Commons Sitting of 24 November 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]

BUSINESS OF THE HOUSE
Ordered,
That there be laid before this House a Return for Session 1992–93 of—
(1) the total number of Questions to Ministers or other Members which stood on the Order Paper, distinguishing those set down for oral, written priority and written answer

BUSINESS OF THE HOUSE

  CLOSURE OF DEBATE AND ALLOCATION OF TIME
  Ordered,
  That there be laid before this House a Return for Session 1992–93 of—
  (A) applications of Standing Order No. 35 (Closure of debate)—

  (1) in the House and in Committee of the whole House, under the following heads:

  1

  2

  3

  4

  5

  6

  Date when Closure claimed, and by whom

  Question before House or Committee When claimed

  Whether in House or Committee

  Whether assent given to Motion or withheld by the Chair

  Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion

  Result of Motion and, if a Division, Numbers for and against

  and

  (2) in the Standing Committees under the following heads:

  1

  2

  3

  4

  5

  Date when Closure claimed, and by whom

  Question before Committee when claimed

  Whether assent given to Motion or withheld by the chair

  Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion

  Result of Motion and, if a Division, Numbers for and against

  (B) applications of Standing Order No. 28 (Powers of Chair to propose question)—

  (1) in the House and in Committee of the whole House, under the following heads:

  1

  2

  3

  4

  5

  Date when Closure claimed, and by whom

  Whether in House or Committee

  Whether claimed in respect of Motion or Amendment

  Whether assent given to Motion or withheld by the Chair

  Result of Motion and, if a Division, Numbers for and against

  and

  (2) in the Standing Committees under the following heads:

  1

  2

  3

  4

  Date when Closure claimed, and by whom

  Whether claimed in respect or Motion or Amendment

  Whether assent given to Motion or withheld by the Chair

  Result of Motion and, if a Division, Numbers for and against

  and
  respectively, the number of days upon which replies to Questions for oral answers were given in the House; and the total number of Questions for oral answer to which such answers were given in the House;

  (2) the total number of Notices of Motions given for an early day;

  (3) the number of Members ordered to withdraw from the House under Standing Order No. 42 (Disorderly conduct), showing separately the orders given in the House and those given in Committee; and the Members suspended from the service of the House under Standing Order No. 43 (Order in debate) or otherwise, distinguishing whether the offence was committed in the House or in Committee, the period of such suspension, the number of occasions on which more than one Member was so suspended having jointly disregarded the authority of the Chair, and the number of occasions on which the attention of the House was called to the need for recourse to force to compel obedience to the Speaker's direction; and

  (4) the number of public petitions presented to the House distinguishing separately those brought to the Table at the ti mes specified by Standing Order No. 133 (Time and manner of presenting petitions).—[The First Deputy Chairman of Ways and Means.]

  (C) the number of Bills in respect of which allocation of time orders (distinguishing where appropriate orders supplementary to a previous order) were made under Standing Order No. 81 (Allocation of time to Bills), showing in respect of each Bill—

  (i) the number of sittings allotted to the consideration of the Bill in Standing Committee by any report of a Business Sub-Committee under Standing Order No. 103 (Business sub-committees) agreed to by the Standing Committee, and the number of sittings of the Standing Committee pursuant thereto; and

  (ii) the number of days or portions of days allotted by the allocation of time order and any supplementary order to the consideration of the Bill at any stage in the House or in committee, together with the number of days upon which proceedings were so taken in the House or in committee.

  DELEGATED LEGISLATION: Return for Session 1992–93 of—

  (A) the numbers of Instruments subject to the different forms of parliamentary procedure and those for which no parliamentary procedure is prescribed by statute (1) laid before the House; and (2) considered by the Joint Committee and Select Committee on Statutory Instruments respectively pursuant to their orders of reference, setting out the grounds on which Instruments may be drawn to the special attention of the House under Standing Order No. 124 (Statutory Instruments (Joint Committee)) and specifying the number of Instruments so reported under each of these grounds; and

  (B) the numbers of Instruments considered by a Standing Committee on Statutory Instruments, &c., and by the House respectively, showing the number where the Question on the proceedings relating thereto was put forthwith under paragraph (5) of Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).—[The First Deputy Chairman of Ways and Means.]

DELEGATED LEGISLATION
Ordered,
That there be laid before this House a Return for Session 1992–93 of—

(A) the numbers of Instruments subject to the different forms of parliamentary procedure and those for which no parliamentary procedure is prescribed by statute (1) laid before the House; and (2) considered by the Joint Committee and Select Committee on Statutory Instruments respectively pursuant to their orders of reference, setting out the grounds on which Instruments may be drawn to the special attention of the House under Standing Order No. 124 (Statutory Instruments (Joint Committee) and specifying the number of Instruments so reported under each of these grounds; and

(B) the numbers of Instruments considered by a Standing Committee on Statutory Instruments, &c., and by the House respectively, showing the number where the Question on the proceedings relating thereto was put forthwith under paragraph (5) of Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).[The First Deputy Chairman of Ways and Means.]

PRIVATE BILLS AND PRIVATE BUSINESS
Ordered,
That there be laid before this House a Return for Session 1992–93 of—

(1) The number of Private Bills, Hybrid Bills, Bills for the confirmation of Orders under the Private Legislation Procedure (Scotland) Act 1936, and Bills for confirming Provisional Orders introduced into this House, and brought from the House of Lords, and of Acts passed, specifying also the dates of the House's consideration of the several stages of such Bills;

(2) All Private Bills, Hybrid Bills and Bills for confirming Provisional Orders which were reported on by Committees on Opposed Bills or by Committees nominated by the House or partly by the House and partly by the Committee of Selection, together with the names of the selected Members who served on each Committee; the first and also the last day of the sitting of each Committee; the number of days on which each Committee sat; the number of days on which each selected Member served; the number of days occupied by each Bill in Committee; the Bills of which the Preambles were reported to have been proved; the Bills of which the Preambles were reported to have been not proved; and in the case of Bills for confirming Provisional Orders, whether the Provisional Order ought or ought not to be confirmed;

(3) All Private Bills and Bills for confirming Provisional Orders which were referred by the Committee of Selection to the Committee on Unopposed Bills, together with the names of the Members who served on the Committee; the number of days on which the Committee sat; and the number of days on which each Member attended;

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(4) The number of Bills to confirm Orders under the Private Legislation Procedure (Scotland) Act 1936, distinguishing those proceeded with under section 7 and under section 9 respectively; specifying, in the case of Bills proceeded with under section 9 against which petitions were deposited, whether a motion was made to refer the Bill to a joint committee, and if so whether such motion was made to refer the Bill to a joint committee, and if so whether such motion was agreed to, withdrawn, negatived or otherwise disposed of; and stating for each joint committee to which a Bill was referred the names of the Members of this House nominated thereto, the first and last day of the committee's sitting, the number of days on which each joint committee sat for the consideration of the Bill referred to it, the number of days on which each Member of the committee served, and whether the committee reported that the order ought or ought not be confirmed;

(5) The number of Private Bills, Hybrid Bills, Bills for the confirmation of Orders under the Private Legislation Procedure (Scotland) Act 1936, and Bills for confirming Provisional Orders withdrawn or not proceeded with by the parties, those Bills being specified which were referred to Committees and dropped during the sittings of the committee; and

(6) The membership, work, costs and staff of the Court of Referees and the Standing Orders Committee.—[The First Deputy Chairman of Ways and Means.]

PUBLIC BILLS
Ordered,
That there be laid before this House a Return to Session 1992–93 of the number of Public Bills (other than Bills to confirm Provisional Orders and Bills to confirm Orders under the Private Legislation Procedure (Scotland) Act 1936) distinguishing Government from other Bills, introduced into this House, or brought from the House of Lords, showing—

(1) the number which received the Royal Assent, and

(2) the number which did not receive the Royal Assent, indicating those which were introduced into but not passed by this House, those passed by this House but not by the House of Lords, those passed by the House of Lords but not by this House, those passed by both Houses but Amendments not agreed to; and distinguishing the stages at which such Bills were dropped, postponed or rejected in either House of Parliament, or the stages which such Bills had reached by the time of Prorogation.—[The First Deputy Chairman of Ways and Means.]

SITTINGS OF THE HOUSE
Ordered,
That there be laid before this House a Return for Session 1992–93 of the days on which the House sat; stating for each day the day of the month and day of the week, the hour of the meeting, and the hour of the adjournment; the total numbers of hours occupied in the sittings of the House; and the average time; showing the number of hours on which the House sat each day and the number of hours after the time appointed for the interruption of business; and specifying, for each principal type of business before the House, how much time was spent thereon, distinguishing from the total the time spent after the hour appointed for the interruption of business.—[The First Deputy Chairman of Ways and Means.]

SPECIAL PROCEDURE ORDERS
Ordered,
That there be laid before this House a Return for Session 1992–93 of—

(1) The number of Special Procedure Orders presented; the number withdrawn; the number annulled; the number against which Petitions or copies of Petitions were deposited; the number of Petitions of General Objection and for Amendment respectively considered by the Chairmen; the number of such petitions certified by the Chairmen as proper to be received and the number certified by them as being Petitions of General Objection and for Amendment respectively; the number referred to a Joint Committee of both Houses; the number reported with Amendments by a Joint Committee, and the number in relation to which a Joint Committee reported that the Order be not approved and be amended respectively; and the number of Bills introduced for the confirmation of Special Procedure Orders; and

(2) Special Procedure Orders which were referred to a Joint Committee, together with the names of the Commons Members who served on each Committee; the number of days on which each committee sat; and the number of days on which each such Member attended.—[The First Deputy Chairman of Ways and Means.]

STANDING COMMITTEES
Ordered,
That there be laid before this House a Return for Session 1992–93 of—

(1) the total number and the names of all Members (including and distinguishing Chairmen) who have been appointed to serve on one or more Standing Committees showing, with regard to each of such Members, the number of sittings to which he was summoned and at which he was present;

(2) the number of Bills, Estimates, Matters and other items referred to Standing Committees pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.), or Standing Order No. 102 (European Standing Committees) considered by all and by each of the Standing Committees, the number of sittings of each Committee and the titles of all Bills, Estimates, Matters and other items as above considered by a Committee, distinguishing where a Bill was a Government Bill or was brought from the House of Lords, and showing in the case of each Bill, Estimate, Matter and other item, the particular Committee by which it was considered, the number of sittings at which it was considered (including, in the case of the Scottish Grand Committee, the number of Meetings held in Edinburgh, pursuant to a motion made under paragraph 3 of Standing Order No. 94 (Scottish Grand Committee)) and the number of Members present at each of those sittings; and

(3) the membership, work, costs and staff of the Chairmen's Panel.—[The First Deputy Chairman of Ways and Means.]

SELECT COMMITTEES
Ordered,
That there be laid before this House a Return for Session 1992–93 of information and statistics relating to the membership, work, costs and staff of Select Committees (other than the Standing Orders Committee).—[The First Deputy Chairman of Ways and Means.

Oral Answers to Questions
  TRADE AND INDUSTRY

    Deregulation
    Mr. Bates: To ask the President of the Board of Trade if he will make a statement on the progress of deregulation proposals.
    The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): As announced in the Gracious Speech, we will introduce a major Bill to deregulate and to remove obstacles to contracting out by central and local government.
    Mr. Bates: I thank my right hon. Friend for that answer. Is he prepared to consider giving priority to deregulation in the small business sector because while many large corporations and institutions believe that they may have the structures to support unnecessary bureaucracy, to the small business man and the entrepreneur that bureaucracy can often be the difference between success and failure?
    Mr. Heseltine: My hon. Friend clearly understands the problem. In all the work of my hon. Friend the Member for Tatton (Mr. Hamilton) on the deregulation initiative, we have ensured that small business representatives have been included in the consultative process.
    Mr. Malcolm Bruce: May I follow the hon. Member for Langbaurgh (Mr. Bates) and ask whether the President of the Board of Trade accepts that many small businesses feel that the imposition of statutory sick benefit, the draconian penalties in relation to VAT collection and the collection of statistics for exports, which deter small companies from seeking export business, should be considered as part of the deregulation programme and not just aspects that affect consumer protection or health and safety?
    Mr. Heseltine: The hon. Gentleman is out of date because we have made significant exemptions in respect of the VAT system for small businesses.
    Mr. Spring: Is my right hon. Friend aware of how much unnecessary red tape and bureaucracy emanates at local level? Will he assure the House that, as he seeks to encourage deregulation, local government plays a part in that important process?
    Mr. Heseltine: My hon. Friend raises an important point and the answer is yes.
    Mr. Robin Cook: Is the President of the Board of Trade aware that of the regulations that he is reviewing as a burden on business, 71 per cent. have been introduced since the Conservatives took office and 21 per cent. since the Prime Minister took office? Has anybody told him that the second largest number of regulations are in the DTI, of which 84 per cent. have been introduced since the Conservatives took office, 27 per cent. since the Prime Minister took office and 13 per cent. since he became President of the Board of Trade? As the overwhelming majority of the burdens on business have been introduced by the Conservatives, is there no one in the Conservative

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    Government willing to defend their record of 14 years of regulating that includes the record of the President of the Board of Trade?
    Mr. Heseltine: I am grateful to the hon. Gentleman. That is excellent news and shows how determined we are to continue improving our performance.

    Small Businesses, London
    Mr. Shersby: To ask the President of the Board of Trade what is his policy for encouraging the expansion of small businesses in the Greater London area.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Patrick McLoughlin): The Department provides a range of services in London and elsewhere designed to allow small businesses to operate with the maximum freedom and efficiency. In particular, the Business Link network that my Department is helping to develop will greatly strengthen the delivery of those services together with other business support organisations at local level.
    Mr. Shersby: Does my hon. Friend agree that most small firms are well managed and if they were not, they would probably not be in business? Will he take every opportunity to relieve them of the burdens of paperwork that afflicts them as part of the deregulation initiative and give the House an example of the kind of burdens that are to be removed?
    Mr. McLoughlin: I am grateful to my hon. Friend for what he has said. As for the examples for which he asked, he will have to wait for the publication of the deregulation Bill to which my right hon. Friend the President of the Board of Trade has just referred.
    Mr. Gapes: Does the Minister agree that the biggest problem for small businesses in Greater London is the impact of the recession? In my constituency, where one adult male in six is currently unemployed, there is certainly no glimmer of hope: unemployment has doubled in the past five years, and is twice as high now as it was when the Prime Minister came to office.
    Mr. McLoughlin: The hon. Gentleman overlooks the important point that small businesses contribute to employment opportunities. Given the whingeing that we hear from Opposition Members, it is no surprise that such businesses have no confidence in the Labour party.
    Mr. John Marshall: Does my hon. Friend agree that the greatest boost for small firms in Greater London will come from a more prosperous economy? Will not those firms welcome the fact that interest rates are at their lowest for 25 years, and the fact that inflation is at its lowest for a generation?
    Mr. McLoughlin: My hon. Friend is, of course, correct. Those underlying factors are giving great confidence to businesses—including small businesses—not just in London, but throughout the United Kingdom.
    Mr. Nigel Griffiths: I welcome all measuress to help small businesses, but why have the Government done so little to crack down on the banks that are persecuting so many small businesses? Is he aware of the survey carried out by the Forum of Private Business? [Interruption.] Conservative Members sneer at its 21,000 membership,
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    but the survey showed that, in the past six months, 50 per cent. of respondents had found that banks were to introduce tougher charging policies. When will the Minister crack down on those banks, and eliminate practices that are doing so much harm to so many small businesses and individuals?
    Mr. McLoughlin: What the hon. Gentleman never tells us is what his party would do. The simple fact is that, since we have been in government, some 400,000 new businesses have started up each year. That is a far greater success than was ever achieved during the socialist years of Labour government.

    Deregulation
    Mr. Hendry: To ask the President of the Board of Trade if he will make a statement on the progress of his deregulation initiative.
    The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): We have made reasonable progress on the deregulation initiative so far, but we cannot be satisfied with the progress that we have made. What we are trying to achieve is a culture change on the part of Ministers and Departments—and, I like to think, possibly a culture change on the part of the Opposition as well. There will be a deregulation Bill, which will shortly be introduced in the House. The proof of the pudding will be whether the Opposition are prepared to support us.
    Mr. Hendry: I thank my hon. Friend for that answer. I assure him that the business community in my constituency considers that the Government have no more vital task than tackling over-regulation.
    Will my hon. Friend assure the House that, as well as tackling over-regulation—which he is determined to do—he will tackle over-zealous inspectors, who all too often appear keen to put out of business small, successful firms for the sake of some unnecessary and expensive regulation dreamt up by some inspector who knows nothing about the businesses that are affected?
    Mr. Hamilton: I entirely agree with my hon. Friend. Regulations that might otherwise be thought reasonable can be made unreasonable if they are interpreted and enforced excessively. Through our local authority, business partnership initiative schemes, we are seeking to bring business and local authority enforcers together, so that authorities can understand their obligation to keep regulation within reason, and so that regulation does not become a burden on business.
    Mr. Burden: It is easy to parrot cliches about deregulation, but is it not disgraceful that the Government should even consider weakening health and safety standards, when last year no fewer than 28,000 people suffered serious injury at work?
    Mr. Hamilton: There is one regulation—uniquely—that I would like to introduce: a regulation to compel Opposition Members to know what they are talking about before they stand up. I realise that it would deny us a good deal of innocent entertainment, especially from the Opposition Front Bench, but I am prepared to forgo that enjoyment.
    The hon. Gentleman is, of course, completely wrong. We do not intend to interfere with sensible health and

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    safety regulations. The scales may fall from his eyes if I read him a press release from my hon. Friend the Member for Stirling (Mr. Forsyth), the Minister of State, Department of Employment, who is responsible for the Health and Safety Commission. The press release states:
    "The purpose of the review being undertaken by the Health and Safety Commission is to simplify, clarify and to update health and safety legislation. There is certainly no plan to sacrifice the high standards already in place—in fact, the aim is to improve them by judicious pruning."
    Sir Michael Grylls: Does my hon. Friend accept that his initiative in introducing the Bill and really get the deregulation programme moving is welcome throughout the country? It is of prime importance, particularly to smaller firms, as my hon. Friend has said. When he comes to consider an announcement on the abolition of the statutory audit, will my hon. Friend resist pressure from other parts of Government to make it a mouse rather than a major announcement—in other words, to include all unquoted companies? There is no necessity for a statutory audit of any privately owned company. It would be disappointing if he were to abolish that audit for just certain companies.
    Mr. Hamilton: I regard resistance as a negative attitude. My job is to be more pro-active than that and to attack Government Departments that are not playing a prominent enough part in the deregulation initiative. I shall bear in mind what my hon. Friend says about small company audits, and I hope a decision on that will be announced very quickly.

    Technology Transfer
    Mr. Maxton: To ask the President of the Board of Trade what plans his Department has to assist with technology transfer from defence-related activities; and if he will make a statement.
    The Minister for Industry (Mr. Tim Sainsbury): A number of schemes in my Department assist technology transfer, including transfer from defence-related activities.
    Mr. Maxton: When the United States Government are planning to spend $19·5 billion over the next five years on retraining programmes, investment programmes and incentive schemes to deal with the problem of technology transfer from defence industries, is not the Government's attitude to this problem irresponsible and dangerously complacent? Is the Minister prepared to see the skills of thousands of highly qualified and trained workers lost to our economy for ever? When will the Government come up with the same sort of package as that of the Clinton Administration?
    Mr. Sainsbury: The most important factor in encouraging technology transfer from the defence industries is to have the right climate to encourage innovation. That is what the Government are determined to support and the Opposition persistently oppose. Let me remind the hon. Gentleman of some of the schemes we have. Apart from the budget for industrial revolution [Interruption.] sorry, innovation—innovation often needs satisfactory revolution—we have the pathfinder programme, the dual use technology centres, the defence research information centre and the changing tack seminars, all of which have been strongly welcomed by industry.
    Mr. Mans: Does my right hon. Friend agree that the best way to develop defence technology for commercial use is for direct links to be established between the companies involved and the Ministry of Defence? That would produce a partnership and bring research and development forward, and the commercial and military use of such research could be equally exploited.
    Mr. Sainsbury: I strongly agree with what my hon,. Friend says from his specialist knowledge. My Department is working closely with the Ministry of Defence. The identification of civilian applications for defence research technology is steadily improving to the benefit of industry.
    Mr. Caborn: I am not asking the Minister for a revolution, but does he acknowledge that there is great concern, particularly in the aerospace industry, about the question of technology transfer? What steps will his Department take to rearrange and reorganise that, as requested in the recent Select Committee report on the aerospace industry? The industry and the Select Committee are concerned about the lack of action from the Minister's Department and the Ministry of Defence. We are not getting the best out of our industry, and we are not assisting firms to stay at the competitive edge of leading technologies.
    Mr. Sainsbury: As the hon. Gentleman knows, we work closely with the aircraft industry in our civil aircraft research and development programme, known as CARAD. The directions in which we spend the money in that programme have been identified by the industry as being the most important. That is the most effective way that we can continue to benefit the industry from our research and development programmes.
    Mr. Bill Walker: Does my right hon. Friend agree that one of the most effective and efficient ways of transferring technology is to ensure that the present companies involved in the supply of defence equipment continue to receive the orders already committed, such as those committed to Babcock Thorn at Rosyth, which has demonstrated very clearly how technology transfer can be operated in practice?
    Mr. Sainsbury: The matter to which my hon. Friend refers is primarily one for my right hon. and learned Friend the Secretary of State for Defence, but one way in which to strengthen defence companies and thus enable them to have the resources to look for methods to transfer their technology to civilian uses is by the successful sale of defence equipment overseas. I take this opportunity to congratulate defence industries on their success in that respect.

