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Aircraft (Launch Aid)

6. Mr. Wilkinson: To ask the President of the Board of Trade what launch aid has been provided by his Department towards British industrial participation in each of the main aircraft variants produced by the Airbus consortium. [19445]

Mr. Greg Knight: Launch aid has supported British participation in two main aircraft produced by the Airbus consortium. A total of £249.3 million was provided for the Airbus A320 and a total of £447.1 million for the Airbus A330/340.

Mr. Wilkinson: In view of the fact that both the wings and the power plants are produced in the United Kingdom, is not the recent order secured by Airbus Industrie for up to 23 A330 aircraft powered by Rolls-Royce Trent engines, testimony to the competitiveness of British industry, especially in that sector, which has consistently run a balance of payments surplus since 1980, and which should bring to the Department of Trade and Industry royalties on sales of about half a billion pounds over the next five years? That is a true success story, symptomatic of success under the Conservative Government.

Mr. Knight: My hon. Friend is right. That is tremendous news. By the time the Emirates take delivery of the order they will have invested about $1 billion in British industry recently. That is good news for the aircraft industry, for Rolls-Royce, for the east midlands and for the United Kingdom as a whole.

Sanctions (Libya)

7. Mr. Dalyell: To ask the President of the Board of Trade, pursuant to his answer of 19 February, Official Report column 905, if he will make it his policy to identify separately those representations from British firms relating to Libya which directly relate to UN sanctions. [19446]

Mr. Nelson: A good many representations to the Department of Trade and Industry on trade with Libya relate to United Nations sanctions. However, it is not the Government's policy to publicise confidential exchanges that the Department has with individual companies.

Mr. Dalyell: In the St. Albans Crown court, why did Judge Colston stop an important case--Regina v. Rees and Rotheroe--and describe the Department of Trade and Industry's behaviour as an "affront to justice"? Those were the judge's words, not mine. Is this Matrix Churchill revisited?

Mr. Nelson: No, it is not. I am the Minister accountable for that part of the Department, and I have looked carefully into the allegations that the hon. Gentleman has made. I am satisfied that there has been no deception and no deliberate withholding of documents required for the courts. There are sometimes genuine practical problems in tracing from thousands of files every document that may be needed. I do not deny that there are occasionally mistakes and inadequacies. We attempt to investigate and correct those, and whenever they are apparent we draw them to the attention of the public or

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of Parliament or, in this case, we draw them immediately to the attention of the courts. I therefore do not believe that the hon. Gentleman's allegation is well founded. Of course there are other aspects in which I know that he has taken an interest, and about which he spoke in the House this morning in connection with trade with Libya. I have noted those with care.

Investment

8. Mr. David Shaw: To ask the President of the Board of Trade if he will make a statement on the benefits to the United Kingdom of (a) inward and (b) overseas investment. [19447]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): Overseas-owned companies provide a third of all manufactured investment in the UK, nearly a fifth of manufacturing employment, over a fifth of manufacturing output and around two fifths of UK manufactured exports. The United Kingdom is itself the second largest outward investor in the world, receiving substantially more income, interest and dividends from its ownership of companies overseas than is paid out to those overseas who own companies in Britain.

Mr. Shaw: Will my right hon. Friend confirm that this is an extraordinary account of the success of the Conservative Government? There is no question that our inward investment has created an enormous number of jobs, and our outward investment has helped not only with jobs in this country, but resulted in one of the greatest dividend flows into this country since the second world war. We are enormously better off, and pensioners have benefited because a lot of the money that comes back to this country does so in the form of dividends, which go into pension funds.

Mr. Lang: My hon. Friend is right, and it is remarkable that this country is the second largest in the world--after the United States--in terms of both outward and inward investment. Our outward investment stock is valued at more than £200 billion, and generated earnings of £24 billion to this country in 1995. We have an exceptional inward investment record, and a large number of companies from around the world are locating in this country because we deliver quality goods at competitive prices. In doing so, we have generated a substantial extension in employment.

Mr. MacShane: What does the Secretary of State have to say about the decision of Toyota, announced this week, to build its new car plant in France? This follows hard on the heels of Ford switching production and jobs from Liverpool to Germany and Spain. Has not much of our inward investment in recent years been on the basis of Britain being fully in Europe? Is not the message now to the boardrooms of the world that the Tory Cabinet is divided on, and hostile and opposed to, Europe? Until we drain the poison from the "Euroseptics" in the Cabinet and replace them with a Government committed to working and playing a leading role in Europe, more and more companies like Toyota and Ford will turn their backs on the UK.

Mr. Lang: The hon. Gentleman is talking absolute nonsense. Toyota has taken no such decision and,

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along with Nissan, Honda, Ford and others, has reinforced its commitment to this country year after year with massive investment. Toyota is in the process of creating more than 1,000 jobs in Derbyshire as a result of massive investment. We have attracted more than 40 per cent. of Japanese investment in Europe, and that figure will rise--it is running at 56 per cent. in the current year. That is a measure of the strength of the United Kingdom which, under a Conservative Government, is one of the most attractive places in the world to invest.

