§ Mr. Roger King (Birmingham, Northfield)On a point of order, Mr. Deputy Speaker. For this debate, on the Community's trading relationship with Japan, hon. Members require papers from the Vote Office to get some background to our present relationship. I went to the Vote Office and obtained copies of the papers, but I felt that there must be some mistake. On looking at the papers, I found that, on the sale, manufacture and trade of semiconductors, we will discuss a report dated 13 May 1987, which of course was before the last general election. Another report, which is on the motor industry and which is of particular interest to me, is dated 22 March 1988 and refers to Japanese relations with the Community in 1987.
Are there not more up-to-date documents? Many things have changed in the meantime, particularly in regard to car requirements. Many of the points have been resolved. I wonder how we can base our debate on such evidence when so much has changed in the intervening period. It is like debating a 1987 edition of The Daily Telegraph—it is hardly relevant.
§ Mr. Deputy Speaker (Sir Paul Dean)I understand the hon. Gentleman's difficulty, but the documents to which he refers are the documents in the motion that we are to debate.
§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood)I beg to move,
That this House takes note of European Community Documents Nos. 6552/87 relating to certain imports from Japan and 5395/88 relating to trade relations with Japan; and agrees with the Government's support of Community policy towards Japan.I share the fears of my hon. Friend the Member for Birmingham, Northfield (Mr. King) that the documents are rather outdated. I will deal with the first one rather quickly and then suggest that we debate fairly widely EC-Japan trade relations, extending them beyond 1987. I hope that, with your leave, Mr. Deputy Speaker, hon. Members will agree that that is the most sensible way to proceed.The first document, which is about the prevention of deflections of trade as a result of the measures taken by the United States against Japan in regard to semi-conductors, was the result of American illegal actions under the general agreement on tariffs and trade. It was a retaliatory action which, I am glad to say, never had to be implemented. The EC took powers to impose high duties on certain products which Ministers at the time thought could be deflected from the United States market into the European market as a result of that trade dispute between the United States and Japan. I am pleased to say that those items were not deflected under the surveillance which the Community adopted, and those duties were therefore not imposed.
The total market involved was never very great—only $300 million—and the surveillance methods which the Community put in place did not reveal any major changes in the European Community market as a result. I now propose to go back to our European Colleagues and see whether we can reach agreement on removing those suspended duties from the Community legislation, and also whether we can get rid of the remaining surveillance procedures, as they are long past their sell-by date and of no particular use.
§ Mr. Phillip Oppenheim (Amber Valley)I am sorry to interrupt my hon. Friend's speech so early. He said that the Government are to go back to the Commission or the Council of Ministers and say that the duties are not necessary. One of the documents available in the Vote Office states:
the Government supports the proposed Community measures, which are solely intended to ensure that potential diversion of trade by Japan".If the issue is irrelevant, why did the Government issue a document in support of it?
§ Mr. RedwoodAt the time the threat was real, the British Government went along with the proposals in the European Community. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) may find it helpful to know that we think that life has moved on considerably since 1987. The British Government's present view is that the measures were not necessary. We do not wish to be in the business of building fortress Europe and we would therefore like to carry our Community partners with us in getting rid of the suspended duties and the remaining surveillance that is still in place. My hon. Friend will be pleased to know that surveillance of the measures has already been reduced, and I hope that he will agree that it would be a good idea to carry on the process and to return to free trade in specified goods.
I agree with hon. Members who think that the delay in the debate on the other document is a pity. I am firmly of the view that the House has a vital role to play in scrutinising EC proposals. Where I have ministerial responsibilities for negotiating items in Europe on behalf of the United Kingdom, I will always endeavour to see that the Scrutiny Committee is advised in good time. I find it much easier to go to Brussels to negotiate with other Ministers from other member countries in the full knowledge of the views of the House. We do not wish to encourage the idea that a large number of important decisions about trade and other economic matters should take place behind closed doors in Brussels without this House first being able to peer behind those closed doors and express its views on the subjects coming up for debate in the European Community Council of Ministers.
I want scrutiny, and I value this evening's opportunity to hear hon. Members' views on trade matters relating to Japan. The Community has an important role to play in conducting many of the negotiations on our joint behalf with the Japanese.
§ Mr. Tony Banks (Newham, North-West)Does the Minister agree that, through economic measures, he and the EEC could put greater pressure on the Japanese in view of their appalling slaughter of whales, which is being done under the guise of scientific whaling, and their slaughter of many other potentially endangered small whale species such as Da11's porpoises? The Japanese have an appalling venal record. Would the Minister be prepared to put his weight behind the campaign to try to get the Japanese to change their ways of treating animals that are much loved and much needed among the world's resources?
§ Mr. RedwoodI have much personal sympathy with what the hon. Gentleman is saying, but I would need to check with my right hon. and hon. Friends in other Departments. As the hon. Gentleman will appreciate, 769 other interests are involved. I will write to the hon. Gentleman when I have checked out the various views on that important subject.
The topical issues that arise as a result of the review of EC-Japanese trade can be addressed by looking at two important themes in the way in which Japan's relations with the rest of the world are evolving. First, as Japan becomes a much bigger and more important economic power, it is becoming an increasingly important investor overseas. I and many other Ministers from Community countries welcome that. Japan is taking money, management skill, technology and innovation overseas and creating jobs and new activities in countries in which it chooses to invest.
We and other member states of the Community have been beneficiaries from investment in important leading sectors in which Japan specialises, such as cars, televisions, semiconductors, machine tools and office equipment. In sectors in which Japan has a particularly strong export performance, there are things from which the Community can benefit by enjoying some of the skills and product designs which the Japanese have at their fingertips.
The second theme is that, again as Japan has grown and developed as a major economic power, it has started to expand its domestic demand and it has opened its markets to a greater extent to imports. Again, that is a most welcome development which in no small measure is due to negotiations conducted through the GATT framework and also in no small measure is due to the bilateral negotiations between the United States and Japan and between the European Community and Japan.
In each of the past three years Japan's domestic demand has expanded more than its total national product. That means that there are opportunities for countries and companies wishing to export into the Japanese market as they expand their domestic demand in response to international pressures for some degree of reflation in the Japanese economy. I am not suggesting that we have solved all the problems. However, in bilateral discussions and through the OECD, the United Kingdom has drawn Japanese attention to the continuing structural problems within the Japanese economy that affect trade patterns between Japan and the remainder of the world. Japan is recognising the force of the argument and is beginning to take action to tackle the problem. For example, how easy is it to get access to retail distribution in Japan if a company has a good product to sell? There is also a large number of subsidies and protections within the Japanese agricultural system—although, of course, the European Community also has problems with the common agricultural policy.