    Trade (Japan)
    Mr. Viggers: To ask the President of the Board of Trade if he will make a statement on the current trade balance with Japan.
    The Minister for Trade (Mr. Richard Needham): Despite the difficult economic conditions in Japan, United Kingdom exports rose 19 per cent. in the first 10 months of 1993 compared with the corresponding period in 1992. The United Kingdom has a visible trade deficit with Japan which, for the same period, stands at £4,894 million.
    Mr. Viggers: Does my hon. Friend agree that raw statistics are rather misleading because of the variation in value between the yen and the pound? The true position is that our exporters have performed strongly in the Japanese market in recent years. Is my hon. Friend in a position to make an announcement now about the successor to the extremely successful Priority Japan programme?
    Mr. Needham: My hon. Friend is right. If we look at the balance between exports and imports to Japan, we see that it has hardly changed in the past five years and is better than it was in the early 1980s. Our exports to Japan have increased by 20 per cent. this year against a difficult background. We continue to attract enormous investment from Japan. I will announce the successor to the Priority Japan programme in the next few weeks and I am sure that it will command the support and backing of the House and British industry.
    Mrs. Anne Campbell: Is the Minister aware that the Japanese have now identified the aerospace and pharmaceutical industries as the ones in which special effort and special investment will be made in the next few years? Currently, we do quite well against Japan in those industries. What does the Minister think that those British industries will be like by the year 2000 in comparison with the Japanese industries?
    Mr. Needham: We have among the most competitive and successful pharmaceutical and aerospace industries in the world. The only way in which that position could alter is if the hon. Lady and her hon. Friends ever sat on the Government Benches and imposed the ridiculous rules that they want to introduce, which would undermine the competitiveness of our country and make our competitive position more difficult than it would otherwise be.
    Mr. Butcher: My hon. Friend will be aware that the United States is looking increasingly eastwards towards Japan and the Pacific basin as the areas of more dynamic growth and trade than that offered by Europe. As a counter to that trend, is my hon. Friend prepared to encourage negotiations to establish a north Atlantic free trade area, which would dynamise the economies of the western European ports, such as our own and the American eastern seaboard? Does my hon. Friend agree that, if we could achieve that, it would be an important subset at the GATT negotiations?
    Mr. Needham: I am for dynamising wherever I can go. Western European/Asia-Pacific trade is now greater than north American/European trade and that trend is likely to continue. The most important aspect of that for the British economy is whether Britain is taking maximum advantage of our opportunities in the east. The answer is yes. For example, our own exports to China are up more than 100 per cent. this year and those to Hong Kong have increased by 48 per cent. Throughout the far east, British industry, British commerce and British services, with the help of the British Government, are doing remarkably well and we will continue to concentrate on that part of the world.

    Manufacturing
    Mr. Hain: To ask the President of the Board of Trade if he will give figures for the percentage change of manufacturing as a proportion of gross domestic product since 1978-79.
    Mr. Heseltine: The share of manufacturing gross domestic product has fallen by around six percentage points since 1979. All the main industrialised countries are seeing a decline in the share of GDP accounted for by manufacturing.
    Mr. Hain: At this rate, Britain is in danger of becoming a manufacturing-free zone with more people on the dole doing nothing than in factories producing British goods. Instead of blaming everybody else, why will the President of the Board of Trade not start to invest in skills, infrastructure and industry and provide industry with the long-term, low-cost finance which it needs. That is the way to recovery. Why does the right hon. Gentleman not have an industrial strategy to build that recovery?
    Mr. Heseltine: The hon. Member will be pleased to know that manufacturing output rose by 1·6 per cent. during the past 12 months. Manufacturing productivity rose by 5 per cent. during the same period, while manufacturing exports to non-EC countries were 16 per cent. higher. I am sure that the hon. Member and his right hon. and hon. Friends will welcome that good news.
    Mr. Anthony Coombs: Will my right hon. Friend remind the Opposition that recent figures issued by the university of Cambridge show that manufacturing output in this country has risen by 30 per cent. since 1979, while under the previous Labour Government it fell? Is not it perverse in the extreme to wish small firms well and at the same time to support the social chapter, to support compulsory recognition of trade unions, and to support increased taxation? Is not that exactly what the Opposition have tried to do?
    Mr. Heseltine: My hon. Friend is anticipating the speech that I hope to make to the House later this afternoon.
    Mr. Barry Jones: May I tell the right hon. Gentleman about a manufacturing success in my constituency—the construction of the executive jet which can fly the Atlantic and which can carry 12 people? Will the right hon. Gentleman tell the House why he permitted the sale of that magnificent aeroplane by British Aerospace to the American firm, Raytheon? Will he guarantee that production of the aeroplane will remain in Britain after three years?
    The right hon. Gentleman should know that my constituents who build the plane are concerned about the future of their jobs in the long term. The right hon. Gentleman boasts about manufacturing. Why did he allow that great machine to be sold to an American company?
    Mr. Heseltine: Is the hon. Member suggesting that we should have controls in every constituency and in every industry over whether British companies should be sold to American companies? The hon. Gentleman should realise that the effect of that would be to choke off the inward investment from which this country has had such success.
    Mr. Burns: Does my right hon. Friend accept that one way to help enhance manufacturing capability in areas that have suffered from defence-related redundancies is through the support of the Konver fund which his Department backs? Given that results on bids for Konver are being made available next week, may I, as a last-minute

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    request, put in a plug for the bid by Essex and Chelmsford to help those areas that have been badly affected by defence-related redundancies?
    Mr. Heseltine: My hon. Friend is right to take every possible opportunity to put in bids that will help his constituency. I only hope that all of my hon. Friends will not take immediate advantage of that precedent.
    Mr. Fatchett: In his responses, the President of the Board of Trade seems to have failed to understand the problems that affect British industry or to accept the Government's record during the past 14 years. Will the right hon. Gentleman acknowledge that 2·6 million jobs have been lost in British manufacturing industry? Will the right hon. Gentleman also acknowledge that this country comes near the bottom—if not at the bottom—of league tables on research, development, and training by the Organisation for Economic Co-operation and Development?
    The Prime Minister talks about returning to basics. Will the Government, as part of that policy, go for an investment policy in manufacturing industry, and also for an industrial strategy so that manufacturing industry in the United Kingdom can be restored to the strength and capacity that it enjoyed when the Labour party left office in 1979? If that is not done, will not there be more years of decline and job losses under this Government?
    Mr. Heseltine: The basic fact that Opposition Members are quite incapable of understanding is that, throughout the advanced economic world, there has been a shift away from manufacturing. If one looks at this country's record, it can be seen broadly that we have marched in line with other similar economies. [Interruption.] It is no use Opposition Members shouting down the facts. Those facts may not suit their arguments, but Opposition Members will not silence me. They will have to get used to that.
    There has been a reduction of 6 per cent. in our GDP percentage since 1979. The House will want to know that until 1987, the equivalent figure for America and for Germany was 4 per cent., for France it was 5 per cent., and for Italy it was 7 per cent. Our output is now rising while the output of other nations is falling.
    Mr. Oppenheim: Will my right hon. Friend cast his mind back to those heady days of manufacturing might in the 1970s when the Labour Government were implementing their industrial strategy? At that time, British Steel was the world's largest loss-maker, British Leyland was the butt of international jokes, multinational car firms were falling over themselves to transfer production overseas, manufacturing output fell—
    Madam Speaker: Order. If the hon. Gentleman wishes to make a speech, he should try to catch my eye in the debate that will follow, and I shall try to call him to speak in it, but I ask him to put a question now.
    Mr. Oppenheim: Is my right hon. Friend also aware that, in the 1980s, we were top of the manufacturing, productivity and growth leagues and second only to Japan in manufacturing output—
    Madam Speaker: Order. I have given the hon. Gentleman a warning. I might call him if he tries to catch my eye in the debate afterwards, but I need a question now.
    Mr. Oppenheim: What is my right hon. Friend going to do about it?
    Mr. Heseltine: I hope, Madam Speaker, that if you do call my hon. Friend, it will be after me because otherwise I shall have nothing left to say. What I shall do about it is to listen carefully to what he has to say in the debate.

    Defence-related Manufacturing
    Mr. Chisholm: To ask the President of the Board of Trade what is his latest estimate of the number of people employed in defence-related manufacturing employment.
    Mr. Sainsbury: The latest estimate published by the Ministry of Defence is that in 1991–92 United Kingdom defence-related manufacturing employment was around 410,000.
    Mr. Chisholm: Does the Minister agree that that is a large and highly skilled group of workers, who must be kept in manufacturing employment? Will the Government therefore abandon their hands-off approach to defence diversification and start by accepting the recommendation of the Select Committee on Trade and Industry on that subject in its recent aerospace report? When considering the EC Konver bids, will the Government give sympathetic consideration to the submission from the Lothian region, where almost 20 per cent. of manufacturing jobs are dependent on defence orders?
    Mr. Sainsbury: On the latter point, I can assure the hon. Gentleman that all the Konver bids being considered today will be given careful scrutiny by the committee. On his first point, I agree that defence employees form a skilled group of employees with many and varied skills which we want to see used to the best advantage. The one sure way to ensure that that did not happen would be for the Government to decide what should happen to them, rather than for their employers, the companies, to make their own commercial decisions. We are not in the business of telling management how to run their companies. We are in the business of encouraging management by providing the right environment for them to succeed.
    Mr. Wilkinson: Does my right hon. Friend agree that one of the saddest casualties of the reduction in defence orders was the receivership of Swan Hunter shipbuilders at Wallsend? Can he give the House an assurance that his talks with Commissioner Karel Van Miert about the absurd Community regulations that prohibit that company from obtaining intervention funding for commercial shipbuilding will lead to the lifting of that regulation, so that other shareholders will have a chance to invest in Swan Hunter, and there will be a future for that company and for jobs on the Tyne?
    Mr. Sainsbury: First, I agree with my hon. Friend about what a sad day it was when Swan Hunter went into the hands of the administrators. We continue to hope that those administrators will be successful in finding a buyer for the company so that shipbuilding can continue on the Tyne. My hon. Friend made an important point about the shipbuilding intervention fund, a matter on which the Commission has to agree because it is a state aid. I had useful discussions with Commissioner Van Miert last week. Our negotiations are continuing and I hope that we

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    shall be able to bring the matter to a conclusion relatively shortly. I believe that we have a strong case in respect of Swan Hunter.
    Ms Eagle: Can the Minister confirm whether a similar approach has been made on behalf of Cammell Laird shipyard? Both the current owners and the potential buyers, who have so far failed to secure more than 1,000 jobs on Merseyside—already a high unemployment area —have all agreed that with access to the intervention fund Cammell Laird could have remained open. If such an approach has not been made, why has it not, as the survival of shipbuilding is as important on the Mersey as it is on the Tyne?
    Mr. Sainsbury: I can assure the hon. Lady that the original approaches to the Commission in July were in respect of all the warship building yards covered by the original agreement about subsidies. Because the circumstances of each yard differ, it has been necessary to focus particularly on discussions in respect of Swan Hunter. My latest meeting with Commissioner Van Miert was solely in respect of Swan Hunter.

    Domestic Telephones
    Mr. Ian Bruce: To ask the President of the Board of Trade what proportion of homes now possess a telephone; and what was the proportion in 1979.
    Mr. McLoughlin: In 1979, 67 per cent. of households were connected to a telephone. The latest figures show that 89 per cent. of households are now connected, which represents a 33 per cent. increase.
    Mr. Bruce: I wonder whether in his busy day my hon. Friend might have a chance to read the Second and Third Reading debates and the speeches made by Opposition Members when we were discussing the Telecommunications Bill. He may well find that the predictions that were made by the Opposition about privatisation have all been proved to be totally untrue. I should like to encourage my hon. Friend to continue the Government's policy of extending the number of people getting into the telecommunications market so that we can not only continue to have a successful industry but also provide the services that consumers clearly want.
    Mr. McLoughlin: I am not sure that it would do much good if I re-read those speeches, but I recommend that Opposition Members do so because they ought to see the way in which their forecasts have so miserably failed to come to fruition. The facts are that to have a telephone installed in 1979, at today's prices, cost £188. Today, that connection cost is £99.
    Mr. Ronnie Campbell: Many of my constituents have telephones and they keep calling me and telling me about the rotten Government and what they are doing. When will the Minister take a hand to British Telecom and ask it to cut the price for the installation of telephones for pensioners? The cost is enormous—it costs almost £200 for pensioners to have a telephone installed. Is not it about time that the Minister did something about that?
    Mr. McLoughlin: I am sorry that the hon. Gentleman does not seem to have been able to pick up the telephone to BT. The figure that he has just given—and which I gave in my last answer—shows how much he is out of touch. As
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    I have said, to install a telephone in 1979 would have cost £188 at today's prices. BT has just reduced the connection charge to £99. I hope that you, Madam Speaker, will now give the hon. Gentleman a chance to get up and welcome that and the privatisation of British Telecom.
    Mr. Peter Ainsworth: Will my hon. Friend confirm that there has also been a substantial increase in the number of payphones in the past 10 years? Does he agree that the telecommunications industry provides a classic example of exactly what deregulation can achieve?
    Mr. McLoughlin: I am grateful to my hon. Friend. That was another scare being touted by the Opposition at the time of privatisation—that somehow all rural phones and mobile phones would cease to exist. The fact is that public phone boxes are working.
    Mr. Cousins: Does the Minister not know that there are fewer telephone lines in British homes than in most European countries? The Minister talked about installation charges. Is he not aware of the extortionate installation deposits which are levied in addition to installation charges, particularly in some of the tough inner-city areas? What is he doing about the antique pricing structures and the rank overcharging which mean that British telephone lines are used a third less than telephone lines in the United States? What is he doing to create a mass market in telephones which link the screen to the telephone rather than confining it to yuppies?
    Mr. McLoughlin: I honestly do not know where to start in answering the hon. Gentleman's question. When we were privatising BT, the Opposition predicted that prices would go up. In fact, they have fallen by 27 per cent. so far as BT is concerned. There has been a greater increase in competition, with cable companies investing massive amounts of money in this country because they see that as an opportunity to develop their industry. They are providing telephone services, too. It is amazing that the Opposition spokesman can find nothing on which to attack the Government but the leading companies in this country.

    Manufacturing, Leicester
    Mr. Janner: To ask the President of the Board of Trade whether he will take steps to assist manufacturing industry in the city of Leicester.
    Mr. Sainsbury: My Department already has in place a number of schemes that are helping manufacturing industries and other companies in Leicester and elsewhere.
    Mr. Janner: I am sure that the Minister is aware of the awful troubles afflicting Leicester's traditional industries —hosiery, textiles and, in particular, footwear—and the massive job losses which have resulted, but is he aware that, despite reductions in interest rates, those companies that are trying to rebuild are having enormous problems raising capital, whether from the banks, venture capital or otherwise? Will the Minister undertake to look into that problem, which affects not only Leicester and the east midlands, but manufacturers throughout the country?
    Mr. Sainsbury: I congratulate the hon. and learned Gentleman on being the first Opposition Member to say anything during this Question Time which has even slightly implied that something good has happened, such as a reduction in interest rates. As he knows, that reduction

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    is a benefit to businesses in his constituency and elsewhere. With regard to small businesses, I am sure that the hon. and learned Gentleman would also welcome the fact that 400,000 new businesses have started up this year. We wish to continue to provide an environment which will encourage the creation of businesses and enable them to succeed and grow.
    Mr. Garnier: Is my right hon. Friend aware that, like the hon. and learned Member for Leicester, West (Mr. Janner), I have constituents who work in manufacturing, textile and hosiery businesses? Is he further aware that many textile, hosiery and engineering businesses in my constituency are thriving and that in my constituency we have the lowest unemployment figure in the county? Does he agree that we have such a happy picture to paint because of the increasing deregulation, which is being welcomed by business men, because of lower interest rates and because the Government have been fighting hard to keep the social chapter off the backs of British business men?
    Mr. Sainsbury: I am delighted to hear from my hon. Friend about the success of some of his businesses. He confirms the point that, in the right conditions, well-run businesses will flourish, expand and create more employment. I congratulate the textile industry on the success that it is achieving in exports, particularly in the wool and best quality textile markets.

    Retail Sector
    Mr. Booth: To ask the President of the Board of Trade if he will make a statement on the change in the performance of the retail sector since 1992.
    The Minister for Energy (Mr. Tim Eggar): Retail sales figures issued last week for October showed a year-on-year increase of 3·2 per cent. in volume and 5·5 per cent. in value.
    Mr. Booth: Putting the vexed issue of Sunday trading on one side for another occasion, what proposals will the Government bring forward to help small shopkeepers by deregulating?
    Mr. Eggar: As I am sure my hon. Friend will understand, I cannot prejudge the contents of the deregulation Bill or anything that might be in the Budget statement of my right hon. and learned Friend the Chancellor of the Exchequer. However, we are acutely conscious of the need to ensure that the retail sector is truly competitive and we know that there must be a particular emphasis on reducing red tape for smaller businesses, whether in the retail sector or elsewhere.

    Exports
    Mr. Austin Mitchell: To ask the President of the Board of Trade what has been the percentage change to the volume of exports of manufacturers to (a) other EC countries and (b) the rest of the world since August 1992.
    Mr. Needham: The volume of United Kingdom exports of manufactures to other EC countries was 0·3 per cent. higher in the three months ended August 1993, compared with the same period a year earlier. The volume of manufacturing exports to the rest of the world increased by 13·8 per cent. over the same period, resulting in an overall increase of 6·2 per cent.
    Mr. Mitchell: On those figures, the Minister accepts that our trade in manufactures with the rest of the world is doing much better, thanks to the fact that our devaluation in relation to the rest of the world was much greater than it was against the EEC. On the other hand, we are doing less well against the EEC because of the surreptitious policy of shadowing the deutschmark, which in real terms has brought the real exchange rate back to the figure before wonderful Wednesday in 1992. Does that not mean that almost half our trade in manufactures in volume terms is now outside the EEC and we need a much bigger fall in interest rates to get the pound down to a competitive level in Europe?
    Mr. Needham: The recovery in this country happened in the second quarter of 1992, before we came out of the exchange rate mechanism. It may not have occurred to the hon. Gentleman that the major reasons why our exports to Europe are not doing so well as they are to the rest of the world is because—
    Mr. Mitchell: Of the pound.
    Mr. Needham: It has nothing to do with that. It is because Europe is in deep recession. Our volumes have increased in Europe. As for the rest of the world, the hon. Gentleman is absolutely right. We have done remarkably well. The Government are working with British industry to ensure that we are making export credit available and that we have a long-term strategy with industry to maximise opportunities outside the EC as well as in it. The hon. Gentleman has accepted that those figures prove that. On that basis, he will congratulate us.
    Mr. Paice: Does my hon. Friend agree that it is amazing that there is relative silence about the exceptional export figures, particularly to the rest of the world? Would my hon. Friend like to take this opportunity to note a very traditional manufacturing company in my constituency, Standens of Ely? That company has been fabricating materials for export to the far east and the Pacific rim, with considerable help from my hon. Friend's Department. Should not such achievement be sung about from the highest mountains?
    Mr. Needham: My hon. Friend has given one example. I am sure that an endless series of my right hon. and hon. Friends could give similar examples, as could Opposition Members if they searched their telephone books and listened to their industrial constituents. British capital goods companies have set themselves a target to double their exports to non-OECD countries in the next few years from £10 billion a year to £20 billion a year. That is the answer to Opposition Members on the resurgence of manufacturing in this country.
    Mr. Bell: The Minister has referred to export credit. What would he tell exporters who increase their competitiveness and productivity, yet when it comes to export credit guarantees look askance at Europe and see what they think are more competitive rates? The President of the Board of Trade said at the Confederation of British Industry conference that our rates were broadly in line. Is the Minister aware of the anxiety of exporters who fear that the European Commission is looking at a new directive designed to create a level playing field for export credit guarantees which they believe is tilted towards the French? Will he give the House an assurance that in relation to that

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    directive and the negotiations, the Department of Trade and Industry will play an active part, with a strategy for trade and for industry, and not leave it to the Treasury with a strategy for money?
    Mr. Needham: When it comes to export guarantees, as the hon. Gentleman knows, we have increased the cover by £2·5 billion, we have reduced the premium rates by 25 per cent., we have several markets back on cover and we have increased short-term insurance cover by £1·4 billion. British industry and commerce are much better placed than they were before. However, I accept that it is vital that we are not the only ones playing on the level playing field. Any directives from the Community or any proposals that come forward will be considered by the Department of Trade and Industry and by the Government to see whether they are of benefit to our industry. We are of course determined to make sure that British industry receives the maximum support possible. That is what we have been doing and we shall continue to do it.

    Deregulation
    Mr. French: To ask the President of the Board of Trade what have been the findings of each of the deregulation task forces set up last March.
    Mr. Neil Hamilton: More than 600 proposals for removing unecessary burdens are being put forward by the seven business task forces. The eighth task force, on the voluntary sector and charities, will report shortly. I expect to be able to publish the contents of the deregulation task forces' investigation documents as soon as possible.
    Mr. French: Has my hon. Friend had an opportunity to read the General, Municipal, Boilermakers and Allied Trades Union publication entitled "Freedom to Kill? The case against deregulation", in which it is argued that the Government are endeavouring to weaken the laws that protect employees against death, injury and disease and give unscrupulous employers the right to kill? Will my hon. Friend join me in condemning the hysterical and emotional language in that publication and confirm that the Government's proposals are reasonable and should not be allowed totally unnecessarily to cause anxiety?
    Mr. Hamilton: My hon. Friend is perfectly correct, but he must remember that where the Opposition and their trade union allies are concerned criticism is never inhibited by ignorance. This is a good example because the Government do not have any firm proposals in the area. The deregulation task forces have made their suggestions for deregulation. We are not obliged to accept them, but it would be sensible to debate the proposals in an adult way; then we can take a balanced view of their desirability. To condemn things out of hand, on the basis of emotion, hysteria, shroud waving and headline grabbing is not exactly an adult approach for an Opposition.
    Mr. Illsley: Will the Minister tell the House why local authorities were excluded from the deregulation task forces? Would it not have been sensible to allow local authority trading standards officers to be part of them, as they are the people best placed to determine which regulations are redundant and which are still necessary?
    Mr: Hamilton: I have to tell the hon. Gentleman that I spent the whole of yesterday afternoon in Bristol, at a
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    conference to which we had invited all the local authorities and trading standards departments in the south-west. It was the fourth such conference to be held in England during the past few months—the others were in Manchester, Newcastle and London. No one from local government has been excluded from the deregulation exercise. Local government has an important role to play in making constructive proposals of its own and we are inviting it to do so. Unlike that from Opposition Members, we have had a very constructive response.

