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High-technology Sector
5. Mrs. Anne Campbell: To ask the President of the Board of Trade if he will make a statement about support for newly established firms in the high-technology sector. [15026]
Mr. Ian Taylor: My Department recognises the vital importance of such firms to the current and future competitiveness of the economy. We therefore support a range of measures to assist them to grow, including the small firms merit award for research and technology scheme and the provision of innovation and technology counsellors in business links, as well as initiatives to assist firms in specific industry sectors such as biotechnology.
Mrs. Campbell: Does the Minister agree that, given that only 6 per cent. of the loans under the small firms loan guarantee scheme go to technology-based businesses, he should be working with the banks, as the Labour party is doing, to double the loans under the scheme by the end of the next Parliament?
Mr. Taylor: I am happy to reassure the hon. Lady, who has kindly agreed with me, that I agree with her; but we will achieve that aim by the end of this Parliament, because we are in the process of inviting offers for the small loans guarantee scheme from other companies that are more familiar with dealing with high-tech companies.
Only the weekend before last, Save British Science and my Department jointly sponsored a conference on bridging the funding gap, which had the venture capitalists talking animatedly with us about how we could encourage finance to go into the smaller companies. I assure the hon. Lady that the debate is alive and well and many of the policies are being applied.
Mr. Batiste:
Does my hon. Friend agree that companies setting up in increasingly important human genetic science need a clear ethical framework in which to operate? In view of yesterday's press conference by the Association of British Insurers, will he ask the new Human Genetics Advisory Commission to look at the implications of genetic testing for the insurance industry to see whether further guidelines should be published to encourage the acceptance of genetic screening, which is important to the future of public health?
Mr. Taylor:
I can announce to the House that the first full meeting of the Human Genetics Advisory Commission will be held next Thursday. It is an independent commission under the vice-chancellor of the university of Nottingham. It is up to the commission to set its agenda, but I would be extremely surprised if insurance was not one of the subjects that it covered early on. I welcome the announcement by the Association of British Insurers, in the sense that I want the debate to come into the public domain. Genetics is a great force for good in terms of our understanding of human disease and our ability to prevent it. I do not want there to be any misunderstandings about the involvement of insurance in genetics, and I want to encourage a wide public debate about it.
Manufacturing Production
6. Mr. Austin Mitchell: To ask the President of the Board of Trade if he will make a statement on the change in manufacturing production in the latest quarter relative to (a) the last quarter of 1973 and (b) the last quarter of 1989. [15027]
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): In the final quarter of 1996, manufacturing output reached a new high and was 2¼ per cent. higher than in the final quarter of 1989 and 8 per cent. higher than in the final quarter of 1973. However, between 1973 and 1979 manufacturing output fell by 5 per cent.
Mr. Mitchell: Is the Secretary of State worried that the increases in output since 1973 and 1989 are so pathetically small, as every other advanced industrial country has had a much bigger rate of increase during that period? Is it not even more worrying that we are at present supposed to be enjoying a boom, but manufacturing production increased by only 0.5 per cent. in 1996? Manufacturing firms are not investing because they have no confidence in the Government, and now--threatened with an overvalued pound--company reports are beginning to show losses and reduced profits. Does not that bode ill, as the worst effects will come through only in a few months' time?
Mr. Lang: I do not think that the hon. Gentleman heard my earlier answer. Manufacturing output is now at an all-time high and this country is manufacturing and exporting more than ever before. The figure is up by 8 per cent. since 1973--and it would be a lot higher but for the fact that, under the last Labour Government, manufacturing did not rise at all, but fell by 5 per cent. We are going through not a boom, as the hon. Gentleman put it, but a period of sustained and sustainable growth which is spreading manufacturing employment--up by 125,000 in the past three years--and prosperity throughout the United Kingdom.
Mr. Congdon: Does my right hon. Friend agree that improvements in manufacturing productivity have played a significant part in our economic success, particularly since 1992? Does he further agree that, if we were voluntarily to impose the burdens of the social chapter on our industry, we would experience the high levels of unemployment currently being borne by France and Germany, which we want no part of?
