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House of Commons

Thursday 6 May 1999

The House met at half-past Eleven o'clock

PRAYERS

[Madam Speaker in the Chair]

Oral Answers to Questions

TRADE AND INDUSTRY

The Secretary of State was asked--

Milk Marque

1. Mr. David Heath (Somerton and Frome): When he will publish the recommendations of the Monopolies and Mergers Commission in respect of Milk Marque; and if he will make a statement. [82356]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): The report from the Monopolies and Mergers Commission on the supply of raw cows' milk in Great Britain has now been received. I expect to publish it before the House rises for the summer recess.

Mr. Heath: I am grateful to the Secretary of State for that answer, but the delay and uncertainty caused by his inability to publish the report are having the gravest consequences for the dairy industry. Somerset dairy farmers in my constituency have already suffered enough this year. Will the right hon. Gentleman deny the rumour now sweeping the industry and give an absolute assurance that the report has not been delayed for political convenience connected with the Welsh elections, and that it will not be delayed until the summer recess? We need an answer now.

Mr. Byers: The report was not received until the beginning of March. It is receiving detailed consideration and will be published before the summer recess. The timing is not for political reasons, but to ensure that full and proper consideration is given to the recommendations.

Mr. John Bercow (Buckingham): I am afraid that the Secretary of State's response to the hon. Member for Somerton and Frome (Mr. Heath) was not good enough. Given that dairy farmers are suffering their worst crisis for 60 years, with average incomes having fallen by more than 60 per cent. in the past two years alone, and as the Government's botched common agricultural policy negotiations in Brussels mean that Britain's milk producers cannot expect to receive any increase in quota until 2006, does the right hon. Gentleman not understand the keen interest and anxiety with which the MMC's verdict on Milk Marque is awaited by dairy farmers in my

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constituency? He has had the MMC report for more than two months--70 days, to be exact. When will he stop dithering and announce a decision?

Mr. Byers: There is no dithering. The report is being considered and we shall publish it as soon as it is practical to do so. That will be before the summer recess.

Millennium Compliance

3. Mr. David Atkinson (Bournemouth, East): If he will make a statement on progress with the millennium readiness of computer systems in the private sector. [82359]

The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): On 4 March, Action 2000 published its fourth report on its state of the nation survey of millennium preparedness among United Kingdom businesses, which showed a continual improvement in terms of the readiness of their systems to cope with the end of century date change.

Mr. Atkinson: Does the Minister agree that, without total disclosure of their millennium compliance by all computer-dependent businesses, no one can say that the British economy will be safe after the end of this year? As the Government missed--indeed, objected to--the two opportunities that I offered them through my private Member's Bills to provide for such disclosure, can the Minister assure the House that British business will be millennium ready?

Mr. Wills: We are well aware of the keen interest that the hon. Gentleman has taken in the problem and we are grateful to him for it; he shows a commendable public spirit. However, we do not think that legislation such as he has suggested is necessary. We must be careful not to create bureaucratic requirements for companies to check things unnecessarily. Companies are subject to many pressures, of which the century date change is one, on their limited resources.

However, may I offer the hon. Gentleman some reassurance about the state of preparedness, especially in connection with the crucial infrastructure of this country? As he will be aware, the national infrastructure forum gave us the latest information from Action 2000 on 21 April, and it showed a considerable degree of readiness. He will be familiar with the colour coding of blue, amber and red. Blue indicates no identifiable risk of material disruption, and, if I may, briefly, with your indulgence, Madam Speaker, refer to the fact that in the--

Madam Speaker: Order. Perhaps that could be the subject of an Adjournment debate.

Mr. Wills: I am sorry, Madam Speaker.

I assure the hon. Gentleman that there is a high degree of readiness, and I am confident that there is no significant risk of disruption.

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Exporters

4. Sir Sydney Chapman (Chipping Barnet): What assessment he has made of the prospects for exporters in the present financial year. [82360]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Treasury and independent forecasters expect the volume of exports of goods and services to grow both this year and next.

Sir Sydney Chapman: As unemployment is expected to rise over the next two years, and, contrary to what the Secretary of State has just said, the Confederation of British Industry forecasts that economic growth will be sharply down this year, does the right hon. Gentleman agree with the Financial Times editorial yesterday, which advocated a weaker currency? What representations is he making to his right hon. Friend the Chancellor to reduce interest rates--although, of course, the Chancellor no longer has the power to do that? Does the Secretary of State not bitterly regret that fact?