    Small Businesses
    Mr. Thomason: To ask the President of the Board of Trade when he last met the Institute of Directors to discuss small businesses.
    Mr. Heseltine: I met representatives of the Institute of Directors last night when I spoke at their annual dinner on a number of issues, including small businesses.
    Mr. Thomason: Does my right hon. Friend agree that many small businesses continue to require assistance in management and marketing? Will his Department continue to ensure that support is provided to them in various ways? Does he agree that that should be seen as part of the extension of an enterprise culture, which is so derided by the Opposition?
    Mr. Heseltine: I am grateful to my hon. Friend and I very much accept the thrust of his questions. I am considering the basis of the services that we provide, especially the more intense back-up for small and medium-sized firms that the Business Link organisation will provide. I hope to be able to say something about that shortly.
    Mr. Turner: Has the President of the Board of Trade received representations from companies in the west midlands regarding the inordinate delays in receiving appraisals through the regional selective assistance policy? That is causing some concern in the west midlands. It is taking more than four weeks for the initial appraisal to be made, which is causing consternation to companies, and I believe that the delay is being caused by staffing problems. We need more staff in that department. Also, market testing is creating great problems in that area.
    Mr. Heseltine: The hon. Member is asking two questions. About £700 million of Government expenditure was market tested last year, as a result of which we have achieved an ongoing annual saving of £100 million. As to his first question, I do not believe that the service that we provide in dealing with those grants is the subject of widespread criticism. If it were, I or my right hon. Friend the Minister for Industry would have heard about it many times. However, if the hon. Member knows of a case that may not have received prompt attention I hope that he will bring it to my attention.
    Mr. Nicholls: Does my right hon. Friend agree that many small businesses in the tourist sector are concerned about over-regulation, especially the package holiday directive? Can he give us any hint as to whether that might be one of the regulations that could be considered for review?
    Mr. Heseltine: My hon. Friend will know that the essence of the exercise that we are carrying out is to study

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    all aspects of laws, regulations and practices, whether from Whitehall, European directives, or the practices of local authorities. In essence, my hon. Friend will find that we have looked at, and will continue to look at, the area that he has drawn to our attention.
    Mr. Robin Cook: If the President of the Board of Trade is serious about helping small businesses, will he acknowledge that, in survey after survey, they cite late payment as their biggest problem? Is he aware that small businesses have to pay their bills, on average, 10 days before they get paid by big businesses? So why does the Conservative party, alone among the major parties, refuse to accept the case for a statutory right to interest on late payments? If interest on late payment works for the Inland Revenue, why not for small businesses? Or does the Conservative party's interest in small businesses stop short of offending its friends in big business?
    Mr. Heseltine: No, that is not our position. This is a matter on which we have made many statements and conducted a great deal of consultation. We realise that it is a matter of concern to small businesses, and we are actively considering it.

    Manufacturing Industry
    Mr. Robert Hughes: To ask the President of the Board of Trade what is his estimate of the growth of manufacturing industry for the year 1992–93.
    Mr. Sainsbury: My right hon. and learned Friend the Chancellor of the Exchequer will publish new forecasts of manufacturing output when he presents his Budget to the House on 30 November. However, it is very encouraging that manufacturing output, manufacturing productivity and manufacturing investment all rose in the last 12 months.
    Mr. Hughes: Surely the Minister is aware that, according to the last published figures, manufacturing industry grew by only 1 per cent. in the previous 12 months. Does not his answer mask the massive decline in manufacturing industry that took place during a period when the Government continually denied that we were going into recession, even though we were already deep in one? Will the Minister now stop complacently pretending that the recovery has taken hold and introduce a proper strategy for investment-led growth in manufacturing, which is the only way the country can get out of its balance of payments problems?
    Mr. Sainsbury: Manufacturing output rose by 1·6 per cent. over the past 12 months. I would have hoped that that would be welcome to the hon. Gentleman, in the light of the decline in many of our major export markets in continental Europe. The sort of policies proposed by the party that he supports—saddling manufacturing industry with the burdens and restrictions that would follow from the social chapter—would be likely to stifle any further growth in output more quickly than anything else.
    Mr. Clifton-Brown: Although I welcome the growth of manufacturing output last year and predictions of more growth next year, may I ask my right hon. Friend to point out to his colleagues in the Council of Ministers how much labour on-costs, such as those from the social chapter, will hamper manufacturing industry? Will he point out to them
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    that it is essential that those labour on-costs be kept to a minimum so that both this country and the rest of Europe can remain competitive with the rest of the world?
    Mr. Sainsbury: It was my impression at a meeting of Council of Industry Ministers last week that a number of colleagues in other Community countries are now conscious of the points that my hon. Friend makes and are perhaps beginning to have second thoughts about the wisdom of some of the things to which they have signed up.
    Dr. Berry: Is the Minister genuinely surprised that manufacturing output is higher this year than last, given the appalling state of the economy last year? Is it not more relevant to recognise that the trade deficit in manufactured goods at this point in the trade cycle has never been worse in recent economic history? How does he explain that?
    Mr. Sainsbury: I hope that the hon. Gentleman will be prepared to welcome the changes since 1981. Manufacturing output is up by nearly a quarter, and productivity and exports are up by nearly three quarters. My right hon. Friend the President of the Board of Trade has already pointed out—perhaps the hon. Gentleman was not listening or was not in his place at the time—that it is normal for advanced economies to experience a decline in the proportion of manufacturing in their total gross domestic product. This country is no exception.

    Skeletal Implants Testing
    Mr. Flynn: To ask the President of the Board of Trade what is the total estimated cost of the development of life-time predicative test methods for the skeletal implants project.
    Mr. Sainsbury: The total estimated cost is £750,000. The Department of Trade and Industry will provide up to £472,000, 63 per cent., and industry £278,000, 37 per cent.
    Mr. Flynn: Is the Minister aware that this project is of enormous importance and will bring relief to many millions of people in this country if successful? Will he investigate the tendering procedure as it is claimed that many organisations with great expertise in this area were excluded?
    Mr. Sainsbury: I am not aware of the point that the hon. Gentleman makes. I have received no formal complaints about the tendering process. If the hon. Gentleman has a specific point that he would like to bring to my attention, I will certainly follow it up if he writes to me.

    Konver Initiative
    Mr. Anthony Coombs: To ask the President of the Board of Trade what grants have been made in the current year under the Konver initiative.
    Mr. Sainsbury: None so far. The Konver programme for the United Kingdom was approved by the Commission only on 19 November. An announcement of grants allocated will be made early in December.
    Mr. Coombs: While waiting in eager anticipation for that undoubtedly much-valued programme, will my right hon. Friend support, when it comes along, the application from Royal Ordnance in my constituency for a bomb-proof

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    waste paper container, which will be valuable in view of the current activities of the IRA? Can he confirm that there is no feeling against small and medium-sized companies in relation to the criteria for the Konver programme? That is certainly something about which the office of the Department of Trade and Industry in the west midlands has hinted.
    Mr. Sainsbury: I congratulate my hon. Friend on finding a perhaps slightly unexpected opportunity to
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    commend that project in his constituency. As I said earlier, the Konver national programme committee is meeting today. I can assure my hon. Friend that it will be looking carefully at all the schemes, including the one to which he has referred. There is no prejudice against schemes from small companies. We are looking for quality schemes, and I believe that we shall find a large number of such schemes to support.

Paediatric Intensive Care
3.30 pm
Mr. David Blunkett(by private notice): To ask the Secretary of State for Health if she will make a statement on the report of the multi-disciplinary working party on paediatric intensive care convened by the British Paediatric Association.
The Minister for Health (Dr. Brian Mawhinney): I welcome the report from the British Paediatric Association on the care of critically ill children, and would like to thank Dr. Peter Fleming and his colleagues for their work.
The report is based on a study of critically ill children and their care in hospital. My Department funded this study, the most comprehensive ever undertaken anywhere, because of the priority which we attach to the care of those children. Today's report needs to be seen against the background of significant improvements in children's health achieved in recent years.
In the past 14 years, infant mortality has halved. Over the same period, the number of children dying at birth or in the first week of life has dropped by about 40 per cent. Rates of immunisation against major childhood infections are at an all-time high. Since the introduction of the HIB vaccine a little over a year ago, the incidence of HIB meningitis has declined by 74 per cent.
The House will also want to know that the total number of designated paediatric intensive care beds has increased from 127 in 1987 to 209 this year. Two out of three children who need paediatric intensive care are admitted to specialist units. There are many such units in the national health service providing first-class care, and I wish to record my appreciation to the doctors, nurses and other staff who work in them.
Today's report rightly expresses concern that some children are still not able to receive the care that they need in specialist units. While those children receive skilled care, nevertheless, as the report identifies, they should be cared for by nurses and doctors trained and experienced in paediatric intensive care. We therefore need to extend our existing facilities and training programmes.
District health authorities have the responsibility for assessing local health care needs and determining how they should be met. They do so within the priorities set by Government. Child health is a priority. Consequently, I have already asked the national health service management executive to ensure that health authorities are aware of today's report and the importance we attach to its main findings, and to ensure that health authorities make a co-ordinated and effective response.
Mr. Blunkett: I am grateful to you, Madam Speaker, for granting this question. Can the Minister tell the House how we can claim to have a national health service when we cannot guarantee equal treatment and access for the most severely ill children across the country? Will he acknowledge that the fact that we have an internal market has severely damaged the chance of co-ordinating the planned and invested care that we need for severely ill children?
Will the Minister accept the recommendations in the report that such specialist facilities cannot be subjected to the internal market and to the mechanisms of local purchasing care? Will he tell the House why, with a 34 per cent. shortfall in specialist children's intensive care, the
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Government are prepared only to refer the report to local district health authorities and to ask the NHS Management Executive to supervise their reaction?
What would any parent feel if they took their child to an intensive care unit only to be turned away? That happened at every single specialist unit during the period of the report's survey. It happened to 77 children this year at the Royal Manchester children's hospital—a situation which the Prime Minister is reported in today's Manchester Evening News as describing as "heartbreaking".
What will the Minister do about this? Why are the Government simply referring the report to local level when 76 per cent. of adult units have no trained child nurse available, when there is a shortfall of 34 per cent. in the places available, and when we know from the report that there is scandalous under-investment in these absolutely crucial specialist facilities?
Will the Minister this afternoon agree with the recommendations of the report that paediatric intensive care should be organised not on a district basis, but on a regional or multi-regional basis to co-ordinate the necessary investment and a sufficient availability of these units?
Will the Minister, instead of merely passing the buck and passing responsibility down to the internal market and the district health authorities, guarantee today that he accepts the clear recommendation of the specialist report that we should have
"a co-ordinated national programme … instituted by the Department of Health"
and not by someone else, for the care of the most sick and needy children? Will he accept the Government's responsibility for co-ordinating, planning and investing in intensive care facilities for children in every part of Britain?
Dr. Mawhinney: Clearly, the hon. Gentleman did not listen to my answer. We are in no sense passing the buck, as he so inelegantly phrases it.
We agree with the report's conclusion that the overwhelming number of children who are very sick should be treated in paediatric intensive care units. I suspect that that is common ground between us all because the concern for very sick children is not a partisan matter. Indeed, I was able to tell the House of the strides that have been made over the past six years in providing extra facilities. I recognise that further facilities must be provided.
I remind the hon. Gentleman that the report makes it clear that these matters should be dealt with in the context of the reformed NHS. He will see in the recommendations that reference is made to purchasers and providers. He is right to point out that the report recommends that it may be necessary for these facilities to be provided on a wider basis—perhaps a regional basis—than simply by each individual district health authority. I am happy to accept that recommendation. I have made it clear in the instructions that I have already given to the NHS Management Executive that, as it works with the district health authorities to ensure that these priorities are addressed and met, it should have that recommendation very much in mind.
Mr. Roger Sims: Does my hon. Friend agree that the increase in beds between 1987 and now is substantial, but that the report suggests that there is scope for more? They are certainly needed. Does he also agree

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that the rate at which knowledge is increasing and technology developing in this area is outpacing the rate at which we can train doctors and nurses in those new techniques?
Dr. Mawhinney: My hon. Friend is right on both counts. Since 1987, the number of paediatric intensive care beds available has increased by some 70 per cent. Indeed, the increase of about 70 beds recommended by the report is less than the increase that has taken place since the last report in 1987, so I have no doubt that we can address the report with the same success as the previous one.
My hon. Friend is right on the second point also. Part of the pressure has arisen because of the skill of the medical profession, which can now offer treatment, care and hope to very sick children who, some years ago, would have been beyond the scope of medical help. We recognise that that is itself creates an upward pressure on the need for provision.
Ms Liz Lynne: The Minister just said that this is the second report in seven years. Although I am glad that he has agreed to act on the report, why are we in such a sorry state if the previous report was fully implemented? Will he assure the House that this report and the intensive care beds needed for children will be properly funded, and that trained staff will be available? Does he now accept that this is just another example of how the NHS reforms have not worked?
Dr. Mawhinney: It is a pity that the hon. Lady put in the last point, because, until then, she was on reasonably solid ground. Her last point was nonsense, as we both know.
We responded to the 1987 report with a 70 per cent. increase in the number of paediatric intensive care beds. On the basis of research, which we funded because we recognised that a problem was developing again, we now learn that more beds need to be provided. Our response will be as strong and directed as our response to the 1987 report. We shall continue to treat this as a priority and shall make it clear to district health authorities that they, too, must treat it as a priority.
Mr. Alan Duncan: Will my hon. Friend confirm that there is good news to tell about children's health? Will he confirm that, whereas the World Health Organisation has set a target of 90 per cent. for the immunisation of children, the record in this country is not 70,80 or 90 per cent. but exceeds 90 per cent. and for some diseases has even reached 95 per cent?
Dr. Mawhinney: My hon. Friend is absolutely right, which is why I put in the answer to my question the significant information about the halving of infant mortality and the 40 per cent. reduction in perinatal mortality in the past 14 years. The report raises serious issues, to which we shall respond with commitment and priority, but it is against a background of improvement in child health which I should have thought hon. Members on both sides of the House would welcome.
Mr. Alfred Morris: Is it not high time that we had centrally available information on where children receive intensive care? Is the Minister aware that many children in need of intensive care have
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had to go to adult intensive care units, while, at the same time, adult patients have had to go from Greater Manchester to as far afield as Blackpool at times of critical need—indeed, in life-or-death situations—and that some of them died en route?
Dr. Mawhinney: I am certainly aware, as the right hon. Gentleman is, that most of the very sick children in need of paediatric intensive care were treated in paediatric intensive care beds. Some were treated in intensive care general beds, and some in children's wards. He and I both recognise that it is preferable for very sick children to be treated in paediatric intensive care beds. No Government can guarantee that no child will ever have to move out of a paediatric intensive care unit because, as he knows, there are peaks and troughs in demand, for which it is impossible to plan. It ought to be the case that, where possible, very sick children should be treated in paediatric intensive care unit beds. That is what we are seeking to achieve.
Mr. David Congdon: It was useful that my hon. Friend was able to remind hon. Members of the excellent improvement in child health care in this country, but there is no room for complacency, as the report makes clear. Will he assure the House that he will put maximum pressure on district health authorities in the reformed health service to ensure that they update their purchasing plans so that we do acquire the improved facilities that we need?
Dr. Mawhinney: We have already told the NHS Management Executive to take the proposal forward as a priority. I hope that my hon. Friend will accept that as the best answer to his question.
Mrs. Alice Mahon: The Minister has already said that this is a heartbreaking report which tugs at the emotions. Therefore, will he give a guarantee extra resources will be provided for more intensive care beds for children rather than pass the buck to district health authorities? As the subject is emotional, to avoid the heat those authorities might move money from other departments in serious need. Will he fund the service properly by provided extra resources?
Dr. Mawhinney: The hon. Lady knows that the priorities of the health service are set by Ministers and reflected down to district health authorities, which have the responsibility for ensuring that the priorities are met, taking account of their assessment of local health needs and how best to meet them. I have told the hon. Lady and the House that we give the subject priority. Each year in the health service, we deliver new services to patients because they constitute a priority. Within that framework, we will, as a priority, deliver the new services to patients.
Dr. Liam Fox: I greatly welcome the frankness with which my hon. Friend has talked about the report. Is not the simple truth that Ministers with responsibility for health will continue to be victims of the success of the NHS? In many sectors, such as neonatal paediatrics, medicine will always be able to deliver more than we can practise. Is not the way that the Opposition use even the health service as a political football testimony to their sickening cynicism?
Dr. Mawhinney: My hon. Friend speaks with great authority as, unlike most of us in the House, he has had responsibility for such matters. I am grateful to him for

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underlining the point that I made a few minutes ago. In the sector medical skill under discussion, rapid developments are being made. Doctors can offer patients care and treatment that would have been literally inconceivable a few years ago. We must accommodate that in the health service because it is a priority for the Government, the health service and the House.
Rev. Martin Smyth: The Minister's statement is to be generally welcomed. However, does he agree that there is still room for improvement, not only in intensive paediatric care, but in paediatric orthopaedics? Does he accept that, even in Britain, there is a need for development in that sector? The process of rationalisation brings added pressures—as happened at the Royal children's hospital in Belfast in my constituency. Will he admit that some of the leading work has been done through charitable work, as in the Gait unit at the Musgrave Park hospital, of which the Minister has personal experience?
Dr. Mawhinney: I am grateful to the hon. Gentleman for his welcome for my statement. I accept that, in various parts of the country, pressures involving the delivery of paediatric care must be addressed. The hon. Gentleman will understand that I am not familiar with the details of his constituency, but I shall ensure that they are brought to the attention of my noble Friend who has responsibility for such matters in Northern Ireland.
Mrs. Jane Kennedy: I welcome the Minister's new-found recognition of the fact that the shortage of specialised trained nurses and doctors in the sector is contributing to the crisis. Will he investigate why, in Alder Hey children's hospital in my constituency, of the 15 nurses who qualified last year, only four found work at the hospital after three years' training in precisely those specialised skills of which he now recognises there is a shortage? Is it not only a shocking waste of resources to train people, but an indictment of the way in which the health service is being run that, after all that investment, those nurses could not find work?
Dr. Mawhinney: The hon. Lady wishes to widen the debate, and that is perfectly acceptable. The proportion of nurses moving into jobs is high, and many are remaining in posts much longer than before. If the hon. Lady was
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alluding to the fact that there is some evidence that nurses who are trained in paediatric intensive care specialties are not remaining in those specialties, she is right, and we are looking at that special issue. I have asked the chief medical officer and the chief nursing officer to enter into urgent discussions with the professions to address the question of the necessary extra training.
Dr. Tony Wright: The Minister will recall events at Birmingham children's hospital a few years ago, when many children needing heart surgery were turned away because of the lack of paediatric intensive care beds. I was the parent of one of those children waiting for such surgery, and my child later died. We were all assured that that situation would never recur. Several years later, and after and two further reports, we are being told the same story. Is that not cause for enormous shame and great anger?
Dr. Mawhinney: I was not aware of the hon. Gentleman's personal circumstances, and I shall bear them in mind in my response, when I say that significant change has taken place since 1987. There has been a 70 per cent. increase in the number of paediatric intensive care beds since the events occurred to which the hon. Gentleman has referred. It is widely accepted among the professions that it is a developing specialty. We funded the report precisely because we wish to have an authoritative assessment of where we are now, so that we can plan to build on the decisions that have already been implemented.
Several hon. Members rose—
Madam Speaker: Order. We are now going to move on to the next item of business, which is the Welsh Grand Committee.

Paediatric Intensive Care
  WELSH GRAND COMMITTEE
  Motion made, and Question put forthwith, pursuant to Standing Order No. 98(5) (Matter relating exclusively to Wales).
  WELSH GRAND COMMITTEE

    BUDGET (WALES)
    That the Matter of the implications of the Budget for Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Andrew Mitchell.]
    Question agreed to.

