11 Apr 2002 : Column 71WH

Westminster Hall

Thursday 11 April 2002

[Sir Alan Haselhurst in the Chair]

UK-Japan Relations

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Ainger.]

2.30 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane) : I am delighted to have the opportunity to lead the debate, not least as all eyes will shortly be on Japan when the World cup takes place there. The debate follows my visit to Japan in January and the success of the third United Kingdom-Japan parliamentary seminar in Tokyo in February. A delegation of the all-party group on Japan—led by my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson)—ably represented Westminster. I understand from my officials that our Japanese counterparts found the meeting so stimulating that they are already looking forward to a return match in the UK next year.

Mr. Ian Davidson (Glasgow, Pollok): Is my hon. Friend aware that during our visit to Japan we touched on the forthcoming World cup, to which he referred? Would he be interested in pursuing my suggestion that one of the best ways of maintaining good relations between Japan and England—there are English football fans in Japan—would be to ensure that no English football fan under the age of 65 were allowed to attend the World cup in Japan unless they were accompanied by their grandparents?

Mr. MacShane : I am grateful for my hon. Friend's suggestion: he is a distinguished parliamentary sportsman. I am sure that Japan Airlines Co. Ltd. could arrange for him to distribute what I believe are called kilts to all English football fans before they set off for the great matches.

Parliamentary links between the UK and Japan are clearly thriving. However, they are just one example of the diversity of the flourishing relationship between our two countries. The UK and Japan are natural partners in many other areas, and we are working together closely and effectively. As the Minister who is responsible for the overall relationship with Japan, I want the already excellent partnership to broaden and deepen. Japan is a natural ally for the UK, and we should make the most of the common ground between us.

This is a good year to look forward to future co-operation: it marks the centenary of the 1902 Anglo-Japanese alliance—the first international treaty that Japan signed following the 1868 Meiji restoration, which laid the foundations of modern Japan. It was the first treaty to be signed by the British Government since 1815, and in 1902 was primarily a military pact designed to safeguard our respective interests in the far east. The

11 Apr 2002 : Column 72WH

alliance marked the emergence of Japan as a world power and helped to underpin the expansion of trade between our two nations.

The current trade and investment relationship between the UK and Japan is still hugely important to both countries. Although I do not gloss over the need for effective structural reform in Japan, the regular litany in the press of depressing statistics should not blind us to the massive underlying strength of the Japanese economy. Japan is not broke. It is not Argentina minus five years, as the wiseacres of the City have sometimes said, nor is it Botswana—a comparison that was made in Newsweek International, which is usually a reliable and sensible journal. Japan remains the world's second largest economy after the United States, despite the fact that for the past decade it has had relatively low levels of growth that average little more than 1 per cent. a year. In 2000, its gross domestic produce was nearly $38,000 per capita, which is more than 50 per cent. greater than UK GDP per capita, and two thirds of the total GDP for Asia as a whole. It has the world's largest foreign exchange reserves, at almost $400 billion, and had a current account surplus of around $80 billion last year. It has a large number of cutting edge companies, and a well-educated and resilient work force. I doubt whether there is a household in Britain that does not own goods ranging from cars to DVD players that cost serious money and are made by Japanese firms.

Looking to the future, Japan is responsible for about 25 per cent. of global investment in research and development. That was 3.2 per cent. of GDP in 2000, compared with 1.9 per cent. for the UK, with strength in growth areas such as renewable energy, life sciences, communications, IT and nanotechnology. UK scientists are working closely with their Japanese colleagues on most of those strategic technologies. In January, I went to Sapporo in the northern Japanese island of Hokkaido. It is a snow-covered area such as one would see in Canada or the colder parts of Europe. I noticed that the pavements of Sapporo were completely dry and easy to walk on. The roads too were easy to drive on. That was because the pavements and roads had central heating. I thought to myself, if this is such a poor country, could we have some of it in south Yorkshire?

Japan remains a key export market for UK companies. It is our largest market outside the United States and Europe. It accounted for £3.7 billion-worth of exports in goods last year, which is 1.2 per cent. up on 2000, and for £3.1 billion-worth of exports in services. Companies in the food and drink, pharmaceutical, chemical, healthcare and electronics sectors are doing particularly well. Investment in the UK by Japanese companies has long been a feature of our bilateral relationship and is continuing, with both large and small Japanese companies looking to invest. When Nissan came to the north-east of England in the 1980s, a distinguished trade union leader said that the Japanese companies would be exporting, as he put it, "alien practices". Those alien practices are jobs that are well paid and today fully unionised. Certainly, with a trade union background myself, I greatly welcome the investment of Japanese companies in all parts of the UK.

11 Apr 2002 : Column 73WH

Every region has benefited from having world-class Japanese companies in their area, providing jobs, new technologies, new skills and new management techniques. The UK now attracts 46 per cent. of Japanese investment into the EU. More than 1,000 Japanese companies now operate in the UK, creating over 80,000 manufacturing jobs, and many thousands more in services. This month we celebrate the first major investment in the chemicals sector by a Japanese company, with Nippon Gosei's decision to locate a £65 million investment in Hull. Moreover, Sony has centralised its global treasury operations in a new centre in London, creating more than 100 well paid, highly skilled jobs, Toshiba has established a mobile telecommunications operations headquarters near London and there have been further expansions in the automotive components circuit.

One of the companies, Nippon Gosei, recently opened in Rotherham and has expanded the employment opportunities it is able to offer my constituents and others in south Yorkshire. The Government are working to build on those successes and to attract more knowledge-driven, high-value investments in the information and communications technology, automotive, life sciences and financial services sectors, where the UK has particular strengths to offer. The investment flow is not merely one way. A number of large British companies such as Vodafone, Cable and Wireless, Virgin, HMV, Compass and Logica have made substantial investments in Japan, as have many smaller high-tech companies, often in niche service sectors.

I had the pleasure of listening to Mr. Chris Gent, Vodafone's chairman, extol the excellent quality of Japanese mobile phone technology. I heard today that the latest generation of Japanese mobile phones will be able to lip read, which will no doubt greatly assist many hon. Members.

The British industry centre in Yokohama has served as a vital incubator for many smaller companies, with the support of the local British chamber of commerce and our embassy. Its excellent work under the ambassador, Sir Stephen Gomersall, flies the flag effectively for British commercial and political interests in Japan.

Our two Governments are working together increasingly closely on the global agenda. The events of 11 September underlined more strongly than ever the importance of international co-operation in the interests of global security and prosperity. It is no exaggeration to say that those events have brought about a paradigm shift in the way in which the Japanese view their role in the world. Under the decisive leadership of Prime Minister Koizumi, Japan responded by swiftly amending its peacekeeping legislation to facilitate its participation in the war against terrorism. Japan has been providing fuel for US and Royal Navy ships involved in operation enduring freedom. Those legislative changes have this week allowed Japan to dispatch almost 700 peacekeepers to East Timor—the largest such deployment ever.

We are delighted that Japan is now looking to play a greater role in United Nations peacekeeping operations. Yesterday in New York, I had the pleasure of discussing

11 Apr 2002 : Column 74WH

the UN's new peacekeeping role and the modernisation of its approach. Britain and Japan will co-operate to make the UN's important work even more effective. We stand ready to offer assistance and to share the experience of our own armed forces.

We are working closely with Japan, the world's largest bilateral donor, on international development issues. My right hon. Friend the Secretary of State for International Development and her new permanent under-secretary, Dr. Chakrabarti, have visited Japan for talks this year. To increase our collective effectiveness, they have explored the scope for closer co-operation in countries where we both work. We are considering the scope for further work together on matters such as the reconstruction of Afghanistan, reducing the global proliferation of small arms and light weapons, and Sierra Leone. Japan has designated 2002 as the year of soaring co-operation with Africa.

Our close co-operation on the global stage on vital issues such as the Kyoto protocol, the middle east peace process and North Korea is aided by the closest of working relationships at the highest political level. The relationship between our two Prime Ministers is excellent. Prime Minister Koizumi, who studied politics at University College, London, met our Prime Minister on 1 July in London—his first overseas call after Washington. The role of the British Prime Minister in shaping the international coalition against terrorism, and in influencing Washington on the way forward, made a deep impression on Koizumi and the Japanese public.

Japan's new Foreign Minister, Kawaguchi, has already established a close rapport with my right hon. Friend the Foreign Secretary. They talk on the telephone regularly, and my right hon. Friend looks forward to meeting her in the near future.

We can do far more together internationally. As trading nations and key US allies who view the world from a similar perspective, we must work together to promote democracy, the rule of law and free trade worldwide. I encourage all my hon. Friends here to keep in touch with their Japanese counterparts and talk to them about the international issues that matter to us all as parliamentarians, so that we can encourage the UK and Japan to work together co-operatively and find ways of dealing jointly with many of the world's problems.

