(No. 3) Bill--
Bill read the Third time, and passed.
The Minister for Trade (Mr. Richard Needham) : The United Kingdom had a trade surplus in manufactured goods of £5.05 billion in 1978, with imports at £22.67 billion and exports at £27.72 billion. In the past 12 months, to September 1992, it had a deficit of £6.18 billion, with imports at £92.16 billion and exports at £85.98 billion. Export volume remains strong.
Mr. Howarth : Is not the picture even worse than that, because, every year since 1983, we have had a deficit in the balance of trade in manufactured goods, peaking in 1989 at just under £17 billion? When will the Government stop being so complacent about that appalling situation and do something about it? When will they put in place a strategy for manufacturing, instead of the inactivity and hopelessness that we have faced in the past few months?
Mr. Needham : The hon. Gentleman knows perfectly well that the trade deficit in manufactured goods has been a long time in coming. Between 1974 and 1979, imports increased by some 37 per cent. and export volumes by 11 per cent. whereas, between 1979 and 1991, imports increased by 100 per cent. and export volumes by 59 per cent. The figures under the previous Labour Government were three times worse than under this Administration.
Mr. Fry : In view of the disappointing figures that my hon. Friend has just given, will he explain why he has not agreed with our Community partners to impose limits on the importation of Chinese footwear and has acted against the advice of the British Footwear Manufacturers Federation and the vast majority of footwear manufacturers? The failure to take that step will result in fewer jobs in this country and increased imports.
Column 264cent. under the previous Administration. In fact, in the past four years our share of world markets has stabilised and, if anything, increased. I know that my hon. Friend feels very strongly about the footwear industry, but Chinese imports represent a small proportion of total footwear sales in Britain. We will continue to consider carefully whether the EC rules have been breached in relation to the import of footwear, but, at the moment, we believe that it is not possible to take the action that my hon. Friend requests within the free trade environment of the Community.
Mr. Barry Jones : Is the Minister aware of the huge job losses in the aerospace, steel and textile industries? Why are the Government so complacent? Why do they not bring before the House a policy to promote and defend manufacturing industry in Britain?
Mr. Needham : The hon. Gentleman knows from his own constituency experience what has happened to the steel industry, which has changed dramatically in the past few years. He knows that British steel exports are 10 times higher than they were several years ago. He will be aware also from his constituency experience of the number of lost jobs that have been replaced by those created by companies such as Toyota. Of course, the Government accept that British industry and manufacturing are crucial and that is why support for our export volumes and export promotion is a vital ingredient of our policy.
Mr. Needham : My hon. Friend is absolutely right. We now have a tremendous opportunity--I speak as Minister for Trade--to get out and sell British products abroad. We also now have an opportunity to ensure that we can replace imports with locally produced goods.
2. Mr. Austin Mitchell : To ask the President of the Board of Trade what assessment he has made of the number of jobs created in the past 12 months as a result of his Department's programmes and policies.
The Minister for Industry (Mr. Tim Sainsbury) : The aim of the Department of Trade and Industry's programmes and policies is to help United Kingdom business compete successfully at home, in the rest of Europe and throughout the world.
Mr. Mitchell : In the past three years, the Government have managed to destroy 600,000 jobs in manufacturing industry, thanks to their policy of high exchange rates and high interest rates. Now that they have been forced out of that deflationary bunker and have a chance to do something different, what proposals does the Minister have to encourage import substitution, so that British industry can win back more of its own market?
Mr. Sainsbury : I can think of no policy more destructive of jobs in manufacturing than the policy that the hon. Gentleman supports, of anti- European Community membership. However, I acknowledge that he is at least consistent, unlike the Labour Front Bench.
Mr. Butcher : Does my right hon. Friend agree that the best job creation programme that his Department could pursue is to ensure that we get a successful outcome in the GATT--general agreement on tariffs and trade--negotiations? Does he agree that the situation is now very serious and poses an immense threat to the traded goods sector of manufacturing in this country? How is it that 2.5 per cent. of Europe's population--the French farmers--have apparently hijacked the pan-European negotiating position? What is going on?
