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House of Commons

Thursday 13 June 2002

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]


London Development Agency Bill (By Order)

Order for Second Reading Read.

To be read a Second time on Thursday 20 June.

Oral Answers to Questions


The Secretary of State was asked—

EU Enlargement

1. David Cairns (Greenock and Inverclyde): What assessment she has made of the impact on British business of EU enlargement. [58215]

The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): European Union enlargement will benefit British business by creating the largest single market in the world, with nearly 500 million consumers, and a level playing field for business across Europe.

Yesterday, I urged British business to seize the opportunities created by EU enlargement at a joint Foreign and Commonwealth Office/Department of Trade and Industry business press briefing.

David Cairns: I am grateful to my hon. Friend for that answer. She will be aware that tremendous goodwill towards the United Kingdom exists throughout the applicant countries. In fact, they would rather do business with the UK than with any of our competitors. She also knows, however, that those new jobs will not fall into our laps but have to be earned. In addition to the advice that she gave yesterday, will she outline what further advice and support the UK Government are able to give to British businesses to ensure that they can fully exploit the undoubted potential that will arise post-enlargement?

Miss Johnson: We have given a wide range of advice and much help to British business. Indeed, as a result of British Trade International's opportunity central Europe campaign, an extra 1,000 companies registered an interest in being involved in central Europe—that is in addition to the 15,000 companies that Trade Partners UK estimates are already exporting to or investing in the region.

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The website that I launched yesterday provides a number of links to key support and help for firms interested in that development.

Michael Fabricant (Lichfield): I am sure that the hon. Lady is right when she says that we can only benefit by enlargement of the European Union, but the question concerned what assessment she has made. Is she aware that the Minister for Europe told me in a parliamentary written answer that the Government have made no assessment, nor have they any intention of ever making one, on the costs or the benefits of our membership of the European Union, whether it be enlarged or not? Will she please go to her colleague, the Minister for Europe, who is responsible for these matters, and ask that the Foreign Office for the first time conduct such an assessment without any further delay?

Miss Johnson: The hon. Gentleman is talking about membership of the European Union, not about EU enlargement. The point is that that enlargement will create 2 million new jobs in the candidate countries, and we estimate that it will create an extra 300,000 new jobs in existing EU member states. Indeed, the estimated gain to the United Kingdom's gross domestic product is £1.75 billion.

Michael Fabricant: Where does that figure come from?

Miss Johnson: It is from independent research conducted in 1997.

Mr. Mark Lazarowicz (Edinburgh, North and Leith): Does my hon. Friend agree that our country's many creative industries, for example film and broadcasting, are one of the areas of British business that would greatly benefit from EU enlargement into central Europe? I am sure that she is aware of the excellent proposals that the British Council is putting forward to allow our creative industries to expand their contacts and networks in central and eastern Europe. Will she join me in welcoming those proposals and could she give her Department's support for them?

Miss Johnson: Indeed I can join my hon. Friend in welcoming that initiative. It is another example of the many benefits that will accrue to us and the industries concerned through enlargement. The Department will give its full support for just that sort of enlargement activity.

Mr. Derek Foster (Bishop Auckland): I have been a pro-European for 40 years, enthusiastic about enlargement as it will underpin the emerging democracies of eastern Europe, but will the Minister take into account the problem that the one-size-fits-all single currency implies a huge transfer of funds from the more successful economic regions of Europe to the less successful, such as my region in the north-east? Would not enlargement make that problem that much more difficult to solve?

Miss Johnson: As I said, there will be real gains both to the candidate countries and to existing EU member states because of the economic benefits of enlargement for all parties. Obviously, it is a matter for individual

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countries that accede to the EU under enlargement when and how they join the euro, just as that is a matter for debate and consideration in this country.