It is not only international issues that we have in common. As mature economies, we share many of the same domestic policy preoccupations and have much to learn from each other. Our two Prime Ministers have recognised that and have initiated a series of meetings between their personal policy advisers. In the most recent, Prime Minister Koizumi's top domestic policy adviser, Professor Shimada, came to London for talks at No. 10 last month. The main focus was on employment policy, welfare reform and urban regeneration. Professor Shimada visited regeneration sites in Docklands and the Paddington basin and toured a next steps jobcentre. I hope that, as a result of such contacts, we can contribute to the development of an effective policy response by the Japanese Government to the country's current difficulties. That will serve British interests too.

11 Apr 2002 : Column 75WH

Another area in which we are thickening our relationship with Japan is energy. For the past 30 years, bilateral energy links have been mainly in the form of nuclear fuel cycle services provided by BNFL to the Japanese power utilities to support their civil nuclear power programme. That has been, and continues to be, a substantial business, contributing about £2 billion to the UK trade balance with Japan during that period. However, pressures to reduce greenhouse gas emissions, global concerns for energy security and the need for further progress on the development of commercially viable renewable energy sources offer considerable scope for developing our energy relationship with Japan into other areas. During his visit to Japan last October, my hon. Friend the Minister for Industry and Energy discussed that with the Japanese Government. We are now looking to identify a number of specific areas in which we can work together to our mutual advantage.

Non-governmental links are nothing new. The UK and Japan established a host of non-governmental links more than 100 years ago, as Japan set about catching up with the west. The British railway engineer, Edmund Morel, played a key role in establishing the Japanese railway system; the Englishman Richard Henry Brunton built Japan's first modern lighthouses; and Henry Dyer helped to establish Tokyo university.

That tradition of vibrant non-governmental links between our two countries remains strong today and received a major boost from the spectacular success of the year-long festival Japan 2001, which kicked off in May last year and is now drawing to a close. The festival brought us a series of memorable cultural events, including the Hyde Park Matsuri, in which His Imperial Highness Crown Prince Naruhito and His Royal Highness Prince of Wales took part. It drew massive crowds to experience the essence of a Japanese summer festival and gasp at the yabusame horseback archery. The Chikamatsu-za kabuki theatre troupe at Sadlers Wells drew rave reviews, as did the British Museum's 100 Views of Mount Fuji exhibition.

However, Japan 2001 has not just been about the big headline events. One of its most striking successes has been the organisers' use of the internet and other modern technologies to foster Japanese cultural events at a grassroots level throughout the country. Interest in the Japanese martial arts has flourished, and more than 750 schools, from the Shetland islands to Penzance, have taken part. With more than 80,000 children involved, the festival has helped to build the foundation for continued firm friendship between our two peoples in the future. Many people contributed to the festival's success, and the leadership of Lord Blakenham was essential.

To keep up the good work, our embassy in Japan marked the alliance's centenary by launching a new green alliance, which will be a trigger for young people in our two countries to think together about environmental issues and participate in volunteer activities. More than 40 schools and universities are participating, and more than 170 venues throughout Japan will be planting UK-grown oak saplings as a symbol of our enduring friendship. I am delighted that the all-party group planted one of those trees in the gardens of the Japanese Diet, and that Foreign Minister Kawaguchi planted the first, in our embassy in Tokyo, in her last day as Environment Minister before her

11 Apr 2002 : Column 76WH

promotion. Two members of the Japanese royal family have been studying at Merton College, Oxford, again strengthening the links between Japan and our higher education institutions. When I visited Japan in January, I was delighted to be asked to launch an additional commemorative programme—UK Now 2002, a series of events put together by the British Council to challenge stereotypes of the UK and to bring the best of contemporary British culture and design to the young people of Japan. Links between our young people were also strengthened last year by the launch of the youth exchange scheme, which enables up to 400 young people on each side to live and work in each other's country, and by the continuing success of the Japanese Government's Japan exchange and teaching programme, under which hundreds of young British graduates get the opportunity each year to teach in Japanese schools and work as international relations advisers in local authorities. I spent a memorable evening of saki and Japanese food with them in Saporo in January. It is a curiosity that the Japanese Government are still the single biggest employer of British graduates.

Finally, I should acknowledge the valuable role of the UK-Japan 21st-century group in bringing together annually a wide range of UK and Japanese opinion formers. This non-governmental think tank held a successful meeting in Oxfordshire in February, under the chairmanship of my right hon. Friend the Member for Hartlepool (Mr. Mandelson) and with the participation of several of my hon. Friends, including my hon. Friend the Member for Reading, East (Jane Griffiths) who is, to the best of my knowledge, the only Member fluent in Japanese. I am pleased that she is present. I was delighted to be able to speak to the group, which decided to pay particular attention in its forthcoming work schedule to the potential for enhanced science and technology co-operation.

This has been a necessarily swift overview of the diversity of the current bilateral relationship. I first visited Japan about 20 years ago, and the Japan that I returned to since assuming my ministerial duties is richer, more confident and has a more vibrant youth facing the challenges of the 21st century. One hundred years ago, we signed the Anglo-Japanese treaty and ushered in a new era of British-Japanese relations. I hope to see such relations in the 21st century become the cornerstone of Britain's engagement with the world and Japan's growing presence on the global political and economic scene. I look forward to an active discussion in today's debate. I am grateful to the House authorities for allowing it to take place, and hope that as many hon. Members as possible become involved in deepening and broadening the relationship between our two countries still further.

2.52 pm

Mr. Richard Spring (West Suffolk): First, I warmly congratulate the Minister on initiating today's debate and thank him on behalf of all Members for his constructive interest in the region.

As a Member, I have had the pleasure of visiting Japan twice, but before entering the House I worked with many Japanese companies, particularly in the financial services industry. It is crucial that relations

11 Apr 2002 : Column 77WH

between our two countries are given reasoned and sensible consideration, so I am pleased that that is exactly what is happening in today's debate.

Japan is one of Britain's closest friends and international partners today, but we should not forget that we have enjoyed a close relationship with Japan for more than a century. It has not been a relationship without periods of disagreement, even intense conflict, but underlying it is a sense of mutual respect and understanding.

We are both island nations with long-established monarchies and a sense of our own histories and unique places in the world. In tracing the roots of this friendship, we can look back about 150 years to the Meiji restoration when Japanese teams began visiting British factories, dockyards and industry to learn new skills in shipbuilding, for example. Indeed, many Japanese still look back to the early years of the 20th century and the Anglo-Japanese friendship treaty as the golden years of our relationship, and many would like to revive it. In spirit, we have done just that, especially in the past 20 years. A mutual respect for the history, traditions and values of our two nations underpins our relations; traditions that blend with the inner resources and strengths of vitality, ingenuity, and social cohesion that the Japanese possess in such abundance. They provide a combination of qualities that I am certain will enable Japan to continue to modernise and to undertake the on-going structural readjustment that is so vital if it is to re-emerge as the fully fledged, key global player that it deserves to be. In the 1970s and 1980s we, too, had to undergo a series of structural changes.

The Anglo-Japanese relationship, on a practical level, used to be based on economic ties, and, to an extent, those were a one-way Japanese inward investment. That investment and those economic ties are still very important and most welcome, but our relationship is now much more a two-way affair. There are many mutually beneficial opportunities for extensive cultural, technological and scientific exchanges, not to mention the tourism to which I shall return later.

That closeness has benefited both our countries, as increased exchanges of information and ties have enabled us to offer important advice on how—and how not—to reform welfare services, and how to improve systems of social insurance. In many respects, as the Minister said, similar problems beset both countries.

Britain and Japan enjoy good economic relations, and in recent years relations between the two countries have continued to expand. Japanese companies now have more than 1,400 business offices in the UK. In manufacturing, the number of direct investments in Britain exceeds 260, which accounts in value for about 40 per cent. of all Japanese investment in the EU. Without a shred of doubt, this country has been transformed by inward investment from Japan in the past two decades. By directly employing about 80,000 people, those manufacturing companies play a part in stimulating the British economy and improving the country's trade balance. British exports to Japan in recent years have also been steadily increasing. The Japanese embassy has been supporting the British

11 Apr 2002 : Column 78WH

Government and industry's positive and constructive approach towards Japan, which is most clearly expressed by the Action Japan export campaign.

On 2 September 1996, our countries' then Foreign Ministers, Yukihiko Ikeda and Malcolm Rifkind, held bilateral talks in Tokyo and agreed to a UK-Japan action agenda, a programme aimed at promoting economic relations between the two countries and also at increasing British trade in Japan, and I hope that it will continue to be successful.

The Conservative party remains committed to making Britain a country in which business can flourish. We want this country to continue to function as a conduit for firms to gain access to British potential and to the European single market. Despite recent economic slow-downs and a degree of stagnation in the Asian economies, on which various economists, not always helpfully, have seen fit to comment regarding Japan, there is much that we can still learn from that country. It remains a hugely rich society, but one that continues to emphasise duty and obligation to fellow citizens. Japanese people also place a massive premium on educational attainment.