Mr. Sainsbury : I entirely agree with my hon. Friend about the importance of a successful outcome in the Uruguay round of the GATT negotiations. Clearly, it would provide a non-inflationary stimulus to the world economy at a time when it is much needed. He will be aware of the great difficulties in arriving at a successful outcome and of the efforts that have been made. My right hon. Friends the Prime Minister and the President of the Board of Trade have been at the forefront of those efforts, but great difficulties remain.
Mr. Stevenson : Is the Minister aware that even the pathetic efforts of his Department to aid British industry are being effectively undermined by policies that have been established by the Treasury, which seeks to impose a further VAT burden on industry by requiring it to pay VAT on account rather than in arrears? In my constituency, that is causing an additional serious burden, which is costing jobs. What does the Minister intend to do about that?
Mr. Sainsbury : I hope that the hon. Gentleman recognises that one of the most important ways to create an environment that encourages business is to improve the tax environment. If the hon. Gentleman looks at the rates of corporation tax and personal tax now, as opposed to those that we inherited from the Labour Government in 1979, he will see that we have made immense progress.
Mr. Riddick : Does my right hon. Friend agree that new jobs will be generated by the creation of new, and the development of existing, small businesses? Is he aware that many small businesses complain bitterly about the red tape and regulation that 2 million of them have to face? What progress has his Deepartment made in tackling that serious problem?
Mr. Sainsbury : I entirely agree with my hon. Friend about the important role of small businesses in job creation, not only directly through the jobs that they provide but indirectly through the service that they provide as suppliers to larger companies. I agree also with my hon. Friend about the importance of deregulation. We have had a drive to remove the burdens of bureaucracy from small businesses. We have not yet achieved enough, but I am happy to say that my hon. Friend the Minister for Energy is renewing that drive and is determined that we shall make real progress. I fear that the Opposition remain committed to imposing just the sort of regulatory burdens on business that destroy jobs.
Mr. Fatchett : With 600,000 manufacturing jobs lost in the past two years, with job losses in manufacturing industry now running at 50, 000 a month and with the Engineering Employers Federation predicting 100,000 job losses in the next 12 months, is it not clear that the Government have totally failed manufacturing industry?
Column 266Now that one President in the United States has lost his job, would not the best policy for this country be for the President of the Board of Trade to lose his job as well?
Mr. Sainsbury : I constantly hope that one day I will hear someone from the Opposition Front Bench say something complimentary about the achievements of British industry. I remind the hon. Gentleman-- [Interruption.] My comment is not confined to the Opposition Front Bench. It would be nice to hear something in favour of British industry said from anywhere on the Opposition Benches. I remind Opposition Members that one of the most remarkable achievements has been the increase of more than 50 per cent. in the productivity of manufacturing industry under the Government.
Mr. Sainsbury : My Department has provided £60 million of launch aid for the civil version of the EH101. We shall help to promote export sales of the civil version through our overseas trade services and we are ready to respond to any requests for assistance in pursuing civil export sales prospects.
Sir Jim Spicer : Does my right hon. Friend agree that the development of the EH101 has been a remarkable success for European co- operation? Beyond that, does he understand that the export market for the EH101 will bring jobs to Westland--a highly successful company--and to 600 small businesses throughout the country? Will he do all that he can to ensure that his Department helps in every way possible to secure the success of an overseas export drive?
Mr. Sainsbury : I am happy to agree with my hon. Friend's assessment of progress on the EH101 and of the potential market for that excellent helicopter in Europe and elsewhere. I assure my hon. Friend that we in the Department of Trade and Industry will do all that we can to help sales of the civil version both overseas and at home.
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : We shall give whatever help is appropriate and affordable in support of the manufacturing sector.
Mr. Lloyd : Is the right hon. Gentleman aware that that is a pathetic answer? He is the man who told the Tory party conference that he would intervene all day, every day, if necessary. Manufacturing industry is still continuing to shed jobs at an horrendous rate. Manufacturers--not those on the Labour party's side of the political debate--are now afraid that their base has shrunk and that it is not sustainable. What will the right hon. Gentleman do about that? What will he do about putting public money into schemes that will create
Column 267manufacturing excellence for the future? For example, when will we see the Jubilee line project and investment in British Rail come on stream?