Mr. Lang: My hon. Friend is absolutely right. Manufacturing productivity has increased dramatically since 1979, and the rate of growth in productivity has been the highest in the G7. We have been closing the gap with Germany and France, which widened under the last Labour Government. He is also absolutely right to say that imposing the European social model on our workplace would damage not just productivity, but output and growth in the economy. We would experience--as we did under the last Labour Government--a much less satisfactory manufacturing performance.
Mr. Hoon: Is it not clear from the Secretary of State's answers that any longer-term consideration of Britain's
relative economic performance compared with our immediate EU competitors demonstrates the underlying weakness of the British economy under successive Conservative Governments? Does the right hon. Gentleman agree that, in terms of real gross domestic product growth since 1990, Britain lags behind the EU average and well behind the United States?
Mr. Lang: The hon. Gentleman seems unaware of the fact that this country's economy is growing faster than those of the rest of Europe this year, and is expected to grow faster next. He may also be unaware that the volume of our exports has been growing faster than those of France and Germany since this Government came to power--as has productivity--and that the productivity gap widened under the last Labour Government. With exports doubled since 1979, and up by a third since this recovery began, the British economy is in better shape than any other economy in Europe.
Mr. Garnier: Is my right hon. Friend aware that manufacturers in the east midlands, particularly in my constituency, are enjoying huge order books, both for long-term and short-term orders, and that their opposite numbers in the European Union are unable to employ people to do overtime because of the restrictions that are imposed there? Would he care to compare the miserable picture painted by Opposition Members with the good news that we hear day by day in our constituencies?
Mr. Lang: My hon. and learned Friend is right. Nothing illustrates that fact better than the comparison of unemployment figures. In this country, unemployment has been falling for the past four years and now stands at 6.5 per cent, whereas in Europe it has been rising: in Germany, it is well over 11 per cent; in France, it is over 12 per cent; and, in Spain, it is over 20 per cent. That is the price that they are paying for the European social model.
European Airbus
7. Mr. Pike: To ask the President of the Board of Trade what estimate his Department has made of the percentage of total European Airbus production work currently undertaken in the United Kingdom. [15028]
Mr. Greg Knight: The latest available figures from the European Commission, which include both aircraft and spacecraft production, show that in 1994 the UK's share of European Union aerospace production was 33 per cent.
Mr. Pike: The Minister will recognise that Airbus, in particular, is important not only to the United Kingdom economy, British Aerospace and its contractors, but to the many people in this country who supply aerospace parts to the other European partners? That work is particularly crucial in Lancashire. Will he ensure that, in the restructuring at Airbus, the companies that are competing for work in Europe and the subcontractors to the other partners are not precluded from competing in the years ahead?
Mr. Knight: I can certainly give the hon. Gentleman that assurance. He has raised an interesting and important issue. The restructuring of the Airbus consortium is
essential if it is to be able to compete in world markets. That is something that we are encouraging and pushing ahead.
Mr. Atkins: Is not Airbus one of the smartest companies in the aerospace operation, and producing some of the best turned out aircraft, which sell around the world? Does my right hon. Friend recognise the importance of Airbus not only to the country, but to Lancashire in particular, in relation to British Aerospace, Lucas and Rolls-Royce, complemented by the Rolls-Royce factories in and around his constituency, which have recently done so much to obtain success on Airbus orders from, for example, the United Arab Emirates?
Mr. Knight: My right hon. Friend is absolutely right. The British Government recognise--as do I--that Airbus is a world leader. We want it to continue to be one. Indeed, Rolls-Royce will play an important part in the future not only of Airbus, but of aircraft production throughout the world.
Mr. Clapham: Is the Minister aware that, in 1993, the Trade and Industry Committee studied the British aerospace industry and recommended that the Government assess the research and technology requirements of the industry and support the national strategic technology acquisition plan? Since then, nothing has been done, and the research and development that was being carried out on undercarriages, for example, has gone to Canada. The industry has now put forward a new strategic plan, called the foresight plan. Will the Minister undertake to carry out an urgent inquiry and support the new plan? Is he prepared to take on board support for the new developments that are taking place in the aircraft industry and the idea of the research programme?
Mr. Knight: I do not accept all of that. The hon. Gentleman said that nothing is being done, but that is not the case. Since 1979, we have given £1.25 billion in launch aid to the aerospace industry and maintained--we continue to maintain it--the civil aircraft research and demonstration programme, which is involved with research and development.
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