The link between Britain and Japan is strong at every level and the contribution made to this thriving relationship by Japanese citizens based in this country is highly valued. The connection reaches from grass-roots organisations with few members to the great multinational companies producing products worth billions of pounds a year and employing hundreds and thousands of people, the most visible signs of which, economic links aside, are the thriving academic exchange opportunities in higher education between Japan and Britain, and the tremendous volume of tourism. While some may be here to improve their language skills, I hope that many also enjoy the numerous tourist opportunities of a long stay. All those visitors represent major, welcome contributions to British life and society, whatever their length of stay.

On defence and security, we find a growing overlap with Japan in the new globalised context. Both Britain and Japan know that their security is wrapped up closely with the USA. Indeed, Japan has made a major move towards becoming an active international player again by offering to send military forces out of the homeland area into crisis spots. That constitutes a huge break with the Japanese post-war tradition of military non-participation and we, and the world, should welcome it as a significant contribution to international global security. It would be advantageous to have that Anglo-Japanese partnership enhanced on a global level. Together we must deal with common threats to world stability. In the war against terrorism, we welcome the fact that Japan has contributed an aircraft carrier and given her full support in so many ways.

East Timor has long been an area of conflict and it is to be hoped that Japan might soon take on a greater regional role, helping to forge regional solutions to problems. We should also co-operate in the face of challenges presented by issues such as environmental change and international development. Significantly, in the war against terrorism, Prime Minister Koizumi has taken a personal lead and from the outset offered Japanese support. Defence agency director General Nakatani ordered the dispatch of maritime and air self-defence forces to provide logistical support for US and

11 Apr 2002 : Column 79WH

British troops fighting the Taliban and the al-Qaeda terrorist network in Afghanistan, the order being issued after Prime Minister Koizumi had earlier approved a detailed implementation plan for SDF logistical support to the US-led military campaign in Afghanistan.

That plan was formulated in line with the new anti-terrorism law in Japan that enables the SDF to be dispatched overseas to provide support to the campaign. The maritime self-defence force plans to send three warships and 1,200 troops; the air self-defence force plans to send eight planes and 180 personnel. That is a vital step and one that required a degree of soul-searching and political courage in Japan. I pay tribute to Japan and thank it for its invaluable help. I also pay personal tribute to Prime Minister Koizumi for his courage and his far-sighted plans for reform. We wish him every success in his reforming endeavours, as they will benefit not only Japan but, indirectly, the British economy. A prosperous Japan is good for Britain.

As the Minister and the hon. Member for Glasgow, Pollok (Mr. Davidson) said, it will not have escaped the notice of many in Britain, and certainly in Japan, that an influx of fans will visit Japan for the World cup series. While I wish the Japanese the best of luck with the organisation and success of the tournament, I hope that all will be well during the period of the games. I endorse what the Minister said about our cultural links, particularly on the success of the festival, which was a great tribute to the organisers and an eye-opener to so many in Britain as to the cultural and artistic riches of Japan.

In conclusion, I say unhesitatingly that UK-Japanese relations look very healthy. We can look forward to a new era of co-operation and a 21st century in which I hope Japan will play an even more important international and regional role. I am confident that British Governments will take the lead in forging new and mutually beneficial partnerships with Japan and in building upon and consolidating existing ones.

3.4 pm

Jane Griffiths (Reading, East): I welcome the debate and the privilege of contributing to it. Many people have long awaited the opportunity to debate the issue of relations with one of our most important allies.

I first had the opportunity to visit Japan in 1979. That turned into a long stay, and I did not return until late 1980. I studied the Japanese language, which is a study that I urge upon all hon. Members. They would find that the language is mellifluous and that it contains slightly fewer sounds than the English language, which makes the spoken language relatively easy to master. All one needs is determination or, as the Japanese say, "ganbatte". As a pastime, many languages are studied in the House, so I hope that Japanese will soon be one of them.

My constituency, Reading, East, is home to many Japanese residents, partly because it is home to the only Japanese higher education institution in the UK, Gyosei college. The college invites several hundred young Japanese people to Reading to undertake study courses, from which they benefit. The people of Reading also benefit from their presence and the opportunity to get to know them.

11 Apr 2002 : Column 80WH

The UK and Japan are partners in the world. It has been said that we are both island nations and as such we have much in common. We both drive on the left, and I have been told that that is because of the horseback knightly tradition, which is different in each country. That may or may not be true.

I look forward to an expansion of our partnership in the world. In the past, it has been said that Japan has been a little reluctant to play its full part in world affairs. In the 1980s, the concept of Japan's internationalisation was much talked about. That is now a reality. I particularly look forward to the UK, Japan and other nations working together in Africa as part of the new African partnership. The plight of many African nations is a shame to the civilised world. It is up to relatively wealthy nations—Japan, the UK, other European nations and, of course, the USA—to work together to help African nations, and to help them to help each other.

Although relations between our two nations remain good, some issues can be an irritant to their maintenance. For example, our two nations take a different position on whaling. Rather than insulting the Japanese Government, as some anti-whaling groups do—with the best intentions—it would be better to work together to solve the issue.

I could not continue without mentioning the World cup. I am delighted that Japan is to be one of the host nations. Japan plays very good football—I shall not compare Japanese with Korean football because that is for another debate. English football fans have a reputation that goes before them. For the vast majority of fans, the reputation is unjustified. It would be unfair to ask English football fans to acquaint themselves with Japanese culture in any depth before they travel to Japan. However, I hope that they will remember that drinking beer is not a competitive sport, but to be enjoyed in moderation, as Japanese people understand. Some of the best beer in the world is produced in Japan, and I hope that our football fans go there and drink Sapporo beer in moderation.

There is a beer hall in Sapporo where people can pay an entrance fee and then drink as much beer as they want, until they have had enough—I shall not give out its address.

Mr. MacShane : I have to announce the sad news that, for the duration of the matches in Sapporo, that beer hall will be closed.

Jane Griffiths : I thank my hon. Friend, and congratulate the management of that beer hall on its wise decision.

I hope that our football fans take part in the life of Japan while they are there. They will find a warm welcome and much that is familiar, although they will find an entirely different culture. What has not been emphasised in discussions about relations between the UK and Japan is the cultural influences that we have upon each other. I am not talking in particular about great works of art or theatre, which we know about but which are rather rarefied. I am talking about, for example, sumo wrestling, which has been shown on television in this country. When I lived in Japan, I became a great fan of sumo wrestling, and I have long

11 Apr 2002 : Column 81WH

hoped that there could be sumo in this country. Sumo challenges our assumptions about sport and athletics. The bulk, body fat and mass of the wrestlers leaves one to believe that they could not possibly be consummate athletes, but that is exactly what they are. The spectacle is to be recommended to all.

Japan has had other cultural influences on the UK, well known to young people in particular. The influence of manga cartoon on our film and on our young people's television has not been emphasised enough. It has been a great influence on European artists and altered the look of many of our cartoons and films. It is an important cultural tradition in its own right. There is a spectrum of cultural influences, including the phenomenon, with which I hope hon. Members here are familiar, "Hello Kitty".

We have a long way to go in developing our relations, but we have come a long way already. I know that we, Britain and Japan, will go forward together, shoulder to shoulder, as key players in the world and as a joint force for good in it. I look forward to greater progress.

3.12 pm

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale): This is a very important debate. It might even be timely, as many hon. Members have referred to the World cup, although, to Scottish ears, the slightly gratuitous over-repetition of references to the World cup this afternoon does not necessarily chime positively. None the less, I liked the suggestion from the hon. Member for Glasgow, Pollok (Mr. Davidson) that, as an ambassadorial gesture, the English fans might be kitted out in kilts. If the Minister or the Minister for Sport wishes to take that up, I can suggest a company of leading kilt makers in my constituency, Lochcarron of Scotland, that would, I am sure, be delighted to help out. That would give a whole new take on international diplomacy.

The hon. Member for Reading, East (Jane Griffiths) made some interesting points, particularly on the cultural aspects of the debate. She made two suggestions: that we should learn Japanese or take up sumo wrestling. I had not imagined learning Japanese, but if there is to be a choice between the two, I think that that would be the easier and I would have to sign up for it very speedily.

Seriously, this is an important debate. We in this House should acknowledge regularly the significance of Japan and Britain's relationship with Japan. Japan is a phenomenally important world economic power and, as has already been mentioned this afternoon, has an important and growing world diplomatic role. We in this country must be seen to encourage that positively.

On 22 February at Ditchley park, the Minister made a speech on Japanese relations, in which he mentioned four themes: the importance of strengthening bilateral relations between our two countries, the need for us to focus on international security and the fight against terrorism, the pressing need to open trade and remove the forces of protectionism and the importance of building democracy. Not surprisingly, we have heard echoes of those matters today. They are a useful focus for this debate and I want to turn my attention to them.

