House of Commons
Thursday 5 June 1997
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
Oral Answers to Questions
TRADE AND INDUSTRY
Inward Investment
1. Mr. Waterson: To ask the President of the Board of Trade what proposals she has to encourage inward investment. [655]
14. Mr. Fabricant:
To ask the President of the Board of Trade what plans she has to encourage inward investment into the United Kingdom. [668]
The Parliamentary Under-Secretary of State for Trade and Industry (Mrs. Barbara Roche):
Inward investment is important not only for the jobs that it brings to Britain, but for the benefit that it brings to local economies.
The Department's invest in Britain bureau will promote the United Kingdom for mobile international investment to ensure that we are the number one location in Europe for investment from countries such as Japan, the United States and Korea. My right hon. Friend the President of the Board of Trade was able to contribute personally to those efforts when she visited Japan last week.
Mr. Waterson:
I warmly welcome the hon. Lady to her new responsibilities at the Dispatch Box. Did she see the report of The Economist intelligence unit a few days ago which concluded that Britain had the second most favourable business environment in the world, second only to Hong Kong? Does she consider that our chances of reaching the No. 1 slot in that league table will be enhanced by having the national minimum wage, the windfall tax and signing the social chapter?
Mrs. Roche:
I thank the hon. Gentleman for his kind and courteous words. We want to promote Britain as the investment centre of the world. To do that, we need a highly skilled and highly motivated work force. All the measures that the hon. Gentleman has mentioned will give us just that.
Mr. Fabricant:
I, too, welcome the hon. Lady to the Dispatch Box. As she will be aware, about 18 per cent.
Mr. Mackinlay:
The Tories are bunching up for the camera to try to make it look as though there are more of them.
Mr. Fabricant:
Thank you, Madam Speaker.
What is the Minister's view of the recent Treasury projection that a million people will be thrown on the dole if the minimum wage is set around £4? Does she agree with that projection? A simple yes or no will do.
Mrs. Roche:
I thank the hon. Gentleman for his kind words.
The Government have always made it clear that the minimum wage would be set at a level the country can afford, that the Low Pay Commission will consult employers as well as employees and that the employers' side of the discussions will be made up of small and large businesses. To be competitive in the modern world, we need a motivated work force. We aim to ensure that we have just that.
Mr. Gunnell:
I congratulate my hon. Friend on her place on the Front Bench--indeed, I congratulate the whole team. We have a high-quality team answering trade and industry questions.
Does my hon. Friend agree that having a Government who are united on Europe will help us in terms of inward investment? Have not the divisions in the Tory party over Europe made it much more difficult to attract inward investors to Britain? Is it not good news for inward investment that we now have a Labour Government who are convinced that they will put Britain back at the heart of Europe?
Mrs. Roche:
I thank my hon. Friend, and I agree with him. One reason why we attract inward investment to this country is our membership of the European Union and the influence that we can bring to bear. The divisions in the last Administration, who put party before country, were extremely unhelpful to our inward investment. The new Government's first commitment will be to the country, not the party.
Dr. Godman:
May I point out to my hon. Friend that there is a long history of inward investment in my constituency? It was the late Hector McNeil, Labour Member for Greenock, who persuaded IBM to come to Spango valley more than 40 years ago. Will my hon. Friend ensure that, whenever possible, those from abroad who are seeking to invest in our constituencies set up research and development centres, which are so important? We do not want just assembly units.
Mrs. Roche:
I absolutely agree. Inward investment is important and needs to be taken seriously because of its benefits to local industries and economies. That is why this Government will actively encourage supply chains, working with local authorities and others to get the very best for our home-grown industries from the inward investment that we hope to attract.
2. Mr. John M. Taylor:
To ask the President of the Board of Trade if she will make a statement on the guiding principles that the Government will follow in superintending monopolies and mergers policy. [656]
The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett):
The Government are committed to effective and fair competition. In exercising my statutory responsibilities, I shall consider each case on its merits. My policy will be to make merger references primarily on competition grounds.