Mr. Heseltine : The hon. Gentleman realises that many of his supplementary questions can be answered only in the context of the "Autumn Statement" by my right hon. Friend the Chancellor of the Exchequer. However, let me help the hon. Gentleman specifically. I have no doubt that he is delighted that we have seen industry save £9 billion in interest charges as a result of the recent reduction in interest rates. He will be delighted to know also that the United Kingdom attracted one third of all inward investment into the European Community in 1990-91. He will understand that there is no base except one of low inflation from which we can see an expanding economy.
Mr. Couchman : My right hon. Friend will know that my constituency has attracted three Japanese companies to its industrial park, which will bring 300 or 400 jobs to the area. How much damage does he think that an adverse vote tonight at the end of the debate on the European Communities (Amendment) Bill might cause to inward investment in my constituency?
Mr. Heseltine : My hon. Friend has asked a central question. I shall give the House the figures as an indication of the scale of the success of the United Kingdom in attracting inward investment. In 1991-92, the Invest in Britain Bureau recorded 332 direct investment projects by foreign companies in the United Kingdom, which will create or safeguard 50,000 jobs. The United Kingdom has 36.1 per cent. of American and 40.9 per cent. of Japanese direct investment in the EC. It is critical that we do nothing to prejudice the certainty of these companies that the United Kingdom is a part of the single market and that it intends to remain so.
Mr. Geoffrey Robinson : Is the right hon. Gentleman aware that British industry has shown considerable resolution in weathering a vicious recession, the longest in the post-war period? Is he further aware that industry had hoped that when he came to office there would be, at long last, personal leadership and a strategy for the manufacturing sector? Unless a clear lead and strategy are forthcoming shortly, the right hon. Gentleman will be seen to be like other Ministers--a do-nothing President.
Mr. Heseltine : The hon. Gentleman has considerable experience of Britain's manufacturing economy. He knows that a policy of direct subsidy by the public sector has been a disaster in terms of advancing the manufacturing base. No man has greater personal experience of how that happens.
Mr. Moate : Is my right hon. Friend aware that some of the largest manufacturing industries--I refer especially to the intensive energy users- -are being crippled by increasing electricity prices? One company in my constituency has had a 50 per cent. price increase in four years and is paying almost £2 million in nuclear levy. Despite many representations, we are making no progress in this matter. Will my right hon. Friend take a personal interest and try to lift the burden off intensive energy users?
Column 268colleagues. I assure him that we will take a considerable personal interest in this matter in the review that is under way.
Mr. Robin Cook : Does the President recall that, during his years in the wilderness, he identified steel, cars and aerospace as the three key industries in our manufacturing base? Is he aware that, during the past month, British Steel has cut output by one fifth, Ford has suspended production and British Aerospace has been exporting jobs to Taiwan?
The right hon. Gentleman promised that he would intervene before breakfast, before lunch and before dinner. If I bought him lunch, would he intervene to save at least one of those industries? If not, can he name just one specific job that he has saved during the seven months since he took office?
Mr. Heseltine : If I were invited to sup with the hon. Gentleman, I would take the longest spoon that I could find. He knows that British Steel is now exporting successfully. He knows that Japanese inward investment in our car industry is likely to turn a deficit into a surplus. He knows that aerospace is one of our major exporting industries.
Sir Peter Tapsell : On the subject of Japanese inward investment, is my right hon. Friend aware that what attracts Japan is our access to the European single market? Is he further aware that, for reasons that I shall explain if I am successful in catching your eye, Madam Speaker, the Japanese would prefer that we did not ratify the Maastricht treaty? They are certainly strongly opposed to monetary union for Britain and for Europe.
Mr. Heseltine : My hon. Friend has as much knowledge as any in the House about the inward investment arguments. However, his view is not that put to me by the significant number of Japanese who visit my Department.
