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GATS Negotiations

9. Ann McKechin (Glasgow, Maryhill): If she will make a statement on her Department's recent consultation on the World Trade Organisation general agreement on trade in services negotiations. [90940]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The consultation ended on 3 January with some 700 replies, including one from my hon. Friend, for which I thank her. I will publish a summary and a response from the Government as soon as possible.

Ann McKechin : I thank my right hon. Friend for her reply. She will be aware that in the current GATS agreement the European Union placed a horizontal limitation on its service commitments to strengthen the protection against the use of public utilities and the manner in which they provide public services. Can she assure the House that she will resist calls in the negotiations to remove that limitation? How will she protect the way in which public bodies in the UK can provide and control public services in sectors such as health and education, even if they are delivered either wholly or partially by the private sector?

Ms Hewitt: My hon. Friend is right about the existing horizontal limitation. A number of the consultation replies stressed the need for Europe to maintain that limitation. I strongly see the force of that argument, although we have not seen the Commission's draft proposals on the limitation. However, as I have stressed before and would stress again today, we have no

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intention of making any GATS commitments that would call into question our ability to maintain public services.

Adam Price (East Carmarthen and Dinefwr): Why did the Government refuse to publish in full all the requests made by other WTO members to liberalise UK public services? Can the right hon. Lady confirm that those requests included the elimination of the subsidy to the BBC and the reprivatisation of Network Rail?

Ms Hewitt: We did not publish the requests for the simple reason that our partners in the WTO, including a number of developing countries, wanted to keep the requests confidential. As a process of negotiation is under way, it makes sense to do that. What we have done is to publish a summary of all the requests made to us. We have also published an 88-page detailed consultation document on the website, and will shortly publish a summary of the responses and our response in turn to them. We have been more open and transparent in the process than any other WTO member. We continue to press our European Union colleagues for the maximum possible transparency in the EU, consistent with ensuring that we have effective negotiations.

British Aircraft Industry

10. Mr. John Wilkinson (Ruislip-Northwood): What discussions her Department has had with the Ministry of Defence on the British aircraft industry. [90942]

The Minister for Employment Relations, Industry and the Regions (Alan Johnson) : The Department maintains a close and regular dialogue with the Ministry of Defence on industrial matters relating to major defence procurements and defence industrial policy. Inevitably, those discussions have, where appropriate, touched on the British aircraft industry.

Mr. Wilkinson : Is not the Minister's Department concerned at the inordinate delays in introducing into service in the Royal Air Force the Eurofighter, the A400M and the new tanker aircraft? Or perhaps the Secretary of State for Defence just does not care because British Aerospace, the main participant, is not British in his eyes.

Alan Johnson: The hon. Gentleman asks about three specific projects, which we are extremely concerned to bring to fruition. From his great experience of the issues, he will know that they are not entirely under the control of the British Government. Indeed, we are waiting for the German Government to come into line on the A400M. We very much care about the aerospace industry, in particular about BAE Systems, which is why I am due to receive the interim report of the innovation and growth team report on aerospace next week from Sir Richard Evans. I think that that will map the future for aerospace in this country.

Mr. Peter Pike (Burnley): Does my hon. Friend accept that it is not just the big players in the aerospace industry, such as BAE Systems and Rolls-Royce, that are dependent on Ministry of Defence work? Many

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highly skilled aerospace businesses in constituencies such as mine also depend on the contracts being given to the British aerospace industry.

Alan Johnson: Of course I accept that point. My hon. Friend knows full well that we have the biggest defence order book for the past 50 years, which provides a tremendous opportunity for British companies—including small and medium-sized enterprises in the supply chain generally, some of which are in my hon. Friend's constituency.

David Burnside (South Antrim): BAE Systems is the biggest producer of aircraft parts and aircraft in the United Kingdom. Does the Secretary of State for Trade and Industry agree with the Secretary of State for Defence that, through its ownership, BAE Systems can no longer be classified as a British company? For example, in the decision between Thales and BAE Systems on the contract for the two aircraft carriers, would not awarding the contract to Thales, which has a major contributor in Harland and Wolff in Belfast, be a more patriotic choice for the British defence industry?

