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Royal Mail

9. Mr. Harry Greenway: To ask the President of the Board of Trade if he will make a statement on the future of the Royal Mail. [533]

Mr. Lang: The Government's plan for the future of the Post Office, including Royal Mail, remains as set out in a statement on 11 May 1995 by my right hon. Friend the then President of the Board of Trade.

Mr. Greenway: Is my right hon. Friend aware that the public do not understand the recent strikes which have caused such disruption to their mail and that they certainly would not understand any disruption of their Christmas mail--or its complete stoppage? May I have his assurance that he will take all necessary steps to guarantee the smooth delivery of Christmas mail, bearing in mind how much that means to people in this country and all over the world?

Mr. Lang: To the extent that that is in my gift, of course the answer is yes. I do not believe that there is any need for further industrial unrest or strikes by the postal unions. It is quite clear from the ballot which was held that less than half the membership voted for the strike; 75,000 members did not vote to strike, which does not constitute a mandate. I invite the Labour party to join me in calling on the postal unions not to disrupt the Christmas mail, with all the hardship and misery that that would bring to the public.

Mr. O'Neill: Does the President of the Board of Trade realise that he has succeeded in uniting the unions and the Post Office on one thing--their condemnation of his increase in the external funding limits, which is crippling the investment programme of the Post Office? In the long term, that is more likely to jeopardise industrial relations and the harmony that should exist in that company than anything on which the unions and the management are failing to agree now.

Mr. Lang: The hon. Gentleman is talking absolute nonsense. Since May 1995, the Post Office has had a new

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corporate planning process. We have abolished the restrictions on capital expenditure and we have granted the Post Office significant end-year flexibility. The important thing is that the Post Office uses that flexibility and its capacity to manage its own organisation for the benefit of the Post Office.

Research Establishments

10. Mr. McWilliam: To ask the President of the Board of Trade if he will make a statement on the future of the public sector research establishments. [534]

Mr. Ian Taylor: The Government are determined to achieve the greatest possible benefit from the substantial resources devoted to the public sector research establishments. Discussions on the future of each establishment are taken on a case-by-case basis.

Mr. McWilliam: Will the Minister give an undertaking that the pensions cost of privatising those research establishments will not be borne by the research budget?

Mr. Taylor: In each of the cases of a prior options reviewed establishment that we are considering, pensions crystallisation will need to be taken into account. I am determined to maintain the strength of the science base, and obviously we would need to take into account the impact of not only pensions crystallisation but redundancies on the science budget or the public sector borrowing requirement. That would be a matter of negotiation with any party if a research establishment were to pass into the private sector.

Mr. Ingram: I think that the Minister is dodging the very question asked of him. Why does he not accept that this Gadarene rush to privatisation of those important research facilities not only demoralises the tens of thousands of scientists who work in those laboratories but has no support within many sectors of industry or the wider scientific community? According to the Royal Society, it could lead to a serious erosion of the United Kingdom research base. May I ask the Minister again whether he will give an unqualified assurance that the already overstretched science budget will not be further raided to pay for redundancies, pension transfer costs or generous sweeteners for the purchasers of the laboratories? A simple yes or no answer will do.

Mr. Taylor: The hon. Gentleman clearly does not understand the complexity of the research establishments and the fact that they differ one from another, or he would not ask such a naive question.

It is impossible to know what the impact of the liabilities of a pension scheme will be until we look at it in the context of each department. The liabilities for pensions exist currently; they are not suddenly plucked out of the air. They are only crystallised if they are transferred out of the pay-as-you-go system in the public sector to the funded system of the private sector. That would need to be taken into account if there were to be a transfer, but I draw the hon. Gentleman's attention to decisions that have already been made. In certain cases, a prior options reviewed establishment has gone into a Government agency; in other cases, it has gone into the

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private sector; and on other occasions, it has stayed in the public sector. There is no dogmatic precondition to the review process.

I challenge the hon. Gentleman's completely negative policy in his so-called manifesto, which states that Labour would not enter into prior options reviews. That is nonsense, when the civil research establishment's cost base accounts for 10 per cent. of total Government expenditure on research and development.