There are problems with the land market in Japan, but the Japanese are showing signs of wishing to make progress. There are other specific problems, which hon. Members may wish to mention, relating to constituency and other interests in, for example, leather, leather footwear, biscuits and confectionery, which attract high tariffs that we would like to negotiate down or to abolish. However, in general we have made great progress on tariffs. They have been reduced quite substantially and, in some areas, Japanese tariffs are below EC tariffs. For example, there is no tariff on cars exported from the EC to Japan, but there is a 10 per cent. tariff on cars imported into the EC. There are many other examples and the barrriers have been coming down.
770 As a result, the state of United Kingdom-Japanese trade is improving from a fairly poor base. During the past 10 months exports have risen by 30 per cent. while imports have risen by only 10 per cent. There are opportunities to reverse—
§ Mr. Win Griffiths (Bridgend)The Minister has given an impressive demonstration of the relative movement of imports and exports, but can he give us the gross figures for both of them?
§ Mr. RedwoodI have the gross figures, and I shall give that information to the House when I reply to the debate and when I have checked them with the figures in my kit bag.
The overall figures show a substantial deficit against the United Kingdom, but it can be reduced if two conditions are met. The first is if we continue the good progress in encouraging major Japanese inward investment into Britain. One of the largest items in our deficit with Japan is the trade in motor vehicles. Plans have been agreed by three Japanese motor manufacturers to construct plant that will produce 500,000 cars every year by the mid-1990s. That is two and a half times the number of cars that we imported from Japan in the last full year. There are other examples, although slightly less startling, in leading sectors where there will be more production in the United Kingdom by Japanese manufacturers that may either substitute for imports or be exported into the European Community and more widely. That will improve the trade balance.
The second way to improve our trading position is by our businesses responding to the great opportunities that have resulted from the market opening measures in Japan and the expansion of Japanese domestic demand. I cannot pretend that that is easy because the Japanese expect high quality, good design, perseverance by salesman and companies, a commitment to their market, the development of language skills so that we can talk in their own language to those to whom we hope to sell, and the highest standards of service to back the products sold. I believe that British industry is up to that challenge and that the heartening increase in exports during recent months and years is a sign that we are making progress.
§ Mr. Austin Mitchell (Great Grimsby)I do not wish to anticipate the Minister's speech, but can he tell us how our deficit with Japan, especially in manufactured trade, compares with our deficit with West Germany, and how Japan's efforts to expand its domestic economy, to raise its exchange rate and to invest in this country compare with the efforts made by West Germany in those three areas?
§ Mr. RedwoodThat is a very good point. The trading balance with West Germany is much larger than the trading balance with Japan. It accounts for about half of the total trading balance, so there are problems. In some ways the position is analogous with the Japanese position as there are problems with protection in agriculture and services in the German economy. In other areas there are no protection problems because we have opened the markets in manufactured trade through the EEC programme. Of course, Germany is a much more important export market than Japan because the total volumes of trade are that much bigger on both sides of the account. We value Germany as an important market for our exports, but there are achievements to be made within 771 the single market programme to open further the German market. There are important ways in which we can deal with the German deficit, just as we are trying to deal with the Japanese deficit.
There has been significant progress in certification and quality control for cars and medical equipment. I know that the Scotch whisky industry is pleased with the progress that has been made in bringing into balance the liquor tax on Scotch whisky and those on other whiskies. As a result, there has been a large increase in whisky exports, which are running at almost twice their level before the changes were made. I hope that there will be more good Japanese Scotch drinkers as the full effects of the measures are felt. I am sure that they will appreciate the benefits of true Scotch. They have made encouraging noises to my right hon. Friend the Prime Minister about how they intend to tackle the problem of look-alikes which pose as the real thing.
I hope that following the strong representations about stock exchange seats there will be some progress in due course, as there was previously when we made strong representations through the Prime Minister and Ministers. I have every confidence that there will be good news to announce, and I regret that I cannot announce it tonight.
It is sometimes argued that the secret of Japanese industrial success lies in its planning system and the special relationship between the Government agencies and the very large companies. We should view that in the context of the true genius and excellence of the Japanese economy—which is that three quarters of all those in Japanese manufacturing work in enterprises that employ 300 or fewer people. One of the keys to Japanese success in manufacturing has been the very large number of small and medium-sized enterprises which are fiercely competitive one with another and which supply the main assembly companies and trading houses that then go round the world to supply the goods that we and many of our fellow countrymen buy.
The cardinal lesson to learn from Japan is that a competitive enterprise economy, which places emphasis on quality, design and flexible manufacturing—all of which the Japanese are so good at—is at the core of export success. It is one reason why this Government are so keen on a strong competition policy. We want to emulate the success of the Japanese competitive-driven industrial performance.
The Department of Trade and Industry has played its role in encouraging business to export to Japan and in trying to help it to do so by assisting in the provision of language courses, by offering the opportunity of seminars and programmes and through trade fairs and other methods to allow British business to present its wares and itself to the Japanese buying public. We shall continue with that programme because we are keen to ensure that British business succeeds in that large and important market place.
When I look at the people coming to the West from eastern Europe, I ask myself why they are coming. I am sure that it is because they are responding to the twin magnetic attractions of democracy and the enterprise open trading system. I do not think that they are coming to take advantage of the directive on lawnmower noise. It is a misconception to think that it is simply the EC directives 772 and the EC programme that act as a magnet. I see in their faces and in their aspirations the wish for open democracy and free debate and the wish to be part of the broader, open trading system that has characterised the West and has built the West's success.
§ Mr. Win GriffithsI am pleased that the Minister is enthusiastic about the democratic principle, but will he extend it to meetings of the Council of Ministers and support opening those meetings to public scrutiny so that its debates and discussions can take place publicly?
§ Mr. RedwoodI do what I can within my limited powers. I write to the Scrutiny Committee and invite its views on any issues due to go before the Council of Ministers. I always make sure that the press know the British position and the British view of how those debates are conducted because it is important that the public can participate indirectly in the process of legislation, especially now, when some important items are coming before the Council of Ministers and are being decided by qualified majority, behind the closed doors of Council of Ministers' meetings.
My conclusion is simple. The open trading system is vital to the prosperity of the West. Progress is being made and recorded in EC-Japanese relations and in building on that system and opening the Japanese market further. I shall listen to the comments of hon. Members and to any problems that they feel exist in EC-Japan trade and I shall make the necessary representations if they have a good case. We must reinforce the open trading system and ensure that the Community acts as our voice in speaking up for the virtues and values on which the prosperity of the West is based.