Mr. Byers: The Government made it clear that we would not play short-term party politics with interest rates. We have given independence to the Monetary Policy Committee of the Bank of England, and we will support decisions taken by the Bank on interest rates. It is largely because of that independence that we now have the lowest long-term interest rates for 40 years, which is good news for exporters and for the economy in general.

Mr. Geraint Davies (Croydon, Central): Does my right hon. Friend agree that today's historic change in Britain's constitution will herald a new era for exporters in which each region can consolidate in partnership to export and compete in the global marketplace? The new regional development agencies and the Welsh Development Agency can help in that. Does he also agree, first, that the political fallout will precipitate a change in the Opposition leadership, which will become more Euro-friendly and therefore build confidence in our key export markets; and, secondly, that today is a great day for British exports?

Mr. Byers: I do not intend to attack the Conservative Opposition, because they are very good at doing that for themselves. It will be an historic day, with the votes being cast in Wales and Scotland. I have no doubt that when people cast their votes they will reflect on the success of this Government, with some 400,000 new jobs having been created since we took office. Some 3,000 new jobs were announced in Scotland during the election campaign and 6,500 jobs have been created in south Wales, with the Baglan bay energy project. For the two years this Government have been in office, a job has been created every two minutes. We are proud of that and we are confident that, when people cast their votes today, they will acknowledge the Government's success.

Dr. Vincent Cable (Twickenham): Does the Minister accept the estimate of the influential National Institute of Economic and Social Research this week that the pound is currently 15 to 16 per cent. overvalued in terms of the underlying competitiveness of the British economy? If he does not agree, will he explain why?

Mr. Byers: What I do know is that, if hon. Members consider sterling in terms of its appreciation against other

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currencies, they will see that its current position bears no comparison with the dramatic increase that we saw before the 1997 general election. Two thirds of the drop in exports last year was not in exports to those countries where our currency has appreciated in value but because of the decline in the south-east Asian markets. That is where the problem arose.

Mr. Jeffrey Donaldson (Lagan Valley): The Secretary of State will be aware that one of the important components in the competitiveness of British industry in exporting goods is the cost of transporting those goods. In Northern Ireland, we are heavily reliant on the road haulage industry for the export of goods from our part of the United Kingdom. Is he aware that £100 will purchase 129 litres of diesel in Northern Ireland, but 227 litres in the Irish Republic; and that the additional burden placed on road hauliers by the Chancellor of the Exchequer through increases in excise duties is making it much more difficult to export goods from Northern Ireland, compared with our competitors in the Irish Republic? Will the Secretary of State make representations to the Chancellor on behalf of the road haulage industry to see whether that burden can be eased in any way?

Mr. Byers: There are many companies in Northern Ireland that are doing well in exports and I was pleased to present the Northern Ireland exporter of the year awards last year. I hear the concerns expressed by the hon. Gentleman. He will be aware that my colleague the Minister of Transport has set up a group with the industry to consider the problems it faces, and I hope that the group will produce some recommendations that will address the very real difficulties that the hon. Gentleman has mentioned.

Mr. Christopher Chope (Christchurch): Why does the Secretary of State show such dismissive contempt for a significant group of British exporters who are the innocent victims of United States trade sanctions? I have asked questions that the Secretary of State has not answered, and firms that are badly affected have written to him and received no response. He was quick to provide £40 million in compensation for the cashmere industry, so why will he not supply some help for a firm such as Beamglow in Cambridgeshire, which employs 100 people and recently invested £2.5 million in new machinery to supply the United States export market? That market has been completely cut off to that firm as a result of the sanctions, and the Government are not doing anything about it.

Mr. Byers: That was all totally wrong. There is no dismissive contempt. The Government offered support to the cashmere industry in Scotland--and in England as well--because the time at which the levy was raised by the United States customs and excise coincided with the period in which cashmere exports were going to the United States. It is a seasonal industry, and the period covering late March and April was one of particular difficulty.

As we discussed in the House last week, the real solution is to resolve the trade disputes. The Government are committed to achieving that long-term solution to the problems. The solution to the problems that companies such as Beamglow face lies in the Government using our

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best efforts to ensure that the trade disputes with the United States are resolved and that free trade and commerce are able to flourish. The message has to be clear--that protectionism anywhere is a threat to prosperity everywhere. That is what we believe, and that is why we shall support measures to ensure open commerce and free trade.


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