House of Commons Hansard Debates for 12 Jul 1995

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official figures, that we have the lowest growth rate since late 1993; that our construction orders are at the lowest level since late 1992; that our housing figures, the orders in housing, are down 13 per cent. from what they were a year ago; and that private industrial development is also down? Is not it a fact that the only thing over which the previous President of the Board of Trade presided was insecurity in our industry, the length and breadth of the land? Is not that what the right hon. Gentleman should be addressing?

Mr. Lang: I am grateful to the hon. Gentleman for his welcome, which I much appreciate. Sadly, I thereafter have to disagree with everything that he said. He has been extremely selective with his figures. He might like to know that, overall, GDP, which has been rising for the past three years, rose by 4 per cent. in 1994. I recall that, when the previous Labour Government were in power, they could not achieve growth on average of more than 1 per cent. per annum.

Arms Sales (Licences)

12. Mr. Fisher: To ask the President of the Boardof Trade what steps he has taken to improve the scrutinyof applications for licences for the export ofarmaments. [32129]

The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor): Procedures and practices are under constant revieto respond to changing circumstances. Since the late 1980s, there have been a number of important specific changes. These include: a higher staff/licence application ratio; more resources concentrated on sensitive cases; greater involvement of senior management; and wider co-ordination through use of information technology.

Mr. Fisher: Did not the former President of the Board of Trade, in his statement to the House on BMARC, admit that 74 per cent. of export licence applications were not even checked by his Department? Was that caused by sheer inefficiency or was there a more political reason--that the Government wished to turn a blind eye to the export of arms? What are the Government going to do to avoid further shambles like BMARC in the future, which have brought such discredit not only to the Government but to the country?

Mr. Taylor: The hon. Gentleman should know that the previous President announced that on a sample basis 74 per cent. did not have full supporting documentation. I have to inform the hon. Gentleman that every application form states whom the applicant wishes to be the end user and ultimate consignee. Therefore, the Department of Trade and Industry was informed by every applicant of where the applicant said that it was eventually sending the goods.

Supporting documentation is not legally required in all cases. However, since the inquiries that were conducted by the Select Committee on Trade and Industry and as a result of the Scott inquiry, the performance of the export licensing department has been significantly tightened. The requirement now is for all applications to have supporting documents and, because of the new computer technology, it is not possible to process a licence unless certain key questions are asked and answered.

Mr. John Marshall: Can my hon. Friend confirm that British Aerospace is a major exporter, that the attack on

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defence exports could cost many tens of thousands of jobs in British industry, and that the Opposition do not care about manufacturing industry or the jobs in it?

Mr. Taylor: I agree with my hon. Friend. British Aerospace is a fine company, doing an enormous amount for the benefit of the British economy, a considerable amount for employment and, I stress, as Under-Secretary of State for Trade and Technology, an enormous amount for Britain's technological base. It is shameful for Opposition Members to condemn the excellence that is available in that British company.

Mr. Wilson: At the time that the Scott inquiry was set up, the Government had been in possession for some two years of all the BMARC papers which were taken during the raid on the Astra headquarters. If those papers had been made available, the Scott inquiry would not have been just about arms for Iraq and Matrix Churchill but about arms for Iran and BMARC. Why were the papers not made available?

Mr. Taylor: The papers to which the hon. Gentleman refers were obtained as a result of investigations into the company's financial status and have been retained for that purpose by the receiver. They have now been made available to Customs and Excise, and we are delighted that, at our invitation, the Select Committee on Trade and Industry is looking into all those matters. There is no necessary connection in the Scott report between Iran and Iraq. The Select Committee's work will be of great illumination to the House in what the President admitted in his statement to the House was a chapter of incidents which we would have preferred not to have happened but which were in no way a connivance, rather the result of administrative inefficiencies.

Mr. Hawkins: In the light of my hon. Friend's welcome statements about the contribution of British Aerospace, does he agree that the attacks on the defence industry from so many Opposition Members will be widely reviled by the thousands of my constituents whose families' livelihoods depend on their employment with companies such as British Aerospace, and they will not forget the attacks that have been made on their futures by Opposition Front-Bench Members?