§ Ms. Joyce Quin (Gateshead, East)I welcome the opportunity to debate trade between the European Community and Japan. It is undoubtedly an important issue and of particular relevance to Britain because of our current large trade deficit, which includes a sizeable trade deficit with Japan. Of the trade deficit that the EEC as a whole has with that country, our deficit accounts for £4.8 billion, or almost one third of the EEC total.
The history of the trading relationship between Japan and the countries of the European Community is depressing. For many years there has been a large and increasing deficit, rising from 6 billion ecu in 1979 to 24 billion ecu last year, and for many years the European countries have been complaining bitterly, without conspicuous success, about the difficulties encountered by European exporters in gaining access to the Japanese market. Motor cars have been a particular difficulty. Between 1977 and 1987, Japan took 560,000 cars from the European Community, whereas 8 million of the 12 million cars imported into the European Community were Japanese.
Over the years, there have been many complaints about Japan's dumping of goods on the European Community market which has had serious effects on national economies and on particular regions within the European market. Recent examples of allegations of dumping, where proceedings have been instituted by the European Commission, have included compact discs, video tape recorders, roller and ball bearings, halogen lamps and 773 hydraulic excavators. That list shows the variety of products that have caused considerable concern to the European economies.
The British market has proved a particularly soft target for Japanese exporters. We have not had some of the stringent quantitative restrictions that have been imposed in some other European countries—
§ Mr. OppenheimDoes the hon. Lady accept—we must face this fact in the West—that a major reason why the Japanese have been able to sell so many goods in Britain, Europe and the United States is that they have produced the goods that the consumer wants to buy, at the cost that the consumer wants to pay and of the quality that the consumer wants. Does she also accept that we have instigated a whole series of protectionist barriers against the Japanese, not least the so-called "gentlemen's agreement", which limits their car exports to this country to 11 per cent. of the market? It was introduced by the Labour Government and is maintained by this Government. Does she further accept that such protectionist devices have done our major industry no good at all?
§ Ms. QuinThe trouble is that, without adopting some kind of industrial strategy of our own, we shall make our position worse by simply opening up our markets still further—
§ Mr. Tony BanksThey do not open up their markets, do they?
§ Mr. OppenheimHas the hon. Gentleman ever been there?
§ Ms. QuinI am grateful for your intervention, Madam Deputy Speaker. I shall come to the protectionism of the Japanese market a little later, if I may.
Little seems to have been achieved for many years despite the threatening sounds coming from the European Commission and individual national Governments, but action certainly needs to be taken because manufactured goods constitute virtually all our imports from Japan, and within that area consumer electronic goods and cars are particularly significant.
§ Mr. Roger Knapman (Stroud)If that is the case and the dangers that the hon. Lady has pointed out prove correct, does she think that the social contract will make things better or worse?
§ Ms. QuinOverall, the social charter—I think that that is what the hon. Gentleman means—will make things better, but if he will allow me, I shall refer to that later, too.
There has recently been a change in the relationship between Japan and the European Community, which is the welcome increase in Japanese investment in Britain and in other EC countries. One of the main causes for that investment is the fear in Japan that, unless the Japanese invest in the EEC and have access to the enlarged market in 1992, they might be faced with a fortress Europe with which they would find it difficult to contend. Nevertheless, that investment is welcome.
In my region of the north-east, Japanese investment has given us one of our few rays of economic hope.
774 Unfortunately, it is a tragedy that such investment has not been matched by British investment in the regions of the United Kingdom that most need it. Although we welcome that investment, we have always said that such plants should not be mere assembly plants but should involve a high degree of local manufacture and, we hope, create a good many spin-off jobs in the local communities, supply industries and related economic activities.
§ Mr. Roger KingI am grateful to the hon. Lady, who will doubtless welcome today's wonderful announcement by Nissan of a £31 million investment in this country, creating 350 jobs and establishing technology centres in Sunderland and at Cranfield college in Bedfordshire. This is the next phase of Japanese involvement, when they establish not only a manufacturing base in the United Kingdom, but a design centre too. Does she agree that this is welcome?
§ Ms. QuinYes, I certainly welcome that news, to which I was about to refer because it is of significance to my part of the country. It is an important move forward, because one of our worries has been that a research and development presence has not been attached to many of the Japanese economic activities that have come into the country. We have always supported the presence of research and development in addition to Japanese plant investment. That is important if we are not to see Britain and its regions become economic outposts of an economic colonial power far from our shores, whether that power be Japan, the United States or any other.
It is said that one reason for Japanese investment in Britain is simply our lower wage costs compared with other European countries. One reason why the Labour Party favours the European Community social charter is that we do not want Britain to become a low-wage economy where workers have few or no rights or benefits compared with their European counterparts. A large European market cannot be an end in itself. It is supposed to benefit all our citizens. We do not want that market to be achieved through the exploitation of our work force.
The Government should look closely at our trade with Japan sector by sector, product by product, and should study the problem areas where we seem to have become over-dependent on Japanese and other imports. Then the Government, in partnership with industry, should seek through investment, training, export support or whatever, to remedy the trade imbalance especially in those sectors where we used to be skilled, but where we have lost out in recent years. Unfortunately such an approach is diametrically at odds with the Government's economic philosophy.
When the Prime Minister was in Japan in September, she lectured the Japanese on how to run a successful economy and advised them to follow Britain's example. I wonder which aspect of the British economy the Japanese would like to copy. Would they like to copy our inflation rate, our interest rates, our unemployment or our trade deficit? I think not. Furthermore, the Japanese have enjoyed nothing like the substantial natural assets of coal, oil and gas that have been available to us during the past decade.
§ Mr. RedwoodDoes the hon. Lady acknowledge that the Japanese have been extremely keen to follow our successful privatisation policies, and that they are well advanced with such policies?
§ Ms. QuinThe Japanese have not been keen to adopt our general attitude towards industry. The Japanese Government have worked in close partnership with industry to ensure Japan's economic predominance. Unfortunately, we have not done the same.
It is clear that the Japanese do not consider what is happening in Britain today as some sort of economic miracle. Mr. Terry Yamazaki, president of the world's largest machine tool company, talked in the Financial Times today about our trade deficit. He said:
I think it is a big problem for the UK. A country's wealth stands on its manufacturing … There should be a national movement in the UK involving politicians, economists and industrialists to look at the whole issue and create a strategy to produce more, particularly more value-added goods".Unfortunately, the Government have simply rejected out of hand similar calls for an industrial strategy made repeatedly by my hon. Friends.Sadly, a more accurate reflection of the Japanese view of our economy is the fact that, recently, they offered us aid from their Third-world budget to save one of our food research institutes that the Government wanted to close in order to save £1 million.
