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House of Commons

Thursday 27 January 2005

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—

Iraq

1. Mr. Tam Dalyell (Linlithgow) (Lab): What action her Department is taking to support British firms in bids for reconstruction projects in Iraq. [211107]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Through UK Trade and Investment, we provide a range of advice and support to British firms that are interested in helping with reconstruction work in Iraq. That advice takes full account of the security situation in Iraq and the terms of Foreign and Commonwealth Office travel advice.

Mr. Dalyell: Realistically, as long as we are seen as an occupying army, and especially in light of those appalling pictures, which have had a dreadful effect in the Arab world, is there any possibility of proper reconstruction until the forces have been withdrawn and Iraq has a Government of its own?

Ms Hewitt: I share the condemnation by my hon. Friend and many others of any abuse of prisoners that has taken place. Of course, the security situation is difficult, but the reality in Iraq is that its economy is growing and its water and sanitation services are significantly better than they were under Saddam Hussein. We have got thousands of schools and hospitals working, and we have got more Iraqis in jobs. I am proud of the fact that many British companies are bringing their expertise to help with that reconstruction.

Richard Ottaway (Croydon, South) (Con): If I can take the opposite view to the hon. Member for Linlithgow (Mr. Dalyell), such is the state of Iraq's infrastructure that it can be remedied only by private investment. Private investors will invest only if the situation is militarily secure and remains so. Does the right hon. Lady agree that the armed forces will have to stay there for a considerable period while the infrastructure is repaired?
 
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Ms Hewitt: My right hon. Friend the Prime Minister has made it clear that we will continue to support the Iraqi people in moving towards self-government. The elections that will take place this weekend are another step in that direction and, of course, we will continue to support the Iraqi people and the new Iraqi Government. They will have to make the judgment about how long they want coalition forces to support them but, for the moment, we will continue to provide that support both directly and by training Iraq's own police and security forces.

Liz Blackman (Erewash) (Lab): TQ Education and Training Ltd in Long Eaton in my constituency has just been awarded a $10 million contract to provide training for the Ministry of Electricity in Iraq. It was extremely pleased with the support that UK Trade and Investment gave it by providing information on logistics and the trading environment and putting it in touch with the appropriate contacts in the Iraqi Government. Is that not an excellent example of the DTI supporting British firms so that they can play their part in much-needed reconstruction in Iraq?

Ms Hewitt: Indeed it is. May I, through my hon. Friend, congratulate TQ Education and Training, which will be doing enormously important work with the Ministry of Electricity, just as other firms will help staff in the Ministry of Oil to gain the expertise that they need? That has been possible only because of the superb work of UK Trade and Investment and I am sure that she agrees that it would be disastrous if the Opposition had their way and effectively abolished it.

Malcolm Bruce (Gordon) (LD): Does the Secretary of State acknowledge that, while the Export Credits Guarantee Department has announced $100 million of additional short-term cover for Iraq contracts, £1 billion, with interest, of historic debts have had to be written off in Iraq and £3.1 billion of outstanding ECGD debts are deemed irrecoverable? Can she tell us how much British taxpayers may have to put at risk and, more particularly, will she undertake to report to the House the extent of any future write-offs? This is not a blank cheque for British companies, and it may not be secure because of the security situation.

Ms Hewitt: I hope that the hon. Gentleman welcomes the fact that the Paris Club recently agreed to forgive 80 per cent. of Iraq's outstanding debts, as that is important in enabling reconstruction to take place. In the long term, with the enormous resources that Iraq has, there is no reason at all why it should not be able to repay debts. The ECGD, within a stringent risk and commercial framework, makes careful judgments on every country where it is asked to provide cover and, of course, on companies' individual applications.

Mr. David Clelland (Tyne Bridge) (Lab): My right hon. Friend rightly acknowledged the contribution that British businesses make to construction and reconstruction in Iraq. PB Power in my constituency has received a grant from the Department, and the company is now using its considerable skills to create a national
 
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electricity generation and distribution system in Iraq to power hospitals, workplaces, homes and schools for the ordinary citizens of Iraq.

Ms Hewitt: I congratulate PB Power, which is doing immensely important work, along with many other companies. I hope that the whole House will join me in paying tribute to the British firms and British workers who are working alongside the Iraqi people and helping to rebuild that country in difficult and often dangerous circumstances.