Mr. Taylor: I agree with my hon. Friend, who has a considerable constituency interest in the defence sector. If Opposition Members were as assiduous as he is in defending the interests of their constituents, there would be fewer arguments against defence exporters and manufacturers. Britain's defence exports are worth more than £2 billion a year and, as I said earlier, they provide enormous prospects for jobs and Britain's technological base. We should be proud of that record. Nevertheless, we take care to which countries we export, and that is the effect of the answer that I gave a moment ago that we have tightened up significantly on the export control department's activities.

Rural Textile Manufacturing

13. Mr. Kirkwood: To ask the President of the Board of Trade what further plans he has to provide assistance to textile manufacturing communities in rural areas; and if he will make a statement. [32130]

Mr. Eggar: Both my Department and the Scottish

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Office are working with the textiles industry to offer practical support and advice from which such rural communities can benefit.

Mr. Kirkwood: Does the Minister accept that there have been some damaging job losses in the textile sector in my constituency recently? Is he aware that the textile sector represents nearly 88 per cent. of the manufacturing work force in the Hawick travel-to-work area? Will he give a commitment that his Department will do all that it can to develop the RETEX scheme for diversification, organised by the European Union to assist the process of diversification? Will he also see what he can do to obtain new export opportunities, particularly for small firms in the region, so that they can replace the jobs that have recently been lost?

Mr. Eggar: I am aware of the importance of textiles to the hon. Gentleman's constituency, and I understand his concern about the recent job losses at Pringle of Scotland.

We are currently taking a number of steps. As the hon. Gentleman knows, RETEX II should start disbursing money in September--£25 million over three years for the United Kingdom as a whole. We want to ensure that that money is spent effectively. I also recognise the need to expand market opportunities for textile manufacturers. The starting point should be an improvement in the relationship between United Kingdom retailers and manufacturers, which should become a "win-win" relationship. My Department has joined the Trade Association in an attempt to bring that about. It recently appointed Mr. Ken Watson--whom I met yesterday--to start an initiative designed to improve the relationship, and we hope that that will lead to many new orders.

Mr. Devlin: Is my hon. Friend aware that companies such as Pringle, and other woollen manufacturers in Scotland and the north of England, import about 90 per cent. of their mohair and cashmere from abroad? The finest cashmere-producing goat in Europe was developed in Scotland, but currently kids are being exported to Spain and Italy, where they receive agricultural support, because no such support is available in England. Why does my hon. Friend not look into that, along with our hon. Friend at the Ministry of Agriculture, Fisheries and Food?

Mr. Eggar: I must confess that I was not aware of the position. I shall make it my duty to become aware of it, and undertake to discuss this important matter with my hon. Friend.

Regional Selective Assistance

14. Mr. Coe: To ask the President of the Board of Trade if he will make a statement on the processing time of applications for regional selective assistance. [32134]

Mr. Page: Processing times vary according to the level of assistance requested. The existing targets are currently under review, and revised target times will be announced in our response to the Trade and Industry Select Committee report on regional policy.

Mr. Coe: I am grateful to my hon. Friend for his reply. He will know of the long delays that have left many south-western companies, including Cornish companies, in a frustrating no-man's-land. I welcome regional selective assistance, which has changed the industrial landscape in my constituency: it has created some 500 jobs since April,

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when offers were made. I urge my hon. Friend, however, to look closely at the time taken to process applications in Cornwall and elsewhere in the south-west.

Mr. Page: My hon. Friend has been an enthusiastic chaser of RSA applications into my office. Along with those 500 jobs, there have been 19 applications relating to his constituency since last year. I accept, however, that the position is rather like the curate's egg--good in parts and bad in parts. The average processing time is about 40 working days, but many applications have been delayed, in some cases because of the slow return of information by applicants. A review is taking place. I know that my hon. Friend would not expect me to make any announcement before responding to the Select Committee, but I expect one to be made very shortly.

Mr. Gunnell: As the Minister knows, we are normally in competition for inward investment with our European partners. Is he satisfied that our processing is at least as efficient as that of any other European country, that some of the criticism about our not always conforming to the "level playing field" arrangements are unjustified and that all our European partners are operating such arrangements?

Mr. Page: The hon. Gentleman is jumping from one part to another. The Invest in Britain Bureau has been enormously successful. Last year, we had some 434 investment programmes, which will produce some 100,000 jobs in this country. On regional selective assistance applications, the review is taking place, and, again, it would be wrong for me to bring forward those details, but I can tell the hon. Gentleman that, last year, we made about 1,065 offers, with a value of £158 million, and we hope to create some 25,000 jobs, so one can see that the RSA process is doing a good job for UK Ltd.