Points of Order
3.51 pm
Mr. Brian Wilson: On a point of order, Madam Speaker. I wonder whether you could assist the House on a point of real confusion and difficulty. I refer to printed papers of the House that were sent yesterday to hon. Members on both sides of the House who are members of the Select Committee on Transport, I do not wish to detain the House, but to make the point of order, it is necessary to quote briefly from the paper, as I understand it is in order to do.
The supplementary estimate for 1993–94 states:
"This supplementary estimate is sought to increase provision for current expenditure on royal travel to cover revised expenditure forecasts with a corresponding decrease in the provision for Government support of British Rail pension funds."
In other words, the authors of that official document of the House made the clear link between taking £730,000 away from the British Rail pension fund to supply it
"to royal travel and grant audit".
Another document covering the same subject was placed in the Library. I have no other way of putting it but to say that that doctored version of the same document sought to obfuscate the link between the money taken from the British Rail pension fund and given, extraordinarily, to the royal train. The two points were broken.
One half of the earlier statement became point 1, which is:
"Increased provision for current expenditure on royal travel to cover revised expenditure forecasts";
and the other half became point 5:
"Provision for Government support of British Rail pension funds".
The fact that £730,000 was being transferred from one heading to another was being deliberately and cynically disguised.
My point of order is this, Madam Speaker. There is a widespread belief, both inside and outside this place, that at least one of the major objectives of the whole unwanted rail privatisation procedure is for the Government to get their hands on the British Rail pension fund surplus in order to use it for other purposes. This document—this deception—will feed those fears.
I have two requests, Madam Speaker. First, I ask you to seek clarification of why the two documents were, respectively, sent to Members of Parliament and placed in the Library; secondly, I ask you to protect the interests of the House, railway pensioners and everyone in the country who wants to see the end of the Railways Bill by asking the Secretary of State for Transport to come to the House and answer for the deception that he attempted, which has been ameliorated only by the incompetence of his Department.
Several hon. Members rose—
Madam Speaker: Order. I think that I can deal with the point of order, unless hon. Members can put a fresh complexion on it.
Mr. Stephen Milligan: Further to that point of order, Madam Speaker. May I seek your guidance? The charge made last night by the hon. Member for Newport, West (Mr. Flynn), and repeated today by the hon. Member for Cunninghame, North (Mr. Wilson), is extremely grave and affects many of my constituents. It seems to be based on a genuine misunderstanding of the document.
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However, as the British Rail pension fund has today made it clear that not a penny has been filched, as has been alleged—it is perfectly clear that there has been a mistake—-and as the Secretary of State has made it clear that this is nonsense, may we have an early discussion of the matter to give Opposition Members a chance to apologise for the unnecessary concern that they have caused to pensioners?
Mr. Paul Flynn: Further to that point of order, Madam Speaker. I have had a discussion with the hon. Member for Eastleigh (Mr. Milligan), who is rather better informed now than he was before and whose remarks are rather more considered than they were earlier.
We are in an extraordinary position. The Select Committee on Transport is in session at this very moment; I left it to make this point of order. We have two documents. One, which we received yesterday, told us that there was a correlation between the increase in the money given to the royal train and the decrease in the money given to the pension fund. The other document, which we received from the Library a few weeks ago, does not make that point at all. It seems to me that in this case the House, rather than the Select Committee, has been misled.
The accompanying documents make it crystal clear that three quarters of a million pounds has been taken from the British Rail pension fund allocation and added to the royal travel fund. Many of us would say that, if spare money is floating about, we can think of many causes—in transport and elsewhere—that need it more than the royal train. At a time when the Government are threatening to take money from the unemployed and the sick, it is an outrage that three quarters of a million pounds should be given to the royal train, which will cost £2·5 million in a single year.
Madam Speaker: Let me respond to the hon. Member for Cunninghame, North (Mr. Wilson), who first raised the point of order, and to other hon. Members who clearly have an interest in the matter.
As the hon. Gentleman will understand, I have not seen the papers to which he referred, or the supporting documents that he mentioned; they are not in front of me. I know, however, that the authentic version of the supplementary estimates is the one that has been deposited in the Votes and Proceedings office. I will, of course, look into the suggestion that some versions of the estimates may not be consistent with the original. I must satisfy myself on that point, and I will come back to the hon. Gentleman when I have done so.
Mr. Dennis Skinner: On a point of order, Madam Speaker. Would it not be helpful, and clear the matter up completely, if any one of those 10 Ministers sitting on the Front Bench came to the Dispatch Box now to clarify the position? Then we could have the issue out, and establish that in no circumstances will £730,000, or any other sum, be taken out of the British Rail pension fund to subsidise the royal train—and, what is more, the Queen should have to subsidise the train herself instead of calling on the British people. She has plenty of money.
Madam Speaker: I am sure that the House will appreciate that the point of order was originally made to me. I will deal with it in a serious and sensible manner.

Points of Order

  BUSINESS OF THE HOUSE
  Ordered,
  That—

  (1) Standing Order No. 13 (Arrangement of public business) shall have effect for this Session with the following modifications, namely:
  In paragraph (4) the word 'thirteen' shall be substituted for the word 'ten' in line 44; in paragraph (5) the word 'eighth' shall be substituted for the word 'seventh' in line 46; in paragraph (6) the word 'Thursday' shall be substituted for the word 'Wednesday' in line 61; in paragraph (8) the word 'two' shall be substituted for the word 'four' in line 67; in paragraph (9) the words 'and Thursdays' shall be inserted after the word 'Wednesdays' in line 74; and in paragraph (10) the word 'Thursday' shall be substituted for the word 'Wednesday' in line 84;

  (2) Standing Order No. 90 (Second reading committees) shall have effect for this Session with the following modification, namely:
  In paragraph (2) the word 'eighth' shall be substituted for the word 'seventh' in line 23;

  (3) Private Members' Bills shall have precedence over Government business on 28th January, 4th, 11th, 18th and 25th February, 4th and 11th March, 15th and 22nd April, 6th, 13th and 20th May and 15th July;

  (4) Private Members' Notices of Motions shall have precedence over Government business on 10th December, 14th and 21st January, 18th March, 29th April, 10th, 17th and 24th June and 1st and 8th July, and ballots for these Notices shall be held after Questions on 25th November, 8th and 15th December, 2nd March, 13th April, 18th and 25th May and 8th, 15th and 22nd June;

  (5) On Monday 7th February and Monday 25th April, Private Members' Notices of Motions shall have precedence over Government business until Seven o'clock and ballots for these Notices shall be held after Questions on Thursday 20th January and Thursday 24th March; and

  (6) No Notice of Motion shall be handed in for any of the days on which Private Members' Notices have precedence under this Order in anticipation of the ballot for that day.—[Mr. Andrew Mitchell.]

Orders of the Day
  Debate on the Address

    FIFTH DAY
    Order read for resuming adjourned debate on Question,
    That an humble Address be presented to Her Majesty, as follows:—
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament—[Sir Geoffrey Johnson Smith.]
    Question again proposed.

  Trade, Industry and Deregulation
  Madam Speaker: I must announce that I shall have to impose a limit of 10 minutes on speeches between 7 and 9 pm.
  3.59 pm
  Mr. Robin Cook: I beg to move, as an amendment to the Address, at the end of the Question to add:
  But humbly regret that the Gracious Speech contains not a single measure to raise investment in industry, to improve the level of skills of the workforce, to modernise public infrastructure, or to expand private research and development expenditure, and no recognition of the burden on the economy and the cost to individual citizens of mass unemployment, and no commitment to make its sustained reduction the priority of macro-economic management today; support the repeal of outdated regulations but reject proposals that will reduce the protection of the public as consumers and as employees by means of legislation that will increase the powers of Whitehall at the expense of its accountability to this House; and further regret that the Gracious Speech contains no proposals to tackle the rigged market created on the privatisation of the electricity industry or to provide a more open opportunity for coal to compete for a fairer market share, but proposes the privatisation of the coal industry which will accelerate closures of mines and threaten the safety of miners.
  At Question Time, those on the Opposition Front Bench were teased for not adequately recognising those industries that have shown advance over the past year. I am always willing to accept the instructions of the House, so let me refer to an industry whose achievements in the past year have been outstanding.
  It is an industry in which productivity is up by one third in 12 months, and in which most of the production units have managed a reduction in price of a quarter in the same 12 months. Curiously, it is an industry about which no planted questions were asked by the Government Whips in order that answers could come forward from Ministers congratulating the industry on its achievements. The simple and sole reason for that is that it is the coal mining industry—an industry which, despite those achievements and advances, is in crisis. The Queen's Speech outlined the Government's preferred solution to that crisis, which is to privatise the coal industry so that they can walk away from the crisis that they have created.
  The President of the Board of Trade is with us today, and I welcome the fact that he has returned to speak from the Dispatch Box on this occasion. He was present to listen to the debate that we had on the coal industry four weeks

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  ago, and he will recall that the Opposition repeatedly asked how many pits would survive until privatisation; how many pits would be left by the time we had finished our debates; and how many pits would be closed to pave the way for privatisation.
  We already know some of the pits that will not make it to privatisation. In the four weeks since we had that debate, seven pits have been fingered for closure. Last week, the President of the Board of Trade passed a watershed of his period in office. I do not know whether he is aware of it, but it would be unfortunate if it went unremarked. When he took office and became responsible for the Government's energy policy, there were 50 pits operating. As from last week, the majority of those 50 pits have been closed or announced for closure.
  No one has pretended that any of the seven pits that have been fingered for closure in the near future are near exhaustion. Hatfield pit has over 30 years of coal reserves at its present rate of production. It has a lifespan which would enable it to remain in production when most of our gas and all our oil will be gone. What strategic sense does it make to fill up the mineshaft that gives access to such a rich energy source? What other Government in Europe would dream of agreeing to do that?
  The Littleton pit has been named for closure. That pit produces coal of such good quality that two fifths of its output goes to industrial and house coal markets. British Coal is importing coal because it cannot meet its industrial contracts from the domestic market. What are we doing importing coal when we have under our feet domestic coal of a standard to meet those markets?
  There has been the most feeble pretence that these pits are not financially viable. Silverdale pit made a profit of £100,000 in the week that its closure was announced. All the coal from Silverdale goes to the Fiddler's Ferry power station, and Fiddler's Ferry is the nearest power station to the ICI chlorine plant at Runcorn. It is an interesting industrial chain. Silverdale is one of Europe's most efficient pits, supplying one of its most efficient power stations, which in turn supplies energy to one of our most efficient industries.
  The power services manager at Runcorn is driven to frustration by the knowledge that Fiddlers' Ferry could supply his plant with electricity at between £10 and £15 per megawatt hour. Instead of squeezing every drop of cheap electricity out of that power station, what is happening? Fiddlers' Ferry is operating at half-capacity, the pit that supplies it is closing, and ICI is paying between £25 and £30 per megawatt hour for power supplied from new and more expensive gas-fired power stations. How does that make economic sense? What kind of industrial strategy is that?
  A year ago, the President of the Board of Trade announced the pit closure programme, and justified it on the grounds that he could not ask British industry to lose competitiveness by paying more for its electricity from coal. Let me tell the right hon. Gentleman what has happened since then. The price of coal has continued to come down and, while it has become cheaper, the price of electricity from the generators has continued to go up. The study by Caminus Energy last month discovered that the pool price went up by 23 per cent. in the first six months of the year.
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  What sort of energy strategy is it that closes down productive coal mines when the price of coal is falling and boosts the production of gas when the price of it is going up? Yet the Queen's Speech does not include any measure to remedy the rigged market that makes that possible.
  There is no proposal to tackle the sweetheart contracts that exist between the gas-fired power stations and the electricity companies. The Gracious Speech provides no measure to ring-fence the nuclear levy to the nuclear power industry. No proposal is made even to stop paying the nuclear subsidy paid to France, even though the electricity it sends us does not have to be produced at nuclear power stations. None of those measures, which would keep the pits open, are contained in the Queen's Speech: instead, we have the grotesque irrelevance of coal privatisation.
  We will oppose that wretched Bill, whenever the President of the Board of Trade manages to produce it, because our coal reserves are a national asset which should not be managed in the interests only of private profit. We will oppose it because we have not forgotten that pits were brought into public ownership to stop the carnage that occurred under private ownership.
  Since 1947, there have been 3,000 deaths in the public coal industry—far too many, but many fewer than under the private industry that it replaced. In the 46 years before nationalisation, there were 50,000 deaths in private coal mines. That equation between public ownership and safer mines is not just a historical fact. The same is true now. The private pits of Britain employ a smaller work force and produce a smaller output than that produced by British Coal, but they had the same number of deaths underground as those in the whole of British Coal in the past year.
  British Coal has the best safety record of any deep mining corporation around the world, and that alone provides compelling reason for keeping it in public ownership. We will also oppose the privatisation Bill because it is utterly and abjectly irrelevant to the real crisis in the coal industry. The privatisation of coal will not save a single pit, but will accelerate the closure of those pits that cannot produce a profit within the time scale set by parliamentary procedures.
  It is the stark irrelevance that bonds the privatisation of coal with the other main contribution of the President of the Board of Trade to the Queen's Speech. Let us first consider the background to our debate. On the very day that we heard the Queen's Speech, the employees of Rolls-Royce heard that another 1,000 of them were to be made redundant. They are skilled craftsmen whose output is vital to the aerospace sector, which is this nation's largest single exporter.
  Today as we debate, Parliament is being lobbied by manufacturing workers from the north-west. In the document that they have produced, they point out that, in the year to March this year, 88,000 more jobs in manufacturing in the north-west have gone. That has happened, mark you, in the year which we have been told is the year of the upswing. In that year of recovery, the north-west has lost the last pit in Lancashire, the last shipyard in Merseyside and almost the entire United Kingdom capacity to produce bulk denim.
  The President of the Board of Trade, or at any rate his Department, is aware of the extent of the crisis in manufacturing. We know that they know it, because they have produced the most damning report on innovation. I do

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  not know how that report slipped through the net. Perhaps no political commissar was allowed to see it in time to detect that it was so politically incorrect.
  The document contains a graph which shows a real lapse in the security of the Department. The graph shows that, between 1975 and 1979 under the previous Labour Government, Britain's share of world exports rose by one fifth. Since 1980, Britain's share of world exports has fallen under the Conservatives by exactly as much as it rose under Labour during the 1970s.
  On the same page, it is pointed out that there are now only three UK companies in the international top 50 of companies ranked by spending on research and development. Over the page, we find that there are now no UK companies in the top 25 companies ranked by the number of new patents registered.
  However, I want to be fair. I shall certainly give the full and balanced picture as it is provided by the report. There is one sector in which Britain leads the world. There is a graph that shows that, in that one sector, British companies are head and shoulders above any competitor. That is the percentage of profits that is paid out in dividends.
  That is something for which the Conservatives can take some credit, as it has happened during their period of office. In 1979 the percentage of profits paid out in dividends was below 50 per cent. In 1991, it was almost 70 per cent. That is double the figure for Japan and for Germany. I cannot comment better on those figures than the report itself, which says:
  "this may be a reflection of an attitude of jam today rather than investment for the future."
  The problem is spelled out in the Government's own document. Perhaps the President of the Board of Trade did not see the document before publication. Perhaps no one has dared to show it to him since it was discovered that the document has been published.
  If the President saw the document, one could not tell it from the Queen's Speech. There is not a single measure to turn that bleak picture around. There are no measures to increase manufacturing investment, which is now one tenth of the level it was in the 1970s under the Labour Government. There are no measures to increase the level of skills in Britain, in which we are among the poorest in Europe, with only Portugal and Greece beneath us.
  There are no measures to increase spending on research and development, although we are one of the few industrialised nations where spending on research and development is less than the pay-out in dividends. There are no measures to discourage companies from treating profits as a bottomless jam jar from which dividends can be paid out.
  Having glimpsed the magnitude of the challenge to the manufacturing base, what did the President have a tilt at in the Queen's Speech? What was uniquely identified in the Queen's Speech as holding back British industry'? It was Whitehall red tape, and the burden on business.
  First, how dare the Government talk about lifting the burden on business when every press briefing about the Budget warns us that statutory sick pay is to be handed over to business? That is an imposition of £1·5 billion-worth of burden on to business. To be fair to the President, we must recognise that he did not think up that nonsense.
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  During the Queen's Speech debate in 1988, the President made a speech which was quite different from the one that I suspect he is about to make. He said about regulation:
  "There will always be somebody in an unfettered marketplace who pressures the standards at the lower end and thus destroys environmental standards that it is the Government's responsibility to uphold. The only way in which that can be prevented is by …regulation by the Government."—[Official Report, 28 November, 1988; Vol. 142, c. 460.]
  I say with humility that I could not make a better case for regulation. Regulation is needed to give a set of decent standards which will provide a common floor so that cowboys cannot drive down standards to get a competitive edge. Today, sadly, the President finds himself on the side of the cowboys, and is extending to them the freedom to get a competitive edge by lowering standards.
  Why has the President been forced to lower his own standards? The reason is that the pace on this is being forced by mightier minds than his. It is being forced by the mind of the hon. Member for Tatton (Mr. Hamilton).
  The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): Oh!
  Mr. Cook: The intellect of the hon. Gentleman is such that I would wish to have his full attention.
  During Question Time, the hon. Gentleman lectured us three times on our ignorance. My respect for that rebuke would have been greater were it not for his decision, in his speech to the Conservative party conference, to cite the EC directive on the import of caramel as one of the cases proving that we need deregulation. The hon. Gentleman will recall that he pointed out to the conference that the Lord's Prayer needs 59 words, but the directive requires 26,911 words.
  The only problem with that parable is that, when we asked the EC Commission for the directive on the import of caramel, it told us that there was no such thing, although someone remembered Sir John Banham, when in Brussels two years ago, making an after-diner speech in which he used that as a joke. That joke is now the foundation of the policy of the Department of Trade and Industry.
  The hon. Member for Tatton is on the right wing. He is one of those people who believe that Government do not work, and who get into Government to prove it. Earlier this year, he made a speech to the Conservative Way Forward group. That must surely become the Conservative way back, but that is its problem. He is reported as saying:
  "Measures controlling everything from health and safety at work and food, to fire prevention and the sale of dangerous goods, should be entrusted to business instead."
  That, God help us all, is the man entrusted with running the deregulation initiative.
  As I understand the reasoning behind the hon. Gentleman's ideology, it is that all regulations are an interference with the market. Left to itself, the market will compete for consumers, that competition will oblige the market to ensure ever higher standards in the competition for customers and if, through the absence of food regulations, a person contracts a fatal dose of salmonella, the market will automatically punish the producer because he will not get that person's custom again. I think that that is the reasoning in the loopy world inhabited by the hon. Member for Tatton, where reality does not intrude and environmental health officers do not call to inspect.
  The hon. Member for Tatton gave the Conservative conference a most telling example of the red tape that holds

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  back British industry. At extended length, he explained that people who bake cakes for Conservative fund raising have to register their premises if they do it for five days every month. I am not clear as to how common is that practice among industrialists, upon whom it is a burden. I have my doubts whether that is how Asil Nadir raised the £400,000 that he gave to the Tory party.
  However, I can pinpoint the offending regulations. I have looked them up. They are called the Food Premises (Registration) Regulations 1991, and the order was signed by four Tory Ministers, including two Cabinet Ministers. The hon. Gentleman has done us a service. He has exposed the humbug in the rhetoric about deregulation, which arises from the fact that the Tories themselves brought in most of the regulations about which they now complain.
  I have here "Butterworth's Company Law Handbook 1979", which sets out British company law in under 500 pages. In 1979, Sir John Nott, the first of many Tory Secretaries of State for Trade, announced the first of many deregulation drives. I also have here "Butterworth's Company Law Handbook 1992". After 14 years of drives to deregulate, the book is now over 5,000 pages—10 times longer—and the pages have had to be made thinner so that everything can go into one volume.
  If those 4,500 extra pages contain matter that is only tying up enterprise in red tape and regulations that serve no purpose, fine—the President will have our full cooperation in cutting that out. As that is always desirable, why does he need a special Bill to proceed? That is the point at which the alarm bells begin to ring. We have read that the Bill will not be a list of the 4,500 pages of regulations which should be repealed. Instead, the Bill will give the Government the power to repeal regulations. Specifically, it will give the Under-Secretary of State for Corporate Affairs the power to repeal those regulations.
  Mr. Stephen Milligan: With his expert knowledge of the workings of the EC and EC directives, can the hon. Gentleman explain how many pages would have to be added to the tome that he has just produced if the charter on European socialism, signed by his colleague in Brussels two weeks ago, became European law?
  Mr. Cook: I do not have the slightest difficulty in saying that, if we want to compete with other countries in Europe, we must compete with them in work practices. That is why no successful industry in Britain would face any serious problem in meeting the terms of the social charter. The people on whom it would bite are the cowboys whom the Government have encouraged to come into business over the past few years and who provide work practices and conditions for their employees of which the Government should be ashamed.
  As I understand it, we are to be invited to provide the Government with the power to deregulate without reference to Parliament, which passed the regulations in the first place. On the day of the Queen's Speech, the Under-Secretary of State for Corporate Affairs went on record as saying that "nothing is ruled out". If the President of the Board of Trade wants the Bill to go through without controversy, he had better start ruling out some of the regulations. In particular, he will need to rule out any
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  deregulation that will reduce the safety of the public. That does not appear to have been a working principle of the review of the regulations.
  I have a copy of a letter about furniture regulations which the deregulation initiative sent to many companies. It informs those companies that part of the review of deregulation is to consider the furniture and fire safety regulations. Those regulations were introduced only six years ago, after a week during which 10 people, mainly children, died as a result of toxic gas produced from foam-filled upholstery. What are we doing even contemplating the deregulation of those controls?
  The Under-Secretary of State for Corporate Affairs went on the record at the Conservative party conference as saying:
  "We must always remember that the silent majority of consumers are backing us all the way."
  This month, the National Consumer Council put that assertion to the test and held an opinion poll. The poll discovered that 91 per cent. of consumers want consumer protection to be regulated by the Government, particularly in respect of fire regulations on furniture. The arithmetic of the Under-Secretary of State appears to be as suspect on this occasion as it was in respect of the caramel directive. His silent majority in favour of deregulation has dwindled to 3 per cent. of that sample.
  I understand why the Under-Secretary formed the view that consumers were silent. He formed seven task forces to carry out the review. Those task forces comprise 55 members, not one of whom is on a task force as a consumer. They are all there as business men. To be precise, 52 are there as business men and, for the sake of what passes for balance, three are there as business women. They are all members of the task forces as producers. Consumers are kept silent while vested interests gather around the table and consider how to cut the costs and standards of regulation, without reckoning the risk or cost to the consumer.
  In fairness to those estimable people, some of them have been admirably frank about how they see their role. Mr. Christopher Spackman is chairman of the construction task force. He comes from Bovis, whose parent company has given the Tory party £600,000 over the past five years. Mr. Spackman and his colleagues have obviously been baking a very large number of cakes.
  This is how Mr. Spackman described his objective:
  "There is no use playing around. We have to be drastic—for example, kill off the Building Regulations."
  There was none of that language that we heard during Question Time, of upgrading and improving the regulations. Mr. Spackman said that we should
  "kill off the Building Regulations."
  We were rebuked for using such words when we used them in respect of what the Government are proposing for health and safety. There cannot be much hope of protection for the home buyer after the building regulations are killed off.
  There is a word to describe the arrangements by which the party in government takes large sums from a company and then takes direction from that company on which regulations it would find it convenient to have scrapped. That word is "corruption". It is the corruption of a party that has been in power for so long that it has forgotten that it holds office in the public interest, not the vested interests of its friends.
  Mr. Spackman, of course, does not confine himself to the building regulations. Mr. Spackman also says that he

