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Free Trade

17. Mr. MacShane: To ask the President of the Board of Trade what steps he is taking to strengthen the global regulation of free trade. [28373]

Mr. Lang: The Government attach a high priority to developing the multilateral trading system based on the World Trade Organisation. The WTO ministerial meeting in Singapore in December should set in train a comprehensive work programme to carry forward the process of multilateral trade liberalisation, building on the achievements of the Uruguay round.

Mr. MacShane: Does the Secretary of State agree that one of the biggest impediments to world free trade is the increasingly protectionist approach of the United States of America? Will he protest to Washington about, first, its ban on beef imports from the United Kingdom; secondly, the level of subsidy given to each American farmer which is twice the amount received by European farmers; thirdly, the outrageous embargo on Cuba, which is now threatening British firms; and, fourthly, the withdrawal of world telecommunications liberalisation from WTO discussions because it is not convenient for Motorola? Will he tell the protectionists in Washington to open up and support free trade?

Mr. Lang: I again welcome the Labour party's change in tone: it is suddenly against protection and in favour of free trade. We have identified all the points raised by the hon. Gentleman and they will continue to feature in our discussions. I hope that he will welcome the great progress that was made during the Uruguay round under the general agreement on tariffs and trade and the substantial improvements that have occurred.

As to the hon. Gentleman's last point about telecommunications, the negotiations have been postponed and we shall work hard to ensure that they are concluded in time for the arrangements to come into force as targeted originally.

Mr. Dunn: Does my right hon. Friend agree that the Labour party's defence of free trade is as absurd as a whistling pig? Does he agree that the Conservative party is the only party that favours free trade? We oppose every form of regulation, whether from Europe or from elsewhere in the world.

Mr. Lang: My hon. Friend is absolutely right. He may have noticed in the press the report of my speech in which I identified 2020 as the target for achieving global free trade. That will be attained through a series of steps, the first of which will occur in Singapore this year when the British Government will lay before the meeting an agenda that will move incrementally towards freer trade.


18. Mr. Davidson: To ask the President of the Board of Trade if he will make a statement on future prospects for the shipbuilding industry. [28374]

The Minister for Small Business, Industry and Energy (Mr. Richard Page): I am pleased that United

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Kingdom shipyards are continuing to improve their competitiveness and to win orders in the face of very difficult international market conditions. I thank the hon. Gentleman for being the only one to turn up and ask me a question.

Mr. Davidson: I thank the Minister for that answer. However, having rushed all the way from Glasgow to hear it, I had hoped that it would be more satisfactory. What steps are the Government taking to ensure that the international competitors to our shipbuilding industry do not cheat by receiving unfair subsidies from their Governments? As the Minister knows, the shipbuilding industry has taken considerable steps to reform itself, but it is being undermined by unfair foreign competition.

Mr. Page: I, too, want a level playing field. If there is any evidence that people are cutting corners and bending the rules, it should be presented to the Department of Trade and Industry where it will be followed up vigorously. It is intended that the shipbuilding intervention fund should be abolished--it should be signed on 15 July--which would mean no subsidies to any shipyards throughout the world, so we will have that level playing field.

Mr. James Hill: Does my hon. Friend agree that not just shipbuilding, but ship repair, is of great importance to United Kingdom yards? Will he join me in congratulating the Cunard shipping line? For the first time, under the management of its new owners, it will, this year, have its total maintenance check--work that is worth £12 million--performed in the port of Southampton. Is not that good news for our ports?

Mr. Page: My hon. Friend is right to remind the House that not only shipbuilding, but ship repair, count--as does the construction of sail, pleasure and sporting boats: it goes throughout the piece. It provides a great deal of work and employment throughout the country. I willingly echo his congratulations of Cunard. The United Kingdom has some excellent ship repair companies and I hope that more companies will take advantage of the facilities that are offered.

Manufacturing Industry

19. Mr. Nicholas Winterton: To ask the President of the Board of Trade if he will make a statement on trends in manufacturing industry. [28376]

Mr. Lang: In the current recovery, output in manufacturing has risen by more than 8 per cent., exports have risen by a quarter to record levels, and investment in plant and machinery has risen by 16 per cent.