Coal Industry

2. Paddy Tipping (Sherwood): What estimate she has made of the amount of coal produced in the UK during the last financial year. [58216]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The UK coal industry produced a total of 32.8 million tonnes, including slurry, in the last financial year. Deep mines produced 18.1 million tonnes and opencast sites produced 14.2 million tonnes.

Paddy Tipping: Does the Secretary of State agree that the current coal aid operating scheme has helped to sustain that level of production? She will know that the scheme finishes on 23 July. Will she outline the very welcome new framework agreed only last week by the EU, and does she propose any measures to link the two schemes—the one that finishes on 23 July and the new one that will come into effect in 2003?

Ms Hewitt: I entirely agree with my hon. Friend about the enormous help that the existing coal aid scheme has given to enable pits to survive the difficult price and trading conditions that existed between 1999 and last year. I am also delighted that last week at the Energy Council we agreed a new framework for support for the coal industry, including a new framework for investment aid—something that my hon. Friend has been pushing for and for which we argued strongly. We are urgently considering how to take advantage of that new framework in order to ensure the future survival and success of our coal industry.

Adam Price (East Carmarthen and Dinefwr): The Secretary of State may be aware that the management of Betws colliery in my constituency are meeting her officials this afternoon to inform them of imminent mass redundancies at Betws colliery in the absence of continued support after 23 July. Can she confirm that the option of extending the existing scheme until the end of the year is still under consideration, and that Ministers will meet the management at Betws before any final decision is taken?

Ms Hewitt: My hon. Friend the Minister for Energy and Construction is himself meeting the management and work force at Betws colliery shortly. That is in addition to the meetings with officials that are already taking place. I must stress to the hon. Gentleman that Betws colliery has already received nearly £3 million in coal operating aid which, under the terms of the operating aid scheme, was granted on the understanding and condition that the mine, like other mines, was viable beyond July 2002. Of course we are looking at all the options and we will discuss the issue with management before final decisions are made.

Mr. Dennis Skinner (Bolsover): Is my right hon. Friend aware that there will be a continuing problem with the coal industry in providing money that, in some ways, finishes up in the back pocket of the owners? We decided

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in respect of Railtrack, some time ago, that we should not continue to pour public money into the pockets of the shareholders who were making a fortune out of it. Would it not make a lot more sense when we save the coal industry—or the remnants of the Tory operations of the past 18 years—to take it back into public ownership? We could buy the shares for a song; we would not be putting money into the pockets of the shareholders; and the chances of survival would be much greater than if we leave the industry to people who are concerned only about themselves.

Ms Hewitt: I am sorry to disappoint my hon. Friend by saying that renationalisation of the remaining pits is not actually on the Government's agenda, but he makes a very important point about the danger, with some forms of aid, of subsidising companies rather than ensuring the future of the work force. There are difficult decisions to be made, especially in the case of those pits where geology makes it impossible for the pit to have a viable economic future. We are working closely with the industry and its work force to deal with those situations.

Richard Ottaway (Croydon, South): Does the Secretary of State agree that the net effect of the EU Council meeting and the new framework announced recently is that the Germans can subsidise their coal industry, in effect, by billions until 2010, which will result in subsidised coal and electricity coming into this country, affecting our own producers and suppliers?

Ms Hewitt: No. The Germans certainly pour a great deal of public money into their coal industry but none of that subsidised coal is exported, and we have worked closely with the Commission to ensure that there is no distortion that would undercut our own coal industry.

Mr. Michael Clapham (Barnsley, West and Penistone): I heard my right hon. Friend's reply to my hon. Friend the Member for Bolsover (Mr. Skinner), but may I point out that Tower colliery, which is owned by the men, is more successful? Within the framework for new aid, will my right hon. Friend consider the involvement of the Coal Authority so that proper direction can be given to the investment that will follow the new aid scheme?

Ms Hewitt: My hon. Friend makes a very important point about the success of Tower colliery. Of course we will consider the point he raises in deciding what kind of investment aid support we may be able to put in place under the new framework that we have successfully negotiated.

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