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  will express his views on the safety regulations for the construction industry, an industry that already has the worst safety record in Britain. It is not just the safety to the consumer that is at risk, but the safety of the employee.
  We know that, among the 3,600 regulations that have been looked at, there are dozens relating to health and safety—for example, the regulation on lifting loads manually, the regulations intended to contain repetitive strain injury while using a visual display unit, even the regulation obliging employers to supply toilet rolls and a lavatory, which was signed by the hon. Member for Derbyshire, West (Mr. Mcloughlin), the present Under-Secretary of State for Trade and Industry, in 1992 when he was at the Department of the Employment.
  That is back to basics with a vengeance. Is that how we will increase competitiveness—by making our workplaces the most dangerous? Is that how we will attract inward investment—by letting companies take greater risks with British workers? Only the myopic would describe the cost of proper safety measures as a burden on business. The business executive who has got beyond counting candle ends and joined the modern world knows that the real burden is the cost of accidents, that better safety is not a burden on business, and that better safety means reductions in lost production, less absence through injuries, fewer compensation claims, and lower insurance premiums.
  Earlier this year, the Health and Safety Executive produced a study of the cost of accidents in five workplaces. It found that the cost of accidents in one company was the equivalent of 37 per cent. of profit. In another company, it was the equivalent of 8 per cent. of turnover.
  As Conservative Members are contemplating deregulating the new regulation on manual lifting, I invite them to remember that 3·5 million working days are lost in Britain through back injury. That is five times the number of days lost through strikes, which Conservative Members are quick to denounce as damaging to the economy. I am not so naive as to hope that Conservative Members might back off because there are 3·5 million days of pain for members of the public suffering from back strain, but I ask them to think again and pause to reflect that 3·5 million lost working days add up to several hundred million pounds of lost output.
  We could make a similar financial case in respect of the environmental regulations. Among the 3,600 regulations which the President of the Board of Trade has put into the review are regulations on air quality, water and waste management, nuisance from noise and litter, and insulation in lofts. We do not do our industry any favours by permitting it to operate to lower environmental standards than in the rest of the world. The rest of the world is our market.
  The OECD estimates that, by the end of the century, the market for green technological products will be £300 billion—bigger than the global aerospace market. The rest of the world will want products that meet their standards, not our standards. They will buy from countries that will provide the best environmental technology. Our industry will not invest in developing that technology if we run our country on the worst environmental standards.
  Such consideration should inform the thinking of any Minister who is interested in a serious industrial strategy. Instead, deregulation is offered to this Session of Parliament as a grotesque parody of industrial strategy.
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  The hon. Member for Tatton defended it by saying that the fastest growing economies are the unregulated tigers of the Pacific rim. The hon. Gentleman deludes himself if he thinks that their impressive technological advance was achieved by doing without toilet paper in the lavatory or insulation in the loft. They advanced by a formidable rate of savings and investment, and by a first-class education service, which is putting through double the proportion that Britain puts into higher education. They got there with a massive programme to build modern transport and communication systems. Most of all, they got there with active partnership between Government and industry to identify, and they to occupy, markets in new technology.
  Britain needs a Government who are ready to face up to the challenge that those countries pose to us. What the Queen's Speech proves is that this Government are incapable even of understanding that challenge. Instead of measures that will provide for more investment, skills and technology, we are presented with a measure which will bring lower safety and environmental standards and a lower level of consumer protection. That this pathetic, mean-spirited Bill should be held up as one of the two big Bills of this Session is a revelation.
  We have a Government who have been in office so long that they are bereft of any sense of purpose, or any idea of what good they can do for the public. It would flatter them to compare them to a row "of exhausted volcanoes", which was Disraeli's phrase. Most of them—I exempt the President of the Board of Trade—have never produced a single notable eruption in their entire careers. They bear more resemblance to a line of abandoned molehills, and it is long past the time that they were turned over and ploughed back into the earth.
  That is what we shall start to get down to tonight, with the first official vote of the parliamentary Session. We will express our contempt of a Government who present deregulation as a parody of an industrial strategy, and we shall signal our determination to fight any attempt by them to abandon their duty as a Government to protect the safety of the public.
  4.31 pm
  The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): When I returned to the House not many weeks ago—I thank the hon. Member for Livingston (Mr. Cook) for his kind remarks—someone asked me, "How's life?" I replied, "A great deal better than the alternative." As I listened to the hon. Member for Livingston today, I wondered whether I had been a little rash in my judgment.
  The Gracious Speech made clear the importance that the Government attach to a successful outcome to the present general agreement on tariffs and trade round. It was fascinating that not a word was said about that, although it is perhaps the single biggest opportunity facing the entire world, to improve living standards and trading opportunities—not a word about that from the hon. Member for Livingston. However, Conservative Members will welcome the boost which the passage of the north American free trade agreement has already given to the Uruguay round. There must be no doubt that no country will work harder than we will for a successful conclusion to that round.
  The calculations show the excitement of the possibilities. The Organisation for Economic Co-operation

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  and Development claims that a successful outcome could raise annual world income by about $270 billion during a decade. That estimate could well prove to be on the cautious side, once the effects of trade in services and the dynamic benefits of trade liberalisation are taken into account.
  We all realise that the timetable is perilously tight and, frankly, all the Governments of the world must face the understandable criticism that it has taken seven years of negotiation, yet we now face trying to conclude the deals on so many issues with just three weeks to go.
  It is also important to remember that a successful outcome to the GAIT round would not only be welcomed on trade grounds, important though they are; the less-developed and poorer countries in particular stand to gain far more in extra trade and investment than they could ever expect in extra aid from the more prosperous countries.
  Within a more open trading environment, our policy is to enable and assist British-based companies to gain the largest possible share of world trade.
  On any detached analysis, there are growing signs today of success. We heard virtually not a word from the Opposition about the direction in which the economy is moving or about the news, which is more encouraging by the day. Inflation is at its lowest level for 30 years. Headline inflation has been below 2 per cent. for 10 months—the best performance since the 1960s. With the base rate now cut to 5.5 per cent., since October 1990 interest rate reductions have added about £12 billion a year of benefit to business. Investment is rising; manufacturing investment in the third quarter of this year was up by 2 per cent. on a year earlier, a point which also seems to have passed the hon. Member for Livingston by—it certainly passed his colleagues by when they drafted the amendment on the Order Paper.
  Our GDP has been rising for 18 months. It was 1.9 per cent. higher in the third quarter of this year than a year earlier. Perhaps most excitingly of all, exports are at record levels. The volume of manufactured exports going outside the EC was up by 16 per cent. on a year earlier. Characteristically, the hon. Member for Livingston sought to diminish the world trade that this country has achieved by claiming that our share of it had risen under the Labour Government. The only way he can do that is by talking about cash and ignoring exchange rate calculations. In fact, persistently and under all Governments, since the war we have lost our volume share of world trade. Our share has now stabilised, however. The task is to ensure that we build up our export success, to make sure that it increases in the right direction.
  It is particularly encouraging to realise that this is now beginning to happen, given the depth of the recession affecting our principal markets in the European Community. Within the single market, it is this country's economy that is leading the recovery. There are clear background signs now that we can look forward to persistent growth. Our prime task, which my right hon. Friend the Prime Minister has spelt out with great clarity, is to enhance the competitiveness of our economy.
  Opening the debate on the Gracious Speech, my right hon. Friend the Prime Minister covered many of the essential ingredients of this enhanced competitiveness
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  when he set out our central strategies for education, training, research and development, infrastructure and macro-economic management—to which my right hon. and learned Friend the Chancellor will return tomorrow.
  In the Gracious Speech, my Department, as the hon. Member for Livingston rightly said, has three Bills: the deregulation Bill, the trade marks Bill and the Bill to privatise the coal industry, and the House would expect me to comment on each of them. I wish to make it clear that the deregulation Bill will not be about destroying the environment, imperilling safety or exposing the unsuspecting to fraud and cheating.
  "We believe it is vital to keep red tape to a minimum."
  I expected that phrase to provoke a response from the Labour party—I thought that its members might have welcomed it. Why? Because those were the words of the Leader of the Opposition to a small firms conference that he held the other day.
  It is all very well for the right hon. and learned Gentleman to come out with these wonderfully ringing words—with which I agree—when he is away from the House and away from the parliamentary Labour party—and when he is not being listened to by his supporters. But when he comes here, he dismisses deregulation, as he did in his remarks on the Queen's Speech, as almost irrelevant to our national recovery.
  The truth is that the only thing that is marginal, in the context of a party that has lost four elections in a row, is the policy of that party on deregulation. We want to make sure when we regulate that we protect the vulnerable, protect the public, protect our heritage and protect the countryside, but in such a way as to deal best with the real risks and to put the fewest obstacles in the way of wealth creation. We must keep paperwork to a minimum and keep the intrusive nature of bureaucracy under the tightest possible control.
  There are three thrusts to the policy that we intend to introduce. The first is the new regulations; we will ensure that regulators count the cost of their proposals before they publish them. Secondly, there is no point in taming domestic regulators in Whitehall if European directives keep piling on the burden. Last year, we persuaded our European colleagues to put the cost of business into account and to publish it when new European measures are proposed.
  Thirdly, there is the subject matter of the Bill. We are reviewing existing regulations. Under the guidance of Lord Sainsbury, eight task forces from business and the voluntary sector have been examining regulations on the statute book to see whether they can be scrapped, modified or improved.
  Even then, primary legislation can stand in the way of reform. That is why we are introducing a deregulation Bill to cut the red tape and open up the opportunities for business. The Bill will include specific deregulation measures, as well as a means to deregulate in the future. [HON. MEMBERS: "Ah."] The hon. Member for Livingston was deeply immersed in creating fear, at which he is a past master. A parliamentary process will be involved in our proposals.
  In the same Bill, we will be removing statutory obstacles to market-testing and contracting-out programmes of both Government and local authorities because we want to see better value for money for the taxpayer in all our policies.
  Mr. Bill Etherington: I am pleased to welcome back the President of the Board of Trade after his illness. He seems to fail completely to comprehend that some Labour Members do not correlate cutting red tape and minimising death and injury in the industry. Why does he fail to comprehend that?
  Mr. Heseltine: I do so for precisely the same reason that the Leader of the Opposition made it absolutely clear that he wanted to cut red tape to a minimum as well. The hon. Member for Sunderland, North (Mr. Etherington) and other Labour Members cannot understand that in a competitive world we have no choice but to make absolutely sure that every avoidable cost is avoided in our legislative programme.
  It must be recognised that deregulation is not simply about the letter of the law. The law gives rise to a plethora of guidance notes, circulars, inspectors and forms—all the familiar trappings of bureaucracy. Our review covers the impedimenta of legislation, as well as the legislation itself.
  Mr. Anthony Steen: Conservative Members are finding this speech extremely invigorating, and I hope that we will hear a little more of this wonderful stuff. I wonder whether my right hon. Friend will bear in mind that it is not simply about deregulation—it is about the over-zealous interpretation by officials not only in Whitehall but at local level. It is an attitude problem which we must address from the top.
  Mr. Heseltine: My hon. Friend is absolutely right, and that is why I referred to the impedimenta of legislation and all the practices that flow from it. We are well aware that many of the changes that we hope to see will not require legislation; they will require changing practices in a new changed culture. The House will have an opportunity to examine our detailed proposals when we introduce the Bill.
  The speech of the hon. Member for Livingston was anticipated, but he is not the only one. Labour Members are already in full cry and, if I may say so, in characteristic vein. This is not the first time that the hon. Gentleman has had an opportunity to indulge in what might be called slightly exaggerated versions of the truth. Indeed, he has a technique. He is a sort of chill factor in the body politic. We are well aware of how he does it because the record is there. He was shadow spokesman for the health service.
  Mr. Robin Cook: I was very good.
  Mr. Heseltine: Let me remind the hon. Gentleman, if he needs any reminding, of what he said before the election about Conservatives seeking a health service where organisations were put on the second floor of buildings to discourage people who were disabled and therefore expensive to treat from enrolling, or where casualty patients died because no one could pay for them. The hon. Gentleman knew that that was not true; it was a great distortion of anything that we had in mind, but if he could find people to frighten, frighten them he would, regardless of the facts.
  The Leader of the Opposition had an even more brazen charge. He said that it is all the Government's fault—we heard that again from the hon. Member for Livingston — because we are simply reviewing our own regulations. Nothing so reveals the fossilised inherent approach of the socialist in practice as that allegation.
  A communications revolution can sweep the world. The globalisation of markets can overwhelm national
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  boundaries. The Asian-Pacific rim can transform the competitive threat. Industry and commerce must change. The one thing that must never change is the good old British regulation. Like the pint and the good old British banger—once a regulation, always a regulation. What a battle cry for the modernised Labour party.
  But who can be surprised? The Labour party is the regulator's natural ally. About the only things left of the trade union movement are the white collar affiliates of the Trades Union Congress who dream up the regulations, inspect the regulated, regulate the regulators and drown the rest of us under the weight of the burden. That is typical of those socialists in their approach, with their ideas frozen in time and practices set solid in concrete. That is the image that one would think they wanted to portray—no change; and when it is done, leave it there.
  Hon. Members will want to consider carefully whether that argument is applied as consistently by Labour Members as they would have us believe. They may not be prepared to change one dot or comma of the most outdated regulation. Not a hair on the head of the most lowly inspector must be subjected to the wind of change, but when it comes to their fundamental socialist beliefs, which have cost them four consecutive elections, they want us to believe that the whole lot have been flung out the window. They fought against Europe for 30 years. Now they take every nugget of Euro-speak before the red ink is dry on the paper. Nationalisation was once the essence of their industrial strategy. Now it has become the word that dare not speak its name.
  I shall give one example of what can be achieved when the yoke on nationalisation is removed. In 1983, we privatised the ports. In 1989, we abolished the dock labour scheme. The hon. Member for Kingston upon Hull, East (Mr. Prescott) doubtless reacted with a characteristically moderate and balanced judgment. The modesty of his language was exceeded only by the energy with which he rushed around the docks spreading the news of impending disaster.
  I took the liberty of doing a little research. In 1980, less than 4,000 tonnes of cargo went through Hull. In 1992, it was nearly 9,000 tonnes. The figure had more than doubled. The only other difference that I have detected over the years of Hull's growing success is the absence of the hon. Gentleman, who, I am told, has not visited the thriving new dock company since its inception. Like the scarlet pimpernel, they seek him here, they seek him there. But the first sign of real success in his constituency brings forth in the hon. Gentleman a unique contribution to the political debate—absolute silence.
  Mr. Dennis Skinner rose—
  Mr. Heseltine: There is someone who has never known what absolute silence is.
  I can only say that when the hon. Member for Kingston upon Hull, East describes my deregulation proposals as a return to the killing fields, nothing persuades me more that I have got them more or less right.
  Mr. Skinner: Give way.
  Mr. Heseltine: Yes, why not?
  Mr. Skinner: I have a little tablet here that the President can put under his tongue. Is he aware that when he talks about imports into Hull, he is talking about the massive increase in coal imports which have enabled him

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  and his fellow Ministers to encourage pit closures? As a result, the 31 pits that he said he would save now look as if they will be closed. He should be ashamed of himself for putting all those workers on the dole.
  Mr. Heseltine: The hon. Gentleman gives the game away. In the real world, employment in the docks is the preoccupation. He cannot understand that there has been a container revolution and that the efficiency of the ports today makes them competitive. What he would really like to see are the days of old when thousands of men carried the loads in sacks on their backs. Then he could have a national union of sack carriers. Doubtless we would have Members of Parliament sponsored by the national union of sack carriers, paying their funds into the Labour party and shackling the competitive instinct of this country, at which the hon. Gentleman is one of the greatest experts.
  I should be the last person to wish to do the Labour party any sort of injustice. I have said that it would regulate everything. I am prepared to believe that every rule has an exception. I have missed out one area where no doubt the deregulating zeal of the Labour party would be at the forefront of its political agenda: the trade unions would be deregulated. Here we would find a veritable bonfire of controls: strikes, go-slows, no-gos, Labour in power, socialism in practice—all back to an agenda that we drove from the country 14 years ago. The painful sacrifices accumulated over 20 years that have given the country the best industrial relations for a century would be thrown away in a single Act of Parliament.
  On this issue at least let me accuse the hon. Member for Kingston upon Hull, East of no silence. He has made it absolutely clear that Labour would repeal all our trade union legislation. There is nothing to keep. It all has to go. The House will want to contrast that with the charge made by the hon. Member for Livingston that, because we talk to leaders in the construction industry, with a view modestly to changing the regulations to lighten the load on our system, we are indulging in corruption. Yet the Labour party is prepared to sweep from the statute book all our trade union legislation to satisfy its paymasters. What are we supposed to call that? So we shall press on with our deregulation programme as part of our determination to help British industry compete.
  Mr. Malcolm Bruce: The President of the Board of Trade is making an entertaining speech. Will he tell the House specifically how the regulations will be introduced? Will the House be presented with a detailed Bill that includes the specific regulations, which can be debated, amended and voted on; or will we be presented with an enabling Bill in which each individual regulation will be determined by statutory instrument? If the latter is the case, that is not the way to deal with deregulation.
  Mr. Heseltine: The good old Liberals are at it again. They want it all ways. Whatever we do, it will be wrong. The hon. Gentleman must contain himself. We will have a Second Reading of the Bill, when he can examine it in great detail. Doubtless he will table some amendments, the scrutiny of which we shall be forced to subject ourselves to. Nevertheless, in the proper, democratic exercise of our duty, the Liberals must have their turn, however small it may turn out to be.
  Mr. Richard Caborn: It is good to see the President of the Board of Trade back on form. His speech is entertaining, if in no way factual. I remind him that a great deal of research was done by the Select Committee on Trade and Industry for its report on Europe. Does he recall that the report pointed out clearly to Ministers that the burden of many European Community regulations had been increased by his own civil servants? That was a strong criticism.
  My hon. Friend the Member for Livingston (Mr. Cook) has referred to the increase in regulation. That has arisen directly from the inability of Ministers, particularly those in the Department of Trade and Industry, to control their civil servants, who are adding extensively to EC regulations. Ministers rode on the back of EC regulations that would not have passed through the House had the turnkey of the European Community not been used.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the hon. Gentleman and other hon. Members present that interventions are supposed to be brief. They are not supposed to be mini-speeches.
  Mr. Heseltine: The hon. Gentleman makes an important point and I thank him for his generous words to me personally. If he wants to help me to a full recovery, he will avoid inviting me to appear before his Select Committee again.
  I now want to say something about the privatisation of the coal industry. The hon. Member for Livingston treated us to a general denunciation of the issues of privatisation, so it may be helpful if first we spend a moment or two looking at the record of privatisation over this decade. We have absolutely no doubt that privatisation drives up standards of efficiency and management, ensures that investment decisions are taken by customers, not Government, leads to increased efficiency and lower costs and encourages innovation, all of which help the privatised companies to get out and become world class players on the international stage.
  Just one sobering statistic—a single sentence—will show why we believe that we have brought about a fundamental and important shift. In 1979, taxpayers paid £50 million a week to subsidise the losses of the nationalised industries. The privatized industries are now paying £60 million a week in taxes to the Exchequer on the profits that they are making. There is no clearer vindication than that of the privatisation policies of the past decade.
  British Steel is now one of the most efficient in the whole world. PowerGen, National Power and the National Grid are international companies. We have a major extension and modernisation of our water and sewerage infrastructure, with a £30 billion investment programme. British Telecom's prices are down by more than 27 per cent. in real terms since 1984. Domestic and small business prices for gas have fallen by 20 per cent. in real terms since privatisation. British Gas now operates in more than 45 overseas markets.
  The hon. Member for Livingston describes that as the grotesque irrelevance of privatisation. There has been a dramatic transformation of the commanding heights of our economy precisely because they have been privatised. This is the remarkable transformation of great parts of the previously nationalised industries. It is against that background that we believe that the best future for coal is in the private sector.