Mr. Winterton: I thank my right hon. Friend for that reply, but, in the light of the sad and regrettable redundancies in the clothing and textile industry, which is an important part of the United Kingdom's manufacturing economy, has he received from the industry any estimate of the cost on its wage bill of the minimum wage? It advises me that as much as 30 per cent. could be put on its wage bill, which would make it uncompetitive internationally and could lead to many hundreds of redundancies in textile and clothing constituencies.

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Will my right hon. Friend perhaps give me an update on progress in opening export markets since the conclusion of the Uruguay round, and in validation of the tariff reductions that have been claimed?

Mr. Lang: I am naturally sorry to hear about the loss of jobs in my hon. Friend's constituency, but I am sure that he will welcome the fact that, since the beginning of 1994, overall employment in manufacturing industry has risen by about 50,000. He is right to identify the national minimum wage as a particular danger to the textile industry. A recent survey showed that, at a rate of some £4 per hour, 139,975 jobs would be lost in north-west England. That illustrates the vulnerability of employment that would derive from a national minimum wage, especially in the UK's regions.

Mr. Pearson: Did the Secretary of State read in the Financial Times yesterday an article called "The ills of manufacturing", which quoted a study that said that, between 1973 and 1992, output grew by more than 50 per cent. in the United States of America and by more than by two thirds in Italy and Japan, but by only a miserly 1.3 per cent. in the UK? Is not the problem as much one of stagnant output in the past 20 years as poor productivity? What are the Government going to do about it?

Mr. Lang: The hon. Gentleman did not hear the figures that I gave in answer to the main question. I said that, since the beginning of the recovery, output in manufacturing industry had risen by 8 per cent. If he contrasts that with what happened under the last Labour Government, when output fell by an average of 0.5 per cent. per annum, he will reflect on the considerable progress that has been made. Since 1979, manufacturing industry exports have risen by 90 per cent. and productivity has risen by 80 per cent. That is a measure of the turnround that is leading to record exports and to record inward investment.

Single Market Compliance Unit

20. Mr. Steen: To ask the President of the Board of Trade what are the staff numbers and the annual budget of the single market compliance unit. [28377]

Mr. Oppenheim: The single market compliance unit was relaunched on 28 March as action single market. It now has three full-time, and three part-time, staff helping UK businesses tackle trade barriers and illegal state aids in other single market countries. Running costs allocated to the activity amount to about £100,000 for the current financial year and most of it is staff costs.

Mr. Steen: Is not the only way in which we can be sure that all European countries enforce directives, rules and regulations equally either to have cross-border enforcement, with our officials going over the border to other European countries to enforce rules and regulations and other European countries sending their officials here to do the same, or to have a massive European plain-clothes police force of bureaucrats in Brussels enforcing rules and regulations centrally? Surely the man and the dog in my hon. Friend's Department will not solve the problem.

Mr. Oppenheim: My hon. Friend's comments remind me of the joke about European hell and European heaven.

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If I remember correctly, in European heaven the English are the police and the Germans are the car mechanics--there are various other characters, but I shall not go through all of them--and in European hell the Germans are the police and the English are the cooks. I do not think that it would be feasible for United Kingdom inspectors to go overseas to inspect other countries.

However, we have the Commission. Although it does not always act as we want it to, it quite often does. Secondly, we ultimately have the right to appeal to the European Court. Indeed, we have taken the case of Air France to the European Court. We are also monitoring the conditions that the Commission has placed on Iberia subsidies. I do not think that we shall ever have such a thing as a perfect single market, but the European Community single market, which this country worked so hard to create, is significantly better than what we would have had otherwise. It is not perfect, but it addresses many of the problems.

Mr. Flynn: How can we use the single market compliance unit when we count all the jobs that come here from abroad but do not keep any record of the jobs that are syphoned out of Britain to European countries? Why did the highly successful, super-technology British company Inmos move from my constituency and relocate in a European country that has both the social chapter and the minimum wage?

Mr. Oppenheim: Largely because it was bought by a state-owned Italian-French company. If the hon. Gentleman is--[Interruption.] Will the hon. Gentleman contain his excitement for a moment? If he is arguing for nationalisation and state subsidies, he will find himself in opposition to Conservative Members and--apparently--to most of his hon. Friends, most of whom have, during this Question Time, criticised subsidies and said how successful the unsubsidised British steel and British shipbuilding industries have been in the private sector. I suggest that he has a word with some of his colleagues.

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