5. Mr. Pike : To ask the President of the Board of Trade what new initiatives he now proposes to introduce to increase diversification in those industries losing work as a result of the reduction in demand for armaments.
Mr. Heseltine : The Government believe that decisions about diversification are essentially matters for companies themselves. Nevertheless, they encourage such diversification--for example, through their regional seminars, which have drawn attention to Government assistance and to opportunities in other markets.
Mr. Pike : Does the right hon. Gentleman recognise that both the management and the work force in industries that are heavily dependent on defence-oriented products--which is very much the case in the north-west and Lancashire--will be concerned about his answer? Is he aware that they believe that he and the Government have a duty to help diversification and to ensure that the industries and the skills of the work force are preserved within civil manufacture? Should not those jobs be secured to preserve the nation's manufacturing industry?
Column 2691980s threatened to close one third of our defence industries to pander to nuclear disarmers and mobs on the street.
Mrs. Ann Winterton : Does my right hon. Friend agree that less diversification would be needed if we in this country did not open our contracts to tender to those European countries that do not reciprocate with our arms industries? May I ask my right hon. Friend when he believes that the single market will be implemented and policed in every member state? Is not that the way forward to a better Europe for trading?
Mr. Heseltine : I am most grateful to my hon. Friend for her continuing interest in these matters. I hope that she will feel able to support my right hon. Friend the Prime Minister in the Lobby tonight in his determination to achieve more effective policing of the European Community.
Mr. Malcolm Bruce : Does the President of the Board of Trade accept that his first answer was unsatisfactory? Does he accept that more than half of Britain's research and development industry is in the aerospace and defence sectors, which are being savagely cut? Organising regional seminars will not ensure that Britain leads the way in technology in either the single European market or world markets. Does he not need to do more to ensure that we diversify our high-tech industries?
Mr. Heseltine : The hon. Gentleman displays a remarkable naivety. No companies are coming to my Department to ask my civil servants for advice on how to run their businesses. Diversification will take place in British industry as a result of the entrepreneurial skills of industry managers, and no one else.
Mr. Heseltine : My hon. Friend has hit a bull's eye. It is precisely because the Labour party wishes to enshrine the social chapter in the Maastricht treaty that it would impose intolerable costs, willy-nilly, on British industry.
Mr. Byers : Is the President of the Board of Trade aware that Swan Hunter Shipbuilders on Tyneside wishes to diversify into the merchant shipbuilding sector but, in so doing, will be in direct competition with German shipyards that presently receive a 36 per cent. subsidy from the European Commission? In the light of that, will the President agree to make intervention funding available? Will he also consider using the provisions of article 4.5 of the seventh shipbuilding directive to protect Swan Hunter from unfair competition? Does he accept that Government action is essential if we are to win those orders and keep jobs on Tyneside?
Mr. Heseltine : I have great sympathy with the difficult position of the Swan Hunter company, which we have considered carefully. As the hon. Gentleman is aware, that grant mechanism was denied to the warship builders as a consequence of arrangements provided for merchant shipbuilders, not warship builders. It is not intended that we should widen the arrangement. There are understandings that preclude the east Germans from competing unfairly with British shipyard products.
Mr. Tracey : Will my right hon. Friend lend his support to the case of training and enterprise councils, particularly the TEC for my district of Kingston and south-west London, which is battling to provide jobs for British Aerospace workers who have been made redundant or are in danger of losing their jobs because of the loss of the Harrier?
Mr. Heseltine : I can give my hon. Friend that assurance. The role of the TECs is widely admired. I share responsibility for the TECs with my right hon. Friend the Secretary of State for Employment. I hope to make further announcements in the near future about the positive opportunities for TECs.
Mr. Cousins : Does the President accept that his seminars were held many months ago and 250,000 workers in aerospace, shipbuilding, electronics and engineering are still waiting for a response? If not, can he simply confirm that he has drawn no conclusions, formed no policy, taken no action and his cupboard is bare?
