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Lord Eatwell: My Lords, will the noble Earl give way?

Earl Ferrers: I would rather not. The debate is time limited and the noble Lord did overshoot his own time—

Lord Eatwell: My Lords, I shall be very quick. The noble Earl just commented on the improvements in the balance of payments. Will he confirm that the trend of the balance of trade, and also of the balance of trade in services, is adverse at the moment?

Earl Ferrers: My Lords, the point that I was trying to make—which seems to be quite hard to get into the noble Lord's head, because he does not seem to like facts—is that the current account is almost balanced, and that is a very unusual state of affairs.

We hear a lot about the apparent threat which is posed by the rapidly growing economies of South-East Asia. I do not take that view. The progress has certainly been startling. China has managed to double its real income per head in 10 years. Thailand took only eight. These growing markets mean growing markets for our exports. I am not very good at statistics, but I remember the United Nations saying in 1960 that there were 3,000 million people in the world, and that by the year 2000 that would have doubled to 6,000 million. That is only five years away, and it looks as though we are likely to overshoot the prediction.

Despite the difficulties of feeding this huge increase in population, these people, as their standards rise—and they are rising—are becoming consumers and customers. According to the International Monetary Fund, the South-East Asian export market tripled in size in the 10 years between 1982 and 1993. United Kingdom exports to the region grew even faster, outpacing both German and French exports. The value of United Kingdom exports to the Philippines grew by over 150 per cent; by over 200 per cent. to Singapore; by over 300 per cent. to South Korea; and by nearly 450 per cent. to Thailand.

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My noble friend Lord Prior said that these were opportunities to take part in infrastructure projects. He is right. I gather that, in the Far East, one trillion dollars is to be spent on infrastructure. If noble Lords are not quite certain what one trillion dollars is, it is 1,000 billion dollars. That is quite an amount. One merely has to think of the opportunities that are there for the taking. I agree with the noble Lord, Lord Peston: China will become a very important and growing market.

But our success is not confined to the Far Eastern markets. I agree with my noble friend Lord Carr of Hadley. There are so many opportunities in Europe as well. In the three months to November we sold more than £1,000 million of computer hardware to the rest of the European Community, which was an increase of nearly 50 per cent. on a year earlier. Over the same period we sold over £600 million-worth of medical equipment and pharmaceuticals—which will please my noble friend Lord Lyell—to the rest of the European Community. That was an increase of 26 per cent. on a year earlier. All that is good news. But many more United Kingdom firms could be doing more to export. The Institute of Exports estimates that only around 100,000 of the nearly 3 million United Kingdom companies are exporting.

The Government have a part to play in all this. I am glad that my noble friend Lord Prior said that it was important for Ministers to go abroad. Last year government Ministers from 14 departments undertook trade missions to over 50 countries, often accompanied by business people, in order to encourage British business to participate in those parts of the world.

I was grateful, too, for the appreciation that was expressed by my noble friends Lord Prior and Lord Sanderson, and by others, for the work that is being done in embassies abroad. There has been a tremendous change over the past five years or so to make them much more commercially orientated. And I agree that opting out of Europe is not an option.

Our success is increasingly being recognised across the world. Among other things, due to our not signing up to the Social Chapter, non-wage labour costs in the United Kingdom are among the lowest both in the G7 countries and in the European Community. That is why we are seeing French and German companies investing in the United Kingdom. I agree with my noble friend Lord Nickson that it is because the United Kingdom is providing a better climate for them than that which they have on the Continent.

Of all the stock of investment from Japan into Europe, 40 per cent. has come to the United Kingdom. Why? Because, as my noble friends Lord Boyd-Carpenter and Lord Marlesford said, in the eyes of the Japanese we are the best European country in which to invest. Of all the stock of investment from the United States into Europe, 43 per cent. has come to the United Kingdom. Why?—because in their eyes we are the best country in Europe in which to invest.