The shipbuilding industry is one to which the Community and the United Kingdom should have paid a great deal more attention in the past 10 years. That industry has been given a low priority in commercial relations and negotiations between the Community and Japan. The Government and the EC have taken the view that shipbuilding is an out-of-date smoke-stack industry. Tell that to the Japanese. The world order books, now healthy, show that Japanese domination in shipbuilding continues. The Japanese order book accounts for some 30.4 per cent. of the world total and Japan's share of the world market rose by 1.2 million tonnes in the third quarter of this year alone.
Contrast that expansion with the savage cuts in British shipbuilding. It is an absolute disgrace that the Government decided to close the excellent modern shipyard of North-East Shipbuilders on the River Wear. That yard was capable of winning large orders, it had interested buyers and it could have made a valuable contribution to reducing our massive trade deficit. The people of Sunderland will not forgive the Government nor lightly forget. But it is not just the shipyard workers or the people of Sunderland and the north-east who have lost out; it is our country as a whole.
§ Mr. Win GriffithsAm I right in recalling that the Government were told that there would be an upturn in the shipbuilding market, but they rejected that advice and went ahead with the closure?
§ Ms. QuinThat was the case. The Government were told that many times, and not just by hon. Members representing shipbuilding constituencies. It is crazy to throw away and to destroy such shipbuilding facilities and it is crazy to lose the shipbuilding skills of those workers who are now redundant.
We share and support many of the criticisms that have been made of Japan—for example, the protectionist nature of its economy and the difficulty encountered by our manufacturers in participating in its large infrastructure projects. The protectionist nature of Japanese agriculture has also been mentioned, but I agree with the Minister that in the EC that is like the pot calling the kettle black.
776 It is still difficult for manufacturers to make their way through the retail and distribution system in Japan, and much more progress must be made. There is a clear contrast between the difficulties of penetrating the Japanese distribution and retail system and the way in which our shops are stacked with Japanese goods. Negotiations must continue and they need to be tough.
Britain and the Community must adopt different industrial policies if the trading balance with Japan is not to deteriorate even further.
§ Mr. Tony BanksI apologise as I must leave the House shortly for a public meeting, but so that I do not leave the Chamber totally depressed by everything that I have heard so far, can my hon. Friend tell me of one area of economic activity or production where we have a success story in terms of trade with Japan? Other than Scotch whisky, where are we showing a balance of payments surplus in our trade with Japan? I want to know, as I want to go out cheerful from the House.
§ Ms. QuinIt will be difficult to cheer up my hon. Friend. I accept that there have been minor successes with whisky and linen, but when one considers the overall trade deficit that we are running with Japan, as well as our enormous trade deficit with the rest of the EC, the position is bleak. It does not augur well for the future, nor does it reflect well on the Government who have been in power for 10 years.
§ Mr. Alan Amos (Hexham)Is the hon. Lady aware that so far this year the trade deficit between the United Kingdom and Japan is about £4 billion and that last year's trade deficit between the EC and Japan was about $30 billion? What does she propose to do about that?
§ Ms. QuinI am not sure that the hon. Gentleman has listened to everything I said. I have repeatedly referred to the need to look at the problems sector by sector and to work out, in partnership with industry, how best those problems can be tackled. We need to spend more on training, investment and research and development. There are no instant answers to reduce the trade balance tomorrow. For 10 years, however, the Government have pursued entirely the wrong course and have created a tremendous problem for Britain and the EC.
If they have the necessary political will, Britain and the Community can start to tackle the problem of our enormous trade deficit with Japan. Before that happens, however, a different economic approach must be adopted, especially in Britain.
§ Sir Julian Ridsdale (Harwich)I shall speak for five minutes only, as I know that a number of my hon. Friends want to participate.
I could spend a long time discussing our relationship with Japan, but first I should like to draw a far more optimistic picture than the pessimistic scene described by the hon. Member for Gateshead, East (Ms. Quin). One of our problems is that we do not have a large enough industrial manufacturing base. I say that as leader of the all-party group on engineering development.
I listened to yesterday's debate and I know what a terrific challenge it is to expand. Our industry today is in a different and much better technical state than it was in 777 1979, but the base is too small. How are we to tackle this problem? If we do so as the hon. Lady said, by saying that we do not want technical investment from Japan—
§ Mr. Win GriffithsShe said that we did.
§ Sir Julian RidsdaleI found it difficult to know whether the hon. Lady was a protectionist or a free trader.
§ Ms. QuinI am grateful to the hon. Gentleman for giving way, but he cannot have listened carefully to what I said. I specifically welcomed investment from Japan, and referred to the investment that had taken place in my own region and the welcome news about the research and development facility proposed by Nissan today.
§ Sir Julian RidsdaleI listened to the hon. Lady's speech, which throughout was an effort to be all things to all people. There was nothing definite about it and no clear policy came through—[Interruption.] If I am interrupted any more, it will he difficult to stick to my five minutes.
How shall we make our industrial base bigger so that we can deal with the problems that face us in the European Community? We have a deficit with the European Community, particularly Germany, for the first nine months of this year of £9 billion, mainly in transport equipment. Transport equipment from Germany accounts for the same figure as that given by the hon. Lady for our deficit with Japan. Therefore, if we can, we must continue with the investment which we are getting. I welcome that new investment just announced by Nissan. Nomura has written an excellent paper called "In Depth" which deals with the problem of expanding our industrial base. It states that, between the years 1995 and 2000, we shall be able, if the present rate of investment from Japan continues, to balance our manufacturing exports and imports. That has great opportunities for our country and I wish to underline that.
Secondly, I wish to underline why the Japanese have been successful in industry. One reason is that they have bigger companies backed up, as my hon. Friend the Minister said, by smaller and medium-sized companies. However, the Mitsubishis and Matsushitas of this world are so big that the amount of money going into research and development from their profits enables the Japanese to have a far bigger research and development programme than any other country.
As a country, we must aim to make our industrial companies big enough because in 1992, with the hypermarket ahead, that will enable us to compete worldwide too. The first test must be to compete in the world markets and the second is to back up that competition with medium and smaller companies. I welcome the fact that the Government are spending more on skill and training, because it is the skill and training of our engineers which matter, and this is where the Japanese have an advantage.
I could talk for a lot longer, but I promised that I would speak for only a few moments because I wanted to underline on an optimistic note how to meet the challenge before us. If we are to deal with the sort of imports that we receive from Germany and other EC countries we must have the investment in this country to enable us to widen our industrial base. That is being done; the opportunity is there. We must encourage it.