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  I have no need to repeat the concern shared by everyone in the House for the difficulties experienced by those in the industry.
  Mr. Terry Lewis: Bloody hypocrisy.
  Mr. Heseltine: The hon. Gentleman talks of hypocrisy. The Opposition have presided over the run-down of the coal industry every time they have been in office. The figures are startling. In 1948, when the industry was brought into public ownership, there were 958 collieries and 700,000 workers; by 1970, it was down to 300 collieries and 375,000 workers. Everybody knows that the market for coal has been declining persistently for the past half century.
  Another matter has been proved beyond peradventure. Energy markets are too volatile for any kind of central planning system to make sensible decisions for the future. A salient feature of Government forecasts on energy is that they have always turned out to be wrong. It was forecast that oil and gas would become rare and expensive towards the new millennium. In practice, new discoveries are taking place all the time. Production is at a high level and reserves are mounting. As a result, prices are low and look set to remain that way.
  We plan to bring before the House as soon as possible this Session a Bill to privatise British Coal. That would free the industry from the dead hand of state control and allow it to compete within the wider energy market. The Opposition do not see it that way. They have not seen it that way whenever we have privatised an industry and they have always been wrong.
  The hon. Member for Livingston is up to his old tricks and trying to suggest that privatisation will threaten the safety of miners. It is despicable how the hon. Gentleman always finds the most vulnerable sectors of society and cynically exploits their legitimate fears for narrow party purposes. When I became President of the Board of Trade, at my first meeting on the subject, I said that I would do nothing to prejudice safety in the mines. I have never been asked to do anything that would do that and, if I were asked, I would not do it. We have fully accepted the advice of the Health and Safety Commission which was contained in its recent report, which has been placed in the Library.
  I look forward to the day when British coal companies are free to seek—and invest in—world opportunities and to export their skills and experience in the huge international market. Furthermore, looking back over the decades, I have no doubt that, had we privatised the industry earlier, British Coal would have saved more jobs and we would have had a larger and more viable industry than the market can now sustain.
  Mr. Robin Cook: The President must have missed out a page of his speech. Before he leaves the issue of privatisation of the coal industry, will he answer the question put to him? If privatisation is to work such a wonderful transformation of the coal industry, how many pits will survive to be privatised?
  Mr. Heseltine: It is an illusion of the Opposition. When they were in power, the pits closed month after month. They never knew, and no Minister will make such forecasts in a market condition where the customer will determine the market.
  My third Bill covers trademarks, which play a critical part for business. The forthcoming trademarks Bill will
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  deregulate procedures. It will open the door to the use of international trade mark registration systems under the Madrid protocol, thereby allowing businesses to protect trade marks overseas in all contracting states by a single application. That will achieve substantial savings for other businesses.
  The Gracious Speech debate and the Opposition's amendment go wider than the specific legislation that I propose to introduce. I should like to update the House on the position of Leyland Daf because nothing so illustrates the difference in policy as the differing approaches of the Government and the hon. Member for Livingston on that issue.
  The House will remember that the company went into receivership in February this year. The hon. Member for Livingston was on his feet demanding instant intervention. "Bail the company out" was the instant policy. I refused, not least because, having put £3.5 billion into Leyland, we did not seem to have succeeded in doing the trick by bailing the company out with taxpayers' money. Instead, we backed the entrepreneurial skills of the management, receivers, banks and financial houses to let them find a commercial market solution. The van and truck businesses were able to set themselves up as two independently run companies. Half the jobs were saved, as was the supply and distribution chain. The cost to the British taxpayer was £5 million in regional assistance.
  While my Department was encouraging and helping all that intricate, detailed work to save half the jobs at minimum cost to the taxpayer, the hon. Member for Livingston was not idle. He was leaping about, flying to the continent, and climbing on any old soap box urging me to do what the Belgian and Dutch Governments were doing. It all made good headlines at the time, and nudged the hon. Member up the shadow Cabinet pecking order a bit. But, as always, when the facts come out, they do not fit the scare stories in which the hon. Gentleman trades.
  The Dutch and Belgian work forces were reduced! by virtually the same proportions as ours, but the poor old European taxpayers were £100 million worse off as a result of their Governments' hasty involvement. That is whai the hon. Gentleman really believes in—spend money first and then try to find solutions. That is what the last Labour Government tried, but it costs money and it does not work.
  The news for us is even better. Both Leyland DAF Vans and Leyland Trucks have recovered well. The vans business is maintaining its production volume and has recently announced an £8 million development programme. Leyland Trucks has been able to increase civilian volumes by 30 per cent. and win export markets, and is discussing joint development of a new medium weight truck.
  However, to the hon. Member for Livingston, all that was grist to the mill. Some of my hon. Friends, who do not need to concern themselves with the details of those matters, may have missed a little press release that he put out at the time. It was in characteristic language and was headed:
  "Labour reveals the threatened 'dossier of disaster' if Leyland Daf closes".
  The hon. Gentleman had identified 6,000 firms that would be pushed into closure by the loss of business. He produced a "dossier of disaster". Ap my right hon. and hon. Friends in the Government in whose constituencies a Leyland van had ever been seen were listed for that hideous impending

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  disaster—6,000 fingers stretched out in blame, reaching to tear the throat from the hapless President of the Board of Trade.
  My poor old right hon. Friend the Foreign Secretary was up to his eyes in it simply because the Rover car company in his constituency had supplied parts to Leyland Daf. Rover would be hit, we were warned. What happened? Rover is selling cars like there was no tomorrow, recruiting extra employees and setting world quality standards.
  It was not just the big fish. Even the junior Ministers were not to be spared the ruthless scourge of the hon. Gentleman's searing foresight. He said that my hon. Friend the Member for Solihull (Mr. Taylor), the Parliamentary Secretary, Lord Chancellor's Department, was about to see Land Rover knocked off its perch. What happened? Land Rover has taken on 300 extra staff, and sales of the Discovery have doubled in Japan and Australia.
  What has happened to those 6,000 fingers? They are stuck in the dykes of Labour's crumbling allegations, as every day the recovery reveals the bankruptcy of its statements. If the hon. Member for Livingston is searching around for another press release, why does he not put out one containing good news stories from the constituencies of his colleagues in the shadow Cabinet? I do not want to impose any unnecessary burden or strain on him. Let us have just a press release of good news stories from his constituency—£20 million investment in NEC semiconductors by 1994; 300 new jobs at VRG International in the next four years; 200 new jobs at Mitsubishi in the next two years; 300 new jobs at Marshall Food Group in the next three years; 400 new jobs at David Hall in the next four years; 400 new jobs at IMTEC. I could continue with the list in his constituency alone.
  So why are there no press releases about all that? Where are all those menacing fingers? They are itching to get to work in the hon. Gentleman's constituency, with the new technologies, new factories and new British opportunities. What else? [Interruption.] The hon. Member for Livingston said that it was a gross misrepresentation.
  Mr. Robin Cook: The President of the Board of Trade must not run away with a mishearing. What I said was that it was an excellent representation of Livingston.
  Mr. Heseltine: That is interesting. It brings me conveniently to the next argument. Why are all those companies in the hon. Gentleman's constituency? What is it that brings them there? They are all seeking a base in Europe and they are choosing Britain because we are competitive and attractive and they are welcome here. Under this Government, Britain will stay that way, but not under a Labour Government.
  I am sorry that the Leader of the Opposition is not here; he is probably looking after some of his new friends in the boardrooms of England. He is famed for his flirtation and carrying-on with the leaders of our great companies—last week, he was at the Confederation of British Industry conference and, week by week, he is among the thick pile and hushed atmosphere of the City dining rooms. I must make it clear to the leaders of our great companies that it is not their smoked salmon that he is after. He has a different agenda. He has a manifesto of Euro-socialism. Of
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  course, he says that it does not mean all that it says, but it has got his name on it, he is a lawyer and it is printed in English.
  The manifesto may not mean much to the Leader of the Opposition or his hon. Friends, but if one asks the directors in the boardrooms of the international companies deciding whether to invest in our country or not, they have no doubt about what it all means. What is the agenda that we have from the Euro-socialists? The manifesto supports
  "a substantial cut in working time"
  including the prospect of a 35-hour or four-day week.
  "to breathe life into the European social Chapter."
  It supports
  "European works councils, consultations of workings in multi-national businesses and European sectoral collective agreements … a guaranteed minimum wage"
  and
  "Community measures … to avoid a tax-cutting competition between member states".
  We shall not even be allowed to cut the taxes to bring the investment to create the jobs in the constituency of the hon. Member for Livingston.
  There is one other little nugget tucked away in the manifesto for Euro-socialism. It supports
  "a European policy on waste".
  Let us start by ripping up the manifesto itself. To what does it actually add up? Every competitive advantage that this country possesses will be thrown away. To pursue the international brotherhood of man is one thing, but to sell the dear old country down the river to get it is another.
  The Leader of the Opposition made much play—[Interruption.] There were a great many more people at the Tory party conference than there are Labour Members present today. The Leader of the Opposition made much play of the need for evidence. He asked, "What is it about the Tories? They make all the decisions and announcements—the only thing that is ever missing is evidence." He accused us of designing policies, against the facts, without regard for evidence, and as a mere reaction to events. I reject that charge absolutely. We are determined to steer the country to a new competitiveness and a sustained recovery.
  If the right hon. and learned Member for Monklands, East (Mr. Smith) wants evidence, I shall give it to him. We have the highest proportion of our population at work among the major Community countries. Unemployment has fallen by 137,000 this year. Inflation is persistently lower than at any time since 1960. Exports are at record levels. Interest rates are among the Community's lowest. Industrial relations are excellent. That is the evidence upon which a sustained recovery can be based and on which I invite my right hon. and hon. Friends to vote for the motion.
  5.16 pm
  Mr. Alfred Morris: The late Earl of Stockton, when he was Prime Minister, was talked of in the House as an actor manager. I hope that the President of the Board of Trade will forgive me for saying that today he has shone more as an actor than a manager. Let no one ever say that he has no alternative career.
  Europe's fastest growing airport, which is also the north-west's most prolific job creator in the private and public sectors alike, has been much in the news recently. I refer, of course, to Manchester airport in my constituency. The airport is owned by Greater Manchester's 10 local authorities and we have been told by the press, on the basis

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  of recent Whitehall briefings of parliamentary journalists, that the Government intend to enforce the sale of the airport to the private sector. We have been told by The Sunday Times:
  "The Government would not benefit directly from the cash raised [an estimated £560 million] but could cut Whitehall grants to the local councils which raised funds from the sell-off."
  Another and perhaps better way of describing what the Government were said to be proposing is that Greater Manchester's 10 local authorities would, at the end of the day, retain not a single penny from the sale price because the Government would cut Whitehall grants to them by the same amount. In other words, the 10 local councils lose their airport, while the Government save £560 million in Whitehall grants. If that is what the Prime Minister means by "going back to basics", I advise him not to take his soap box anywhere near Manchester airport or to any of the 10 town halls.
  If accurately reported by The Sunday Times, the Government plan will involve theft of public property on a massive scale and will make the "great train robbers" look like petty pickpockets.
  Many responsible newspapers were expecting the Government's intentions in regard to Manchester, Birmingham, Luton and other airports to be announced in the Gracious Speech, most probably in the context of the debate on the Bill to facilitate deregulation which, of course, we have yet to see in print. Now, we are told that Whitehall has discovered that it might not be as easy as it thought to grab Britain's still publicly owned airports for the private sector.
  For example, on 19 November, after a briefing at the Department of Transport, The Guardian reported that forcing local councils to sell their airports could be "fraught with difficulties". But despite all the briefing given to Parliamentary journalists, the House has still to receive any kind of statement on the Government's intentions.
  I speak in the debate first to seek full clarification of the Government's position. It cannot be emphasised too strongly that it is just not good enough for Ministers and their officials to give a welter of briefing to the press while Parliament is being left in the dark. My second purpose in speaking today is to warn the Government that there will be the most fierce and utterly unyielding opposition to any attempt to dispossess the people of Greater Manchester of their proudest asset, not least, much to their honour, from a great many Conservative members of the 10 local councils.
  If Ministers are in any doubt about the scale of Conservative opposition to what the Government are said to want, let them spend a day or two with their party's local public representatives in, for example, Bury and Bolton. They will find scant, if any, dissent in any party in Greater Manchester, from the message in a recent leading article in the Manchester Evening News, which said of our airport:
  "It is the shining jewel in Greater Manchester's crown, and should be allowed to remain the property of 2·5 million people in Greater Manchester who benefit from the profits the Airport makes".
  Ms Estelle Morris: I am grateful to my right hon. Friend for raising the important point on the future of airports. Will he accept that any campaign or effort to oppose the privatisation of Manchester airport and other airports will be joined by hon. Members who represent Birmingham constituencies?
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  Is he aware that, under the control of local authorities in Birmingham, our airport is a success story because it has expanded its standard and level of service to make it equal with not only any other airport in the country, but throughout the world?
  Mr. Morris: I hope that I may be excused for referring to that welcome intervention as one not from an hon. Friend, but from a close relative, my niece, whose work for and total commitment to her constituents in Birmingham I greatly admire. I understand that we are the first niece and uncle ever to serve together in the House and, of course, I am grateful for what she said.
  Mr. Nicholas Winterton: Would the righ hon. Gentleman give way although I am not a relative? Is he assured to learn that at least one Conservative Member shares many of his concerns? Will he accept that Manchester airport is a fine example of a successful partnership that makes a substantial profit? Indeed, some months ago, a number of us attended the opening of terminal 2, which was not only constructed below its estimated cost, but was finished ahead of time. If that is not an example of efficiency in the public local government sector, I do not know what is.
  Mr. Morris: In a way I am related to the hon. Gentleman, at least geographically in terms of our constituencies. Mine adjoins his at the airport and he is a regular user. I entirely agree that the airport's achievements are a superb example of partnership at its best, as I shall explain in more detail.
  Mr. Barry Jones: It is also superb for people in Wales.
  Mr. Morris: As my hon. Friend says, it is also much appreciated in Wales. I know that he often drives from Wales to Manchester because of a quality of service that gives great pride to those who work there, based, as the hon. Member for Macclesfield (Mr. Winterton) says, on close partnership between the public and private sectors.
  I must now complete the quotation I was giving the House from the leading article of the Manchester Evening News. It concludes:
  "The Government must be made to understand that Manchester International Airport has nothing to gain from being sold off."
  Let me briefly document the justification for that last sentence. Manchester airport is highly efficient and very profitable. By every test—growth, profitability, performance, consumer satisfaction—the airport is Britain's best. In fact, only two months ago, the airport won the "Best of Britain" accolade, and its ability to pick up other prizes and awards has made it the envy not only of other British airports, but of airports across the world. Of the 12,200 people who work at Manchester airport, some 80 per cent. are in the private sector. Tens of thousands of other people in the north-west, all in the private sector, owe their jobs to Manchester airport's huge success.
  The airport's profit in the past year was £42·8 million, compared with £7·4 million nine years ago, and it is now out-performing Gatwick. In 1988-89, when Gatwick, as a British Airports Authority airport, was publicly owned, it had 21,056,000 passengers a year and Manchester 9,700,000. Now that Gatwick is in the private sector, it has 19,843,000 passengers a year, compared with publicly owned Manchester's 13,200,000. So much for the totally

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  bogus argument that transfer from public to private ownership means automatic growth. Stanstead, which is heavily subsidised, is another instructive case that Ministers may wish to examine for the purpose of comparing private and public sector airports.
  Manchester airport's success did not happen overnight. It was achieved by courage, foresight, imaginative planning, patience, intensely hard work and shrewd business sense. That combination made Manchester airport as important to the regional economy of the north-west today as the ship canal was earlier in the century. Who were the shrewd business men who brought this about? They were successive generations of Manchester city councillors, public men and women of all parties and of none. Expertly advised, and acting together with the full support of Manchester's ratepayers, they took the investment decisions that are paying off so handsomely today.
  There were many years when Manchester airport did not make a profit. The people of Manchester have had a return on their investment as ratepayers only since the early 1980s. Moreover, that return has been ploughed back into the regional economy. In what the Government are said to be proposing, there can be no guarantee that the airport's profit will stay in the north-west. It comes as no surprise in Greater Manchester, now that the major risks have been taken and an increasingly successful future is assured, that people want to poach our most valuable asset for private profit. That is why there is so much resentment in the conurbation about the Government's reported intention and why there is such strong, all-party determination to resist any attempt at dispossession.
  If anyone questions our airport's efficiency, let him name the private companies in the north-west that showed anything like a profit of £42·8 million in the past year, or let him point to any other airport that has won, by independent adjudication, so many prizes and awards. By common consent, Greater Manchester has many daunting problems that merit the attention of the House. Its longest and most distressing queue is that for jobs. We have one of the gravest problems of youth unemployment in Britain and the Government's reported plan for an enforced sale of Manchester airport is widely seen as a threat to make the job crisis even worse.
  The best message that we can send to those who own, control and work at Manchester airport is one of congratulations on what they have achieved and the best wishes of the House for still further success. In the interests of the economic revival of the north-west as a whole, Greater Manchester's fixed commitment is to an expanding international airport that will create more and more growth, and more jobs in a region with unacceptably high unemployment. I ask the Government now to drop their manic obsession with privatisation for privatisation's sake, to learn from Manchester airport's undoubted success and to help it to attain the important new goals which it has the high management skills and sense of purpose to achieve.
  After the Newbury and Christchurch by-elections, the Government promised to repent, to change their ways and to start listening to people. Let them now, at long last, have the common sense to start listening to the voice of the
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  people of Greater Manchester on an issue of crucial importance to them and the north-west of England as a whole.
  5.30 pm
  Mr. John Biffen: The right hon. Member for Manchester, Wythenshawe (Mr. Morris) is a long-standing and compelling exponent of the virtues of aviation in the north-west, but I am sure that he will understand if I choose to follow the main course of the debate as set out by my right hon. Friend the President of the Board of Trade.
  As the first Conservative Member to speak following my right hon. Friend's appearance at the Dispatch Box, I should say how warmly we welcome him back, and how delightful it was to embark on a vigorous debate and an argument which set out the developing areas of dispute between the two sides of the House. It is a dispute that we shall take to the nation in two or three years' time, at the conclusion of this Parliament, and it is our responsibility to ensure that our differences are put in the most compelling fashion. Only in that way can we secure a popular and meaningful mandate.
  In following the theme set by my right hon. Friend, I intend to detain the House for only a short time, and to speak mainly about issues of deregulation. My first three points concern the proposed Bill. I welcome the introduction of such a Bill. There seems to be almost a culture of controls and regulations which build up incrementally over the years, and it is perfectly legitimate to look again at whether they are fulfilling the role for which they were intended—a proper and protective social role. I welcome the legislation in that context, and I shall not be offended if its basis is the use of statutory instruments. Indeed, I find it difficult to conceive how it could be done otherwise, although I take the point made by the hon. Member for Gordon (Mr. Bruce).
  As a consequence of the decision to deregulate, the public will be relied on to do their own regulating, as it were, and to make their own judgments. "Caveat emptor" is a cheerful and casual expression, but in truth it is more applicable to an alert middle class than to the public at large. I hope that the Government will underline their commitment to the legitimate role of protection by making further contributions to the consumer advice bureaux. It is not a particularly expensive or onerous undertaking, but it would be appreciated and would legitimise the responsibility that will be placed on the public.
  My second point was mentioned by my right hon. Friend the President of the Board of Trade. Inevitably, the whole operation will have a Community context. I do not believe that the House yet appreciates the consequences of the Single European Act. The Act requires tremendous authority for the European Commission, and seeks a level of compliance that I do not think the Government appreciated when the Act went through Parliament. I am glad to see that the hon. Member for Argyll and Bute (Mrs. Michie) agrees with me. This is not really a party point, but one of the areas in which the House has a learning curve. The development of bureaucracy under the Single European Act is now proving onerous in this country, and I consider it a matter of direct political challenge.
  In a recent article in The Economist, my right hon. Friend the Prime Minister spoke of "the tangle of regulations". Some years ago, when he was at the Board of

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  Trade at the close of the post-war Labour Government, Lord Wilson of Rievaulx talked of the "bonfire of controls"—a phrase that was not particularly original, and has now passed into political usage. I think that we should now envisage the prospect of a Euro-inferno, given the consequences of the treaty of Rome and, more particularly, the operation within that framework of the Single European Act.
  I hope that the subsidiarity provisions can be used aggressively to seek the end outlined by my right hon. Friend the President of the Board of Trade, and that he will have some system whereby he can report back to the House not merely on aspiration to reduce controls, but the achievement of that aspiration.
  My third point involves the so-called even playing field, which is prayed in aid repeatedly in circumstances such as these. I must say that, until the last few years, everything in my life—in terms of economics—denied the existence of an even playing field. It was recognised that there were always differences; life was a tapestry of judgments made against that background.
  None the less, I think it important to establish something in our arguments about the social chapter. I do not suggest that Conservative Members are disposed to downgrade the significance of social obligations; it should be asserted, however, that these judgments properly belong to national Governments and Parliaments rather than to Community institutions. That is the position that we now have—although it exists in a rather blurred fashion, as many of my fellow Euro-sceptics would be the first to stress.
  That is a profoundly important judgment, if we are trying to minimise the impact of bureaucracy—not because we seek to hold back its exercise for legitimate objectives, but because the additional level of bureaucracy intended to bring about pseudo-uniformity is found increasingly distasteful.
  My right hon. Friend the President of the Board of Trade—clearly relishing the prospective fight—has given a sharp tap to the kaleidoscope of European debate. He has identified Labour as the party of size—of general bigness —within the Community, and he has clearly done valuable research to that end. I am glad to say that I can wholly endorse his analysis and I should like to take it a little further.
  A fascinating recent development is the cult of size. Of course, bigness has a certain appeal to the faction of the Labour party now in the ascendancy, represented by the leader of the Opposition, but it also has a great appeal to certain elements of the manufacturing community. I was particularly interested by a speech made recently in Harrogate by Mr. Iain Valiance, chairman of British Telecom. Mr. Valiance is a man of bigness in every sense —starting with his salary, which according to my calculations is equal to the entire parliamentary salary bill of the parliamentary Liberal party, give or take a touch. [Interruption.] I am invited by an anonymous voice on the Front Bench, in typically ungenerous fashion, to say how I would judge value for money. I have always had the deepest regard for the party of Gladstone, but I realise that judgments are constantly subject to revision. I will perhaps allow myself that reflection and no more.
  Mr. Valiance made a very powerful address—not so much a speech, more a string of sound bites—and asserted:
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  "Britain must not allow itself to be marginalised; to become so introspective that it is effectively excluded from the inner core of EC decision making. The key areas of monetary policy, employment issues, social costs"—
  I hope that all his fellow industrialists took that point—
  "innovation and regional aid are too important for that."
  Those are all legitimate areas for Community discussion, but the approach that comes from big business, exemplified by Mr. Valiance and elements of the Labour party, is that those are matters which are to be determined under the basic philosophy of the judgment of size and the alleged virtues of centralisation. That is totally contrary to the views of my hon. Friend the Member for Ludlow (Mr. Gill) and myself, but our response will get further encouragement from the Government Front Bench and the President of the Board of Trade, as has been the case this afternoon. We are in for exciting times as the European debate is taken forward towards the next general election.
  Given those judgments, the question of regulation is not a technical matter at all, but begins to run to the very heart of how we see the relationships between the nations of Europe and the institutions of the Community. Through the Commission, we are currently seeing the development of a most powerful regulation-making body; we are seeing ambition to bring about a degree of uniformity that inspires the most tremendous commitment to regulation.
  I have an idealism about Europe which is based on free nation states in open co-operation. Others may take a more centralist view, but there is no idealism in a Europe of bureaucracy, and that is the Europe that is emerging.
  5.41 pm
  Mr. Malcolm Bruce: It is always a pleasure to follow the right hon. Member for Shropshire, North (Mr. Biffen). I am not going to make a European speech, but I have considerable agreement with the hon. Gentleman's point. Whatever our views about Europe and our own domestic arrangements, we have to beware of excessive regulation. The thrust of that debate should strike a chord on all sides of the House and outside; it is the detail about which we may have substantial reasons to differ.
  The President of the Board of Trade was in good form. It was suggested that he made the speech that he was unable to make at the Conservative party conference; it was certainly of that style.
  It was interesting that he ended his speech by saying that the measures he outlined are what we need to put Britain back on the road to recovery. I take that to be an admission by the Government that we have had not 14 years of consistent economic success but a rollercoaster ride; that the Government's policies have not always worked in the best interests of the British economy.
  The core problem for the Government is the scale of the budget deficit of £50 billion. It should be put on record that a substantial part of that deficit is a direct creation of the Government's own incompetence and irresponsibility. It is arguable, but something like £15 billion of that deficit is a hangover from the cost of sorting out the poll tax. The same amount is the cost of Lord Lawson's tax cuts., for electoral reasons, at a time when we could not afford them. That took money out of the Exchequer, as did the cost of the job cuts that have flowed from certain aspects of the Government's policy.
  The right hon. Member for Manchester, Wythenshawe (Mr. Morris) made a powerful plea for Manchester airport, and put a finger on a worrying dimension of the