11 Apr 2002 : Column 82WH

Japan has been the key economic success story of the post-war period. In recent years, there has been a danger of that being forgotten because of undoubted difficulties in Japan. Stripping away the occasional example of schadenfreude, we must recognise that Japan is of huge importance. That should be encouraging to us because it is good for Britain. The complacency in this country about Japan's role in the world that was evident 30, or even 20, years ago has been brutally shaken up. In a generation, we have moved from sneering to cheering—from mocking Datsun Sunny cars to queueing up for PlayStation 2 releases. That is an image transformed and a success that we would do well to replicate in our country.

However, there are problems that have consequences for the region and the world economy. We must hope that Japan finds its way out of its present economic difficulty. In that process, trade will be of key importance. This country, and the west in general, used to be concerned about old-style protectionism in Japan. That protectionism has largely disappeared and the trend towards openness is continuing. The balance of trade is still rather one way, and Britain has to make up much ground.

Nevertheless, I would highlight the strengths of British success in Japan. To make another reference to my constituency interests, Locharron of Scotland is an important part of a textile industry that is still finding strong markets in Japan. The key industry in the borders is knitted cashmere. My home town, Innerleithen, features such world names as Ballantyne, which has top shops in Tokyo as well as in other key world capitals. Although some of these matters are now devolved, we would welcome whatever support the Minister and his colleagues could give to help small British companies to promote top-quality products and expand their markets in Japan.

In the papers this week, an interesting story showed that things have moved on. An Oxfam report highlights that the European Union is deemed to be more protectionist than Japan in its dealings with developing countries. That is not the self-image that we would want to have in Britain and is another wake-up call for us. We should consider that carefully.

Trade is not just a bilateral issue; it is multilateral. The current dispute about steel in the World Trade Organisation is a good example of an issue on which Britain—as part of the EU—and Japan have similar interests in their dealings with the United States, and their concerns about the consequences of its actions. I am sure that Japan is watching carefully how Europe handles the matter. I am anxious because I am a veteran of the banana war between the USA and Europe, where collateral trade damage to other trade issues and countries became a great concern. Japan will be taking careful note of that at the moment. It is a warning to us all that it is not just a matter of ensuring that the USA behaves properly in the dispute, but that Europe does, too. In doing so, we must not work against the interests of our other trading partners across the world.

The WTO has become particularly topical in Asia recently. Japan's huge neighbour, China, is now a member of the organisation, which must surely give Japan a different perspective on it. I hope that it will also make Japan join in the reformist agenda, which recognises the strengths of the idea of the WTO—what

11 Apr 2002 : Column 83WH

it stands for—but is not oblivious to its problems and failings. There is no question but that disputes between international trading blocs are becoming more complex and bitter and that the WTO is unable to cope with them. Some of its decisions are opaque, and at times it certainly does not provide international leadership. As Japan observes and co-operates with China's entry to the WTO, I hope that it will act with Britain and others to ensure that the organisation has the skills and resources that it needs to do the very important job of policing world trade.

Investment is closely linked to trade and, as the hon. Member for West Suffolk (Mr. Spring) mentioned, there is a vital relationship between our two countries in that regard. A statistic that I believe has already been highlighted—I hope that it is right; it comes from the Foreign and Commonwealth Office website—is that the UK receives about 45 per cent. of all Japanese inward investment to the European Union. That affects a thousand companies and 88,000 jobs, which is not insignificant. There are still issues surrounding financial services deregulation in Japan, but in Britain we certainly have a very strong Japanese presence. I understand that the second largest of the overseas-owned banks in the City of London is Japanese.

I do not wish to provoke the hon. Member for Glasgow, Pollok, who seems to be enjoying himself this afternoon. However, Japanese investors increasingly raise the issue of the single currency and ask whether Britain will be part of it. The FCO website says that

I always listen carefully to the hon. Gentleman. Like him, I would be wary of entry to the single currency at the current rate, but we cannot duck for much longer the long-term questions about the future of outside investment in this country—particularly Japanese investment—if we do not do something about the single currency.

Mr. Spring : Does not the hon. Gentleman think that a good way of dealing with that very important issue would be to invite the Government to produce a White Paper, for which we have consistently asked, on the economic, political and constitutional implications of the single currency as well as the possible investment impact, and to elevate the debate beyond website level?

Mr. Moore : I am very conscious, Mr. Gale, that I will soon be in deep trouble if I attempt to turn this into a debate on the single currency, so I will not seek to do so. Instead, I invite the Minister to comment on the hon. Gentleman's and my observations when he replies.

A priority in our trading, investment and economic dealings with Japan must be a commitment to the open and competitive relationship that has developed in leaps and bounds during the past 30 years. I hope that it will continue.

For much of the post-war period, Japan's foreign policy was largely dominated by the events of the war and its role in it. As a consequence, there has been considerable nervousness about any development of an external role for Japan, and there has at times been some concern in the region around Japan about its domestic

11 Apr 2002 : Column 84WH

developments. Not long after he became Prime Minister, Mr. Koizumi caused some concern with his visit to the Japanese war graves. There was also concern from South Korea and China about the content of certain school textbooks. That sensitivity might have grown into something bigger, but during the past year the skill of the Japanese Prime Minister has taken Japan into a more outgoing, expansionist phase instead of moving into an isolationist phase. That move could cause concern, but I view it positively and hope that it will continue.

Some Opposition politicians have made unwise comments about the potential development of nuclear weapons. By contrast, the recent visit by the chairman of the Standing Committee of China's National People's Congress was a great success and provided a flavour of the growing confidence of different countries in dealing with one another. What is good for the region must be good for the rest of the world, particularly Britain. The Minister highlighted the fact that we have been strengthening our direct ties, and the UK-Japan 21st century group, which is chaired by the right hon. Member for Hartlepool (Mr. Mandelson), plays an important role in that and should be encouraged.

Japan is playing a more confident world role, not least in building democracy. Its work on behalf of Afghanistan is clear and strong. It hosted the conference on the rebuilding and development of Afghanistan in Tokyo on 21 and 22 January. That was important and the generosity of Japanese aid pledges has not gone unnoticed.

The hon. Member for Reading, East made an important point about the new partnership for African development. Japan is a key player in G8, alongside the United Kingdom, and helps to drive that initiative forward. The initiative was born in Africa, which is taking the lead but needs western industrialised support. Potentially fatal hesitation might have resulted from the wrong reaction to Zimbabwe and its role in the Commonwealth, but President Mbeki of South Africa played an important role in keeping Africa focused on the right issues. I hope that Japan and the United Kingdom will respond positively to that development and give every support to the initiative.

The Minister referred specifically to the prospect of Japan becoming a permanent member of the United Nations Security Council, and Liberal Democrats strongly support that aspiration. Its present set-up, which reflects a bygone age, should be changed and Japan has developed an important new role.

If I may say so in passing and not too cheekily, today marks the creation of the International Criminal Court, which will become effective at the beginning of July. Some permanent members of the Security Council—most importantly, America and China—have not adopted or do not support the court, and perhaps the Government will encourage Japan to endorse it as a sign of its commitment to a peaceful world order and the development of the United Nations role.

On the whole, our relationship with Japan is positive, but it would be wrong not to touch briefly on some trickier issues that bedevil it. One area of difficulty between our two countries concerns the nuclear issue. The Conservative Member who referred to the nuclear

11 Apr 2002 : Column 85WH

stockpile of plutonium and how it could be developed into nuclear weapons may have been speaking wide of the mark, but I should be interested to know what discussions and representations the Government are having with the Japanese to discover the reason for that stockpile and how it may be used. Nuclear energy is a fraught issue, to use British understatement, and the fiasco of BNFL's falsification of records concerning MOX waste was the defining moment in that relationship. It regularly sends delegations to Japan to seek to reassure it that that serious matter was a one-off.

Japanese domestic opinion is alarmed about what is going on, and trust, which is a key word, may not be possible in those circumstances. Perhaps the Government can grasp the issue and recognise that many countries across the world are not interested in nuclear energy and will move away from it as a future fuel source. Such countries will consider BNFL's future to be dealing with the clean-up of existing problems with nuclear energy, and not trying to develop technologies for a new generation of nuclear stations. Japan is rightly and proudly associated with environmentalism, not least symbolically through Kyoto, and it is important that we support it in improving that reputation.

The hon. Member for Reading, East referred to whaling, and I should like to ask the Minister a couple of brief questions about that. Whaling has been a long-running source of international tension. Non-governmental organisations such as Greenpeace have highlighted their worries about the increasing number of whales caught for scientific research. Perhaps more seriously, they have also made allegations about the ways in which bilateral aid between Japan and other countries is being used to influence votes at the International Whaling Commission. Those are damning and damaging allegations that are in the interests neither of Japan nor the rest of the world. The Government surely have a role to play in understanding that issue, explaining its dangers to Japan and its truth to the rest of us. I hope that the Minister will be able to touch on that in his closing comments.