News Industry Supply Chain

2. Angela Watkinson (Upminster) (Con): What plans she has to reform the news industry supply chain. [211108]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): In August last year, the Secretary of State for Trade and Industry approved recommendations from the Office of Fair Trading to revise the newspaper wholesalers code of practice so as to remove current restrictions on retailers selling on newspaper titles to other retailers within the same wholesaler territory. We hope that removal of those restrictions will help promote the practice of selling on and give retailers increased choice and flexibility of supplier.

Angela Watkinson: Mr. Ashia, Mr. Patel and Mr. O'Connor, three independent newsagents in my constituency, have expressed concern about the wholesale monopoly that gives them no choice of supplier. They are backed up by the National Federation of Retail Newsagents, which says that publishers and wholesalers suggest

"that thousands of small newsagents could be threatened, if current agreements are not given a Block Exemption from scrutiny under the Competition Act 1998"

whereas, in reality,

"this is no more than a ruse to allow publishers and wholesalers to maintain their stranglehold over the news industry."

What would the Minister say to the three newsagents who contacted me?

Mr. Sutcliffe: The hon. Lady and other hon. Members have been approached by a large number of organisations including the National Federation of Retail Newsagents, the Newspaper Society and wholesalers. The issue is complicated but we want to preserve maximum choice for retailers, particularly local newsagents. In the repeal of vertical exclusions, we undertook to ask the Office of Fair Trading to discuss the matter with the various sectors involved and to report back to us. We are expecting that report in the very near future and we hope that it will address many of these issues.

Mr. Peter Pike (Burnley) (Lab): My hon. Friend will recognise that local newsagents are an important community service. They are increasingly squeezed by superstores selling newspapers and they are not getting a fair deal from the wholesalers. It is important that we
 
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get the report as soon as possible so that they get a fair deal, stay in business and continue to provide a local community service.

Mr. Sutcliffe: My hon. Friend has championed that cause at Question Time and in debates in the House about the balance between wholesalers and small newsagents. It is important that small newsagents are protected, because of the service that they offer to our communities. We must wait for the OFT report, which I expect to be available soon because the extension of the repeal ends on 1 May. I acknowledge the point that is being made and hope that we will reach the right decisions quickly.

Mr. Henry Bellingham (North-West Norfolk) (Con): I am grateful for what the Minister has said so far, but is he aware that, over the past decade, the combined effect of margin squeezes, spiralling carriage costs and poor wholesaler service has forced thousands of small newsagents into bankruptcy and closure? The result is that there are already 1,000 postcode sectors in the UK serving more than 4 million people that have no access to a newsagent. Does the Minister agree that, along with the closure of sub-post offices and small garages, that is bad news for the small firms sector and for communities, which is why it is so important that he acts?

Mr. Sutcliffe: I acknowledge the points that the hon. Gentleman raised. He will be aware of the process that we have to undertake under the competition regime. We also have to ensure maximum consumer choice, so that people can buy a paper or magazine from a local newsagent, supermarket, garage or wherever. I recognise the significant role that local newsagents play in our communities and their wider social role. I hope that the OFT recommendations will give us an opportunity to make sure that local newsagents are protected, but we must wait for the process to take its course.

David Taylor (North-West Leicestershire) (Lab/Co-op): May I declare an interest to the extent that generations of my family ran village post offices and newsagents? Does the Minister agree that it is important that the views of independent newsagents are not misrepresented? There appears to be a risk of that today. They have said that the solution to the supply and distribution problems faced by the industry will not be found by simply enacting a wide-ranging UK block exemption that prevents scrutiny of a market that is already highly concentrated and restricted, so they are in favour of reform of the kind that is anticipated. That is the case, is it not?

Mr. Sutcliffe: My hon. Friend takes a great interest in newspapers. I enjoy our early morning Tea Room meetings reading them. He is right that, when the Secretary of State took the decision last year, 12 months were given before implementation to allow the industry an opportunity to come together and work out a good relationship. That is why the Office of Fair Trading was involved. I am aware that some people feel that the block exemption needs to be continued, but I know that the OFT is taking all these matters into consideration, and when it produces its report, we will make a judgment on it.
 
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