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European Regional Development Fund
6. Sir David Knox: To ask the President of the Board of Trade what is the value of grants allocated to England from the European regional development fund since its inception. [32113]
Mr. Eggar: It is £7.1 billion in 1996 prices.
Sir David Knox: That is a significant figure. Does my right hon. Friend agree that the grants are playing an important part in strengthening the British economy? Does he believe that the British people are aware of the nature and scope of these grants? If not, what is he doing to publicise them?
Mr. Eggar: My hon. Friend is absolutely right: the grants are an important part of assistance to the appropriate regions. As my hon. Friend knows, his constituency is in the midlands uplands area, which is eligible for objective 5b assistance and it received a programme allocation of £10 million. Assistance through the regional assistance programmes of the European Union is an important contribution to the successful economic growth not only of this country but of the European Union as a whole. This is just another example of the tremendous benefits that we gain from being part of the European Union. It is assisting us to establish ourselves as the enterprise centre of Europe.
Mr. Pearson: Does the Minister believe that the shambles of the current European regional development fund round is due to non-co-operation among Brussels officials, incompetence in Government regional offices, or both?
Mr. Eggar: There have been delays in taking decisions about a number of structural funds and much of the responsibility for that lies with Brussels. Government officers and I have been trying to speed up the decision making on those grants. Above all, we must ensure that we get good value for the money that is disbursed. That is why we introduced the regional challenge programme and why the private sector is able to benefit from European regional development funding. That decision has provided a further £800 million in joint funding. We must continue to improve the speed of disbursement and the quality of disbursement decisions.
Innovative Technology
7. Mr. Flynn: To ask the President of the Board of Trade what new proposals he has to improve innovative technology in industry. [32114]
The Minister for Science and Technology (Mr. Ian Taylor): The information society initiative, the crusade for biotechnology and the LINK programme are key departmental initiatives. Business links is appointing innovation and technology counsellors.
Mr. Flynn: Is not a principal reason why Britain has slumped from 13th to 18th in the world prosperity league table the fact that the average British company spends twice as much on dividends as it spends on research and development, while the top 200 companies spend three times as much on research as they spend on dividends? As the tiny country of Taiwan registers more patents than Britain and a single Japanese company registers more patents than all of British industry, are we not doomed to slump even further in the world prosperity league as we become a nation of branch factories for innovative, successful Pacific rim companies?
Mr. Taylor: The Government's policies have encouraged greater business expenditure on research and development in the past few years. However, I do not disguise the fact that I would like to see even more investment in that area. I am concerned about the level of investment in research and development among British companies, which do not compare well--I exempt the pharmaceutical industry, of course--with world-class companies. The hon. Gentleman should remember that a patent alone is not a guarantee of success: it is the exploitation of ideas that is important. There is a considerable movement in British industry and in the science base to try to ensure that we exploit ideas that are generated in both industrial and university laboratories.
Mr. Fabricant: In contrast with the negative comments of the hon. Member for Newport, West (Mr. Flynn), is it not a fact that the crusade for biotechnology has encouraged major British firms to experiment and to develop products in that area? Is not the largest pharmaceutical company in the world a British company and based in the United Kingdom?
Mr. Taylor: My hon. Friend is right. The crusade for biotechnology, which was launched by my right hon. Friend the President of the Board of Trade and me yesterday, is a remarkable effort across Government Departments to highlight the importance of that sector to the United Kingdom. There are several measures which show our determination to support new British companies that are emerging in the biotechnology area, to support the science base, and to encourage the spin-out of ideas and the protection of intellectual property. The move was warmly welcomed by a number of leading biotechnologists from large and small companies and also by leading academics.
Mrs. Anne Campbell: If we exclude the pharmaceutical and chemical industries, does the Minister agree that there has been an 11 per cent. fall in manufacturing investment in research and development since 1986? Is he considering the request from the Select Committee on Science and Technology that the Government review fiscal incentives for research and development so as to improve our appalling performance?
Mr. Taylor: Fiscal incentives as such are a matter for the Treasury. We always keep under review what is occurring in other countries. The most interesting point about the fiscal base in this country is that it is often cited as a factor by companies wishing to invest here. I welcome the increasing number of research and development projects that are coming to this country as a result of the Government's overall economic management. That is a key factor and, allied to our excellent science base, I am sure that the hon. Lady will join me in welcoming the increase in research and development which is often encouraged by overseas investors in this country.
Balance of Trade
8. Mr. Pawsey: To ask the President of the Board of Trade what was the United Kingdom's trade balance with EU countries in the last quarter for which figures are available. [32115]
- The Minister for Trade (
Mr. Anthony Nelson): During the first quarter of 1996 the United Kingdom had a deficit in trade in goods of £994 million with EU countries.
Mr. Pawsey: I thank my hon. Friend for that response. What action does he believe British industrialists could take to improve the level of exports to the Community? Does he agree that the Community is either a common market or nothing, and that there is no need for us to go deeper into a political union with Europe with a common currency and funding common defence and foreign policies?
Mr. Nelson: We still have a long way to go to take full advantage of the single market, which we pioneered and which we still have an obligation to see through. Undoubtedly, however, our exports have seen exponential growth there, characterised by a large number of small to medium-sized companies that employ many people. Exports are not important in themselves, but in the employment to which they give rise. The Government's policies of low inflation, low taxation, low interest rates and low non-wage costs--all distinctively British and Conservative--have resulted in high exports and substantial growth of small to medium-sized businesses in Europe. We should welcome all that.
Mr. Nigel Griffiths: Why is the Minister being so modest when the President of the Board of Trade revealed on 20 February that Britain has the worst deficit in the European Union apart from Greece, whose most memorable export achievements are the Elgin marbles and Nana Mouskouri? When Italy, Germany and five other neighbours have trade surpluses and we have a deficit, is it any wonder that the Conservatives have relegated this country in 18 years to 18th place in the world prosperity league?
Mr. Nelson: I thought for one shocking moment that the hon. Gentleman was about to break ranks by not asking a dismal and despondent question putting Britain down, but of course he fell into line. The truth is rather different.
Mr. Griffiths: Explain the decline since 1979.
Mr. Nelson: I will. Many of the figures that are given for deficits relate to trade in goods and do not necessarily take account of trade in services, and we are one of the few countries in Europe that has a surplus on that account. We have seen tremendous growth, which we should all welcome, in our exports to Europe, characterised by manufacturing exports. The picture is much brighter and the hon. Gentleman does his party and the country no service by trying to paint it otherwise.
Lady Olga Maitland: Will my hon. Friend confirm that Britain exports more per head than the USA, Japan and our main European competitors? Does he agree that that is because this country is unfettered by the social chapter and the minimum wage?
Mr. Nelson: My hon. Friend is right. This country has an outstanding record on exports, not only in absolute but in comparative terms. Much of that record derives from
the fact that we have not imported high wage costs and non-wage costs from the European Union in the social contract. We must ensure that the difference between the parties on that issue is brought into sharp relief for the country and the electorate, because it is a key component of job creation and exports for this country.
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