Those are two difficult issues, but I do not want them to overshadow what I regard as a very positive and overwhelmingly beneficial relationship between our two countries. It is important that we build on the success of the past 50 years since the second world war. We need, particularly in economic areas, to build on what has developed very strongly during the past 20 or 30 years. Japan is rightly taking a stronger international role, which Liberal Democrat Members support, and we also support the Government in strengthening those ties.

3.32 pm

Mr. Iain Luke (Dundee, East): I have never been to Japan, but I was recently a member of an Inter-Parliamentary Union delegation that was involved in extensive discussion with countries from all over the world. Japanese parliamentarians made a very positive and intense contribution on globalisation.

Globalisation is an all-embracing term defining the economic and communications revolution set in track by industrialisation and imperialism. Over a considerable period, it has shaped the contours of the

11 Apr 2002 : Column 86WH

modern world in which we live. The effect of that process has been far-reaching, and it has had an impact on all of us, wherever we live, on whichever continent. Globalisation will continue to have an enormous effect on the world that our children inherit. It has given birth to an economic market without frontiers; it has increased the nature, extent and volume of world trade; and it has created a truly global community that makes us more closely linked and interdependent.

Although that process originated as a product of our industrial revolution, and other western countries' subsequent industrial revolutions, Japan has undoubtedly made a huge contribution to it. Its 19th-century cultural revolution, which was set in train by the Meiji restoration, opened what had traditionally been a very closed society to western thought, industrial change and innovation. As a graduate in modern history who specialised in courses on the far east, I have studied Japanese history. Japan's tremendous growth and the cultural changes that it went through are hugely engrossing areas of study that should be of interest to us all.

The United Kingdom and Japan have had historic links through the industrial revolution and globalisation, and it is important to stress the involvement and input of Scotland in such a special relationship. It is worth emphasising that although the formal treaty relationship was struck in 1902, informal contact and economic exchanges had occurred between the two countries for the greater part of the 19th century. I refer to two important links that were forged between north-east Scotland and Japan in the middle decades of the 1800s. At this point, I may fall out with the Minister. He said that Henry Brunton was an Englishman, but my records show that he was an engineer from Muchalls near Aberdeen, who went to Japan in 1868 and stayed there for eight years to supervise the installation of a scheme for lighthouses for the entire coast of Japan. Thomas Glover was certainly a Scotsman. He was another product of north-east Scotland and was born in Fraserburgh. He went to Japan in 1859 and was involved in various business ventures in Nagasaki. His house continues to be a popular tourist attraction.

Subsequent to such visits by the Scots, the first real intergovernmental Iwakura mission to be mounted by the Japanese Imperial Government was to the United Kingdom and America. It visited Scotland in 1872 during a two-year programme of intense fact-finding in the outside world as part of the Meiji restoration. The mission was led by Ambassador Iwakura and included four associate ambassadors, 48 delegates and 54 students. It was a forerunner of the foreign excursions frequently undertaken by our all-party groups. The mission precipitated the development of important cultural and industrial links between Scotland, the rest of the UK and Japan. Indeed, two Scotsmen, Henry Dyer and Sir Alfred Ewing, became principals of prestigious engineering colleges in Japan.

That close reciprocal relationship was disturbingly disrupted by war in the 1930s and 1940s, but happily it was resumed with greater vigour and enthusiasm by both countries in the later decades of the last century. As a result, we have witnessed the creation of a special relationship between two highly industrial, modern market economies of constitutional democracies, which,

11 Apr 2002 : Column 87WH

although separated by the extent of the globe, have many things in common. It is not well known, but Japanese society is based on an intense clan society such as the one that existed in Scotland before the highland clearances. Much of Japan's industrial development was based on a system whereby clan chiefs received money from the Government for giving up their feudal rights for the clansmen. Japan has a prosperous and developing constitutional monarchy with bicameral Houses of Parliament.

A century on from our initial formal treaty of alliance, we are now partners in a new alliance to create better understanding between two great countries. We have the joint aims of creating a peaceful and co-operative world order to eradicate terrorisms and third world poverty, and to promote greater and more equitable levels of prosperity and well-being throughout the world.

When contact between the countries was first made, the United Kingdom was truly the workshop of the world and Scotland was a significant component of the UK economic equation. Since then, compared with the Japanese economy, the UK has suffered a relative economic decline. In the 1960s, 1970s and 1980s, Japan became the innovative centre of new technologies and new industries throughout the world. In the past decade, however, I am glad to say that the UK has witnessed a resurgence of its enterprise, with Scotland again playing a leading part in the development of the high-tech IT revolution. It is creating and enjoying a synergy with our industrial and economic partners in Japan and the United States of America, with which both countries have close relationships.

A joint goal for all three countries in the industrial partnership is to continue to foster a positive and progressive partnership and to encourage trade, enterprise and prosperity. At the same time, they want to ensure that the growing economic strength and potential of Japan's close neighbour, China, is harnessed and productively channelled into constructive economic relationships with its Asian and western trading partners. They also, whenever possible, encourage democratic reform in the Chinese system of government.

As major players in the process of globalisation, and as two of the four major economies that have benefited from the world economic system, Japan and the UK are morally obliged to ensure that more disadvantaged emerging countries can more equitably share in the wealth and material well-being produced by our two countries' entrepreneurial efforts. There is also an obligation—this is the nub of the debate—to ensure that proper management of our economies is a top economic goal. We must ensure that the international economic trade regime enshrined in the WTO operates equitably so that the depressions that caused so much chaos and despair in the past are consigned to the bin of history. We look forward to more even economic progress in decades to come. A major feature of that economic management is ensuring that the production and extraction processes needed to fuel economic activity and development take place within the parameters set by the Kyoto agreements.

I welcome the positive comments made by my hon. Friend the Minister on 22 February in a speech entitled "A new Japan/UK alliance for the 21st century". He

11 Apr 2002 : Column 88WH

suggested that our two nations have a pivotal role in ensuring a wider world community for peace and prosperity. At the centre of that is the creation of greater understanding in our two countries of our respective values and cultures. Much has been made of this year's World cup, to be played in Japan and Korea. That will be a lesson for the Japanese population, who will witness at first-hand the football tribalism so evident in both British and English society—a culture that, to judge from watching television, the Japanese community has taken to heart. Unfortunately, the civilising influence of Scotland's tartan army will not be available in the tournament. However, the people of Japan have already taken tartan and Scottish whisky to their hearts. Japan is one of whisky's best customers and biggest importers, and long may that last. There is whisky, as well as beer, to be enjoyed and to supplement the sake.

As in the earlier period of the UK-Japanese relationship, Scotland plays a major role as an economic partner and cultural collaborator. Indeed, my own city, Dundee, on the east coast of Scotland, is playing a major role in heightening that greater cultural understanding. I draw the Chamber's attention to an article that appeared in the Daily Record of 20 November 2000 with the headline "Our Dennis is big in Japan". According to the byline, the journalist is Alistair Munro. The Dennis in this case is not my hon. Friend the Minister, but none other than Dundee's own Dennis the Menace. The rest of the headline reads: "Menace helps teach kids English". The article states that research shows that the Dundee-born tearaway comic strip is doing more to help Japanese children to learn English than the usual English textbooks, with growing numbers of schools in Japan using the Beano, Dennis the Menace and Gnasher. I have many back copies because of my young family, and anyone present is welcome to take them home.

On a more serious, academic note, I draw the Minister's attention to another link that Dundee has with Japan. The prospectus of the university of Abertay, Dundee offers a course that is not matched anywhere else in the UK. It is a BSc honours course in computer games technology with Japanese studies. The course is progressive, and the university of Abertay has many links with the far east and near east. The course is a variation of a highly regarded computer games technology course that is already available at the university, and it allows students who are in the concluding years of their studies to gain work experience at placements with Japanese games companies and research facilities. Such collaboration is the essence of our relationship both today and in the future.

Hopefully, the initiatives that have been undertaken in my home town are being replicated throughout the United Kingdom. Our relationship has been built on inward investment into the UK through, obviously, the growth of the Japanese motor industry and through IT investment from Japan, which is all too evident in Scotland. That will continue to secure friendly and prosperous relationships between our two great countries. We should examine fields in which my city has great potential, such as biomedical research, which is a strong point of the Dundee economy.

The point was made that we should try to learn Japanese. My grasp of languages is fairly poor, but I had a joyful experience when I was at the Scottish business

11 Apr 2002 : Column 89WH

school at Edinburgh university. One of my friends in the class was a Japanese banker who came to the university to study the postgraduate MBA course. His English was not so good, but his mathematics was red hot, and he gave me a great deal of help with business economics. We had a great Burns night together when he gave a good rendition of Japanese drinking songs that mirrored some of the more bawdy works of Burns from his productive times. There was a great feeling of comradeship and enjoyment, and the event was much more sophisticated than the karaoke that occurs in other hostelries throughout Scotland.

