturing Industry

15. Sir David Knox: To ask the President of the Board of Trade when he next expects to meet the President of the Confederation of British Industry to discuss manufacturing industry. [21956]

Mr. Heseltine: I and other DTI Ministers regularly meet the Confederation of British Industry to discuss a range of issues. The latest CBI survey confirms the strength of manufacturing industry. Export orders are growing faster than ever and export optimism is at its highest for a generation.

Sir David Knox: Does my right hon. Friend agree that reasonably stable exchange rates are particularly important if manufacturing exports are to continue to rise, as they have recently? Will he confirm that, whether or not we are in the exchange rate mechanism, it is a major objective for the Government to prevent fluctuations in the exchange rate, as upward and downward movements are particularly detrimental to the manufacturing sector?

Mr. Heseltine: I know that my right hon. and learned Friend the Chancellor of the Exchequer will have all those matters carefully in his mind. My hon. Friend will understand that the Government's determination to maintain strict control over the economy is at the forefront of our objectives.

Mr. Sheerman: Does not the President of the Board of Trade realise that when he meets the CBI he has no credibility at all if he pretends that in the past 16 years we have not lost market after market and home market after home market? Is not his credibility zero if he does not talk to the CBI about how we haul back on that long path to securing those markets for British manufacturers?

Mr. Heseltine: The hon. Gentleman makes an interesting point by suggesting that the problem existed 16 years ago. I agree. Precisely because the last Labour Government did so much to undermine the competitiveness of British industry, it has been a hard and painful process to turn it round. However, the latest CBI survey shows exactly how substantial our success has been. Inflation has been below 3 per cent. for the past 18 months--the first time that has happened since 1961. Exports are some 11 per cent. higher. Growth in the economy has been 3.9 per cent. over a year. Understandably, the CBI reflects those exciting figures in its forecasts of the state of optimism of British industry.

Sir Michael Grylls: Despite the huge improvements in British manufacturing industry in the past decade or so, will my right hon. Friend discuss with the financial institutions

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the gap that appears to exist in long-term finance for firms with a turnover of between £3 million and £50 million? In Britain, those medium-sized firms still find it difficult to get long-term secured loans--true secured loans, not overdrafts dressed up as loans--for expansion and developing new products. It would pay dividends if my right hon. Friend used his influence in that direction.

Mr. Heseltine: My hon. Friend takes a great interest in those matters. I am totally sympathetic to the point that he makes. I have frequent conversations with representatives of the financial institutions and the Bank of England on those important issues.

Research and Development

16. Mrs. Anne Campbell: To ask the President of the Board of Trade if he will outline the measures he is undertaking to encourage business expenditure on research and development. [21957]

Mr. Ian Taylor: There are a substantial number of measures, ranging from grant schemes such as SMART and SPUR, to those which improve the market intelligence available to business, such as the UK R and D scoreboard and the technology foresight programme, in which the DTI has been heavily involved.

Mrs. Campbell: Does the Minister support the view of the Science and Technology Select Committee that the evidence in favour of tax incentives to encourage business expenditure on research and development is sufficiently strong to warrant a Government review? Can he confirm that one is being carried out?

Mr. Taylor: I can reassure the hon. Lady that we constantly keep under review the need to encourage research and development and innovation in the United Kingdom. The competitiveness White Paper, which is due to be launched in a few weeks' time, will demonstrate just how extensive our thinking on those matters has been. There are provisions for companies to write off revenue or current account against related profits. That is not often drawn to our attention, but it already exists in law.

Sir Dudley Smith: Does my right hon. Friend agree that research and development is extremely expensive? There is absolutely no guarantee of success, but it is absolutely vital to the future of Britain or of any country. In the circumstances, may I reiterate what the hon. Member for Cambridge (Mrs. Campbell) said? We need always to pay attention to the tax position as well as other measures. My hon. Friend's Department can do more than any other to encourage research and development.

Mr. Taylor: I understand exactly what my hon. Friend says about the importance of R and D and innovation for British business. It is one of the keys to our competitiveness. That is why the DTI is now actively engaged in benchmarking to help companies. It is why we have expert counsellors in the business links, which are growing up around the country, promotions and conferences to encourage business to understand the importance of research and development and discussions with the City to change its attitude to the relationship between dividend policy and long-term investment in research and development.

Mr. Clapham: As the Minister accepts that innovation is vital to the competitiveness of British industry, can he

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explain why his Department cut support for it by £5.5 million while allocating £30 million to the renovation of No. 1 Victoria street?