Exports (East Midlands)

15. Mr. Tredinnick: To ask the President of the Board of Trade if he will make a statement on export figures in the east midlands for the past five years. [32135]

The Minister for Trade (Mr. Anthony Nelson): Separate regional figures are not provided but nationally, in the past five years, exports have risen by 33 per cent. to £134 billion, with east midlands companies making a full contribution to that growth.

Mr. Tredinnick: I warmly congratulate my hon. Friend on his new appointment and wish him well in the future. Does he agree that an important contribution to that export growth comes from firms, in Hinckley in my constituency and round about, such as Profilex, Nelson Burgess and Triumph Motorcycles, which is the country's second largest motor cycle company? Is it not remarkable that the May Confederation of British Industry survey found that the east midlands was leading Britain's export growth?

Mr. Nelson: First, I thank my hon. Friend for his kind sentiments. It is nice to be released from the Treasury and I am looking forward to my new freedom as Minister for Trade. Secondly, I join him in welcoming the fact that the east midlands is in the vanguard of this country's exports growth. That is a tremendous performance for that region and his constituency; a performance that I am sure will be sustained under Conservative policies of free trade and free enterprise, unlike Labour policies of intervention and minimum wages.

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Industrial Competitiveness

16. Mr. Gapes: To ask the President of the Board of Trade what plans he has to improve the international competitiveness of British industry. [32136]

Mr. Lang: The wide range of measures that the Government are taking to promote the competitiveness of UK industry at home and abroad is set out in the recent White Paper, "Competitiveness: Forging Ahead", which has been so well received by industry.

Mr. Gapes: Given the international weakness of the pound and of the British economy, and the fact that this country's growth is the lowest in the G7 and the second lowest in the Organisation for Economic Co-operation and Development, does the President of the Board of Trade agree that, if we were to stay out of a single European currency, massive speculation would take place against the pound, necessitating an increase in interest rates?

Mr. Lang: I wonder whether all the hon. Gentleman's colleagues and hon. Friends agree with him in that sentiment, but I wish he and his hon. Friends on the Opposition Benches would desist from talking down the British economy, which is one of the best performing economies in the industrialised world. Since his party left office in 1979, exports have risen by over 90 per cent. thanks in large measure to the remarkable efforts of the former Minister for Trade, my right hon. Friend the Member for Wiltshire, North (Mr. Needham). On inward investment and mobile projects, this country has attracted more manufacturing projects than Germany and France combined.

Mr. Batiste: Given the importance of science and technology to industrial competitiveness, and the new functions of my right hon. Friend's Department, can he confirm that the functions of the Office of Science and Technology will be ring-fenced within his Department and that it will continue its strategic overview of Government research and development conducted across the board?

Mr. Lang: I can certainly reassure my hon. Friend that, by placing responsibility for these matters entirely with my hon. Friend the Member for Esher (Mr. Taylor), who will be the Minister with responsibility for science and technology, I am clearly signalling the specific and separate importance that I attach to science in its own right and as an adjunct to the Department of Trade and Industry, where so much benefit can be derived for industry. My hon. Friend the Member for Elmet (Mr. Batiste) will be reassured when we are able to let him have more details on the future of the Office of Science and Technology, the technology foresight programme and other projects with which the Government are associated. I think that he will find that his answer is satisfactory.

Privatised Utilities (Regulation)

17. Mr. Burden: To ask the President of the Board of Trade what plans he has to change the mechanisms for regulating privatised public utilities. [32137]

Mr. Eggar: The mechanisms for regulating the privatised utilities have evolved over time, in response to the practical experience of the various directors general. Independent regulation has delivered real benefits to consumers and to wider market development.

Mr. Burden: Does not the Minister recognise the frustration among the British people who regularly see

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more and more excesses in the privatised utilities? Today's news about the water industry and share options is just the latest example, but the Government say that they have nothing at all to do with them. When they were forced to listen, they set up the Greenbury committee which offers no guarantee that anything will be done. When will the Government accept that they have a responsibility to enforce decent standards in this area, and when will they establish a regulatory mechanism that puts the consumer first and does not fudge matters in the way that the Government have done?