There is growing awareness and collaboration between the two countries, which I am sure the Minister and his team encourage. In the long term, it is for our mutual benefit and for the benefit of the wider global community that Japan and the UK—and Scotland, as part of the UK—build greater bridges and links to continue the dialogue that has existed since the 19th century. We should learn from the mistakes of the past to ensure that the economic future of the globe is peaceful and prosperous so that future generations will have a pleasant existence in a harmonious world that works for the benefit of all.

I am glad to have made my contribution. As I said, I have never been to Japan, but I hope that the links between Dundee and Japan have been relevant to the debate. I look forward to hearing subsequent contributions.

3.47 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I echo many things that were said about the UK and Japan. However, I start on a negative note by referring to the comments of the hon. Member for Reading, East (Jane Griffiths) about whaling. I share her worries, but surely the matter is not without the possibility of a reasonable settlement. I share the hon. Lady's view that it is inappropriate to throw insults at each other—particularly from this direction towards our friends in Japan. I hope that we will be able to conclude that rather unfortunate part of the relationship between Japan and the UK, and that the Minister will comment on that.

When the Minister opened the debate, he mentioned the forthcoming World cup finals in Japan. We have heard about that event so many times, and it grates on the Welsh ear because we have no representation there. Repeating that does not help—the fact becomes more hurtful as time goes on.

However, speaking of football—rugby football—there was a time when the Welsh rugby team could defeat the Japanese team comfortably. Alas, for two main reasons, that is not so now. There has been a vast improvement in the standard of Japanese rugby. It has grown in leaps and bounds over the past 10 to 15 years, but there has been a sad transient reversal of the standard in Wales. I was at one of the first post-war matches between Japan and Wales some years ago in the old Cardiff Arms Park stadium. On that splendid occasion I had the great fortune to sit next to the coach, Shiggi Kono, who I believe is still associated with the game in Japan. The sun is rising on Japanese rugby, and I wish it well.

11 Apr 2002 : Column 90WH

Economic links between Japan and Wales began about 50 years ago. Some 50 major Japanese companies have set up in Wales. Japan is traditionally a significant investor in Wales and an important export market for Welsh goods. In the first three quarters of 2001 the Welsh export market to Japan was worth £60 million, which is a considerable sum for a relatively small economy. Wales has gained significantly from that relationship, which has brought it jobs and good training, and has helped to create a viable high-tech industry there. Workers were given high-quality training to ensure that they developed the essential skills for a dynamic industry and the opportunity to run high-quality high-tech factories.

Not only those who work for the manufacturing plants have benefited. Japanese companies have also helped indigenous Welsh companies. Over time, firms moved their sourcing of components from Japan to local companies, and smaller Welsh firms have flourished as satellites around the plants. Japan has contributed a great deal to the economic development of Wales, and the legacy of all that it has done is crucial to our future. I pay tribute to the Welsh Development Agency and other agencies in Wales that had the foresight to visit Japan early on, many decades ago.

Like many people, when I purchase electronic goods I look at the Japanese products first, because of their high standard and reliability. I can think of hardly any electrical or IT goods in my household—or, indeed, in any offices—that are not manufactured by Japanese companies. However, those companies are going through a tough time. Hitachi, NEC, Toshiba and Fujitsu have announced global job losses and drops in profits last year caused by the falling demand for electronics and other IT goods around the world. The effects of that have been felt badly in Wales, with several plant closures and inevitable job losses. Many Japanese firms have relocated from Wales to eastern Europe. For example, Hitachi moved 350 jobs from Hirwaun to eastern Europe. The closure at Christmas was a sad moment, as it spelled the end of nearly half a century of television production, nearly two decades of which was under the management of Hitachi, one of the first Japanese companies to invest in Wales.

More than 2,000 redundancies were announced last year at Japanese plants in south Wales. There have also been some positive announcements, such as a £100 million investment programme by Toyota at its Deeside engine plant, but the overall pattern is still one of slight decline. However, I am sure that that can be addressed when the economic outlook improves. The Government are doing a lot, and I hope that they continue to do all that they can to secure Japanese investment in Wales. The Minister is positive on that point as on others, and I am sure that he has his eye on the ball.

The Japanese companies that I mentioned are under great pressure. Their tighter profit margins mean that considerations such as the cost of labour must be uppermost in their minds, hence the relocations to Europe. Possibly, the relocations are also partly due to the euro debate; I do not know, but I think that they could be. Leading Japanese industrialists have recently made statements that hint that something should be done, and that an indication, one way or the other, should be given about the euro.

11 Apr 2002 : Column 91WH

I hope that the Government will create the correct economic environment to secure those jobs. As I have said, that environment will be influenced by the strength of the pound. It is vital that those jobs—which are highly skilled and essential to local communities—are retained, and that we are able to sustain the high level of investment not only in Wales, but in the other constituent parts of the UK.

In September 2000, the First Minister of the National Assembly for Wales led a trade delegation to Japan. This is what he had to say:

That is excellent news, and it continues to happen. Since then, I understand that there has been a further delegation, and that the Minister has visited Japan. I hope that that relationship between Wales, the UK and Japan will go from strength to strength.

Because of the falling demand for electronic goods, Japanese technical expertise focuses increasingly on systems, services and software. We need to ensure that the partnerships between Wales and Japan continue into that new era. Wales has an excellent record in engineering expertise. For example, the world's first fibre-optic cable was developed and manufactured in St. Asaph in north Wales, and I hope that Japanese companies will make increasingly large investments in that sector in Wales—and throughout the UK. I strongly believe that if that happens, those investments will prove to be as successful for Wales and Japan as Japanese investment in the traditional manufacturing sector in its heyday.

The Minister rightly referred to the need to encourage more knowledge-based industries. That is a crucial sector, in which Wales needs to make headway. A report by the Cardiff-based economics consultancy Robert Huggins Associates describes how the percentage of knowledge-based business in Wales increased by only 0.4 per cent. between 1983 and 2001, despite the expertise that Wales has in that sector. Therefore, Wales has a lot of ground to make up.

Trade and investment are not the only links between Japan and Wales; tourism is also important. In 2000, there were 13,000 trips by people from Japan to Wales, and their estimated spend was £4 million. That is a small but significant part of the overseas visitor market, and I hope that it will rapidly grow, not just because such trips bring economic gain to Wales, but also because they give Japanese people the opportunity to visit Wales and its people.

Last year was excellent for Welsh-Japanese investment because, as part of the Japan 2000 festival, several events were held in Wales. For example, the Fujisawa male voice choir joined Côr Bro Ogwr at Sony hall, Pencoed, when the choirs sang in each other's languages. Other highlights have been a matsuri at the museum of Welsh life at St. Fagans in Cardiff, and the creation of a traditional Japanese garden at the national Welsh botanic garden. Many Welsh arts organisations that have never been to the far east are now planning to stage work there, while their Japanese counterparts are planning return visits to Wales. That can only be good for the future.

11 Apr 2002 : Column 92WH

My children told me to say that some Welsh groups, such as Gorkys Zygotic Mynci, Super Furry Animals and Big Leaves—all of which record in the Welsh language as well as in English—are big in Japan. That is what my kids have told me, anyway—although I am not in a position to deny or confirm that.

Not a lot of people know that there are at least two universities in Japan that offer courses in the Welsh language. Both courses are hugely over-subscribed. I happen to be—for my sins—a member of the White Robes of the Gorsedd of Bards in Wales. I am not bragging when I say that that honour is not readily bestowed. I was privileged at Llanelli national eisteddfod to see the induction of a Japanese professor of Welsh into the White Robes. His Welsh speaking was beyond perfection. I hope that we can build on that excellent cultural exchange between our two countries for the good of our economies, our future happiness and growth, and the creation of mutual respect.

I am upbeat about relations between our countries. There has been a slight downturn in the Japanese economy, but it will come back. It is a strong country and will come back stronger than ever, and I hope that when that happens, we in Wales and the rest of the United Kingdom can share in the growth.

4 pm

Mr. Ian Davidson (Glasgow, Pollok): I am proud to speak as joint secretary of the all-party British Japanese group which, I am happy to say, is the second largest in Parliament—an indication of the friendship and good feeling between our colleagues here and in Japan.

I congratulate the Minister on securing this debate. I do not always agree with him on those issues about which he is wrong. I make that distinction, because many agree with him even when he is wrong, simply because he is the Minister, whereas I choose not to do so. However, he has been absolutely first class on issues related to building links between the United Kingdom and Japan. I especially wish to pay tribute to the way in which he was able to increase from five to 10 the number of hon. Members in the parliamentary delegation who recently visited Japan, which made the visit more successful than it might otherwise have been.