Mr. Taylor: The hon. Gentleman, sadly, lowers the tone of a constructive discussion. Civil research and development in this country has been rising. The overall figures are affected by the decline in defence in R and D expenditure, but I assure him that the DTI is concentrating on assisting British industry to understand the importance of long-term R and D--particularly smaller companies. There will be further announcements in due course, when the competitiveness White Paper is published.

Japanese Trade Barriers

17. Mr. Dunn: To ask the President of the Board of Trade what representations have been made to the Government of Japan about the trade barriers against British goods; and if he will make a statement. [21958]

Mr. Ian Taylor: We take every opportunity to make representations both directly and through the European Commission where the interests of British firms are damaged by trade barriers. We have regular and frank discussions with the Japanese Government on such issues. My right hon. Friend the President of the Board of Trade and my right hon. Friend the Minister for Trade both visited Japan this year and raised current trade problems.

Mr. Dunn: Does my hon. Friend agree that there is a general perception that exporters from the empire of Japan have easier access to our markets than do British exporters to the empire of Japan? Will my hon. Friend be ever determined to ensure ease of access to Japanese markets by our industrialists and that free trade actually is free trade?

Mr. Taylor: I can give my hon. Friend some good news. In the first quarter of this year, our exports to Japan were up 40 per cent. The changes that the Japanese Government are now making voluntarily and in response to the yen crisis are likely to lead to further opportunities for British business, which we enthusiastically support. Our relationship with Japan, which has further to go in some key sectors, is best resolved through the multilateral arrangements of the World Trade Organisation. We hope that, in an effort to build the WTO's credibility, all nations--including the United States--will take that into account. That is why we referred our problems with whisky supplies into Japan to the WTO, backed by the European Union in the last few days.

Mr. Pike: The Minister said that our net exports to Japan are up 40 per cent. What is the balance of manufactured trade between this country and Japan?

Mr. Taylor: We have a deficit in manufactured trade but the figure for overall visible trade is a good deal more positive and in credit. Our overall position is extremely important. In 1994, our exports to Japan totalled £2.9 billion and imports totalled £8.9 billion. Those are the full year figures, so I prefer to use those.

Trade Marks

18. Mr. French: To ask the President of the Board of Trade how many applications have been (a) received and (b) processed by the Trade Marks Registry since October 1994. [21959]

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Mr. Ian Taylor: In the period from 31 October 1994 to 31 March 1995, the Trade Marks Registry received 24,241 applications, of which 23,717 were processed by the formalities section. In the same period 19,344 cases were examined, 13,090 cases published and 10,973 cases registered.

Mr. French: Is my hon. Friend aware that the volume of applications is such that it typically takes about five months to produce an acceptance or rejection, notwithstanding the registry's hard-working and diligent staff? Does he agree that such delays produce an unnecessary commercial handicap? Will he introduce a maximum target time of no more than three months?

Mr. Taylor: My hon. Friend refers to a problem that has arisen because of the success of trade mark applications following enactment of the Trade Marks Act 1994. I hear what my hon. Friend says and we will look further into the matter. Improvements are being made and staff have adjusted to the high volume of applications, which shows how well the British economy is performing. Otherwise, there would not be the demand that we are experiencing.

Trade Statistics

19. Mr. Thurnham: To ask the President of the Board of Trade what is his latest estimate of Britain's share of world trade (a) in visibles, (b) in invisibles and (c) in (a) and (b) combined. [21960]

Mr. Needham: In 1993, the latest year for which information is available, the United Kingdom had a 5 per cent. share of world visible exports, an 8 per cent. share of world invisible exports and a 6 per cent. share of visibles and invisibles combined.

Mr. Thurnham: Will my right hon. Friend confirm that, under the Government's policies, Britain is more than maintaining its share of world trade compared with the years of decline when we suffered under socialist anti-enterprise policies dictated by trade union barons?

Mr. Needham: The hon. Member for Huddersfield (Mr. Sheerman) said that we were losing market share after market share. In fact, that is not true. Our share of world trade has gone up from 4.9 per cent. under the last Labour Government to 5.2 per cent. now. For a nation of 1 per cent. of the world population to have 6 per cent. of the world's trade is no mean achievement.

Mr. Purchase: Although we have improved our exports and general share of world trade, we have not kept pace with the general increase in world trade, which, during the past 12 months, has averaged more than 8.5 per cent., a total which we have fallen somewhat below. Is it not true that we are suffering now from a lack of capacity in our exporting industries which, had it not been wasted during the 1980s, would have stood us in good stead now?

Mr. Needham: The hon. Gentleman knows that our share of world trade increased last year. Our share of exports in volume terms was 11 per cent. up against an increase of 8.5 per cent. Instead of being somewhat down, it was a hell of a lot up.

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