§ Mr. Matthew Taylor (Truro)I listened with interest to the comments of all the hon. Members who have spoken, but there are serious gaps in the approaches to the problems of both the Minister and the Labour spokesman, the hon. Member for Gateshead, East (Ms. Quin). I shall return later to the comments of the hon. Member for Harwich (Sir. J. Ridsdale) and talk a little about the problems we have in long-term investment, research and development and training.
Before doing so, I shall address the issue of protectionism—for two reasons. First, it is raised in one of the documents that we are debating—out of date as that is, as was pointed out earlier. It seems extraordinary that the House should debate a document two years and one general election after it was published, at a time when the system is being dismantled rather than set up as the document states.
Second, it is appropriate that we should be looking at such a protectionist document when we consider what is happening in the United States. We have considerable reason to be concerned about the pressures for protectionism in that country. Unlike the hon. Member for Gateshead, East, I wish to make it absolutely clear that the Liberal Democrats fundamentally oppose them. The document refers to the Government's work to oppose what the US Government in 1987 were attempting to do. We welcome the Government's stance on that matter, although we would urge action to be taken through international bodies rather than through threatening counter protectionism. We fear the escalation of protectionist measures around the globe.
The debate currently taking place in the United States among politicians, the media and many people who are influential in that country who constantly press for greater protectionist measures against what they see as the Japanese threat is precisely the sort of development against which we should argue as we move towards the developments in Europe in 1992 and beyond.
When we look at the developments in the Pacific basin, we see that in many ways Japan will be the least of our worries. I disagree with the hon. Lady's claim that the only reason the Japanese are coming to this country is low wages. There are a considerable number of reasons, many of them associated with Japanese fears about protectionism. However, a realistic analysis shows that Japan has a high-wage, high-cost economy, and has difficulty competing with its near neighbours in many spheres in which it has traditionally excelled. We are in a rapidly changing and developing system in which we should not push for protectionism but pursue policies that address some of the weaknesses clearly inherent in this country.
§ Ms. QuinI do not think that I said that the only reason why the Japanese were investing in this country was low wages. I said that it was a factor, and I did not want to see us become a low-wage economy compared to our European counterparts. I do not think I gave that as the only reason, but if I did, I did not intend to do so.
§ Mr. TaylorI accept the hon. Lady's comment. I doubt whether that factor is a high priority for the Japanese. The overall competitiveness which they believe they can get from this country is significant, but significant too are the links between Japan and this country, particularly the language links—not that we speak Japanese. As we are 779 probably well aware, they speak good English and commonly do so. Therefore, for many reasons it is easier for them to trade from this nation.
I said that I would give some ways to tackle this problem. I shall mention two: the first relates to investment and Japan's investment structure. We cannot look at what happens in Japanese industry unless we recognise that the Japanese invest long-term and are prepared to make long-term losses, particularly when investing in overseas production plants.
I do not have an insight into the economics of the various car investment programmes in this country, but I doubt that those Japanese companies expect a payback on those investments in car manufacturing bases in much less than five or six years. British industry looks for a payback of overseas investment or other investment in two or perhaps three years. Even such time scales as those are pushing matters. We need to find the reason for that and start to address some of the ways in which we can overcome it.
I do not intend in this debate to provide all the solutions to a problem that hon. Members are just starting to recognise. However, the pension trusts and investment trusts that exist in Britain do not exist in Japan. Most shareholdings in Japanese companies are small scale and that gives the management of the companies much greater freedom to invest long-term than is possible in an equivalent situation in Britain where the six-monthly report presents a great problem. It is even more of a problem in America, where companies have to account for themselves about every three months. It is worth looking at the success of West Germany, which is probably the one European country that does not operate under the short-term pressures that exist here.
I do not claim to know how we should tackle the problem, but we should certainly address it. It is not simply a question of work practices or of Japanese work attitudes. It is the willingness of the Japanese to invest long-term in their industries. It is not simply due to the work of the Ministry of International Trade and Industry.
I said that I would deal secondly with research, development, training and education. The Minister did not address the input to industry in terms of research and development and training and, going back even further, in terms of the education of young people. It is not simply that we need to do something to rectify the trade imbalance. The problem is more basic because we are doing insufficent at grassroots level to enable ourselves to compete. As I have said, there are short-term attitudes to investment and research and development. Companies that make large-scale investments in research and development are often penalised by being taken over or broken up. The efforts to take over and break up Pilkingtons were a good example of that.
There is massive under-investment at all stages in the training of our young people. I hope that the Government are beginning to recognise the problems that that creates. Almost any industrialist that one speaks to talks about our young people coming forward without encouragement or training. They have nothing like the education of young people in the sunrise countries.
Trade figures and the economy are worrying, but perhaps the most worrying thing that has happened in the 780 last few weeks was the clear indication from the Secretary of State for Education and Science that he had abandoned the plans by his predecessor to double the number of people going into higher education. It is in that area above all others that we are selling ourselves short, and that means that industry is finding it difficult to attract candidates of the right calibre. I differ strongly from the Minister about student loans and other matters, but perhaps we should agree on the need to tackle the fundamental weakness that is caused because we are not investing in our future in the most important sense by developing the abilities of our young people.
The decision by the Secretary of State for Education and Science to abandon the target of doubling the number going into higher education is a tragedy and will be seen as such by future generations. The Government are removing from young people opportunities that they will never be able to accept again. Per head of population, Taiwan is now turning out more graduates than Britain. That situation will escalate and Britain will rapidly become an under-educated and under-privileged country, while nations that until recently have been considered Third-world countries will be turning out the best-educated and, ultimately, the best-paid people in the world.
§ 8.4 pm
§ Mr. Roger Sims (Chislehurst)In speaking to the motion, I must declare an interest on two counts. Prior to my election I was employed full-time by Dodwell and Company, probably the largest non-Japanese trading company in Japan, and I retain a connection with that company and its parent company, Inchcape plc. I am also parliamentary adviser to the Scotch Whisky Association. My hon. Friend the Minister has spoken about the importance of Scotch whisky in our trade with Japan.
Japan is a unique market, which presents problems. There are certainly non-tariff barriers, some of which perhaps exist by design, while others came about simply by accident. However, they are slowly coming down. It is certainly a large and potentially profitable market, but it needs special attention.
Business men in the United Kingdom or elsewhere in the European Community cannot assume that, just because their products sell elsewhere in the world, they will sell in Japan. Japanese trading structures are different, and so are their business methods and their consumer demands. Anyone visiting Japan will probably find it a very foreign place. Not only the language and culture but even the thought processes of the Japanese people differ from those of Europeans. I say that not in a disparaging sense but simply as a fact that we must understand.