Mr. Heseltine : The hon. Gentleman is ill-informed. My right hon. Friend the Minister for Industry attended such a seminar in the north-east only 10 days ago. The companies know full well that civil servants in the Department of Trade and Industry do not and should not have the skills to explain to British management how to diversify product range. That is a management responsibility, which we should not blur.
Mr. Gallie : Will my right hon. Friend take note of the 500 extra jobs that have been created by British Aerospace at Prestwick? Will he also take note of a letter that has been circulated today by the chief executive of British Aerospace urging that the Maastricht treaty must be progressed? Will he join me in urging Opposition Members from Ayrshire to vote with us in the Lobby tonight in support of the chief executive of British Aerospace?
The Minister for Energy (Mr. Tim Eggar) : We have announced a package of measures aimed at economic regeneration of the communities which may be affected. We will be working in partnership with local authorities and development organisations. My right hon. Friend the President of the Board of Trade has asked Lord Walker to co-ordinate these measures.
Mr. Hughes : The President's announcement on pit closures, together with the multiplier effect, will mean the loss of some 100,000 jobs. Has the Minister read the recent report by the Office of Population Censuses and Surveys, which shows that in the former heartland of the Welsh coalfield--the four counties of West Glamorgan, Mid-Glamorgan, Dyfed and Gwent--20 per cent. of all males are inactive and that there is all manner of social and health deprivation. Is not it a pretty shameful indictment
Column 271of a son of Swansea that he should now be contemplating bringing the same havoc and distress to so many other communities in Yorkshire and Nottinghamshire?
Mr. Eggar : I am surprised that the hon. Gentleman so writes down the considerable achievements of the noble Lord Walker in regenerating economic activity in south Wales. It is widely accepted that considerable efforts were made by the noble Lord, his predecessor and my right hon. Friend the present Secretary of State for Wales. Indeed, many parts of the United Kingdom look with admiration at what has been achieved in south Wales in the past decade.
Mr. Eggar : My hon. Friend has made his position very clear. The review will be conducted openly and will encompass a wide number of issues. I am sure that my hon. Friend will make his views clear to the review, as he has to me privately.
Mr. Hardy : Will the Government be prepared not only to refrain from granting further licences for gas-fired stations while the review continues but to make it clear that licences will be revoked where the review shows that the licence should not have been granted in the first place?
Mr. Eggar : I am sure that the hon. Gentleman and the House would not want me to prejudice the results of the review. Existing contracts for independent power projects are subject to the regulator, who has announced that he will consider the economics of the projects with a view to pronouncing some time in mid-December. Future approvals are covered by the review, and doubtless it and the White Paper will comment on the issue.
Sir Michael Grylls : Does my hon. Friend agree that Britain has had a proud record in the past 20 years of creating new jobs and new job opportunities in steel-closure areas and, more recently, in coal-closure areas? In the last year up until the end of September, British Coal Enterprise Ltd. created 9,482 jobs in the coal-closure areas. Jobs can be created, and if British Coal Enterprise's efforts can be increased, it can deal with the current problem.
Mr. Eggar : I agree with my hon. Friend that British Coal Enterprise has a first-class record. It is not perhaps widely enough known that some 86 per cent. of all former miners who have registered with British Coal Enterprise since 1987 have found jobs within 18 months.
Mr. Steinberg : In view of the proposed destruction of the north- east coalfield, will the Minister tell the House what he proposes for Tursdale workshops in my constituency which employs 300 men? If the coalfield is to be decimated, are these jobs safe or will this workshop close, with the destruction of the industry for the people in my constituency and their families?
Mr. Eggar : I am aware of the hon. Gentleman's concern and of the concern of other hon. Gentlemen in the north-east on that particular issue. While not directly the subject of the review, it is a matter which will have to be taken into account during the review period, and I will make sure that British Coal is aware of the hon. Gentleman's concern and that of his constituents.
