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Mr. Darling: As my hon. Friend is aware, we believe that we need radically to reform the system of agriculture support in Europe. However, negotiations are taking
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place at the moment and they have to conclude, to be realistic, by the end of July. It is clear that there are three main problems: the perception of the EU offer; support for United States agriculture; and access to manufactured goods and other services in countries such as Brazil and India. Movement will be required from everyone if we are to reach an agreement. The prize of getting that agreement in the current round is extremely great and we want to encourage it, but if negotiation is to work all parties must show sufficient flexibility, and they need to do it soon.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): The Secretary of State will be aware that the trade deficit with China has increased by more than 500 per cent. since 1997 and stands at a staggering almost £10 billion. When I asked how many trade deals the Prime Minister had signed in the last eight years, the reply was:

So when did the Secretary of State last meet his friend Commissioner Mandelson? What was the outcome of those discussions, and what will he do about this disastrous and deteriorating situation?

Mr. Darling: As I said a few moments ago, we want to increase our trade with China. We are well aware of the situation and will do everything that we can. We also want to encourage the Commission to do what it can to increase trade and I am confident that the position will improve in years to come.

Company Directors' Responsibilities

5. Lorely Burt (Solihull) (LD): What steps he expects company directors to take to ensure they have sufficient regard to the interests of employees and the impact of the company's operations on the community and the environment. [75722]

The Secretary of State for Trade and Industry (Mr. Alistair Darling): The Company Law Reform Bill, which we debated two days ago, will ensure that company directors must have regard to the effect of their company’s operations on the community and the environment in promoting the success of the company for the benefit of its members.

Lorely Burt (Solihull) (LD): I am genuinely seeking guidance. Clause 158 of the Bill states that directors have a duty

but that in doing so they should have regard to other matters. How far should the company have such regard when there could be conflict for shareholders? For example, Tesco, South Africa, Shell—

Mr. Speaker: Order. I am sure that the Secretary of State can manage an answer.

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Mr. Darling: The hon. Lady makes a good case to be a member of the Committee that will scrutinise the Bill’s 950 clauses. The Minister for Industry and the Regions, my right hon. Friend the Member for Barking (Margaret Hodge), is in Europe today, sadly—[Hon. Members: “Sadly?”] Well, I think she is happy to be in Europe, but sadly she is not in the Chamber. However, she will be keen to engage with the hon. Lady on her question. We discussed the matter at length a couple of days ago when we said that we believe it important that company directors should have regard to a variety of things, including environmental and social concerns, but at the end of the day they have to use their best judgment to come to a view about what is best for their company. Their loyalty has to be to the company and its members; it cannot be divided, as I said the other day.

Most people, including, I think, our party, welcome what we have done. I am sorry that the Conservatives are already showing signs of trying to undermine that. Despite what they say, the amendments they are tabling appear to be removing that environmental commitment.

Alun Michael (Cardiff, South and Penarth) (Lab/Co-op): Does the Secretary of State agree that principles such as those of fair trade and sustainable development can best be pursued in a spirit of partnership, making use of the principles of enlightened shareholder value set out in the legislation? Will my right hon. Friend encourage campaigners, whether on environmental or trade issues, to take advantage of that opportunity and be part of the consensus, which is good for business, good for the environment and good for people?

Mr. Darling: I strongly agree with my right hon. Friend. As I said on Tuesday, the Government have struck a sensible balance, making clear what directors are supposed to do. Members would do well to remember that in another place many people opposed the Bill and would dearly like us to return it in a way that would allow them to get back into it. It is obvious that no matter what the Conservative leader says about the environment, his Front-Bench Trade and Industry team are tabling amendments to remove the environmental commitment—[ Interruption.] One can go only on the amendments that have been tabled so far. Perhaps there will be another change of heart, so I look forward to hearing the Conservatives’ renewed commitment if that is the case.

UK Trade (India)

6. Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): If he will make a statement on UK trade with India. [75723]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): Bilateral trade and investment with India continues to grow. In 2005 exports to India rose by just over 25 per cent., making the UK the second biggest exporter to India in the European Union. The UK remains the preferred investment location for Indian headquarter operations in Europe.

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Dr. Kumar: May I praise the Government for making a tremendous effort to try to strengthen our relationship with India as India emerges as a world power? [Hon. Members: “Yes.”] What progress has been made since the last joint declaration between India and ourselves in 2004, which was signed by our Prime Minister and the Indian Prime Minister, Manmohan Singh, regarding trade issues?

Jim Fitzpatrick: It is obviously clear that the whole House agrees with my hon. Friend’s kind words about the Government’s record. His supplementary question was about developments since the joint prime ministerial meeting. That meeting reinforced or began initiatives, such as the second conference in January this year of the joint economic and trade committee. The United Kingdom trade and investment group has the second largest staff complement in India, compared with other countries around the world, with 72 staff and a £9 million commitment. There is an inward investment summit due in London this year in the autumn—again for both Prime Ministers.