The Minister mentioned heated roads in Japan, to show the prosperity of that country. There are heated roads in my constituency sometimes—when one of the neighbours has set cars on fire in the street. I agree that recent reports about the economic crisis in Japan are exaggerated. I have been there on many occasions and, goodness me, if that is a crisis, I would certainly like to have some of it in my constituency.

British parliamentarians' recent visit to Japan to meet our counterparts followed a visit by Japanese delegates to the House some 18 months earlier. I hope that the Minister will encourage such visits, because the relationships and dialogue built up during the process of parliamentary debate and discussion are valuable and ought to be encouraged. I am grateful for the efforts of Keith Haines of Japan Airlines who ensured that those of my colleagues who are not as accustomed to travelling as I am were able to do so in comfort and security. We were well looked after.

11 Apr 2002 : Column 93WH

It was noticeable that our discussions with Japanese colleagues were frank and open. That is usually a euphemism for an argument, but that was not the position in this case. The Japanese delegates were more open than has sometimes been the case about the difficulties that they face and the way in which they want us to co-operate. Frank and open discussion was especially helpful when we discussed our countries' relationship with the United States. There is a growing appreciation, both in the United Kingdom and in Japan, about the extent to which our positions are parallel. We both see ourselves as allies and friends of the United States, but we do not wish to be taken for granted or to provide uncritical support. We both feel that there are occasions when the Americans do not fully take into account the views of others in the world, and they sometimes need to be led to solutions that more fully reflect a world view. On several occasions, the Americans have acted in a unilateral manner and have sought to bully others in their own interests.

We need to build on our links with Japan to ensure that we act in accordance with our mutual interests as a restraining force in the world. Both countries can take credit for having restrained the Americans, especially in their response to the events of 11 September, which were so horrendous. The undoubted gut reaction in the United States was to lash out vigorously and immediately. What we achieved there as allies of the Americans was remarkable, and the Minister and the Prime Ministers of Britain and Japan are to be congratulated on their work.

We should also consider building on our relationship with Japan as regards aid to the third world. Japanese generosity in that respect is well understood and noted by those involved. However, there may be scope for greater co-operation. Operating with insufficient dialogue between us is not necessarily the most efficient way of utilising our resources. I am aware that third world countries who do not wish to reform practices that we would regard as corrupt tend to play donors off against each other. Presenting a more united front would help to promote good governance. As the Minister and others mentioned, Japan's role in East Timor is to be supported, as is its increasing role as a peacekeeper throughout the world. The British armed forces recognise and appreciate the support that Japan has been providing to British naval forces in the Indian ocean, and I hope that we can build on that support.

Co-operation in military matters should be taken further. Is the Minister prepared to reconsider enhancing procurement collaboration between the UK and Japan? We have a mutual interest in not becoming dependent on the United States for procuring high technology. Neither Britain nor Japan can go it alone in so many high-cost military spheres, but together we could achieve a greater balance between the United States and the rest of the world. I endorse the comments about continuing our support for Japanese membership of the UN Security Council, which is long overdue.

People-to-people links are also important, as are links at a high political level. It is only appropriate to draw to the attention of the Chamber the series of matches that have been held between the British and Japanese parliamentary rugby teams. We have each won a match,

11 Apr 2002 : Column 94WH

which is a politically balanced outcome. We should pay particular tribute to the work of Yoshiro Mori, the former Prime Minister of Japan, who has been a moving force behind the Japanese team and one of its stars. Following on from his previous proud sporting record as a stand off, he has transformed himself into a prop forward, which has different physical characteristics, as those who are familiar with the game will know. He scored a try in a recent game in Tokyo after the British players agreed that we would co-operate by freezing when he was near the line with the ball. Unfortunately, our planning had not extended to explaining our intention to the Japanese players.

Mr. Mori did not move at the fastest of speeds, and when he received the ball, the Japanese players pushed in behind him. As there was no resistance, he was completely flattened by his own players, which demonstrated the truth of the old political adage that it is not those in front that one has to watch out for, but those behind. However, we explained our intention to them later, and Mr. Mori succeeded in scoring a try. An attractive picture of it was taken, which he then displayed in the office that he occupied as Prime Minister. It was obviously the subject of discussion on several occasions. The building of such links is very important. As far as I am aware, no other country has its players displayed on the wall of a Prime Minister's office in a picture that shows the Prime Minister himself scoring a try.

In that context, it is only fair to draw attention to the multi-talented nature of British ambassadorial staff in Japan. Both Sir David Wright and Stephen Gomersall played in games against the Japanese Parliament, which, if not the greatest of sporting achievements, was greatly to their diplomatic credit. The Japanese parliamentary team have also played here on occasions, and their friendliness and sportsmanship was apparent, not least in the recent World cup parliamentary tournament.

It may be appropriate to mention, on behalf of the Government and the Opposition, how disappointing it is that the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore)—despite coming from an area with a long tradition of playing rugby and being young enough to make a contribution—has not managed to turn out for the parliamentary team. I mention that to several of his constituents, including my father, when I meet them. It is a great cause for regret that the Liberal Democrats have yet again betrayed the traditions of Parliament by showing themselves as weak-kneed and lily-livered. Does the hon. Gentleman have an explanation?

Mr. Moore : No. The hon. Gentleman is consistent in his attempts to attract me into this great parliamentary sporting body. I have to say, however, that I do more for world peace by staying off the rugby pitch.

Mr. Roger Gale (in the Chair): Order. As the hon. Gentleman's sporting integrity was challenged, I felt obliged to allow him to respond, but I now ask that we return to debating the matter in hand.

Mr. Davidson : How very perceptive of you, Mr. Gale; I had just reached that point.

Hon. Members who have been to Japan, either through sporting or parliamentary visits, would want to pay tribute to the support that we received from

11 Apr 2002 : Column 95WH

embassy staff. It is always difficult to single out individuals, but I want to mention Mara Myers who was particularly helpful. I hope that my reference to her helpfulness will not result in her transfer to Paraguay or somewhere similar. Foreign Office staff in this country have also been helpful, but it would be invidious to mention them by name, as they are too junior to have learnt how to be unhelpful while appearing pleasant. No doubt they will correct that as they develop their careers in the service of this country in the Foreign Office.

The World cup has been mentioned. I speak as the chairman of the Scotland-Nigeria Friendship Society, which will take a keen interest in the first round. Many of my colleagues have found an affinity with Sweden; others with South Africa: hopefully someone will support England in due course. Many English football fans are barbarians and I hope that the Minister will pursue the problem vigorously and seriously. This country's reputation, built up over many years, is in real danger of being destroyed by the misdeeds of some fans and by inappropriate cultural behaviour. I was horrified when my attention was drawn by some of my colleagues to alcohol-dispensing slot machines on the streets of Tokyo. The mind boggles at what English football fans might make of that. Many bars in Japan allow customers to run up tabs and pay at the end of the evening. I anticipate difficulties, especially if fans order without ascertaining the price and seek to avoid payment.

The Japanese have made strenuous efforts to ensure that the World cup will be a success. Some of my colleagues and I had the privilege of visiting one of the stadiums where England will play and of looking at some of the facilities. Excellent arrangements have been made, but the event could too easily be spoilt by inappropriate behaviour. I hope that the Government will make enormous efforts to ensure that it goes as well as possible.

Finally, we have similarities with Japanese parliamentarians. There, too, "finally" usually means that Members are 40 per cent. through their speech, but they want to give their audience hope that they are about to draw it to a conclusion. As in this country, Japanese parliamentarians say that they will not repeat what their colleagues have said but go on to do so. I want to avoid that, and mention a couple of points, not about trade, which has been adequately covered, but about cultural and social links, and the considerable efforts that have been made to build them up.

It worries me that the culture involved is what may be described as high culture, appealing only to an elite. We have not made quite as much effort as we should have done to promote popular culture as well as high artistic endeavour. I was impressed recently in Glasgow with a group doing Japanese drumming which had been trained in one of the local secondary schools. It was entertaining and gave people an interest in and a feel for Japan; many of the group's school mates were involved in a constructive way. The Government should try to focus more of their expenditure in the area on such issues.

I hope that in time the Government will establish people-to-people links with Japan that are as strong as those that have rightly been established with our European partners. I appreciate that the costs are higher

11 Apr 2002 : Column 96WH

and that the effort must therefore be greater, but earlier expenditure will bring results in the longer term, and I hope that the Government will take heed of that.

I want to pick up some of the points made about Japan's economic future and its present policies. When Labour Members and I were in Japan recently, we were a bit concerned that Japanese parliamentarians had a rose-tinted and misleading understanding of this country's economic reform, especially under Mrs. Thatcher, which they seemed to think had been relatively pain free. We explained that it had led to mass unemployment and social unrest on an almost unparalleled scale. Perhaps there is a role for the British embassy in compensating for the over-enthusiastic view of right-wing economic and monetarist reforms expressed by the consultants who are shipped out to Japan. We are in danger of giving the Japanese a distorted view of the process of Thatcherism. I am sure that the Minister, who is aware of the issue, will take it into account when further discussions take place.

