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House of Commons
Thursday 16 September 2004
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
Oral Answers to Questions
TRADE AND INDUSTRY
The Secretary of State was asked—
Postal Services (Scotland)
1. Mr. Michael Weir (Angus) (SNP): What recent representations she has received in respect of postal services in Scotland. [189170]
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The Department receives representations on postal services issues from a wide range of people and institutions, many of which concern services in Scotland.
Mr. Weir: I thank the Secretary of State for that answer. She will be aware of the less than stellar performance of Royal Mail management in meeting delivery targets over the summer. Is she aware, however, of the reports in Scotland that the management have again floated the idea of abandoning the universal service obligation, which is so important to rural areas of Scotland? Can she tell us if she has had formal approaches on this point, and will she assure the House that she will not agree to any such proposal?
Ms Hewitt: The universal service obligation is written into law as a result of changes made by our Government. Of course we are not going to abandon that. I have had no formal representations on this issue.
Although, on the issue of quality of service, there was very poor performance earlier in the year—about which all of us are unhappy—I am pleased to say that in more recent months that quality of service has been improving significantly. In Dundee—I am sure that the hon. Gentleman will share my pleasure about this—the delivery of first-class post on the following day has gone up to almost 93 per cent., which is one of the best performances in the country.
Mr. Alistair Carmichael (Orkney and Shetland)
(LD): The Secretary of State may be aware that the particular postal service of greatest concern to my constituents in Orkney and Shetland is the parcel post. Since deregulation of the parcel post, mail order companies in particular have increasingly either refused to deliver to
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addresses off mainland Britain, or have charged extra for it. Can I ask the Secretary of State when the Government will get to grips with that issue and ensure that people in island communities can enjoy the same level of service as those on the mainland?
Ms Hewitt: I sympathise with the hon. Gentleman's point on behalf of his constituents. There has, of course, always been a problem with meeting the quality of service targets in those most remote communities, particularly island communities. Post Office management are working on that, and certainly I and the Under-Secretary, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), will draw it to their attention again.
Business Start-ups
2. Mr. Jim Cunningham (Coventry, South) (Lab): How many new business start-ups there were in Coventry, South in the last year for which figures are available. [189171]
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): In Coventry, it is estimated that there were 1,800 business start-ups in 2003. The latest official figures based on VAT registrations show that 620 businesses registered for VAT in Coventry, which is a welcome increase on the previous year.
Mr. Cunningham: I thank my hon. Friend for that answer, but may I ask what assessment he has made of the potential withdrawal of Jaguar from Coventry, and what the impact would be on small businesses, bearing in mind the fact that more than 4,000 jobs could be at stake were Jaguar to pull out of Coventry? What assistance has Ford had in term of grants over the past 18 years from Government?
Nigel Griffiths: I am not aware that any decision has yet been taken. Jaguar, I understand, is considering its operations, but is rightly insisting first on briefing its work force on the company's future production plans. My right hon. Friend the Secretary of State will, of course, discuss the implications of any decision with the company as soon as an announcement—if any—is made.
Brian Cotter (Weston-super-Mare) (LD): The Minister refers to increasing numbers of people going into business. Is he aware of figures that I have received from the Library this week that since 1992, the number of young people aged between 16 and 29 starting their own business has fallen by some 39 per cent? I ask the Minister to consider that in view of the fact that we need to encourage enterprise, particularly among young people. Will he also address the great concern that people who go to university, whom we need to start businesses, will be burdened by debt after university and will therefore be unable to get started?
Mr. Speaker: Order. That is very wide, but perhaps the Minister can answer some part of the question.
Nigel Griffiths:
In relation to business start-ups in Coventry and elsewhere, I do not recognise those figures
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at all. Last year, 63,000 young graduates started businesses. Last week, Barclays published a survey of new business start-ups, which showed that 288,000 businesses started in the first six months of the year, an increase of some 19 per cent. on last year.
Last year's figure of 455,000 new businesses represented a 19 per cent. increase on the previous year, the largest since Barclays began its surveys in 1988. Both start-ups and the Government's record are very strong.
Mr. Michael Foster (Worcester) (Lab): As my hon. Friend will know, many businesses starting up in Coventry will be there to support the motor industry and Jaguar in particular. Will he and the Secretary of State impress on the Ford Motor Company that it risks losing the distinctive marque—the Britishness—of the Jaguar if it is seen rolling off a production line somewhere in Detroit?
Nigel Griffiths: I know that my hon. Friend speaks with much authority, having worked at the Browns Lane plant for many years. I fully appreciate that the smaller companies—small and medium-sized enterprises, of which there are dozens in the supply chain—depend on that level of work. That is why, as part of its manufacturing review a few years ago—the first major review for 30 years—the Department focused on the issue, and the automotive sector has benefited. None the less, I share my hon. Friend's concern about the implications of any cuts in any factory on the supply chain and on SMEs.
Industrial Competitiveness
3. Mr. John MacDougall (Central Fife) (Lab): What measures she is taking to ensure that UK industry is competitive; and if she will make a statement. [189172]
The Minister for Industry and the Regions (Jacqui Smith): Since the implementation of the Government's manufacturing strategy in 2002, a range of measures has been taken to improve business performance and competitiveness. For example, the manufacturing advisory service has become a huge success as a source of practical help for manufacturers throughout England and Wales, generating more than £67 million of added value since 2002—around £100,000 for each company with which it has worked. We have also doubled our support for science and innovation. In June 2004, we announced a 10-year science and innovation investment framework, giving a sustained long-term boost to science funding.