Miss Julie Kirkbride (Bromsgrove) (Con): Is the Minister aware that the area with probably the highest positive trade balance with India is the British higher education sector, which now faces increasing competition from other countries that would like to attract Indian students? What further measures does he think we should take to get more young people from India to study in the United Kingdom in the hope that one day, when they set up their own successful businesses, they might want to trade with the United Kingdom?

Jim Fitzpatrick: The hon. Lady makes a fair point. The Government committed £10 million extra to bursaries as a result of the prime ministerial meetings to which my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) referred a moment ago. As well as a variety of other measures, a high-level trade group was set up to look at where we can further develop relations with India and the Indian Government, including in education. I look forward to progress, as she obviously does.

Mr. Lindsay Hoyle (Chorley) (Lab): I wonder whether my hon. Friend is aware that one of the biggest exports to India is scrap metal, which I do not think should count. We ought to be seeing more manufactured goods. What can he do to ensure not only that British companies have a bigger presence in India, but that there is a good open market for finished British products?

Jim Fitzpatrick: I hear what my hon. Friend says. Clearly, we are committed to developing trade and economic contact with India. I know that the Trade and Industry Committee initiated its own inquiry in November last year and it is due to report next week. We are looking forward to that report and its recommendations, because obviously it will give us some directions on how the Committee thinks we should make further progress.

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Manufacturing Industry

7. Dr. John Pugh (Southport) (LD): What assessment he has made of the impact of venture capital firms on employment in UK manufacturing industry. [75724]

The Minister for Energy (Malcolm Wicks): Modern manufacturing is critically dependent on investment for successful performance, growth and employment generation. Venture capital plays a key role in providing that investment.

Dr. Pugh: I thank the Minister for that response, but does he realise that venture capital firms are closing genuinely profitably factories in this country, such as the Chewits factory in my constituency, simply to relocate production to eastern Europe and maximise their returns? Does the Minister regard that as undesirable, or inevitable, or as representing a clash of interests between the manufacturing industry and the City?

Malcolm Wicks: I am aware of the sad news about Chewits, which could lead to the loss of 130 jobs in September. I am happy to discuss that matter, in terms of advice to those workers, with the hon. Gentleman if that would be helpful. However, the good news is that Southport has a buoyant labour market. Its claimant unemployment rate was just 1.9 per cent in April. That is well below the national average and the national average is historically low. However, as I said, I offer to discuss these particular matters with him.

Rob Marris (Wolverhampton, South-West) (Lab): May I caution my hon. Friend against putting too many of his eggs in the venture capitalist basket? He and his Department should continue to support manufacturing in the heartlands such as my area in the west midlands. All hon. Members will be aware of the difficulties that we have had with Rover and Peugeot. Will he tell me what steps the Government are taking to change the mood music on manufacturing? Manufacturing has not been as high on the Government’s list of priorities as it should have been in the last few years. It is now starting to come up. Will he tell me what further steps might be taken, such as a manufacturing summit, to show that the Government care and wish to increase investment?

Malcolm Wicks: Of course we are aware that there has been a long-term decline in manufacturing industry throughout much of the European Union, yet manufacturing remains a vital part of the British economy and, in many respects, is still buoyant. Indeed, I note that for the three months ending in April 2006, there were more than 50,000 unfilled vacancies in manufacturing industry. My hon. Friend is right to say that, as well as the further development of the service sector, manufacturing is vital to the economy.

David Simpson (Upper Bann) (DUP): Can the Minister tell us which regions of the United Kingdom have had the largest number of job losses in the manufacturing sector?

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Malcolm Wicks: Yes, I can give the hon. Gentleman that information, but it is detailed, so I will not attempt to do so off the top of my head. I will be happy to write to him. Obviously, the overall picture is of the move back to full employment, with 2 million more jobs created since the spring of 1997—I pick out 1997 almost at random—but that nevertheless hides regional variations. I will be happy to supply the information, which is published, to the hon. Gentleman.

Sir Nicholas Winterton (Macclesfield) (Con): May I warmly support the views expressed by the hon. Member for Wolverhampton, South-West (Rob Marris)? While venture capital firms can play a valuable part in the provision of investment for manufacturing, they too often dilute the ownership of a firm. The cost of venture capital is too high, because manufacturing industry needs long-term investment. What can the Government do to encourage long-term investment in manufacturing, which is the only way in which we will guarantee a manufacturing base in this country in the long term?

Malcolm Wicks: The best way is with the healthy and buoyant macro-economic environment that the Government and the Chancellor have provided, with low interest rates and inflation. Surely providing that is the role of the Government and the best thing that they can do, rather than making too many interventions and over-regulating. We are committed to manufacturing industry, which is a buoyant part of the British economy. Venture capital has a role to play, but that role is relatively small when put alongside other forms of investment. We share the view that is being expressed in the House about the importance of manufacturing industry. Our judgment is that the best way to stimulate and encourage the industry is through prudent—to coin a word—macro-economic management.