Design Industry

9. Dr. Twinn: To ask the President of the Board of Trade if he will make a statement on the contribution the design industry makes to the United Kingdom economy. [19448]

The Minister for Science and Technology (Mr. Ian Taylor): The design consultancy industry alone contributes more than £3 billion to the UK economy. I have announced the millennium product award to bring forward 2,000 new products to demonstrate the excellence of British design, the best of which will be displayed at the millennium exhibition.

Dr. Twinn: I thank my hon. Friend for that exciting news for the British design industry. Does he agree that the best way for British industry to contribute to increasing its competitiveness in the world is to invest in British industrial design? In doing so, our industry can take a step forward in the world and become even more competitive.

Mr. Taylor: My hon. Friend is absolutely accurate. More British companies must realise that design plays a key role at every stage of the manufacturing process, and is not just a bolt-on exercise. The reputation of British design around the world is underpinned by the fact that £350 million a year in consultancy fees is attributable to the British design consultancy industry. That indicates the reputation of British designers abroad, and we must make better use of them in this country.

Mr. Sheerman: Does not the lack of indigenous investment mean that fewer of our excellent designers are employed here by British companies, making those companies more competitive overseas? We have some of the best designers in the world, but too many of them go abroad to work for foreign companies, and between 80 and 90 per cent. of the work of the top consultancies is for foreign companies. Surely it is a mark of the Government's failure that we cannot keep good designers working for British firms.

Mr. Taylor: It is an indication of how succesful the Government are in anticipating some of the problems for British industry that we have 53 design consultants in business links around the country, that I have pioneered many of the steps forward for British design in its relationship with government, that we have announced the millennium product award to ensure that British design products are on display at the millennium exhibition, and that the Design Council is going from strength to strength under John Sorrell and Andrew Summers. This is a great tribute to what we are doing, and we are looking for equal enthusiasm from British industry.

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Inward Investment

10. Mr. Harry Greenway: To ask the President of the Board of Trade how much inward investment has come to the United Kingdom in each of the past three years from (a) the United States of America, (b) Japan, (c) Germany and (d) other countries; how many jobs have been created as a result; and if he will make a statement. [19449]

Mr. Lang: In 1992 to 1994, the last three-year period for which comparable data are available, inward investment from the United States of America amounted to £11 billion, from Japan nearly £200 million, from Germany £2 billion and nearly £12 billion from the rest of the world. Those figures are taken from the Organisation for Economic Co-operation and Development "International Direct Investment Statistics Yearbook 1996".

Invest in Britain Bureau records show that about 215,000 jobs have either been created or safeguarded by projects announced over that period.

Mr. Greenway: Does my right hon. Friend agree that those are brilliant figures, which are attributable to the success of this Government's policies, in huge contrast to the policies of the predecessor Labour Administration, although that was a long time ago? Is not the Government's attitude to enterprise that which the Governments he mentioned most want? That is why the money comes here. Does he agree that that is in contrast to the policies and thrust of the Labour party, which would decimate those figures within a short time if ever a Labour Government were elected, which they must not be?

Mr. Lang: My hon. Friend is absolutely right. Those figures represent the world's verdict on the United Kingdom as an attractive location for investment--an enterprise-friendly location with low corporate taxation; good communications and infrastructure; a good, skilled, productive work force; and a commitment to helping to make projects a great success. The threat that hangs over inward investment as a result of the Opposition's policy agenda cannot be exaggerated. The burdens of the social chapter and the European social model would destroy jobs and frighten off inward investment, just as they have in the rest of Europe.

Dr. Godman: I welcome that investment, but may I remind the Secretary of State that, where American investment is concerned, IBM came to Greenock more than 45 years ago, largely at the prompting of the local Labour Member of Parliament, Hector McNeil? As the right hon. Gentleman well knows, IBM is still a major employer in the west of Scotland. Since then, there have been many other inward investors, but does he agree that not enough of them are setting up research and development facilities? Locate in Scotland, Scottish Enterprise and his Department are failing to persuade investors to set up research and development centres.

Mr. Lang: I acknowledge the fact that IBM has been here for getting on for half a century. It is one of 4,200 American companies that have located in the UK. I do not agree, however, with the hon. Gentleman's point about research and development activities. The quality of

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investments coming to the United Kingdom has risen substantially in recent years, and a substantial proportion are not only reinvestments and expansions by existing companies, but associated with some research and development. Indeed, the strength of our academic institutions has been one of the other factors that has attracted such investment, but it could easily be frightened away by the policies of an incoming Labour Government if they abandoned the enterprise-friendly, low corporate tax policies of this Government, which have been so successful in encouraging our competitiveness and attracting investment.

Mr. Atkins: Is my right hon. Friend aware that many of the reasons why Isuzu decided to invest in a joint manufacturing operation with Leyland Trucks in my constituency, employing many of my constituents and those of my hon. Friend the Member for Chorley (Mr. Dover), were the reasons that he just enunciated--a low-cost economy that is successful as a direct result of Conservative policies, which must continue if the likes of Isuzu are to come here again?

Mr. Lang: My right hon. Friend is right. Japanese investors set demanding targets for productivity and efficiency. They have recognised the strength of the United Kingdom, which is why we are securing in the present year more than half of all the Japanese investment in the European Union.


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