Confederation of British Industry (Hansard, 18 January 1989)

§ 12. Mr. John Marshall
To ask the Chancellor of the Duchy of Lancaster when he last met the Confederation of British Industry; and what was discussed.

§ Mr. Newton
I last met the CBI on 24 November when I spoke at its conference "Business Opportunities in Urban Regeneration".

§ Mr. Marshall
Did my right hon. Friend underline to the CBI that the greatest threat to the future of British industry comes from inflationary wage increases, not the level of interest rates?

§ Mr. Newton
I did not do so on the occasion to which I referred, but it is certainly true that a 1 per cent. increase in interest rates, even if sustained for a full year, puts up industry's costs by a good deal less than a 1 per cent. increase in wage settlements. The whole of industry needs to bear that in mind.

§ Mr. Corbett
Did the Secretary of State commend to the CBI the Church of England "Action in the City" programme and appeal in inner-city areas such as Birmingham heartlands? Will he encourage the CBI and its members to donate generously; will he also chip in a few quid himself?

§ Mr. Newton
As it happens, we have chipped in what the hon. Gentleman is pleased to call a few quid, to the extent of several hundred thousand pounds, to various Church initiatives in this area. I met the Bishop of Willesden and the Archbishop of Canterbury's team on this matter shortly before Christmas, with a view to building on the growing co-operation between the Church's aims and the Government's aims and policies in this area.

§ Mr. Burt
I am sure that when my right hon. Friend last met the CBI he discussed the problems of congestion, rising land values and general unpleasantness in the south-east, and encouraged any industry worth its salt and thinking of its future to move north—particularly to the north-west, and more specifically to the metropolitan borough of Bury.
When he next sees the CBI will he encourage member firms to move to the north-west? I am sure that he will welcome the record year that north-west industry enjoyed last year, not just with firms moving north but the resurgence of traditional manufacturing industry and the growth of small firms. Is it not time to move north?

§ Mr. Newton
The purpose of my speech to the CBI conference was to draw its attention to the opportunities that exist and to reinforce what is already happening. My most recent visits earlier this week were slightly further east than the places mentioned by my hon. Friend. I went to Sheffield on Monday and to Newcastle and Sunderland 328 yesterday. It is clear that business men are beginning not only to recognise but to seize the opportunities represented by the growth in industry in the north.

§ Mr. Campbell-Savours
Will the Minister discuss with the CBI the high level of imports of footwear from south-east Asia? They have risen from 54.5 million pairs in 1982 to 88 million pairs last year. Does he not understand that that is leading to the closure of footwear factories throughout the United Kingdom? The footwear industry is in a desperate state, and that includes Millers in my constituency. What is the Minister going to do about Reebok, the firm that puts the Union Jack on the side of its sports gear and sends it all over the world for example? Its products appear in shops throughout the United States. If one lifts the tongue of a shoe and looks inside one finds "Made in South Korea". Will he stop that practice?

§ Mr. Newton
I have not looked inside the tongue of any shoes recently. I undertake to consider the latter part of the hon. Gentleman's remarks. As for the first part of his question, he knows that the European Commission is considering the matters he has raised.

§ Mr. Hind
When my right hon. Friend the Minister has discussions with representatives of the CBI, will he emphasise the importance to the construction section of the CBI of the need to build factories in the north of England? He will be aware that, because of the resurgence of northern industry, there is little vacant factory space available. If growth is to be sustained, the construction industry must be robust in its approach to that problem.

§ Mr. Newton
Yes. That is very much a part of the opportunities that exist for industry, and of the resurgence in the north. During my visit to Sunderland yesterday, I was pleased to be able to give some further details of English Estates plan to build 45,000 sq ft of factory space in Sunderland.

§ Mr. Gould
Has the Chancellor had the chance to discuss with the CBI the mess that his Department is making of competition policy? Such is now the confusion that no one knows which way the Secretary of State will jump from one case to another. Does the Minister recognise that in cases such as Cons Gold and GEC, reliance on narrow but somewhat specious competition grounds, highlights the absence of strategic thinking? In the case of the House of Fraser, the unexplained mystery of the Secretary of State's refusal to publish the DTI's report or refer the matter to the Monopolies and Mergers Commission fully justifies the High Court judgment that the policy is "irrational and unreasonable". Will he clear up that mystery and tell us the basis of competition policy?

§ Mr. Newton
There is no mystery about the position of my right hon. Friend the Secretary of State on the report. It is being considered by the serious fraud office and my right hon. Friend's view, which I think is widely shared, is that it would be inappropriate to publish the report while that consideration continues. As to whether I have discussed with the CBI "the mess", as the hon. Gentleman puts it, of the Government's competition policy, the answer is no, because there is no mess.