Postal Services

8. Mr. Philip Hollobone (Kettering) (Con): If he will make a statement on the future of rural post offices in Northamptonshire. [75725]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): The Government are committed to supporting the rural post office network, as I briefly explained a few moments ago. That includes support for branches in Northamptonshire, with annual social network payments of £150 million for the next two years. The Government will set out future proposals for the network in due course and after consultation.

Mr. Hollobone: Following the Government’s savage assault on the sub-post office network in urban centres, is it not the case that, in the next five years, every rural sub-post office in Northamptonshire will face the threat of closure due to the end of the Government’s support mechanism for rural post offices and the abolition of the Post Office card account?

Jim Fitzpatrick: The Government invested £210 million in the urban reinvention programme to do all that they could to ensure that a sustainable post office network was maintained in the cities. We will do all that we can
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to do the same for rural areas. I cited earlier some of the figures that make life commercially difficult for the Post Office. However, we spent £500 million on the Horizon project, which modernised computer systems for all post offices so that new products could be provided. The Post Office is now the UK’s No. 1 provider of foreign exchange and the largest individual provider of travel insurance. It launched its new instant saver account in March 2006. The Post Office is doing all that it can to ensure that it provides business as well as possible.

Mr. Peter Bone (Wellingborough) (Con): Why has the policy failed so horribly in Northamptonshire, and especially in Rushden, where Avenue road, Bedford road, London road and Newton road post offices, which served the main town of Rushden, have closed? Clearly the Government’s policy has failed.

Jim Fitzpatrick: We do not believe that we have failed in our policy. The target for the urban network was to make sure that 95 per cent. of people were within a mile of a post office, but the figure is actually 99 per cent. We will look at the rural network in due course. The hon. Gentleman knows that, because of changing habits, the rural network is losing £3 million a week. We cannot force people to use rural post offices, but we will do all that we can to make sure that we maintain a sustainable network.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): The Minister says that the customers have walked away. The Government forced them away. They made it very difficult for people to get card accounts, but now that people have finally struggled over all the hurdles to get one, the Government are moving the goalposts and taking the accounts away. The Government are playing their part in taking business away from rural post offices.

Jim Fitzpatrick: I hear what the hon. Gentleman says. I said in a response to the hon. Member for Orkney and Shetland (Mr. Carmichael) that the Government are doing what we can and will look to maintain the most sustainable network possible. The Department for Work and Pensions is in discussions with the Post Office about the future of the card account, which is due to close in 2010. I mentioned the £500 million Horizon project. We also have a £150 million subsidy for the next two years. The Government are clearly committed to doing what we can to maintain a sustainable post office network.

Corporate Social Responsibility

9. Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): What steps his Department is taking to promote and implement the Organisation for Economic Co-operation and Development guidelines for multinational enterprises as part of the Government’s corporate social responsibility policy. [75726]

The Minister for Energy (Malcolm Wicks): The UK national contact point—terrible jargon which refers to an individual official in the Department of Trade and
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Industry—works with business and non-governmental organisations to raise awareness of the OECD guidelines for multinational enterprises and to promote their use by companies in developing their own codes of conduct. The Government will shortly publish their response to a stakeholder consultation on possible improvements to the national contact point’s promotion and implementation of the guidelines.

Mark Lazarowicz: The Minister for Industry and the Regions, who replied to Tuesday’s debate on company law reform, referred specifically to the guidelines as an important means of addressing concerns about international corporate social responsibility. What steps will the Government be taking to ensure that the guidelines are given teeth, both at the UK level and, perhaps more importantly, at a European and wider international level?

Malcolm Wicks: As I said, we will shortly publish our response. We gave more time for the consultation because the working group established under the aegis of the all-party group asked us for more time to submit further comments. I am not sure that we have received them yet. We are anxious to tackle these issues and to publish our response as soon as we can.

Mr. John Redwood (Wokingham) (Con): Has the Minister seen the excellent corporate social responsibility report of Tesco, showing how these guidelines are being applied to cut the carbon imprint, improve energy efficiency and undertake socially responsible actions with employees and in purchasing? When will his Department catch up with the best practice of companies such as Tesco, which seem to me to be streets ahead of many Departments?

Malcolm Wicks: It is true that, although carbon dioxide emissions from some sectors, including the energy sector and intensive energy users, are reducing, they are still increasing in the service sector, whether that is the superstore or the governmental system. When I visited the excellent Tesco branch in Thornton Heath, I was impressed that one staff official had responsibility for energy efficiency. That is a practice that we should adopt. Should Government do more? Yes, we should, and we are looking at that in the energy review.

Mr. Jonathan Djanogly (Huntingdon) (Con): The Conservative party welcomes the OECD guidelines and, on the basis that corporate social responsibility should be set in the context of wider corporate governance, we also welcome the lead that the OECD has given with its continental corporate governance panels. But the question remains: why do the Government give so little time to promoting corporate social responsibility, particularly, as my right hon. Friend the Member for Wokingham (Mr. Redwood) pointed out, given the excellent, world-beating corporate responsibility practices that we find in so many British companies?

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