I want to follow up the points made by the hon. Member for Tweeddale, Ettrick and Lauderdale about the euro. It has been my impression for a while that the economic difficulties that would be caused by a rush into the euro and the problems of entering the euro at an inappropriate exchange rate have not been adequately explained to the Japanese. There is undoubtedly a loss of investment from Japan and other countries to the United Kingdom. That loss affects not only the UK, but the whole of western Europe, as Japanese firms move to the low-wage economies of eastern Europe. I have discussed the matter with a number of Japanese colleagues and companies as well as in other eastern locations. The advantages that we offer in language, transport and skills remain, irrespective of our membership of the euro.

Planning issues have been identified from other potential inward investors. I note with interest that the Government are moving to overcome some of those difficulties. In my experience, Japanese inward investors welcome above all our friendliness and responsiveness. Gratitude has been expressed for Japanese inward investment, particularly by communities in Wales. Japanese inward investors also welcome the economic, social and political stability, which goes beyond questions of foreign exchange rates. It is too trite to say that the lack of membership of the euro is the main or only factor that discourages Japanese investment. We need to take a wider and more mature view of those issues.

I endorse the points on whales and whaling made by my co-secretary of the Japanese group, my hon. Friend the Member for Reading, East (Jane Griffiths). The issue has caused a great deal of concern to many in this country. We should continue to reflect our anxieties to the Japanese on those matters.

I have enjoyed greatly the links that I have established with Japanese parliamentary and other colleagues. They have always struck me as having an extremely good sense of humour. Their love of scotch and golf makes them similar in many ways to the Scots. We have a bond. Had we been given the choice of having the Japanese or the English as neighbours, I am not sure that we would necessarily have ended up in our current position, but we are where we are and we have to make the best of it. Antisocial neighbours are always a problem. I hope that

11 Apr 2002 : Column 97WH

the Minister will take on board the points that I have made and redouble his considerable efforts to ensure that we build on our already good relationship with Japan.

4.22 pm

Mr. MacShane : This has been an agreeable debate. There have been no manifestations of inappropriate cultural or nationalistic behaviour, but simply the natural effervescence of people who believe that the English football fan in a kilt would be a peace-loving horticulturist who would lay off alcoholic drinks just as long as he wore that noble garment. I will pass that on to the other Government Departments that are specifically concerned with that issue.

Throughout the debate reference has been made to points of policy that are the responsibility of other Government Departments. At the Foreign Office we try to co-ordinate and make a common international position that is tenable and sustainable, but I hope that remarks made in this debate will be noted, whether on whaling, which is a matter for the Department for Environment, Food and Rural Affairs, or on tourism, which is a matter for the Department for Culture, Media and Sport with its oversight of the British tourist industry.

We have had good contributions from real experts on Japan, who have been there often: the hon. Member for West Suffolk (Mr. Spring) has visited both as an hon. Member and in a private business capacity. It is probably fair to say that this is not an area where there is a great deal of bipartisanship. That is why, having greeted with some dismay the news that Baroness Thatcher will never make a speech in public again, this may be the moment to draw the veil of history over her activities as Prime Minister. It is time for all of us to start living in the 21st century.

Mr. Spring : Will the Minister give way?

Mr. MacShane : The 20th century would like to speak.

Mr. Spring : May I presume that the Minister is paying tribute to the extraordinary role played by my noble Friend Baroness Thatcher when she was Prime Minister in encouraging so successfully huge inward investment from Japan into this country?

Mr. MacShane : This week, Lord Callaghan celebrated his 90th birthday. There was no doughtier a champion of Japanese inward investment, particularly into the Principality. A great strength of Welsh politics is that it has not sought to make party political points; all sides have worked for economic investment into Wales.

My hon. Friend the Member for Reading, East (Jane Griffiths) invited us all to learn Japanese. My right hon. Friend the Prime Minister is committed to all his Ministers speaking at least one civilised language. I should be happy to undertake Japanese lessons. I agree with what my hon. Friend said about learning Japanese; I have many friends who have learnt the language and they confirm that although it seems mysterious at first,

11 Apr 2002 : Column 98WH

it has the same vowel sounds as Italian and a reasonably logical structure. The fact that it is an ideographic language may make it difficult for us to read, but we should not be put off. The company Linguaphone generously distributed its cassettes to hon. Members last year and if any hon. Member would like to start learning Japanese, I will do what I can to help.

The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) made an important point about Britain's high niche exports. I have been encouraging all our embassies aggressively to promote Scottish whisky, in its many splendid varieties, as an after-dinner drink. The UK produces fabulous textiles and woollens, and I would be happy to help the industry, through Trade Partners UK or in any other way, to promote its products.

I am reluctant to enter the debate on the euro because that could prolong my speech. Japanese firms come to the UK for many reasons. We are probably the most international and open economy in Europe, and our regional and municipal authorities go out of their way to make our friends from Japan welcome. All Prime Ministers, whatever their political views, have a strong commitment to such inward investment. However, the fact that we are part of a single market of 350 million people—a figure that will increase to 500 million in the next couple of years—is also important; if one produces in this country, one can export anywhere, duty-free and tariff-free, in the world's biggest market.

The issue of the single currency must be considered. I do not know how easy it would be to invest and sell in the United States if California, Wisconsin and Florida, for example, each had to deal with its own, separate currency. I must put on the record comments—not specific warnings—that make it clear that if at any stage there were a perception that Britain were turning its back definitively on the single currency and thus on Europe, the future of Japanese investment would need considerable rethinking. I put it no more strongly than that.

My hon. Friend the Member for Dundee, East (Mr. Luke) has not been to Japan. "Go east, young man," is all I can say to him. It is a wonderful and welcoming country of extraordinary stillness and beauty. It has lively politics, a great ecological movement and one of the most expressive youth cultures in the world. I have enjoyed every moment that I have spent in Japan. Apparently, the best way of getting there is by becoming a great parliamentary rugby player: I therefore invite my hon. Friend to polish his jockstrap and start training, in the hope of an invitation to be scrum half—since it seems that no hon. Member from Wales can play any better than most of its club sides.

The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) talked about Japanese whaling. One must be honest: that is a pebble in the shoe of the relationship between our two countries, as it is with many others. The problem is not unique to the UK and Japan; many countries are concerned about Japanese whaling, but they are equally concerned about whaling by Norway. That country is a close ally, friend and partner of Great Britain, although we believe that there is no justification for whaling, other than perhaps for some subsistence whaling by indigenous people.

11 Apr 2002 : Column 99WH

We have expressed concern: we have told Japan that extending the JARPN II research programme is unnecessary and provocative. We strongly oppose any effort to lift or weaken the moratorium on commercial whaling, which was put in place by the International Whaling Commission. We will make that clear at the IWC meeting in May, but I stress that Japan is not being singled out. The British Government's position is clear.

I was glad that my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson) referred, in the serious part of his speech, to the need for greater co-operation on overseas development issues. The new permanent under-secretary at the Department for International Development, Dr. Chakrabarti, recently visited Japan, where he signed what I think was called a "sister alliance" between the relevant two Departments, along exactly the lines that my hon. Friend suggested.

I agree that we need to step up foreign policy discussions, but I do not think that there will be many takers in Japan for anything other than a welcome for the United States security contribution in the region, just as we welcome its security contribution in Europe. I particularly welcome the contribution that the US makes in the Balkans, where I have some ministerial responsibility.

The swift action by Prime Minister Koizumi after 11 September showed how clearly the Japanese understood the need to tackle terrorist action. Their willingness to change the law and provide refuelling support for the US and the Royal Navy on the high seas showed that Japan was prepared to match a political

11 Apr 2002 : Column 100WH

commitment not only with words, but with concrete military action. The Government very much welcome that.

I could not agree more with the points made about popular culture. My hon. Friend the Member for Reading, East referred to manga cartoons, and all our children are imbued with Japanese culture every morning. If we do not get up early enough to switch the blasted television off, there they are, watching the best cartoon films for children in the world. The extraordinary strength of Japanese sport and culture, and the way in which Japanese artists are able to absorb and transform the best of western European art and culture, are a marvel to us all.

I hope that parliamentary links can be strengthened, and I am pleased that we could help to increase the delegation's size. I hope that those hon. Members who have participated in the debate will be able to visit Japan more often. There are problems with finance, but I hope that Parliament may consider changing the rules to allow hon. Members to make more visits on the parliamentary vote. That is certainly my wish.

So long as I am the Minister responsible, I will continue to support all efforts by any hon. Member to get to know that great country and to invite friends from the Japanese Diet to visit us, and to ensure that, in the 21st century, Japan and the UK march as friends, allies and partners, grow together and work jointly to solve many of the problems in the world.

Question put and agreed to.

 IndexHome Page