Mr. MacDougall: I am grateful for that response. However, does my right hon. Friend agree that we must continually examine areas in which we compete in view of developments in countries such as China, where £50 a week is considered a good wage? Should we not consider the impact of that on our ability to compete in whichever markets seem to be in the best interests of the country's development, and must not our response to that challenge be based on our educational and training abilities and, indeed, our inventiveness?
Jacqui Smith:
My hon. Friend has identified the key challenge for manufacturers—the global competition
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that they face. He is absolutely right: we cannot compete in the world today on the basis of low wages, nor should we want to. As he says, we must compete on the basis of innovation and high skills, building on our inventiveness. That was the key point in the progress report on the Government's manufacturing strategy, which we published in July. Also, through the manufacturing forum that we are to establish we will chase progress on our action plan.
Mr. Mark Field (Cities of London and Westminster) (Con): As the Minister will recognise, since 1997 Britain has fallen rapidly down the world competitiveness league table in comparison with other leading industrial nations. Why does she think that has happened?
Jacqui Smith: What I recognise is that many independent assessors acknowledge that the United Kingdom is actually one of the most competitive and best places in the world in which to do business. They also recognise that under the hon. Gentleman's party we saw the decimation of our manufacturing industry and a failure to invest in the things that make a difference—skills and innovation. I am afraid that the Conservatives have not learned their lesson. Their proposals for cuts in the Department of Trade and Industry—
Mr. Speaker: Order. The Minister must stop.
Mr. John McFall (Dumbarton) (Lab/Co-op): The Minister will be aware that for the UK to be competitive, good corporate governance is essential. Auditing is a central part of that. My right hon. Friend will also know of the campaign by the big four accountancy firms to cap auditor liability. Will she cast a wary eye over it before the Government give in to this case of special pleading?
Jacqui Smith: My right hon. Friend will know from the discussions last week, from the discussions this week in Committee on the Companies (Audit, Investigations and Community Enterprise) Bill and from the consultation last December, that we have set out clearly what our objectives for audit need to be. Those are a competitive audit market, the ability for businesses to get audits and ensuring that quality is raised. We will judge any proposals for changes to auditor liability against those objectives. We set out the details of what we will and will not accept in the written ministerial statement last week. We are prepared to look at further measures that would pursue those objectives. We are clear that that is what we need in terms of any reform.
Mr. Stephen O'Brien (Eddisbury) (Con): It is the vast gulf between what the Government say and what they do that is undermining UK competitiveness. To be precise and to give the answer that the Minister should have given my hon. Friend the Member for Cities of London and Westminster (Mr. Field), we know from the World Economic Forum's global competitiveness ranking that the UK has slipped from fourth to 15th place since Labour came to office, not least through the over-regulation of British business under this Government.
Let us consider the use of sunset clauses, which put time limits on business regulations, for example. The 2001 Labour party manifesto, to which all Labour
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Members signed up, pledged to use sunset clauses. The Cabinet Office has issued guidelines to civil servants telling them that they
"must always consider whether sunsetting . . . is appropriate".
Why, then, did the Minister for Small Business and Enterprise describe sunset clauses in June 2004 as "the quack cure"—
Mr. Speaker: Order. I want shorter questions than that. That will do from the hon. Gentleman.
Jacqui Smith: I must draw the hon. Gentleman's attention to the World Bank study of 145 countries, entitled "Doing Business in 2005", which placed the UK top in the EU with the best business conditions. It said that
"all the top countries regulate but they"—
"do so in less costly and burdensome ways."
We will not make any apology for regulating to ensure decent working conditions in this country. The hon. Gentleman, through his sunset clauses, wants to take those opportunities away from our work force.
Mr. O'Brien: Well, that is another broken promise from the 2001 Labour party manifesto. There is not a single example of a sunset clause being used, and on average there have been 4,000-odd regulations a year under Labour.
Let us take one other example of the threat to the UK's competitiveness. Does the Minister agree that if she scraps Britain's opt-out from the EU working time directive preventing people from working more than 48 hours a week, our constituents will be justified in concluding that she will be abolishing the chance for hard-working men and women in this country to do overtime?
Jacqui Smith: On top of the decent working conditions that we put in place, we recognise the importance of flexibility in the labour market and the ability for workers to choose with respect to the opt-out. That is the position that we have taken in our negotiations in Europe. It is a bit rich for Conservative Members to lecture us on employment when it is under this Government that there are 1.9 million more people in work, and it was under the hon. Gentleman's Government that people were thrown on the scrap heap.
Jonathan Shaw (Chatham and Aylesford) (Lab): In order to continue to be competitive, many intensive energy industries, especially the paper industry, are keen to move to combined heat and power, but at present it is not cost-effective for them to do that. The Government published their CHP framework in April. Is my right hon. Friend able to shed any light on whether any progress has been made on that framework?
Jacqui Smith:
Perhaps I can provide my hon. Friend subsequently with some more detail about the progress on that, but the important point is that we must, in our energy policy, both deliver the environmental objectives that we have set out—we are working across Government, including with the Department for
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Environment, Food and Rural Affairs on that—and provide the security of supply and the energy options necessary to ensure that our industry is successful.
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