Business men must study Japan, and I urge them to go for that market. They should visit it often and be patient and careful in negotiations and in dealings. There is no need for any business man unfamiliar with the market to work on his own. Help and advice are readily available from the admirable and well-equipped exports to Japan unit in the Department of Trade and Industry. Any business man with a saleable product or service could approach one of the trading companies. They are old established and have offices in the United Kingdom. They have Japanese staff who are experienced in selling imported goods. They also have Japanese-speaking expatriates who know the market, speak the language and 781 can advise on presentation, packing and can also carry out the marketing and distribution of the product. Dozens of companies have successfully taken that course.
One of the more frustrating aspects of the work in which I was engaged was that, when we succeeded in establishing a product in the Japanese market, the manufacturer would say, "Thank you very much for all you have done. We shall now set up our own company in Japan." However, that is life.
One of my many responsibilities in the company was handling exports of Scotch whisky to Japan, which is the largest whisky drinking market in the world—although, alas, most of it is the domestic product. As the Minister said, sales of Scotch whisky to Japan have increased over the years. In 1988, exports of Scotch whisky to Japan were worth £88 million. The value to the end of September this year was £66 million, and there is every prospect of a substantial increase in the end-of-year figure.
As the Minister said, undoubtedly one of the reasons for that is that at last the Japanese have bowed to pressure from many quarters, including the Government and the European Community, and have complied with a GATT judgment to remove discrepancies in liquor tax on imported as distinct from domestic whiskies. In some cases the discrepancy was to a factor of seven. There remains a differential between the tax on whisky and that on gin, vodka and shochu, a local spirit.
In Japan, certain people are producing liquors that can be, and are being, passed off as whisky but are other spirits and therefore attract a tax one third of that to which true whisky is liable. It is obvious that these deceptive and misleading products are producing unfair competition to genuine Scotch whisky, for which there is no substitute. I know that representations on this issue have been made by my right hon. and learned Friend the Secretary of State for Scotland and by my right hon. Friend the Prime Minister in recent visits and by the EEC. I urge continuing pressure on the Japanese Government to comply with the GATT judgment in full and, if the House will pardon the pun, persuade them to carry out the agreement in the spirit as well as the letter.
I have been referring to liquor taxation, which applies to all products, domestic and imported. However, there is discrimination against whisky itself and, in particular, a high import duty. I accept that all nations are entitled to apply duties on imported products, but the duty on a bottle of Scotch whisky entering Japan is six times as high as that on Japanese whisky entering the European market. Scotch attracts a higher rate than other imported whisky. I hope that in his reply my hon. Friend will assure us that the Government are seeking a reduction in the import duty on Scotch whisky in the current GATT negotiations.
§ Mr. Austin Mitchell (Great Grimsby)It is a peculiar pleasure to rise from these packed Benches of eager Members coming in to hear me. I regret that the rather arcane rules of television coverage prohibit the cameras panning along to see the serried ranks of the anti-doughnut tendency, here to hang on my every word, because this debate concerns one of the nubs of British industrial problems, which is important to viewers.
I detect in attitudes towards Japan, and particularly the obsession with the deficit in trade with it, a peculiar double standard on the part not only of the Government but of 782 the Community. Our deficit in manufactured trade and trade generally with the EEC is running at the same scale as the deficit of the entire EEC with Japan. That is a sign of the attitudes to the problem. Why are the Government and the EEC obsessed with that deficit with Japan but unconcerned about the scale of our deficit with the Common Market? If the EEC deficit with Japan is damaging to the European economy, how much more damaging is the deficit of one single nation with the EEC? The Minister told us, quite rightly, that our deficit with Japan is half our deficit with West Germany. That is the nature of the problem, and it is unrealistic that the EEC concentrates its attention on the deficit with Japan and ignores the far more damaging effects on this country of the deficit with the EEC.
In 1970, just before we entered the Common Market, we had a manufactured trade surplus with the EEC that, in today's prices, would be worth about £4 billion, but now we have a deficit of £18 billion. That turnround of £22 billion with the EEC must mean the export of 1.5 million jobs, probably even 2 million if we take into account the jobs lost in trade with other markets. That is the scale of the damage that we have done to our industrial economy. Compared to that, concern about trade with Japan is unrealistic.
The papers that we are debating just tinker with the problem. They whinge about the widening deficit but suggest little to solve it. That deficit is just a Nippon clip-on to our deficit with the EEC. Our real problem is what to do about it. My hon. Friend the Member for Gateshead, East (Ms. Quin) has rightly suggested that both Britain and the EEC need an industrial policy if we are to have the industrial renaissance about which we have heard and if we are to rebuild our industrial base in competition with countries that have an industrial policy in which Government and industry work in a close conspiracy, as they do in Japan. The dominance of the Ministry of International Trade and Industry is lessening as time goes by and it may be that its achievements are overrated, but still the co-operation between it and the banks, and between the banks and industry, to channel long-term investments so that they can ride out the unprofitable years and build up market share, is an example that we could well emulate. Instead, our obsession is short-term, and is produced by a concern about balance sheets.
As I listened to earlier speeches, I was thinking that there should be a Mitchell's law about how a country's economic success is in inverse ratio to the number of accountants that it has in top positions in industry. The Japanese have hardly any, but we are overwhelmed and dominated by them. Long-term considerations are unimportant in a world dominated by accountants, who are obsessed by balance sheets. That is one reason for our problems. My hon. Friend the Member for Gateshead. East was right to say that another problem needs to be addressed. We should concentrate much more than the Government are doing on the human capital, on training and building up skills.
The third argument that must be made and the third factor to be taken into account is the exchange rate. Throughout the world there is a trading imbalance between the Anglo-Saxon countries, and particularly the United States and the United Kingdom, and West Germany and Japan. The United States and the United Kingdom are in horrendous deficits and ours is now 783 between 4 and 5 per cent. of GDP, which is bigger than the American deficit. West Germany and Japan, the countries that have made a success out of losing the war, are running enormous surpluses.
The problem for the world, not just for the EEC, is how to redress that imbalance. The exchange rate must be the only available method to do it. In other words, there is a pressing requirement that Japan and West Germany revalue their currency upwards or, failing that, that the dollar and the pound come down. On the present figures, the pound would need to come down by about 25 per cent. and the dollar by as much as 20 per cent., because both are overvalued. Unless there is a revaluation of the dominant currencies, the deficit currencies have to come down. That is the only way to do it.