Alan Johnson: We have just agreed a defence industrial policy between the Ministry of Defence and Department for Trade and Industry that has been widely welcomed and which makes it absolutely clear that we are looking for value for money for the British taxpayer. BAE Systems is a British-controlled company in terms of the competition for two 55,000–tonnes carriers. Whichever contract is successful, it will mean jobs and prosperity for British workers—but that contract must be awarded on a proper competitive basis.

Postal Services

11. Mr. Andrew Lansley (South Cambridgeshire): When she last met the chairman and chief executive of Royal Mail to discuss postal services and prices; and if she will make a statement. [90943]

The Minister for E-Commerce and Competitiveness (Mr. Stephen Timms): Ministers and officials have a regular dialogue with directors of Royal Mail on a range of issues relevant to the role that my right hon. Friend the Secretary of State has as a special shareholder of the company.

Mr. Lansley : Will the Minister say when he or the Secretary of State last met the chairman and chief executive of Royal Mail? Was the price control regime proposed by Postcomm discussed? In particular, if Postcomm withdraws from the extension of the scope of price control over Royal Mail—which seems to me and others who believe in competition to be somewhat excessive—will the Post Office not seek to delay matters by going to the Competition Commission? Incidentally, did the Minister express reservations about the Post Office's proposals in relation to format-based pricing?

Mr. Timms: The hon. Gentleman is an experienced observer of arrangements for competition regulation and will know that there have been animated discussions between Royal Mail and Postcomm over Royal Mail's recent application for a price rise. Postcomm is an

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independent regulator and it is important that it and Royal Mail agree a way forward that is acceptable to all parties. I am optimistic that will be the outcome. In terms of the discussions, Postcomm is a fully independent regulator. In looking at the current price rise application, the Government have of course submitted information of which Postcomm will take account but the decision is entirely for Postcomm.

Mr. Bob Blizzard (Waveney): Returning to the vital role that rural post offices play and bearing in mind that most village post offices are also shops, is not the best way to ensure their survival for the people who live in villages to use those post offices regularly? Is it not the case that if all the people who regularly drive to a supermarket and spend #40 or #50 to fill their car boots spent just 10 per cent. in their village shops/post offices, that would ensure the survival of the rural network?

Mr. Timms: My hon. Friend is absolutely right. The Post Office has an important role to play in taking advantage of the big investment that has been made in new technology and offering new services that will attract people back to the post office network, to ensure that it has a thriving future.

Manufacturing Industry

12. Mrs. Cheryl Gillan (Chesham and Amersham): What recent assessment she has made of the state of manufacturing industry. [90944]

The Minister for Employment Relations, Industry and the Regions (Alan Johnson): We are continuously monitoring and tracking the progress of manufacturing in partnership with our key industry stakeholders.

Mrs. Gillan : I am sure that the Minister is constantly tracking the manufacturing industry. The Engineering Employers Federation estimates that 500,000 jobs have been lost in manufacturing since the Government took power in 1997. Yesterday the Office for National Statistics announced that in the three months to November 2002, manufacturing jobs fell by 155,000 on the same period last year. Does the Minister think that the Government are living up to the Secretary of State's promise to think of manufacturing as an integral part of the future of our economy?

Alan Johnson: Yes, I do. Manufacturing is an integral part of our economy. It is crucial to the future of the country, as it represents 60 per cent. of our exports and a fifth of our gross domestic product. Manufacturing is indeed facing problems in this country, as it is in Japan and in the USA. There is a global downturn—the first synchronised global downturn in those three parts of the world since 1974. Manufacturers know that it is a tough world out there. This is not the ritual dance in which we sometimes engage, but perhaps I could have a quick little pirouette: 2.75 million jobs in manufacturing were lost under the previous Government. We are seeking to draw up the first manufacturing strategy in this country for 30 years, and to address the practical problems facing manufacturers. The Engineering Employers Federation, which is entirely engaged in that process, understands that full well.

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