Recently, Deutsche Bank decided to move its international business from Frankfurt to the City of London. Why? Because in its eyes the City of London is the epicentre of financial activity in the world.

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Only two weeks ago Toyota announced a £200 million investment in Derbyshire, which is expected to create 1,000 new jobs. That follows the announcement last October of a £400 million investment by Samsung in the north east. I hope that that does not distress the noble Lord, Lord Bruce of Donington, too much. But this will. The past president of the European Commission, M. Delors, said recently, "Britain is a paradise for investors". We should all take great pride in that.

I know that the noble Lord, Lord Bruce, does not like investment overseas. He seems to feel that it is a waste of our money if we invest overseas. Let me tell him that our outward investment from the United Kingdom was £20,000 million in 1994 but our fixed investment in the United Kingdom was £100,000 million. That is five times as much.

What prominence in the media is given to the remarkable standing that we enjoy throughout the world? It seems to take fourth place to the denigration of people and institutions which appears to be the current stock in trade and the cause of anxiety to my noble friend Lord Boyd-Carpenter. Yet it is good news, and we ought to be proud of it. There is every reason to be proud of it.

I was glad that the noble Lord, Lord Cooke of Islandreagh, referred to Northern Ireland. Let us have a look at that. For the first time in 25 years Northern Ireland is free of fighting. That is an astonishing achievement. What has happened? The Northern Ireland Tourist Board's offices throughout the world have been overwhelmed with queries: 20,000 in December alone. In the year to November 1994, the Industrial Development Board for Northern Ireland landed seven major new inward investment projects estimated at over £250 million and producing up to 1,600 jobs. Unemployment is now at a 13-year low and employment at an all-time high. That is an astonishing achievement. Let us hope that the quest for peace continues and is successful.

We should take more pride in our country, especially when there is so much to be proud of. I agree with my noble friend Lord Carr of Hadley that Her Majesty's Government should make people feel good and feel proud. I simply say that I am doing my best. I agree with my noble friend Lord Sanderson that it is so much better if you get a vote of confidence in United Kingdom industry when it is doing so well. He is so right.

Recession scythes through people and businesses in a devastating and indiscriminate manner. We have been through a bad time. So have others. But we are out of the recession, even though the feel good factor, as my noble friend Lord Prior said, seems so elusive to many; and he went on to explain why that was so. The noble Baroness, Lady Seear, does not like the expression "feel good factor". Nor do I. She does not like the word "soundbite". Nor do I. But, strangely, although it was quite unnecessary for her to use the word, she nevertheless did so. That just shows the way we get used to using things we do not like. I do not know exactly what it means.

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It is neither technological advance nor trade which causes unemployment. It is the failure to foresee what will happen in the future and the inability to adapt in advance to change which lead to jobs being lost. Adapting is not always easy. That is why a flexible labour market is so important.

The Organisation for Economic Co-operation and Development says that the United Kingdom now has one of the most flexible labour markets within the OECD. Our determination to modernise industrial relations has had, as my noble friend Lord Prior said, spectacular results. The noble Lord, Lord Bruce of Donington, complained that the trade unions had been denuded of their powers. In contrast, my noble friend Lord Nickson reminded us of the days of shame, which are no longer with us. But we must remember that less than half the workforce now has its pay determined by collective bargaining. The number of days lost to industrial disputes in 1994 was less than 1 per cent. of what it was in 1979. That is the lowest level since records began over 100 years ago.

The fact is—the noble Lord, Lord Eatwell, does not seem to realise it—that jobs are created by demand and industry reacting to, and even creating, demand, not by governments. All the public works we want to see can only come if we can afford them and make our economy and business successful.

The noble Lord, Lord Sefton of Garston, if I may say so, made a bizarre speech, peculiar to himself. He showed that some members of the Labour Party have not moved an inch in the last 50 years and that he is one of them. He complained about the abolition of the wages councils. So did the noble Lord, Lord Eatwell. But those people whose wages were governed by wages councils in 1993 and who did not change jobs enjoyed an average wage increase of 6.7 per cent. in 1994. How's that for doing away with a wages council which is supposed to ruin the lives and standards of living of people at the lowest end of the scale?