Visible Trade

11. Ms Eagle: To ask the President of the Board of Trade in which quarter the United Kingdom last recorded a surplus in the visible trade balance. [536]

Mr. John M. Taylor: The United Kingdom last recorded a surplus on visible trade in the fourth quarter of 1982. [Interruption.] Taking the current account as a whole, which one should, the House should know that the second quarter of 1996 produced the largest current account surplus for more than nine years.

Ms Eagle: How can we have that much-vaunted Conservative economic miracle when, according to their own figures, the Government are forecasting a £13.5 billion deficit on trade in goods this year alone? Will the Minister now get up, be honest and tell us when that figure will be in surplus?

Mr. Taylor: There have been only six years since 1946 in which there has been a surplus in visible trade. Those years were 1956, 1958, 1971, 1980, 1981 and 1982--all years of a Conservative Government.

Mr. Butterfill: Will my hon. Friend confirm that, notwithstanding the figures on the balance of trade, the United Kingdom's share of world markets has increased every year for the past few years, whereas Germany's, for example, has declined?

Mr. Taylor: I am grateful to my hon. Friend for reminding me of those matters. He is absolutely right, and the House should be aware of them.

Mr. Sheerman: The Minister knows the real truth--that the heart of the problems afflicting our economy, which has been so badly managed by this Government, is that our industrial base has shrunk and shrunk, year after year after year. When our manufacturing base is down to less than 20 per cent. of gross domestic product, compared to 25 and 26 per cent., we are getting close to a minimum level of viability as a manufacturing nation.

Mr. Taylor: I think that the hon. Gentleman is looking down the wrong end of his telescope. In the three months to August, exports of goods were at record levels and were 7 per cent. higher than they were a year earlier. Since 1979, the volume of both manufactured goods and total goods exported has doubled.

Inward Investment

12. Mr. Riddick: To ask the President of the Board of Trade what steps he is taking to encourage inward investment. [537]

Mr. Greg Knight: The Department's Invest in Britain Bureau will continue to promote the attractions of the

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United Kingdom for mobile international investment to consolidate our position as the No. 1 location in Europe for such investment, especially from countries such as Japan, the United States and Korea.

Mr. Riddick: Is it not the case that almost 40 per cent. of the inward investment into the European Union comes to the United Kingdom? Is it not also true that, since 1979, inward investment has helped to create or safeguard almost 1 million jobs? Has not that tremendous success been achieved because, thanks to this Conservative Government, we have economic stability, moderate taxation and a willing and skilled work force and we have not signed up to those job destroyers, the social chapter and the minimum wage?

Mr. Knight: My hon. Friend is certainly right to say that 1995-96 has been the best year yet for record inward investment.

Mr. Pike: Does the Minister recognise that little of that mobile industrial investment goes to the traditional industrial areas of this country or into research and development, which is absolutely crucial to the future? Will he ensure that such investment is made according to those essential criteria?

Mr. Knight: I am sorry, but do not accept the premise of the hon. Gentleman's question. Indeed, on my way to the Chamber today, I happened to see the television set in the Library switched to Ceefax, on which the Department of the Environment had announced a £1 billion regeneration programme that would create 55,000 new jobs in areas of former coal mines in the north-east, north-west, Yorkshire and the midlands.

Mr. Bell: I add my congratulations to the right hon. Gentleman on reaching the exalted rank of Minister. We had a period of silence from him when he was in the Whips Office and, given the Government's programme, I can see that that will continue until the general election.

Is it not strange that all that inward investment pours into our country, year in and year out, despite four years of Labour party opinion polls showing that we have a 25 to 30 per cent. lead? Is it not a fact that the question of the social chapter and the national minimum wage holds no fear for those inward investors? Should not the Minister come to the Dispatch Box now, in deference to my hon. Friend the Member for Bolsover (Mr. Skinner), and tell us what studies his Department has done into the question of inward investment if we were to have a single currency?

Mr. Knight: First, I am grateful to the hon. Gentleman for his kind opening remarks, although I am not sure that everyone who has served in the Whips Office would necessarily regard my position as a promotion.

I suggest that the hon. Gentleman should widen his reading and that, instead of merely picking off articles from the Walworth road approved list, he should speak to business men and the Institute of Directors and also read the IOD's annual reports. He will see that one of the major factors in inward investment is that we have lower production costs--not that we have lower wages, but that we do not have the job-destroying minimum wage or the social chapter. That is, indeed, a factor in many of those decisions.

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