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  Government. Now that the Government are running out of things for which they are directly responsible and which they can sell, they will plunder other people's investments to bail themselves out of a hole of their own creation. The least that the Opposition parties can do is expose that as asset-stripping to get the Government out of the mess that they have created. It is not the ideology of privatisation for privatisation's sake.
  A central concern of the British economy is our role as a trading nation. It is a truism to say that we will not be able to maintain a decent standard of living for our population unless we can trade successfully with the rest of the world. We live on an overcrowded island, and we have to use the skills of the nation to add value and to enable us to pay our way.
  If any of the figures that are currently coming out demonstrate a genuine recovery in our performance, I welcome them. I am not interested in taking issue with the Government about the figures. We need to ensure that we have a clear, long-term development that will put Britain into a position of competitiveness.
  I hope that Ministers will accept that we are a long way from being able to claim that, because we are in deficit to most of the major traders in the world. We have reduced our deficit with the European Community over the past few years, but we still have a deficit with it, and with Japan and North America. Spain stands out as the shining example; it is the one country that we seem to be able to export significantly more to than we import from. Our otherwise poor performance must be put right if we are to find success in the future.
  There is a whole raft of things that we need to do. We need to have a strong base of manufactured products and services that add value and are competitive. We need to abandon our propensity for short-termism. The hon. Member for Livingston (Mr. Cook) said that it was short-termism that meant that, over the past few years, dividends had been maintained while profits were squeezed. That is not healthy for the long-term good of British industry. British industry may argue that that is not its fault, but is caused by the pressures put on it by the funding institutions on which it depends.
  It was this argument which caused the boardroom fallout in Britain's biggest company, British Petroleum. That was why Robert Horton was forced to resign. His view was that the dividend ought to be cut, but his opponents thought that it should be maintained. They maintained the dividend to the point where the company went into loss for the first time. It is absurd that a company should maintain dividends to the point where it goes into loss, and that issue should be addressed. That is not an attack on the City of London—which has great contributions to make to our economy—but it is a weakness that undermines our long-term investment strategy.
  As to the Government's own short-termism, the Trade and Industry Select Committee yesterday took evidence from the National Engineering Laboratory, and from Warren Spring. The National Engineering Laboratory is being prepared for privatisation, and when I asked the chief executive for his mission statement, he said:
  "Our mission is to prepare ourselves for privatisation."
  I pointed out to him that that was more of a job description than a mission statement, and that we needed to know what
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  was the laboratory's function. I am sorry to say that I did not get a coherent answer, because of the Government's driving force.
  Warren Spring is a much more serious situation. It is a laboratory which is developing practical technology in the environmental area that we need to develop. Warren Spring was being prepared for privatisation and, in response to the Government's strictures, had taken itself into profit; its site had been sold to Glaxo for £25 million to £30 million, and a new site had been promised.
  Without warning, the Government announced that Warren Spring would be closed and forced into a merger with the Atomic Energy Authority. The result is that some two thirds of its excellent staff will be made redundant and 25 per cent. of its business has been lost. That action, which was taken to save a little money, has left a skilled and dedicated work force destroyed and demoralised for what in the private sector would be termed asset stripping. That is a classic example of Government vandalism, which does not serve the long-term interests of the British economy. We need to find better means of co-operation to ensure long-term investment.
  Members of the Select Committee also visited Korea recently, where we were interested to discover that the Koreans have developed a new generation RAM chip. They claim to be world leaders in that work. We asked those responsible how that development was brought about. They replied, with a somewhat puzzled expression, "The industry got together and decided that we needed investment, and the Government naturally agreed to contribute their half. Isn't that what happens in your country?" That, sadly, is exactly what does not happen. Korea is not an underdeveloped economy; the average industrial wage in Korea exactly matches that in the United Kingdom.
  We need to learn certain things. One of the weaknesses of our economy is that small and medium-sized enterprises do not seem to be able to achieve the same degree of technology transfer, innovation and export success as that of overseas competitors in similar companies. That failing is apparent wherever one goes.
  Regardless of the reported motivation and the timing of the intervention from the Prince of Wales, his suggestion that he should be made more use of in promoting British exports should be taken up with enthusiasm. British business men and exporters who have been part of trade missions in which the royal family has taken an active part will readily admit that members of the royal family generate far greater interest in British goods than those business men can do, simply through their presence. They believe that they have been able to win business on such missions because of contacts that otherwise would not have been made.
  We have an excellent overseas consular service for which many business people have reason to be grateful, but we should use those services more effectively. Those in the consular service and companies also need to understand that export markets must be supported.
  One of our weaknesses is that, when we are in a recession, we put our toe in the water of the export market, but, as soon as things pick up back home, we abandon the customers that we have just found. Those customers are understandably less willing to do business with us again. The French, the Germans and the Americans do not behave

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  in such a manner. The Government must take on board the fact that they have a contribution to make, in partnership with British companies, to achieve export success.
  I was disappointed, although not surprised, when the President of the Board of Trade did not reply to my request for information on the format of the deregulation legislation. It is fine, and good fun, for the right hon. Gentleman to partronise me—I do not mind that—but in fact he patronises not me or the Liberal Democrats, but the process by which our laws are made.
  This is the only democratic forum in which we can debate and improve the details of any proposal. I must take issue with the Government if they consider it acceptable that the deregulation legislation is simply an enabling Bill, which will lead to a whole raft of statutory instruments. The right hon. Member for Shropshire, North (Mr. Biffen) said that such a process was the only option, but I hope that he would acknowledge that we cannot amend statutory instruments. If the Government get them wrong, all they can do is withdraw them and introduce different ones.
  At the very least, I hope that the Government will be able to offer a detailed compromise that gives some clear idea of what the proposals are likely to be, even if the fine details are to be left to statutory instruments. We are all anxious to hear about that.
  We must not underestimate the impact of regulation on small businesses. It is a matter of great concern, however, that, when the Under-Secretary of State for Corporate Affairs talks about what we consider the core factors of health and safety and fire regulations, the language he uses to justify sweeping those regulations away is that used to justify the slave trade and putting boys up chimneys. That makes me think that there is no difference between the phrase "back to basics" and "Victorian values".
  The argument is that, by ridding business of regulation, more jobs will be created, but they will be jobs at any price, including the health and safety of those performing in the workplace. That is not something that the House would welcome.
  I asked the Forum for Private Business for its views on business regulation. It referred to the report, alluded to by the hon. Member for Livingston (Mr. Cook), about the threatened proposal to cut the employer's statutory sick pay reimbursement. It put to me the following case:
  "Imagine a firm of 100,000 employees. Imagine that it was hit with an epidemic of 10,000 employees in the same department all going sick at the same time. Without the rebate, the businesses will have to fund sick pay for the 10,000 while shouldering the cost of lost production and taking on temporary replacements … As I am sure you can imagine such a firm would suffer very badly … Ah well, you may say that is a very unlikely situation … True but imagine now a business with 10 employees, how likely is it that one employee will go sick? Quite likely: such a firm could quite possibly face even 2 or 3 going sick at the same time … 10 per cent., 20 per cent. or even 30 per cent. of its workforce."
  If the Government persist with their proposals, such firms will simply be forced out of business and, ultimately, the net revenue to the Government will be lost. It is not even in the Government's interests to persist with that proposal. I would believe more in the Government's commitment to deregulation if they were prepared to address the burdens that they have imposed, which can be removed.
  I do not have time to address the raft of other issues that I had in mind. I should like the Government to tell the
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  House, however, about the future of the Post Office. Do they have any idea about that, because many people are asking?
  As time goes by I wonder just how much of the coal industry will be left. The President of the Board of Trade may have spoken about the irritation that will be caused by amendments tabled by the Liberal Democrats, which the House will have to detain itself to consider. He should remember what happened with the privatisation of other energy industries. If the Government had listened to the arguments behind certain amendments tabled by the Liberal Democrats, they would have saved an awful lot of money, as well as being spared a great deal of embarrassment. Many jobs would also have been saved.
  It is the Government's refusal to accept that any wisdom exists outside their own ranks that has led to the situation in which the coal industry is now being destroyed by a Government whose only ever strategy for energy has been to have no strategy.
  I represent an area in which the North sea oil and gas industries are extremely important. It is also an area in which certain companies lead the way and where substantial exports are made per head of the population. In the six months since the Government introduced tax changes in the Budget relating to exploration, however, jobs have already been lost from the exploration industry, and export opportunities have been lost. As forecast at the time, those changes have been deeply damaging to the industry.
  The price of oil in terms of North sea production has never been so low, whereas the costs are high. Exploration activities are already moving from the North sea to Russia, other states within the Commonwealth of Independent States and the far east. The Government introduced their tax change at an inappropriate moment. The North sea industry needs active support. We need an active exploration programme to ensure its long-term future. One does not provide that by completely removing tax incentives.
  This debate relates to the core of the British economy. We must be able to add value and pay our way in the world. After 14 years, however, the Government do not yet understand how to go about that. The deregulation measures do not spell out a revolution, as the Minister for Industry inadvertently said at Question Time: they are merely another phase in a propaganda war that often misses the point.
  5.59 pm
  Mr. Iain Mills: It is sad that in our discussions so far no one has drawn the House's attention to the successes this year in the car industry. I should declare an interest as joint chairman of the all-party motor industry group. It is relevant to the later part of my speech that I declare my chairmanship of the community trademark office committee, and my long-standing work with trademark agents, the anti-counterfeiting group, and others on such matters.
  My constituency covers the area between Birmingham and Coventry, where the dominant industries are cars and car components. Hon. Members who represent midlands seats will know that the motor industry has achieved great success, not only this year, but in previous years during, the recession.

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  I came to the House in 1979, to see employment law changed to the benefit of the car industry, and I was fortunate to be the parliamentary private secretary to the noble Lord Tebbit when we made the step-by-step changes in the early 1980s. The changes were a part of a package that was created by a Conservative Government to allow the car industry to manage its own affairs, and to achieve a level of productivity that is now the envy of the world.
  On a trip to Japan with the all-party committee, we were told by the Japanese that they saw Britain as the most natural place to base their outward investment in manufactured goods to tackle the European markets. That was not only because of the difference between the yen and the pound, but because of our work practices, productivity and attitude. In 1979, that would not have been conceivable.
  How have we managed to move from the winter of great strife, from the days of Longbridge being permanently on strike, when the car industry was crippled by bad productivity and poor reliability? I spent 20 years in the industry, so I know something about it. How have we managed to reach the point where we are admired by the Japanese and by Taiwan, which is now a high wage cost economy? Those countries see Britain as the place to invest because of our high productivity and low wage costs, and because of our good attitudes towards work.
  We have accepted that people may not any longer be workers, but that they should be associates, from the chairman and the managing director down to the shop floor. In 1979 in the car industry, that would not have been possible. That has come about because of the policies of a Conservative Government. It is not often referred to by Opposition Members, but there is no doubt that their constituencies benefit from the increasing productivity. I hope that my right hon. Friend the Chancellor of the Duchy of Lancaster will send my congratulations to the President of Board of Trade and to his predecessors.
  It was obviously important to ensure that our car and car components industries had the right fiscal climate in which to carry on their business of producing and selling cars. That is why, with Nissan, Honda and Toyota, we have inward investment from Japan, where 80 per cent. of cars are local content built, and where 80 per cent. of those cars are exported.
  Hon. Members should think that through, because it means that there will be an awful lot of new jobs. If 80 per cent. of cars which have 80 per cent. local content are exported, the Japanese firms are not in any great way competing with our domestic manufacturers. Rather, they are taking sales away from our EC competitors, companions, or whatever they may be.
  I suspect that that is why our EC partners resent us, and why they are trying to reinforce their strong views that we should average our costs upwards through the social contract into a high wage cost economy, so that they will not have the problem. I hope that my right hon. Friend will pass that message on to the Secretary of State for Employment and others. It is clear to those of us involved in discussions in Japan and Taiwan that any extra imposition of regulations or costs through the social contract would be a disaster for that most important manufacturing sector of our economy.
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  The companies to which I have referred are basing their activities in the United Kingdom, and that is just the iceberg tip of the Japanese and Taiwanese investment in this country. We are assured by those concerned, including the Japanese ambassador, that investment will continue. Therefore, there is every possibility that part of our domestic manufacturing economy will continue to grow, and so it should.
  There are also what one might call the more traditional firms which manufacture cars in this country. Those firms are not always British, but they have a high local content. For example, Peugeot has a site near my constituency in Coventry. Part of the site for Land Rover is in my constituency, as is the headquarters of Rover. Ford and Vauxhall are also familiar to me, and all those firms have had stunning successes. An increase of 12 per cent. in production during the past year is not a bad thing for a Conservative Government to look back on.
  One may disagree with the exact nature of the increase in sales during August, September and October—whether it is 16 or 18 per cent.—but the fact that it will give a year-end increase in car sales in the United Kingdom is an extraordinary achievement for the industry. That has not been achieved only because of the successes of the industry, although that is the primary reason.
  It has been helped by a Conservative policy of removing special car tax—a bold move, which was taken in two steps. It has stimulated sales, particularly in the fleet sector. It is often forgotten that the company car market was in the doldrums during the recession. Many salesmen and others were asked to keep their cars for three years, and later that was increased to four or five years, or up to 200,000 miles. That was because increased technology and reliability and the high quality of British-built cars allowed them to use the cars for that length of time. I am sure that many hon. Members have 200,000 miles on the clock of their cars, and I hope that they all have British cars.
  I give one word of warning to my right hon. Friend. Traditionally, when the car industry is doing well—an 18 per cent. increase in home sales and a 12 per cent. increase in exports shows that that is the case now—Chancellors of the Exchequer tend to think that is a way of regulating the economy. I would ask my right hon. Friend to pass a message to the Chancellor that any increase in company car tax beyond that already in the pipeline from the previous Chancellor's tax moves would be a great mistake, and could cripple the fuel for our economic recovery.
  As cars and car components are sold, there is a knock-on effect for other jobs in the car industry. That is reflected in three quarters of a million jobs in the car components industry throughout the country. I ask my right hon. Friend to make strong representations to the Chancellor of the Exchequer, as I have done, that there must be no change in taxes—in particular, those which affect fleet or company cars—that would restrict the increase in car sales, all being well, should continue.
  It would be unfair of me to speak too long, particularly as a ten-minute limitation on speeches will apply later. I would like to welcome strongly the Bill on trademarks which was given its First Reading in the other place earlier today. I have searched for a copy of the Bill in the Vote Office, and I am assured that one will be available shortly, although I am not complaining about that.
  I greatly welcome the introduction of a Bill on marks. I do not suppose that Opposition Members will be fully aware of the significance of the Bill. I would draw their

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  attention to a parliamentary answer given to me by the Prime Minister. The answer showed that a Bill to introduce a Community trademark and to simplify the system of registration of brands and trademarks will in the first year save industry some £50 or £60 million. That is because of the lower cost to register marks, as they will no longer have to be registered to protect great British names throughout every country in the EC. It will be possible to do so from one office.
  The continuing costs per annum will be about £30 million, and it seems to be an excellent Conservative measure with a thoroughly Eurpean content to which, I hope, my right hon. Friend the Member for Shropshire, North (Mr. Biffen) will not object. The Community trademark is the most innocent of measures in terms of the Eurosceptics' attitude towards Europe. The mark is keenly wanted by the capitalist structures of industry and commerce, and will enable us to have a pan-European protection for famous brand names. There is a negative side to it, which I will come to.
  The measure will be greatly welcomed by our massive trading partners of Japan, America and other areas. They want the ability to protect their marks and trademarks throughout Europe, and eventually, one hopes, through GATT and the Madrid convention, throughout the EFTA countries, and the world.
  There were last-minute doubts, I understand, but I can assure the Government that the measure will please trademark and patent agents and those who are responsible for great British companies' names, and will also please industry. I understand from conversations with Opposition Members that the Bill is not controversial, although they may have detailed arguments. The speech made at the Edinburgh conference of the anti-counterfeiting group by the junior spokesmen for the Labour party suggests that the Opposition are in full support of the measures that we hope will be included in the Bill against commercial counterfeiting.
  As I have not seen the Bill, I do not know whether there are provisions in it to deal with my next point. We are concerned, and we have made urgent representations, about the difficulties created at car boot sales and markets where traders show, above counterfeit goods bearing famous brand marks, a disclaimer saying, "A brand copy". That is as a result of the Price and Veys cases, brought under the Trade Descriptions Act 1968. Traders can now get away with selling counterfeits of famous names with that disclaimer.
  We looked at that matter in the Committee considering the Copyright, Designs and Patents Bill, which became an Act in 1988. It was made quite clear by my hon. Friend the Member for Coventry, South-West (Mr. Butcher), who was then a Minister, that counterfeiting was a criminal act and should attract criminal penalties. I ask my right hon. Friend the Chancellor of the Duchy to pass on to my right hon. Friend the President of the Board of Trade my strong concern that, if the Bill does not contain measures to deal with that most important point, it should be amended to include them.
  I was terribly disappointed, as one who reluctantly supported my right hon. Friend the Prime Minister in the Maastricht debate, to see the pork barrel politics and the less than graceful behaviour at the recent summit—not by my right hon. Friend the Prime Minister, but by Mr. Delors and others in the Commission. They proposed a handout of
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  European institutions based on nothing more than, "What do you want? We'll give you this if you'll agree that someone else can have that."
  The Trademark Office, which will be attended by the most eminent people from commerce, industry and the trademark profession, will be located in Alicante. 'That might raise a ripple of laughter. The sandy beaches are delightful, but there are only two flights a day from London, and one flight a day from Frankfurt, so goodness knows how those people will get there.
  Mr. Steen: The beaches and the weather in South Hams are much better than they are in Alicante.
  Mr. Mills: While London is the most desirable location, South Hams would not have been a bad location. Knowing how well it is represented by its local Member of Parliament, I am sure that facilities beyond the usual would have been laid on for any trademark agents coming from Japan.
  That seems to be the European way of doing things —a share-out of the most important institutions. Germany insisted on the bank, and we were bought off with the Medicines Agency. Spain, supported by all the Latin countries, also got the health and safety body—I thought that we were the health and safety experts, or so my friends from the Labour party tell me. We were the obvious location for the Trademark Office.
  Mr. Jim Cousins: Does the hon. Gentleman think that the possibility of privatisation of the Patent Office was helpful or unhelpful in those discussions?
  Mr. Mills: The hon. Gentleman raises a good point. The move of the job-heavy aspect of the Patent Office down to Newport was originally seen as an inhibition, but not in the final stages. I am assured by the Commissioners concerned that the original decision was to look at the location of the office based on suitability for the people who would use it, and on the facilities that it would offer.
  I do not have to tell the House that London, with three airports and flights throughout Europe and the world, with its infrastructure of over 2,000 trademark agents, 1,000 trademark solicitors and many trademark barristers, was an obvious choice.
  The Europeans are not concerned about privatisation of our national Patent Office, as long as it is operating, because the Community Trademark Office will take over, to a large extent, from the Patent Office in registering trademarks. That was not an issue. Apparently the only issue was who would deal with what to get what. I find that thoroughly objectionable, and I question my previous commitment to aspects of Europe. I have never been a federalist, but that almost makes me want to join the camp of those of my right hon. and hon. Friends who are sceptics.
  I do not wish to end on a negative point. I started with a positive point, so I shall end with one. The Alicante decision is apparently final. I have written to Mr. Delors to express my strong view on it, and I shall continue to campaign. However, the achievement of a Community trademark is more important than the location of the office in terms of our commitment to Europe, the savings to our companies and European companies and our ability to be