One merely has to look at what privatisation has done to the economy and the companies concerned. Britain led the way. Other countries have followed. In 1979, nationalised industries cost the taxpayer £50 million per week. Privatised industries now return £50 million per week to the Exchequer through taxes on the profits they have earned. In 1979 it took 13 man-hours to produce a tonne of steel. Now it takes less than four hours. British Steel is now the world's fourth largest producer of steel and is among the top 10 United Kingdom exporters. How's that for success?

Those are great success stories. They are the great success stories for British industry. The success of the economy would become all too clear if only we could lift the veil of the razzmatazz of public argument.

The noble Lord, Lord Ezra, my noble friend Lord Laing and the noble Baroness, Lady Seear, were worried by unemployment. That anxiety is prevalent among everyone. They were right to introduce the issue. The right reverend Prelate the Bishop of Worcester drew our attention among other things to the help of the Prince's Youth Business Trust. He wanted prosperity now rather than in the future. That is an understandable aim. But

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the only way we can do that is to ensure that our economy and our businesses are successful. I have tried to show that, although there is much to be done, a lot has been done. I agree with the right reverend Prelate that if we had less unemployment, we would have less crime too. I am certain of that.

Since 1992, unemployment has fallen by over 600,000. That means that roughly 1,000 people a day have been taken off the unemployment register. In the past year, unemployment has fallen faster than in any other major European Community country, with the result that our unemployment rate is well below the European Community average. We now have the highest proportion of the population of working age actually in work of any major European Community country. They are not just part-time jobs—a point that worried the noble Lord, Lord Haskel. Last year nearly three-quarters of the jobs created were full-time jobs.

A flexible labour force, vital though it is, is not enough. I agree with my noble friends Lord Prior and Lord Laing and the noble Baroness, Lady Seear. There is no doubt that education and training will be the key to our future success. We have an astonishing inbuilt advantage. There are now about 350 million native English-speaking people in the world. English is now the official or semi-official language in 70 countries. By the year 2000, which is only five years away, it is estimated that 1,000 million people abroad will be learning English. Teaching English is already earning us £500 million a year.

High skills and high productivity are needed if we are to compete in an increasingly high technology world. They are not the only ways in which we can ensure that we remain competitive. They are also the route to high wages. It is not just the quality of the investment which is so important but the use to which that investment is put. That depends on the skills of the workforce and the way in which firms organise their investment. I agree with the noble Lord, Lord Peston, when he said that the future lies in a highly skilled, highly efficient and highly paid workforce.

I believe that we live in exciting times. Who would have believed, 10 or 15 years ago, that we would see the collapse of the Berlin Wall? Who would have believed that we would see the collapse of communism? We witnessed all of that. Of course those developments bring problems, but they also bring opportunities. Who would have thought that we would see the Far East, India and China blossom as they have. Then there is the astonishing part that IT—I apologise to the noble Baroness, I mean technology—can play, as the noble Lord, Lord Chalfont, said.

These are enormously exciting times. I am certain that with the record of our industry and the success of which it is capable, as it has shown within the past 12 months particularly, we stand a good chance of doing well in the future and of capturing some of those markets, of which there will be an enormous amount and where there will be great demand.

7.50 p.m.

Lord Prior: My Lords, I congratulate my noble friend for the robust and skilful manner in which he

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summed up our debate. I thank all those who took part and I welcome especially my noble friend Lady Hogg. On this occasion I felt that everyone meant it when they said that she should have spoken longer and that we hope to hear her on many other occasions. That is generally said about every maiden speaker, and there is generally not a word of truth in it. But in this case there was. We welcome her appearance here today.

It has been an interesting debate. We heard the true voice of socialism. We heard the true voice of conservatism also, and it is just as well in this House that we should occasionally do so. In those circumstances, thanking everyone for taking part, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

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