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Engineering Manufacturing (Business Activity)

12. Mr. Michael Fabricant (Lichfield): When he plans to meet representatives of the engineering manufacturing industry to discuss the levels of business activity. [90020]

The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): DTI Ministers are in regular contact with firms and representative organisations in the engineering manufacturing industry to discuss their industry's affairs, including activity levels.

Mr. Fabricant: The Minister heard the comments of my hon. Friend the Member for Buckingham (Mr. Bercow) with regard to the Engineering Employers Federation. Does the Minister accept that the success of engineering depends to some extent on the success of retail trade in Britain? He will have heard the news this morning that Marks and Spencer's sales are down 10 per cent., although some of the company's problems are not related to the sort of frocks that it sells. Is he aware that the John Lewis Partnership is reporting a 3.2 per cent. drop in sales, in cash terms, compared to the same period last year? The Secretary of State said earlier that we should be celebrating the success of our economy. In any other place, would we not describe the economy now as being in recession?

Mr. Wills: I shall revert briefly to engineering, which was the subject of the hon. Gentleman's original question. Of course I recognise the importance of that sector, and I am delighted to see that it is growing at 2.2 per cent. at an annualised rate, compared to the equivalent quarter last year. All hon. Members will welcome that evidence of growth in engineering.

Mr. Barry Jones (Alyn and Deeside): Does my hon. Friend accept that a prime example of successful engineering manufacturing is the aerospace industry? With that in mind, may I persuade him to make available only £550 million investment launch aid for the Airbus 3XX project? That will create thousands of new jobs. By scheduling my constituency as an assisted area, our right

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hon. Friend is giving a tremendous boost to engineering manufacturing in my constituency for the next century, and my people thank him for that.

Mr. Wills: I am grateful to my right hon. Friend for those remarks. I know that the application for launch aid is now in, and I can assure him that it will be considered carefully and in great detail as he would expect.

Mr. Peter Brooke (Cities of London and Westminster): What is the reaction of the Government, who made a lot of noise about competitiveness when they were in opposition, to the sharp fall in the United Kingdom's place in the world competitiveness league announced in Switzerland this week?

Mr. Wills: Of course we are doing everything we can to make sure that this country improves its competitive position. We inherited from the Conservative party not a golden legacy, but a situation that was severely threatening to all our manufacturing industry and businesses. We are taking every step to ensure that that is put right. Having put an end to the boom and bust that characterised the years that the Conservative party spent in government, we have created a new climate of stability, which is the core foundation for economic success. We have cut corporation tax to the lowest levels ever and we are creating a properly competitive environment in which business can flourish and prosper.

Mr. Hilton Dawson (Lancaster and Wyre): Is my hon. Friend aware that he has brought real hope to the manufacturing industry of Lancaster with the announcement that he has made today about levels 2 and 3 assisted area status for the city? Is he further aware that there is singing and celebration throughout the streets of that glorious city because of the coupling of that announcement with the fine announcement on single regeneration budget funding for the Luneside regeneration project? Is he looking forward to his visit to Lancaster on 5 October? Not only will he be celebrated throughout the entire city for putting the benighted Tory years behind us, but he will hear evidence and information about how we intend to use the money well to bring Lancaster back to full employment and prosperity.

Mr. Wills: I have listened to my hon. Friend's eulogies about Lancaster for many months and I am delighted that I am to visit that great city. I am looking forward to that and I welcome his words of thanks about the work that we have put in on the assisted areas map. We have tried to address real need throughout the United Kingdom and I am delighted to hear that we have succeeded.

Mr. Roy Beggs (East Antrim): The policies being pursued by the Government have safeguarded existing

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jobs in Northern Ireland, and indeed have helped it to attract new investment, but will the Minister and his Department be very conscious of the fact that electricity costs in Northern Ireland are the highest of any region of the United Kingdom? We in Northern Ireland have reached our emissions target through the introduction and use of gas, but will he consider seriously the adverse impact--and the damage to stability, prosperity and peace that could be caused if jobs were to be lost--of increased costs for manufacturing industry caused by the climate change levy?

Mr. Wills: I recognise the hon. Gentleman's concerns. I understand that there is now connection through an interconnector, which ought to bring costs down in the future. Let me say three things in relation to the climate change levy. First, there will be no overall increase in taxation. Secondly, of course we need to promote competitiveness, but we also need to balance that goal with the need to promote sustainable development. Thirdly, we recognise that the energy-intensive sectors have a special case and we intend to set significantly lower rates for them.

Disqualified Directors

13. Mr. Colin Burgon (Elmet): What plans he has to increase the penalties for disqualified directors who run businesses. [90021]

The Minister for Trade (Mr. Brian Wilson): There are no restrictions on disqualified directors running businesses on their own account. Accordingly, there are no penalties arising. There are no plans to change that. The penalties for directors who act in contravention of disqualification orders are imprisonment for up to two years or a fine, or both. There are no plans to increase those penalties.

Mr. Burgon: I thank my hon. Friend for that reply. How can disqualified directors acting behind the scenes in the management of companies best be detected?