Mr. Flynn : Is it not true that the Government do not even count the number of jobs lost to this country abroad? Is it not rather like trying to fill a bath by watching the water coming in and failing to notice that the plug has been pulled out and that jobs are syphoning off to other countries? From Cwmbran and Pontypool and from Inmos in my constituency thousands of jobs have gone to other continental countries because of lack of investment in British industry. Is it not true that the Minister's Department has done nothing every day for the past six months to help British industry before breakfast, before dinner and before supper and that he has got up the next morning and done nothing again? When will the Government show the same faith in British industry as the Italian, the Belgian and the German Governments?
Mr. Sainsbury : I can appreciate why the hon. Member is concerned about potential job losses from a factory in his own constituency, but he has made some extraordinarily wild and inaccurate allegations about the alleged support available elsewhere, and he seems totally to overlook the massive number of jobs created in this country by inward investors, not just from the United States, Japan or the far east but from other parts of Europe, coming here because we create the right environment to encourage enterprise.
Mr. Nicholas Winterton : I hope that my right hon. Friend will accept that the 500 jobs created in Prestwick in Scotland represent a direct transfer of jobs from Woodford which is located on the periphery of my constituency. That may be considered as transferring jobs overseas, I am not sure, but will my hon. Friend accept that many major manufacturing industries in the United Kingdom are transferring thousands of jobs to other parts of the world, particularly to the Indian subcontinent and the Pacific basin and, in doing so, are transferring and shipping to those countries not only the jobs but the highly sophisticated, modern machinery which will then be used in employing people in those countries to compete against manufacturers in this country?
When will the Government realise that manufacturing industry is the only source of non-inflationary economic growth and that we need an industrial strategy now, not tomorrow?
Mr. Sainsbury : I am sure that the whole House is well aware of the great interest that my hon. Friend takes in manufacturing industry. Because of that interest he will be aware that not just in this year or this decade or even this century it has been the pattern of manufacturing industry to diversify and invest in other countries. There has always been change. Without it, we cannot have an effective and competitive manufacturing industry.
Mr. Bell : But even the Minister of State will accept that investment abroad is not covering the balance of payments deficit on our manufactured exports. The Government's policy over the past 13 years has failed. It is no longer good enough for the Minister to come to the Dispatch Box and
Column 273say that it is up to British industry to locate where it will. When the Single European Act comes into force on 1 January we will be looking for investment in this country by British firms in British industry, in British goods and in British jobs. Where will the Department of Trade and Industry be? Will it be on the coat tails of the Treasury?
Mr. Sainsbury : I do not know what British industry would think of the hon. Gentleman's suggestion that it is not good enough for the Department of Trade and Industry to say that industry can make its own decisions about where to invest. Does the hon. Gentleman want to bring back industrial development certificates?
Mr. Sainsbury : My hon. Friend is right, and our success in attracting inward investment, to which my right hon. and hon. Friends have already referred, is evidence of that. If one thing could deter any inward investor in Britain it would be imposing the social chapter upon British industry.
Mr. Lewis : Given the problems of the Government's own making in the coal industry, should not the Department of Trade and Industry take a more hands-on approach? The people whom I represent who are threatened by the huge Lomax coal application in Greater Manchester consider it stupid and crass to be ruining communities in deep mine areas while expanding opencast mining and ruining the lives of people who are threatened by that intrusive method of winning coal. We need a sensible overall policy which satisfies the needs of opencast and deep mine coal communities.
Mr. Eggar : I am aware of the concern about opencast mining in many parts of the country, but I am also aware that in some parts of the country, such as Scotland and the north-east, opencast mining is critical to the survivability of deep mines, so it is a complex matter. As the hon. Gentleman knows, the particular matter to which he referred is currently before the planning authorities. As I understand it, the precise proposal is to opencast some 470 hectares, of which 77 hectares have been described as the biggest coal spoil heap in Europe, and there are some who see considerable environmental benefits from that operation. However, it is a matter for the planning authorities.
Mr. Alexander : Does my hon. Friend agree that, contrary to the view of the hon. Member for Worsley (Mr. Lewis), opencast mining must be part of the general coal scene, and it is no part of the survival of the general coal
Column 274industry to start being restrictive about a profitable part of it? Therefore will he resist the temptation offered by the hon. Gentleman's question?