Mr. Eggar: I am not sure whether the hon. Gentleman was in the House earlier when we discussed this issue. He should ask his right hon. Friend the Member for Sedgefield (Mr. Blair), who led for the Opposition against electricity privatisation, why he did not raise or identify the whole issue of share options at that time. The hon. Gentleman should ask his right hon. Friend why he failed to pick that up. The overall benefits of privatisation are there for all to see--reduced prices for consumers in real terms. Electricity prices are significantly down. They are sharply down for gas and there will be significant additional price reductions for electricity over the coming months.

Mr. Jacques Arnold: My right hon. Friend will be well aware of the considerable success of the public utilities in obtaining international contracts for Britain. For instance, the water industry has obtained £2,000 million-worth of contracts for Britain in the past year alone. How does it help our public utilities to gain such business for Britain if Opposition Members are forever slinging mud at them?

Mr. Eggar: I very much agree with my hon. Friend. British Gas is competing and winning around the world, and a number of our water utilities are doing exactly the same. Our electricity utilities, particularly the generating companies, are investing effectively, and that will bring dividends to the United Kingdom and provide significant employment in supplying companies in the UK and to individuals who are directly employed. That is a good result for Britain, and the Opposition should not drag Britain down in their approach to this important issue.

Mr. O'Neill: Is the Minister aware that there is widespread concern about the quality of treatment received by the regional electricity companies at the hands of the regulator? Is he aware of the frustration at the lack of transparency and accountability shown by Professor Littlechild and his staff? Will he take steps to ensure a more businesslike and more commercially aware approach to regulation by Offer? Does he not realise that the companies and the consumers require a more balanced approach? At present, the regulator has neither sympathy for the consumers nor understanding of the commercial realities of the business in which he operates. Surely he can get the balance right and try to satisfy them. If he cannot, will the Minister take steps to remove him?

Mr. Eggar: I am surprised at the hon. Gentleman. I thought that he had accepted the case for independent regulators. It does nothing for the independence of regulation and the effective operation of the industry for

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regulators to be under partisan political attack on a personal basis. That does the hon. Gentleman no credit at all.

Mr. Mans: Does my right hon. Friend agree that, when these recently privatised utilities were in the public sector, there was no one acting on behalf of the consumer because there were no regulators? On top of that, those utilities were highly inefficient and were able to invest in their infrastructure only when the Treasury let them do that. Does he further agree that the position is not only better in terms of the money that the public sector has to provide, but better for consumers, who get better value for money?

Mr. Eggar: I completely agree with my hon. Friend, and there is a further point. There is a great deal of transparency in the way in which the regulatory system works. The issues are put on the table for everybody to consider but they were never available for consideration in that way when those industries were nationalised and decisions were taken bilaterally in ministerial offices. The last thing that Labour took account of when it was in government was the interests of consumers. It took account the whole time of its political interests and the interests of the then Labour-run Treasury.

Arms Sales

18. Mr. Mullin: To ask the President of the Boardof Trade what proportion of British manufacturingexports was accounted for by arms or arms related material (a) in 1979 and (b) in 1994; and if he will make a statement. [32138]

Mr. Ian Taylor: In 1979 the value of exports of identified defence equipment accounted for 1.3 per cent. of exports of manufactured goods from the United Kingdom. In 1993 the proportion was 2 per cent. Figures for 1994 will be published by the Ministry of Defence later this month.

Mr. Mullin: Considering that the Minister is a member of a regime which over the past 17 years has presided over the destruction of about a third of our manufacturing industry, does he consider it a disappointment that the one area in which we appear to excel is the manufacture and marketing of arms? Does he think that we should find a more honourable way of making a living? Does his Department have any plans to encourage arms manufacturers to diversify into more productive activity?

Mr. Taylor: I am not sure whether the hon. Gentleman intended to pay us a compliment by calling us a regime, but judging by his other standards, he was not attempting to be friendly. As for the British manufacturing base, the efficiency and technical application of United Kingdom manufacturing has dramatically improved since 1979 and the defence industry has had a major positive influence on new management techniques and technological application. There is nothing to be questioned about whether this country should be selling manufactured goods. We have only 16 per cent. of the world market. I would like more, but our share shows that many other leading countries are also involved in arms sales. The key question is to whom we should be selling, not whether we should be selling.

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