Mr. Wilson: As my hon. Friend might expect, we are doing a great deal about that. In January 1998, the Insolvency Service launched a telephone hotline for the public and the business community to report disqualified directors who continue to act while banned. There has been a good response: 925 calls were made to the hotline and 125 cases were referred to solicitors for consideration. Companies House checks have also been introduced to ensure that all disqualified directors resign from all current directorships and are not appointed to any new ones. A great deal is being done to curb the activities of rogue directors.

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Northern Ireland

12.30 pm

The Secretary of State for Northern Ireland (Marjorie Mowlam): With permission, Madam Speaker, I wish to make a statement.

First I apologise to the right hon. Member for Bracknell (Mr. MacKay) and the hon. Member for Montgomeryshire (Mr. Öpik) for having only just got them a copy of the statement. We thought it most important to finish writing the statement and come to tell the House at 12.30 pm what is going on in Northern Ireland. I hope that they will understand the speed at which we have had to move.

The House will be as sad as I am to hear that the Deputy First Minister designate of Northern Ireland, the hon. Member for Newry and Armagh (Mr. Mallon), has just resigned from that position. He will be greatly missed in Northern Ireland in that job because, as I know only too well from my position, his contribution has been crucial in holding everything together. The experience of over 30 years that he has brought to the process has been incredible. I hope that he can see his way to stand again for an office in the Assembly in the months and years ahead because without him it will be a sadder place. It will miss his skills, oratory and contribution greatly. I am sure that it is a great relief to all hon. Members that his skills, abilities and oratory will not be lost to this House.

On 2 July my right hon. Friend the Prime Minister proposed with the Taoiseach a way forward to implement the Good Friday agreement. It was a way forward to secure both devolution and decommissioning, with a clear failsafe for both. As proposed on 2 July, the Assembly met this morning to select the departmental Ministers to take office on devolution. Devolution would have followed on Sunday.

The decommissioning process would then have begun within a period specified by the Decommissioning Commission--as General de Chastelain said on 2 July:

Actual decommissioning would then have followed, according to a timetable laid down by the Commission, "within a few weeks". If commitment on either devolution or decommissioning had not taken place, there was a failsafe: parties would not have been expected to continue in government with those in default.

As many in the House will now know, the Ulster Unionist party, the Democratic Unionist party and the Alliance chose this morning not to nominate any Member to ministerial office. All parties have agreed on the principle under the Good Friday agreement of an inclusive Executive exercising devolved powers. With those parties not nominating Ministers, it was clear beyond doubt that such an inclusive Executive could not be formed. Therefore, this morning I acted immediately to undo the appointment of Ministers designate since the requirement for a cross-community Executive had not been met. I will now take steps with the Irish Government to institute a formal review under the Good Friday agreement.

The Minister of State, Northern Ireland Office, my right hon. Friend the Member for Torfaen (Mr. Murphy), and I will be available to the parties in Northern Ireland over the next few days for discussion as to the nature of that review. My right hon. Friend the Prime Minister will meet the Taoiseach next week to announce the arrangements,

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agenda and timetable for this review. It will take place under paragraph 4 of the review section of the agreement. It will be a review not of the agreement itself but of its implementation.

Earlier this week the House debated the Northern Ireland Bill which provides the failsafe envisaged under "The Way Forward" proposals. We judged that it would help to reassure Unionists and nationalists, but particularly Unionists, that we were serious about the failsafe if we published the Bill and demonstrated that it was on its way to becoming law. I am grateful to the House for considering the Bill at such speed on Tuesday. We shall not withdraw it, because it may well be that a failsafe on those lines will be necessary to underpin whatever way forward is eventually agreed. However, the Bill will not now proceed at emergency speed in the other place this afternoon.

I still believe that the way forward proposed by my right hon. Friend the Prime Minister and the Taoiseach is a balanced approach that could have succeeded. I do not seek to blame any party in the House. The last thing that the people of Northern Ireland need now is an outbreak of recriminations. I believe that all those who supported the agreement when it was made genuinely wanted to see it implemented. The reality is that we either move forward together, or we do not move forward at all.

Today is a setback: it would be foolish to deny that. It would be even more foolish to conclude that the Good Friday agreement cannot continue. Apart from those who have always opposed the agreement, no one is seriously suggesting an alternative way forward. There is still a wide measure of agreement on the issues that have divided people in the past, such as on the resolution of the fundamental constitutional question on the basis of consent; on a fully inclusive form of government, with both communities represented; on a fair and just society in which both traditions are respected and rights are safeguarded; and on the decommissioning of all paramilitary arms in a manner determined by an independent commission, and the eventual normalisation of society.

That is, in my opinion, a massive consensus, which was inconceivable before the Good Friday agreement, and which puts today's setback, serious though it is, in perspective. One must never forget that, however fed up one may get with the results of this morning. Most of all, I place my faith in the people of Northern Ireland, who are bitterly disappointed, as is clear from the phone calls that we have received in the past 10 minutes--let alone what I believe will happen this afternoon in terms of public opinion.

During this year, and particularly in recent weeks at the beginning of the parades period, people in both communities have shown that the strongest of disagreements can be expressed peacefully. For their sake, we, the Irish Government and all the Northern Ireland parties must not be disheartened. We must continue to work to implement the agreement that the people have approved.

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