When it comes to redressing those terms of trade, Japan has done more than West Germany to right its balance sheets with the world. It has done more to get its exchange rate up and to expand domestic demand and by way of overseas investment in other economies—in other words, exporting some of its surplus through investment in the countries that are buying its goods. Contrary to what the hon. Member for Truro (Mr. Taylor) said, with respect to that investment—beggars cannot be choosers, and under this Government we have to be beggars—much of it is because of the Government's deliberate strategy of turning ours into a Trojan horse economy. We have lower pay, lower taxes, more deregulation and weaker unions than European economies. That makes us the entry point for Japanese firms into the EEC. That is the inducement that the Government are holding out. They are not holding out the prospects of a high-pay, high-skill economy. The investment is not a compliment to this country. I am not saying that we should not have it—I welcome it because it is essential and the mutual co-operation is beneficial—but it is coming to an economy negotiating from weakness, thanks to the Government's policies.
As I have said, we need an industrial strategy and not a hands-off policy. Under its present administration, the Department of Trade and Industry is more hands off than a Saudi cure for kleptomania. Secondly, we need training. Thirdly, we need a readjustment of the exchange rate if we are to have a more equal trading relationship. Only that will allow us to build up what we need. We need national champions to fight for the United Kingdom in all spheres of industry. We need them to take on the dominant firms that are so successful in Japan, and to a less extent in Germany. Our problem is that, in car manufacturing and engineering, we do not have the national champions that once existed. Unless the Government compensate for that by co-operating with industry and working with it, we are doomed to failure. If that happens, another nail will be driven into the coffin of industrial Britain.
We must expand our industrial base. It is too small for national viability and too small to survive. We cannot continue to buy from the world unless we produce and sell in return. The policies that are now being pursued, especially on the exchange rate, are harmful and damaging. We are talking about a national strategy that I and no one else want to see, because it will result in the strange death of industrial Britain.
§ Mr. Phillip Oppenheim (Amber Valley)I have considerable sympathy for my hon. Friend the Minister, who must defend EEC policies which many people, including independent observers, see as blatant protectionism aimed at the Japanese. It is worth emphasising that there has been no diversion of the products mentioned in the papers before us from the American market to the British or European markets. It is worth remembering, too, that European tariffs of 100 per cent. on televisions, power tools and computers were meant to counter the tariffs that the Americans ended almost three years ago. It is extraordinary that, because the Americans did something three years ago, we must introduce countermeasures.
It is common for western politicians and journalists to accuse the Japanese of being devious in their trade policies. Bearing in mind the fact that the duties to which I have referred are not justified and that the Americans dropped theirs almost three years ago, is it not the height of deviousness on the part of the EEC to use out-of-date, finished and dropped American tariffs as an excuse for imposing a series of tariffs to catch Japanese products?
A related issue is dumping. I do not think that semiconductors have been mentioned so far in the debate. The European anti-dumping regulations are drafted so that it is almost inevitable that they will find dumping where, in fact, none exists. They have been used by the EEC as an unfair tool. Recently the Commission threatened Japanese semiconductor manufacturers with anti-dumping duties. Those threats forced the Japanese producers to come to an agreement with the Commission that they would not sell below a certain price.
That is undoubtedly a restraint on trade and an interference with the free market. It has been inflicted on the basis of anti-dumping regulations which have been commented upon by a completely independent observer, Michael Davenport. He should know a thing or two about these matters because he worked for the European Commission. In a recent report of the Royal Institute of International Affairs, he wrote:
Not only do the EEC anti-dumping duties and regulations overtly discriminate against foreign companies, but in common with other import restraining measures they ignore the damage inflicted by anti-dumping duties on the users of imported products. Anti-dumping policies should be recast before they become like the mythical whirlpool Charybdis, which insatiably sucked in every passing ship.The European Community has been using antidumping duties increasingly in recent years. Between 1980 and 1987 it carried out 367 anti-dumping investigations against only 217 in the United States and 147 in Canada. These investigations are being targeted increasingly at the Japanese and other east Asian nations. Increasingly, the investigations are moving away from the bulk commodity products which were the subject of most investigations in the 1960s and 1970s. They are being targeted now at high-tech Japanese and other east Asian products such as televisions, excavators, video recorders and, recently, semiconductors.One reason why the EEC has been targeting Japan with grossly unfair anti-dumping duties in recent years is special pleading by the industrial lobby. In the case of semiconductors, the main culprits have been Siemens of West Germany, SGS Thompson, a Franco-Italian joint venture, and Philips of Holland. It is worth noting that all 785 these companies have been substantially supported and subsidised by their national Governments and by the EEC. They have the cheek to go to the Commission and say, "Is it not awful that the Japanese have been undercutting us?" They do not mention that the real reason for the success of the Japanese semiconductor manufacturers is that, in the late 1970s and the 1980s, they were prepared to take risks. As the hon. Member for Truro (Mr. Taylor) said, they were prepared to make the massive investment that was needed in research and development and in plant. They have taken western semiconductor manufacturers to the cleaners.
§ Mr. Matthew TaylorI tried to explain that it is institutionally difficult for our companies to invest in the long term. Had our companies taken such gambles, many investors—giant investors, who can wield considerable influence on what companies do—would have said, "This is mad investment and it should not be undertaken." That is the fundamental difference between British and Japanese companies.
§ Mr. OppenheimThe hon. Gentleman makes a valid point, but too much stress is placed on so-called short-termism in the West and long-termism in Japan. I agree that it is an important factor, but some people, as with the Ministry of International Trade and Industry—MITI—and the other easy excuses that are advanced for Japanese success, exaggerate its importance. I accept, however, that the Japanese have a large pool of investment available to them. That has been a significant factor in their success.
Apart from the special pleading by the industrial lobby, the other reason for the EEC's targeting of Japan by protectionist measures is that increasingly the EEC is running its own industrial strategy and policy. It is a two-pronged policy. On the one hand, the Commission is beginning heavily to subsidise certain industries. On the other, it is erecting protectionist barriers to keep out products that originate from outside the EEC.
Underlying this strategy is a feeling which is common in the West—that the Japanese have succeeded unfairly. It is considered that they have succeeded through some subsidised industry plot to undermine the west and attack western markets. It is felt that the basic policies of the Japanese have been protectionist. It is argued that an industrial strategy has been implemented by MITI to ensure that Japanese companies receive a lot of money from the Government and special considerations.
I ask the proponents of the MITI myth, as I call it, to answer the following question: if these industrial strategy policies of protectionism and subsidies work so well, why are not the industries of Communist countries—perhaps the most protected and subsidised—equally successful? If we do not want to take the example of the Communist bloc, why are not the economies of India or Brazil successful? After all, those Governments have been hugely protectionist. They have heavily controlled their economies and subsidised their industries.
I would go further and point out that hardly a nation in the west has not at some time tried industrial strategies and protectionism. I include in that list the United States, which puts itself forward as the great friend of free trade, the great liberal market and all the rest, but it is in fact among the most protectionist nations in all sorts of ways 786 that I do not have time to go into now. It has also indirectly subsidised many of its industries, particularly aerospace and computers.
