HC Deb 01 May 1991 vol 190 cc311-3
14. Mr. Douglas

To ask the Secretary of State for Trade and Industry what response he will make when he next meets the CBI to its recent report on the state of the economy.

Mr. Speaker

Mr. Douglas.

Mr. Douglas

No. 14, and in Scotland we measure people from the neck up.

Mr. Lilley

I welcome the CBI's business agenda for the 1990s, "Competing in the New Europe". The CBI is right to set winning the battle against inflation at the top of its agenda.

Mr. Douglas

The Minister will be aware that the CBI is extremely concerned about the fall in the level of investment. That being so, why are the Government allowing the European Commissioner, Bruce Milian, to withhold £100 million which is due to coalfield areas, including my constituency, which have been deprived of funds? How does the Secretary of State hope to change the Commissioner's mind and ensure that the £10 million that is due to the east of Scotland goes to that area, that the matter is settled and that there is a satisfactory interface between the Department and the Treasury? When will he ensure that the coalfield areas get their dues?

Mr. Lilley

I had a useful meeting recently with Commissioner Millan to discuss this issue. Many misunderstandings were clarified. I hope that, before long, the money will be released. I am glad to have the powerful support of the hon. Gentleman.

Mr. Teddy Taylor

Will my right hon. Friend discuss with the CBI the new uncertainty that is facing industry as a result of United Kingdom laws being suspended or amended because of appeals that these laws conflict with Euro-laws on everything from lotteries to Sunday trading? As the guardian of industry and commerce, will my right hon. Friend take steps today to advise shopkeepers and the owners of supermarkets on whether they are entitled in the Government's views to open their premises on Sundays? Will he take steps also to advise local authorities whether it is the Government's view that they have powers to implement the Sunday trading legislation that has been approved by Parliament?

Mr. Lilley

I understand that yesterday's decision related only to whether local authorities should give undertakings to the court when seeking injunctions to prohibit Sunday trading. If that is right, the decision would not appear to cast doubt upon Mr. Justice Hoffmann's decision last year that the Shops Act 1950 was not incompatible with the treaty of Rome. The decision represents no change in the underlying law.

Mr. Austin Mitchell

When the Secretary of State next meets the CBI will he tell its representatives that they are right to be gloomy about the state of the economy, given that all the factors that produced the Lawson revival in the 1980s from the credit bubble to the effect of oil on the balance of payments and the devaluation of 1986—were one-offs that cannot recur? Will he tell them also that the future of the economy under this Government is permafrost unless we get a competitive exchange rate and low interest rates? The Government cannot expand the economy without regenerating inflation and widening the balance of payments gap. That will be the position until we have a change of Government.

Mr. Lilley

The hon. Gentleman's views are certainly not those of the CBI. I advise him and other Opposition Members to read the CBI's "Business Agenda for the 1990s", which says: It will certainly be important that the United Kingdom does not retrace the steps that have been taken to advantage over the past decade. One of the aims of the CBI has been to remind the 25 per cent. of the Electorate at the next General Election who were under 18 in 1974 how much has been achieved in the last decade. For it is all too easy to forget what the situation was like in the late 1970s, industrial disputes, apparently regarded as inevitable". The CBI does not want to return to that, but the Labour party's new proposals commit us to doing so.

Sir Robert McCrindle

Following his welcome attempt yesterday to redefine the role of his Department, will the Secretary of State say in more detail what he meant by "encouragement to innovation"? In so far as that might have to follow the increase in Government-sponsored research and development, will he tell the House whether the appropriate funds are available for that purpose?

Mr. Lilley

Commercial research and development undertaken by companies is best encouraged by a competitive environment. We shall encourage that. However, research and investment at a pure, pre-competitive level need and receive Government support. We spend some £3 billion on civil research and development. That is more than the Japanese Government spend proportionately for the size of our economy. We are introducing encouragements for industry to exploit the potential that that gives, to encourage small and medium firms to get more involved in research and development, particularly with the science base in universities, and to change the climate in the City and industry to encourage innovation.

Mr. Gordon Brown

Will the right hon. Gentleman answer the central question and face the consequences of the recession in terms of lost jobs and lost capacity, when 10,000 jobs are going every week and 2,500 companies are going bankrupt every month? Does he agree with the central finding of the CBI survey that was issued yesterday? Unless something is done, 50 per cent. of companies expect to cut investment in the next four months and 45 per cent. of companies—nearly one half—expect to lay off workers. How many more months of redundancies and closures will it take before the "do nothing" Department of Trade and Industry begins to act, or has the Conservative party become, as it was in the 1920s and 1930s, the party of recession and unemployment?

Mr. Lilley

The key finding in the CBI's report was that the balance of companies expecting further decline was down sharply, from 51 to 17 per cent. As for investment spending, the key fact is that industry is maintaining spending on innovation and new products and processes and increasing it on training. I should have thought that the hon. Gentleman would welcome that. My speech looked forward to the future in the 1990s, building on the success of the 1980s. The hon. Gentleman wants to take us back to the 1960s and 1970s. The trouble is that Opposition Front-Bench Members all belong to the "Let's turn back" group.