On the wider question of reform, the Government will be introducing a new competition Bill this autumn, adopting a tough prohibitive approach to deter anti-competitive practices and abuse of market power.
Mr. Taylor:
I congratulate the President of the Board of Trade on her appointment. May I ask her to explain why the Government have already done two U-turns--one on the proposal to merge the Office of Fair Trading with the Monopolies and Mergers Commission, the other on the burden of proof in takeover cases? She has been quoted as saying--she has said it again today--that competition grounds will be at the heart of her policy. Will she confirm that, and remark its fidelity to the proposals first set out by Lord Tebbit?
Mrs. Beckett:
I thank the hon. Gentleman for his kind remarks. If I recall correctly, it has been the practice of successive Governments of all political shades for 40 years or so to have competition policy handled in the way that I have described.
As for two U-turns, either the hon. Gentleman's researchers have not been assiduous enough, or he has not read our documents with sufficient care. I can assure him that no U-turn is involved. If he reads the policy document that we issued long before the election, he will discover that while these issues were identified as the subject of people's concern, and while proposals had been made to effect the sort of changes described, there was no commitment to them whatever. I can tell the hon. Gentleman in the utmost confidence that Lord Borrie's view of the proposals chimes absolutely with my own.
Mr. Doran:
I welcome my right hon. Friend most warmly to her new position. I know that she would not want to comment on individual cases, but is she aware of the proposed merger between Grampian Television and Scottish Television--a proposal that is opposed by most sections of opinion in the north of Scotland? When considering new legislation, can she assure me that current grounds for referral to the MMC will not be weakened in any way?
Mrs. Beckett:
I thank my hon. Friend for his kind remarks. He is right to say that I cannot comment on individual cases. I hope, however, that it will already be apparent--certainly from what we have said about the new legislation that we intend to produce--that, far from weakening the approach to competition issues, we intend substantially to strengthen the position adopted by the previous Government.
Mr. Harvey:
I, too, congratulate the right hon. Lady on her appointment, and I welcome the flexibility that she
Mrs. Beckett:
I see no evidence that that will happen, although I understand the hon. Gentleman's concern. I have sought to head off any attempts to discern policy by testing me out by making the simple, clear statement to a business audience yesterday that, on competition policy as on other things, there is no need for people to waste their time on close textual analysis: I say what I mean and I mean what I say.
3. Dr. Alan W. Williams:
To ask the President of the Board of Trade what measures Her Majesty's Government intend to take to improve (a) the competitiveness and (b) the trading position of British companies within the European Union. [657]
Mrs. Beckett:
The Government will work in partnership with business to improve the country's competitiveness and trading position. For instance, during our presidency of the European Union next year we intend to complete the single market. That will be particularly important in areas such as telecommunications, air travel and financial services, where there are great opportunities for British business which will stimulate competition and give the customer a better deal. We will also take steps to improve the effectiveness of Government support for exporters.
Dr. Williams:
I congratulate my right hon. Friend on her appointment. Does she accept that the increase in the value of the pound--16.5 per cent. since last August, taking us back almost to pre-black-Wednesday levels--poses a threat to our competitiveness?
Mrs. Beckett:
As my hon. Friend knows, concern has been expressed about some of those issues, but he also knows that the root of competitiveness and long-term prosperity for Britain is the cultivation of economic stability. Lack of economic stability was a sharp feature of the previous Government's record. We believe that actions taken recently by my right hon. Friend the Chancellor of the Exchequer will contribute to stability, which in turn will contribute to an overall competitive position--and that includes exchange rate issues.
Mr. Wilkinson:
In greeting the right hon. Lady in her new position at the Dispatch Box, may I ask her how the adoption of the social chapter, the imposition on British companies of the provisions of an employment chapter from Brussels, and the idea that Brussels should have the power to impose sanctions on British companies which do not obey the diktats of Brussels, can possibly improve the competitiveness of British companies in the European Union and world markets and improve employment possibilities in British firms?
Mrs. Beckett:
As I am sure that the hon. Gentleman is well aware, we very much take the view that future
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