HC Deb 18 April 1990 vol 170 cc1410-2
5. Mr. Barry Field

To ask the Secretary of State for Trade and Industry if he will make a statement on the outcome of his trade mission last month to Poland and the Union of Soviet Socialist Republics.

Mr. Ridley

Together with a group of business men, I visited the Soviet Union and Poland from 10 to 17 March. Poland is making rapid progress towards replacing socialist economic policies with a free market. There are good opportunities for British investors. In the Soviet Union, the pace of change is slower.

Mr. Field

A principal reason for my right hon. Friend's visit to Russia and Poland was to urge them to introduce a commercial and legal framework to reassure entrepreneurs and businesses that they could invest with confidence. How did he succeed on that and on currency convertibility and the ending of import licensing? Does he agree that, with only £197 million of exports to Poland last year, it is much too important a market to be left to West German business men?

Mr. Ridley

My hon. Friend is right. We need a proper framework of law and rules on pricing, insolvency payments, debt collection, monopolies and subsidies controls before they can become full market trading countries. The prospects of anything transpiring are less in Russia than in Poland, which is trying as hard as possible to put in place the essential commercial infrastructure. That will help us greatly to invest, to Poland's benefit as well as to ours, and to increase trade. At the moment, the Poles have a shortage of hard currency and are unable to purchase much from the west. It will be much better when Poland has achieved convertibility. We urged it to achieve fully convertible currency at the earliest possible date.

Mr. Hood

During his mission, did the Secretary of State discuss with the Polish people the failure of the British free market capitalist system? Did he explain why we have a massive trade deficit and high interest rates and why small businesses are going bankrupt by the day? The Government have introduced the uniform business rate, which will bankrupt even more. Did the right hon. Gentleman hold that up to the Poles as an example for their future economic strategy?

Mr. Ridley

I do not know which country the hon. Gentleman is talking about. He might like to know that since 1981 manufacturing output in this country has gone up by 32 per cent.; manufacturing productivity has gone up by 51 per cent.; profits have increased by four times; and manufacturing investment has been growing at a real rate of 5.5 per cent. a year. The hon. Gentleman seems to have mixed up the two countries. Anyone would have thought that he was talking about Poland. It would be a disaster to try to apply east European methods of economic management, as they have been hitherto, to the very successful British economy. It should be the other way round.

Mr. Ward

Will my right hon. Friend join me in condemning the Opposition for underselling this country at every opportunity? Does he agree that should the Soviet Union and the Polish nation seek help in setting up free economies on the lines of our banking and business world, we will give them every possible assistance, despite the efforts of the Opposition?

Mr. Ridley

My hon. Friend is absolutely right. Britain is viewed everywhere—except among Opposition Members—as one of the world's most successful economic transformations. We are sufficiently well off to be able to provide a £50 million know-how fund to help the Poles to set in place the essential infrastructure to which my hon. Friend referred. At the same time, we have made generous contributions to various funds, including £15 million for agriculture, £190 million towards EEC assistance and $100 million to the stabilisation fund.

Mr. Beith

Will not the Secretary of State have to have further discussions with his counterparts in the Soviet Union if events in Lithuania move towards some kind of economic blockade? Will not he need to make it clear to his Soviet counterparts that he will facilitate any trade arrangements that may be necessary to ensure that essential supplies and commodities can be made available to the people of Lithuania?

Mr. Ridley

It is not for me to answer for foreign policy towards Lithuania. All that I can say is that we are watching the situation very carefully and my right hon. Friend the Foreign Secretary will take any action that he deems to be correct at the right time.