There is a tendency in the West to exaggerate the extent to which Japan has been subject to an industrial strategy and at the same time to forget the extent to which western economies have been subject to industrial strategies. But if the Japanese industrial strategy, if we can call it that, has worked better than those in the West—or should I say if the industrial strategies and policies of the MITI bureaucrats have done less damage than the industrial strategies of western Governments—perhaps it is because MITI's policies have been more in line with the workings of the market.
Whereas in the West we have often used huge sums of Government money to subsidise and prop up unviable, failing industries that are riven with all sorts of deep structural problems, the Japanese have encouraged those industries slowly to fade away and have put the rest of their money into encouraging newer, more highly value-added, sophisticated industries. That may be why MITI's policies have done less damage in Japan than similar industrial strategies have in the West.
§ Mr. OppenheimI hope that the hon. Lady will excuse me if I do not give way. I have been asked to finish shortly.
It is also worth remembering that the Japanese now subsidise their industry far less than we do in the West. For example, spending on research and development by the Japanese Government has for a long time been far lower than Government spending on research and development in the West. It may come as a surprise to many hon. Members that most research and development in Japan is carried out by private companies.
Furthermore, the Japanese are now far less protectionist than we are in the West. People do not realise the extent to which the West is protectionist. The suit that my hon. Friend the Minister is wearing was probably made by a British or a European company protected by something called the multi-fibre arrangement, which restricts imports of textiles from developing countries. The ministerial car that my hon. Friend will be driven home in tonight was built by a British company protected by the gentleman's agreement which restricts the Japanese to 11 per cent. of the market. The Japanese do not restrict us in that way. Moreover, the company that built the car, Rover Group, has had huge subsidies from successive Governments. If when he gets home he watches part of tonight's debate on his video recorder and his television, he may not be aware that the European video recorder and television industries have been heavily subsidised by national Governments and at the same time subjected to protectionist barriers in the form of quotas against Japanese and Korean producers.
Far from us accusing Japan of trading unfairly, the Japanese should be a little more vociferous in complaining about the unfair trade barriers that we maintain against them. Western companies can and do sell in Japan if they have good-quality products and are prepared to make a long-term commitment to the Japanese market and sell properly in Japan. There is a long list of Western companies that have done well in Japan.
The real reasons for Japanese success lie not so much in industrial planning by MITI as in the Japanese industrial 787 system. They lie in the open-mindedness of Japanese industry in being prepared to buy in technology from abroad, compared with the attitude of many western companies that if technology is not made here they do not want to be bothered with it.
The Japanese have low Government spending, and low tax. Japan lacks complacency and feels that it must compete in order to survive. It has had high levels of savings which are taxed at a low level and so have allowed industry to invest more money. Japanese companies have been able to invest and, above all, they have treated their employees well, making them feel part of the organisation. That lesson should be learnt by management in the West.
There are great dangers in present EEC and American policy towards Japan. By erecting more trade barriers against the Japanese, and by unfairly accusing them of trading unfairly, we risk increasing tensions and splitting the world into competing trading blocks, just as happened in the 1920s and 1930s, which led to such disaster. If we want the Japanese to do some of the things that we think they should do, such as changing their policy on whales, it is about time we gave them their due for their achievements and stopped pretending that protectionism within the EEC is in any way competing against the Japanese.
§ Mr. RedwoodI am grateful for a few minutes to reply to this well-informed, good debate, even if it did not attract too many doughnutters into the Chamber to get on to the television screen. That may be a good thing.
My hon. Friend the Member for Chislehurst (Mr. Sims) gave good advice to United Kingdom firms to get involved in the Japanese market as exporters. I agree with his comments on Scotch whisky. As I said earlier, progress has been made through the equalisation of liquor taxes and there have been good results in Scotch whisky exports into Japan as a result.
I can assure my hon. Friend that the Government are pressing for further action on import duty and are concerned about the differentials in the liquor tax with other kinds of spirits. We have already made strong representations on the question of look-alikes and have received certain assurances on marketing rules and the style of the product. The Government will continue to ensure that the Scotch whisky industry's views are strongly represented in Japan.
My hon. Friend the Member for Amber Valley (Mr. Oppenheim) made some good points about dumping and the problems that arise from that. My hon. Friend is right to say that we must be careful about anti-dumping procedures and Britain always sets out two points to our fellow member states in the Community. The first is that users, as well as producers, have needs and we have to 788 balance those needs when looking at anti-dumping cases. Secondly, anti-dumping procedures must take place within the framework of the general agreement on tariffs and trade where there are clearly laid down rules. One reason for the strong Community objections to the United States action that triggered the document that we are debating was that the United States action was outside the GATT rules which the EC condemns.
The hon. Member for Great Grimsby (Mr. Mitchell) gave a good dissertation on why Labour remains the party of devaluation. Labour Governments have always devalued, and I am glad to see that he would recommend that to the Government. However, he should note that the Japanese have always abided by the Plaza and Louvre accords, and there was a period of revaluation of the yen as a result of those pledges.
As to the hon. Gentleman's industrial policy, it would be easier to take lectures from him if, for example, he bought a British car, but I believe that he does not. As my hon. Friend the Member for Amber Valley said, I drive a British car and I am wearing a British suit. Anyone who believes in British industry should back that belief by purchasing British goods. That is the true support that it needs. That is its best reward.
My hon. Friend the Member for Harwich (Sir J. Ridsdale) made some wise observations on the need to encourage Japanese investment here. I am delighted that the hon. Member for Gateshead, East (Ms. Quin) agreed that Japanese investors are welcome in Britain and that they are investing not just in assembly but in a range of other activities including componentry, research and development and technology centres. I am sure that the House welcomes that development.
There are a number of success stories. British companies in pharmaceuticals, aerospace, high-quality textiles and a number of other areas have made the long-term commitment to the Japanese market. They have shown that they can sell into Japan by concentrating on giving good service and reliable quality, and they are examples to those British companies that have not yet taken that plunge.
The hon. Member for Gateshead, East was critical of the Government's stance, but she may be unaware of the extent of the success of Opportunity Japan. She might like to know that the Japanese have praised that programme as an example of how other countries could, through their Governments, introduce industry to the Japanese market.
§ It being one and a half hours after the motion was entered upon, MADAM DEPUTY SPEAKER put the Question, pursuant to Order [24 November]:—
§ Question agreed to.
§
Resolved,
That this House takes note of European Community Documents Nos. 6552/87 relating to certain imports from Japan and 5395/88 relating to trade relations with Japan; and agrees with the Government's support of Community policy towards Japan.