HC Deb 25 June 1979 vol 969 cc19-20
23. Mr. Forman

asked the Secretary of State for Industry if he has any plans to alter the State subsidy arrangements available to certain sectors of British industry facing acute international competition.

Mr. David Mitchell

We are carefully considering the whole question of Government assistance to industry, including those sectors facing acute international competition. My right hon. Friend will announce our decisions in due course.

Mr. Forman

In the course of his consideration, will my right hon. Friend the Secretary of State pay due attention to the example of Denmark, where for a number of years since the war a very successful economic and trading policy has been pursued? This has been done without recourse to restrictionist trade policies but with generous long-term unemployment benefits and adequate resources for retraining.

Mr. Mitchell

We share the concern about the need for fostering change and flexibility. In view of what my hon. Friend said about the work being done in Denmark, we shall ask officials to look into this practice for us.

Mr. Hardy

What advice will the Minister give successful industrialists who face increasing difficulty in maintaining their export achievements, not merely because of the threat of the removal of State support, but because of the present value of sterling, which has been maintained by very high interest rates, and which may further increase? This in itself is a profound disadvantage, and a future cause of unemployment.

Mr. Mitchell

The facts that the hon. Member has mentioned are central to the many economic problems facing the country. We have inherited an economic situation—the money supply and the like—which has led us inevitably to increase the minimum lending rate. We are disappointed at having to do so, and we emphasise that this will not be a permanent feature. However, the tax reductions which were made to restore incentives will be a permanent feature.