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  at the heart of Europe in promoting the Community trademark. Therefore, I welcome the introduction of a Bill on that matter in this Session.
  6.14 pm
  Mr. Ken Purchase: I know that the hon. Member for Meriden (Mr. Mills) has a long and deep relationship with the motor industry and has acted as an excellent conduit to it for Members of Parliament who want to learn more about the motor trade. However, I take exception to his remark that, throughout the 1970s, the industry was permanently on strike. That is far from the truth. It was certainly the view of the popular press, and that was how it liked to portray the industry, but it was not the truth for those working in it. I know that the hon. Gentleman worked in that industry for a long time, and he was not on strike for all that time. In fact, strikes would have been rare.
  The hon. Gentleman spoke of the pork barrel politics of handouts and which country gets what agency. We are getting the agency that will control pharmaceuticals. I do not know whether we are getting a good deal or a bad deal. I have recently seen research which suggests that, by the year 2000, through gene research and the advent of gene technology applications and treatments, up to 2 million jobs could be created in that sector in the Community, largely at the expense of pharmaceuticals. Hoffman-Laroche has estimated that about £8 billion-worth of sales will be lost annually as a result of that development. Whether the pork barrel politics has worked in Britain's favour remains to be seen.
  The President of the Board of Trade spoke of deregulation. Although Ministers have denied, first at Question Time and then later, that deregulation will involve wholesale removal of the health and safety at work protections that we enjoy, I intend to give the right hon. Gentleman a taste of what he may expect in opposition should he introduce the measures that are rumoured and that we fear.
  I do not know whether the President of the Board of Trade has extensive industrial experience or, if he has, how involved he has been at shop floor level where such measures really count. I know that some Conservative Members have such experience, and I respect them for it, but I do not think that the right hon. Gentleman has paid any attention to the different practices in large and small companies.
  I worked in the engineering industry for getting on for 20 years and spent part of that time in contract toolrooms in the west midlands, mainly in the black country and Wolverhampton. As a young man with two children and a mortgage, I took risks to ensure that my rate of pay remained at a level that would sustain my commitments. I am appalled when I think back on them, but I escaped serious injury. Others did not. I shall mention a couple of cases because detail is important.
  A colleague at a small contract toolroom lost his hand in a milling machine accident. It was severed at the wrist. He was a youngish fellow in his thirties, also with a mortgage and children. He was a member of the trade union, but the settlement was miserable—just a few thousand pounds for the loss of a hand. The accident pre-dated health and safety at work regulations, the milling
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  machine was not properly guarded and he was rushing. We used to use the phrase—if it is not parliamentary language, no doubt I shall be told—tear-arsing, and it was a common or garden thing.
  Before regulations on eye protection, my father lost an eye in a most painful way while maintaining a pair of dies. For the last 15 years of his life, he received a miserable pension. Like many of us, I will not tolerate a return to the practices, in small or large companies, that led to such injuries. [HON. MEMBERS: "Hear, hear."] I am pleased to hear Conservative Members applauding that sentiment.
  It is true that, in modern, forward-thinking, progressive and enlightened managements in our larger companies now, such problems have largely been eliminated in two ways: first, strong, proper and sufficient legislation was introduced to regulate the way people operated machinery and the practices that they followed; secondly, it was expensive—not as expensive as my father losing an eye or my colleague losing a hand—to introduce all the necessary controls. As a result, many different and more advanced processes were introduced that guaranteed protection for people working machinery, such as tape control machinery, numerically controlled machinery and that controlled with plug boards. All those processes tended towards a solution to injuries at work.
  Conservative Members point out the huge gains that have been made in productivity, not just in the past 14 years but over 20 to 25 years. That has been due largely to the introduction of technology which saves on working hours, reduces the length of process and is economic in the use of metals and the other materials that it uses. But there has been a cost. In my area of the west midlands, it has meant that 350,000 jobs have been lost.
  One might say that that is how markets work, and to some extent that is right, but the Government have failed completely to recognise that what was needed was not to lose those skills that were inherent in the area that I represent—and in the west midlands generally—and about which the hon. Member for Meriden (Mr. Mills) knows enough, too. It should have been ensured that those skills were channelled into productive enterprises, whether in manufacturing or service industries. That has not happened, and the price that we have paid for the introduction of the most superb technology, which was developed in this country, has been extremely high.
  On regulation, today and over the past few days I have had phone calls from a small company that is just starting out in Wolverhampton. The local inspectors descended on that company and told it that the process in which it is engaged—the manufacturing, shaping and forming of resins—is not safe for the workers who use those materials, as the extraction is not sufficient. It would not be sufficient to get a simple extraction plant and connect it to the outside, because the emissions would be too poisonous and dangerous to the surrounding domestic properties.
  The company contacted me and asked whether there was any way that it could be helped. The Government's loan guarantee scheme was one way, and one of the few pieces of legislation that have been exceedingly helpful —at least in theory—to small or medium-sized companies. I regret to say that many banks have refused to co-operate fully in it, even though their risk has been minimised by Government guarantees. I further regret that very few banks would entertain really small companies which

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  wanted assistance with £10,000 or less, because the cost of administering and monitoring the scheme would have been too expensive.
  Nevertheless, I believe that it is a good scheme and I advised the company to see its local bank about it. Unfortunately, the main owner of the company has negative equity on his house. Therefore it was felt that it would not be entirely appropriate for the bank, which merely has to cover 20 per cent. of the risk, to support it on that occasion. I have sent him to another bank that I think may be more helpful.
  The scheme should be working like clockwork, but it will take from six to eight weeks to process the application. That is far too long for a scheme which should have been designed to be simple and easy. It would be a start if we cut out some of the bureaucracy. It should be made easier for local bank managers to take that decision as speedily and cleanly as possible.
  The company knows that it is not allowed to put its emissions into the atmosphere—quite rightly. It knows that that is right and it supports that. The company is looking for the money to assist it. Paradoxically, in that area of work, it is the kind of company that can produce all the ducting and the process that will help to take the emissions away, but it cannot get the money to start up properly even though it has a relatively full order book.
  Many small and medium-sized companies should have limited liability and be able to enjoy reasonable protection, provided that the directors act in a proper way. But limited liability brings with it pretty onerous duties with regard to company accounts. I suggest that another area that would be worth considering in terms of deregulation would be a simplified set of accounts for small companies, particularly those—of which there are many—working as companies limited by guarantee, where the people working in the enterprise own and control it on the basis of their pound share and their willingness to commit assets to the company.
  It seems to me that it is way over the top that such companies must use European conventions to present their accounts. For companies, particularly those limited by guarantee, we could simply go back to the balance sheet, the profit and loss account and perhaps a statement of application of funds. That would be helpful to small companies and I look forward to the Government introducing such regulations, although I may be looking in vain.
  It is important that the matter of payment, and late payments, to small companies is tackled properly. That will need regulation, not deregulation. I believe that a mixture of measures should be taken by the Government to assist the collection of debt, particularly that which has been outstanding for 60, 90 or 120 days or even longer. Perhaps a statutory right to interest would assist, although I suspect that that would not go to the heart of the matter because the smaller companies would be persuaded that it would be in their interest to forgo their statutory right if they wanted to get more work from the companies concerned.
  Perhaps we should look at British standard 5750. Companies are increasingly saying to their customers and clients that they conform to that standard. Would it not be appropriate before the kite-mark was agreed that measures were taken to include prompt payment of debt? That is
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  another area that could be considered in the quest for a solution to the serious problem of small firms' debt collection.
  I shall move briefly now to small firms and access to research. More than 90 per cent. of employees work in companies with fewer than 200 employees. That is a significant statistic in terms of the development of products, of innovation and even of invention. My experience of small companies is that innovation is their speciality. They may take a product and develop it to the nth degree, by ingenuity applied at the point of production. That is what they excel at. But often they need technical and sometimes research assistance.
  I suggest that it would be helpful if grants were available—and I mean grants, not tax incentives, because small companies trying to develop products often do not have profits to set against the tax liability. I suggest grants, perhaps administered through universities, and especially through former polytechnics, many of which have well developed links with their local industrial scene. In that way we could gain access for small companies with good ideas. They could be properly assessed, and thought could be put into that time does not permit within the company itself.
  The White Paper on science and technology which was published last summer should be developed very rapidly. We need to reach serious conclusions on how to ensure that our scientific effort is channelled into liaison with the engineering and industrial sectors so that we make the best use of British brain power and ingenuity and all that that has meant to us in the past.
  If "back to basics" should be about anything, it should be about restoring the excellence that was once Britain's prerogative in terms of science. We have let that fall away. That is very largely your fault on that side, if I may say so.
  Madam Deputy Speaker (Dame Janet Fookes): Order. I hope that that was not directed at me. I remind the hon. Gentleman that remarks are addressed to me.
  Mr. Purchase: I apologise, Madam Deputy Speaker. My speech style is a little informal, unlike that of the President of the Board of Trade which is very theatrical. I apologise and no offence was intended.
  We should encourage young people to take up science as a career and ensure that they can move freely between industry, university and back again in the pursuit of a career.
  Mr. John Sykes: Did the hon. Gentleman not welcome the Government's recent announcement about pushing funding for students towards manufacturing rather than to the arts?
  Mr. Purchase: I believe that science and engineering have been made profoundly unattractive by the rewards offered at the other end of the scale. Some phenomenal matters were brought to our attention during the 1980s under the Thatcherist rule. People with no experience, who had never set an industrial mousetrap, made fortunes. I know so, many people who have worked so hard and with such effect and brilliance, but they ended up with very little.
  We must make engineering, industry and science attractive. Smart graduates will not opt for the lowest

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  reward; they will opt for the best reward. We must start at that end of the equation and also consider how to attract more people into those areas.
  Mr. Oliver Heald: Has the hon. Gentleman had an opportunity to see the kind of educational material that is now available as part of the national curriculum, which has been prepared by the Chemical Industries Association Ltd., with which I have absolutely no connection? That material is an impressive example of what can be achieved. Does the hon. Gentleman agree that the way in which the Government are encouraging trade associations to come up with schemes of that kind is a good move in the right direction? If he has not seen that material, will he look at it?
  Mr. Purchase: I have not seen that material, but I saw a programme on Channel 4 one evening earlier this week in which young people backed off from the idea of a career in science or engineering on the basis that such careers were dirty and did not offer much money. They believed that there were higher rewards in the City and in accountancy and legal work.
  People in education on that programme said that the advent of the national curriculum had made the position worse and not better. There may be a middle position between those two views, but if there is it is not being well communicated to the educators. They do not believe that the Government have a commitment to science and engineering careers in the way that perhaps the hon. Member for Hertfordshire, North (Mr. Heald) and I would like.
  We socialists always end on a cheerful note as we are very cheerful people. We like a good laugh and a good joke. The horizons are there for us to search for. Young people need and deserve encouragement and this House must do all that it possibly can to ensure that they get it.
  6.33 pm
  Mr. Christopher Gill: I am grateful for being called so early in this debate. As one who has absolutely no ambitions to see his name attached to any new statute on the statute book, I am uniquely qualified to talk about deregulation.
  As the owner and driver of a business for 30 years, I have been on the receiving end of much legislation and regulation. It has often occurred to me that I have succeeded not because of Government, but in spite of Government. I trust that the remarks that I have to make, based on a lifetime's experience of running a medium-sized business, will be helpful to those on the Government Front Bench in terms of shaping a Bill which will be both sensible and practical.
  I am pleased to support the new initiative which the Bill will represent. However, I do not for a moment underestimate the scale of the task or the obstacles that will have to be overcome. I want to instance my attempt at deregulation. This January, as a new year's resolution, I decided to make my own initiative for deregulation and I opposed the Hedgerows Bill.
  People who contacted me after I opposed the Hedgerows Bill applauded my sentiments when I explained that I was attacking regulatory overkill. They supported the principle that I was trying to express.
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  However, they said, "Mr. Gill, unfortunately you have chosen the wrong Bill to express your opposition to regulation. You have started in the wrong place. It is all the other Bills that are wrong. This Bill is wonderful and this is the one we must have." Ministers will come up against that kind of thinking time and again.
  Deregulation is an idea whose time has come. It is universally supported throughout the wealth-creating sector and it is a logical initiative for a Government who have already fuelled the engine of the economy with improved labour relations, competitive exchange rates and the lowest interest rates for 16 years.
  I do not intend to waste time examining the reasons for the present situation of regulatory overkill, the causes of which might include anything from special pleading, the feeling that "something must be done" and the belief that the man in Whitehall knows best, to the personal ambitions of hon. Members to get their name on the statute book and the Government's desire to be seen to be doing something. What concerns me most are the effects of over-regulation and the consequences of those effects on the long-term prospects of this country as a manufacturing and trading nation and the effects on the body politic.
  I want to refer to the effect on an important area of political activity—local government. The effect of the plethora of legislation has been to dilute constantly the ability of councillors to take decisions. That plethora of legislation has certainly restricted their ability to make decisions based on common sense, local conditions or special circumstances, because it is necessary for them to take advice from the paid officials of the council who are the professional people charged with the task of understanding the rules and regulations to which we are all now increasingly subjected. As a consequence, the gulf between the elector and the elected has widened. That phenomenon is not confined to local policies. All hon. Members would do well to recognise that.
  I want to instance another effect of over-regulation. It imposes unnecessary and costly burdens more upon the bona fide than on any other section of society, because those who live beyond the law clearly avoid those costs and burdens. Human nature being what it is, the powers that be—the enforcement officers—relentlessly pursue the easy targets while harder cases are written off or ignored.
  To my right hon. and hon. Friends on the Government Front Bench I say that the law is the law. The Government have a responsibility to ensure that it is applied even-handedly and without fear or favour. One essential criterion of any law or regulation must therefore be whether it is enforceable. My colleagues will need no reminding of the fate of the unlamented community charge and the consequences of that unenforceable legislation on the Conservative party and its leader.
  A further hazard of regulation or over-regulation is the scope that it affords for crime, corruption and fraud. The House will be saddened by the tragic killings earlier this week of two Ministry of Transport inspectors investigating the theft and sale of illicit Ministry of Transport road certificates. Later in this Session, Parliament will receive the Court of Auditors report, which will doubtless once again highlight examples of the fraud that has become institutionalised as a direct result of the many regulations governing the common agricultural policy.
  Wherever we look and whichever way we look at it, the bona fide foot the bill. They foot the bill for the cost of compliance. I am, of course, encouraged by what my right

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  hon. Friend the President of the Board of Trade said. The regulators will in future be charged with counting the cost of regulation before a regulation is introduced. However, I make one special plea—that we do not simply count the cost to the Government of additional regulation or the apparent superficial cost to individual industries but also count the cost of the time and effort which are devoted to regulation, which are time and effort which are not devoted to producing a product or improving a service.
  I repeat that it is the bona fide who always foot the bill. They foot the bill for the unfair advantage that is given to those who continue to live beyond the law, and, through their taxes, they pay for the theft from the public purse, represented by the fraud and corruption of which we are only too well aware. Perversely, the effect of much legislation can be the absolute opposite of that which is intended.
  I refer to the time when the House decided that it would introduce a regulation which prevented travellers or tourists from taking more than £50 out of the country. That is going back a long time, but I invite hon. Members to consider the effect of that Act of Parliament, which was designed to ensure that money remained in this country, both in the short term and, more significantly, in the long term—it resulted in the establishment of the package tour industry. The package tour industry took off from that moment—a phenomenon that we had never seen before. It was unintended and the absolute opposite of what the Government had wanted.
  Parliament must renounce its belief that every problem has a legislative solution. The Government must trust the people. The majority of the population just want to be left alone to get on with living their lives, running their businesses and providing for their families, but that is not to say that the law should not come down heavily on those who transgress the accepted norms and standards of a civilised society.
  I illustrate my feelings on the subject by inviting my right hon. Friend the Chancellor of the Duchy of Lancaster to consider that, if he has a constituent who does absolutely nothing, that constituent probably has no worry or concern about regulation. If that constituent is retired, unemployed, under age or even a drop-out, regulation hardly affects him at all, but the moment that constituent sets out to do something or to make something, he is assailed on all sides. That simply cannot be right. That is something that the country can no longer afford, least of all in competition with the low-cost economies of the Pacific rim.
  Business and life are about taking risks, but, on the other hand, public opinion and, dare I say it, the civil service are, generally speaking, risk-averse. Government must ensure that a balance is struck between those two competing nostrums. The Government must hold the ring between that which is desirable and that which is necessary. In seeking to achieve that balance, Ministers have my absolutely unqualified support.
  There must be a presumption against further regulation, and there must be a recognition that much contemporary legislation seeks only to correct the imperfections of the legislation that preceded it. I am tempted, somewhat facetiously, to say, in view of what the House will soon have to consider, how much better it would have been for all concerned if, instead of legislating for Sundays, we had kept the fourth commandment—that might be an instance of back to basics.
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  We must ensure that the many commendable, intelligible and popular policies which are espoused by our Government in this Chamber are the policies that finally emerge at the end of the legislative process. Too many straightforward ideas, whether they involve paying for local government, testing in schools or food safety—incidentally, the Food Safety Act 1990, in its three years of existence, has already spawned no fewer than 81 regulations—have lost their focus when expressed in legislation. That is why I have said on previous occasions that Ministers will need to be ruthless in the prosecution of this vital battle. The obstacles and resistance that they meet on the way to deregulation may also mean that, on occasions, they have to be quite arbitrary so as to establish the greater good.
  6.45 pm
  Mr. Michael Clapham: I wish briefly to consider the philosophy that underlies the Gracious Speech, refer to industry generally and discuss the proposals to privatise the coal industry.
  The framework of ideas which underpins the Gracious Speech was structured by an extreme and now dominant influence within the Conservative party. Those views prevail, despite attempts by the President of the Board of Trade and his colleagues to pull back that influence. Clearly, in the words of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), that influence has passed to the B team. I will not take the euphemism of the B team any further.
  "Back to basics" is a phrase to which no public relations people worth their salt would put their names. At one and the same time, it suggests failure and is meaningless. That point was admirably made by the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) in his article in Thursday's issue of The Guardian, when he wrote:
  "who on earth could have landed us with the cry of `Back to basics'? … No one has ever captained an advance by shouting to his troops 'Back, boys, back'."
  Clearly, that phrase is a measure of failure. It shows that the Government have no idea how to mobilise available resources in society to make a better life for our citizens.
  For the economy, "back to basics" means deregulation, as we have heard, and that in turn refers to low wages, poor working conditions and a lack of representational rights. It is clear that the Government will never learn that to motivate a work force means treating people in industry as equal partners.
  In April, a secret report commissioned by the Government revealed the tragic state of British industry. The findings clearly showed that, despite being competitive on costs, the United Kingdom's product base was very weak. The President of the Board of Trade failed to mention that point. He also failed to refer to a report in June by the World Economic Forum, which showed that the United Kingdom was sinking to the bottom of the league of the 22 wealthiest nations. The United Kingdom has fewer qualified engineers than any of those 22 countries. In education, it ranks only above Greece and its private funding of research and development is the lowest of the 22 nations.
  Bearing that in mind, one would have thought that the Gracious Speech would include provisions for putting in place strategies to promote competitiveness and to reverse the decline. Instead, organisations such as the National

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  Engineering Laboratory and the Warren Spring Laboratory are either to be privatised or combined. For example, the latter is to be combined with the Atomic Energy Authority.
  Dr. Liam Fox: Perhaps the hon. Gentleman will tell the House how he thinks that competitiveness would be improved by the social chapter regulations, which the Labour party supports.
  Mr. Clapham: As I said, the Conservative party has failed to realise that to motivate people to reach better competitiveness in industry, it is necessary to treat people with dignity and to treat people in industry as equal partners.
  The rigging of the energy market against the coal industry has made it impossible to achieve a balanced energy policy. The dash for gas threatens to destroy the entire coal industry and most of the nuclear industry. Instead of widening the market for coal and dealing with the imbalance in the energy market, the coal industry is to be privatised. The President of the Board of Trade should realise that it is a matter not of ownership but of markets. If there is no market for coal, as he has tried to point out, the Government have to intervene to widen the market. Without such Government intervention, the market stays closed, with a result that is detrimental to society.
  The President of the Board of Trade mentioned nationalisation in 1947 and said that about 958 collieries were nationalised. He went on to say that privatisation would offer great qualities and give industry great opportunities. In fact, the industry was nationalised after a fashion during the first world war. At the end of the war, the Sankey commission was set up before the industry was handed back to the private owners.
  In the 26 years between 1921 and 1947, the coal industry experienced its worst period of industrial relations. The loss of confidence in the ownership of the coal mining industry, the bad industrial relations and health and safety records of the industry, as well as the fact that it had fallen behind technologically, led to its nationalisation.
  In the 1950s, the well-remembered Prime Minister, Harold Macmillan, referred to the fact that the coal industry had gone beyond the phase of being able to serve social purposes by returning to the private profit incentive. That statement is as true of the coal industry today as it was in 1950. Deregulation and privatisation of coal mining are a recipe for disaster. As I said, the problem is one not of ownership but of markets.
  All in all, the Gracious Speech is devoid of ideas for regenerating British industry. It is regrettable that there is no mention of tackling unemployment, of a strategy for industry or of unravelling the rigged market. It smacks of a Government who are being led by the nose by a particular group within the party. It also smacks of a Government whose time is up.
  6.54 pm
  Mr. John Sykes: I am grateful to be called, Madam Deputy Speaker, because, as the House will know, I speak as a northern manufacturer whose family firm was established in 1845. I also speak as the secretary of the Back-Bench deregulation committee, and as one who is passionately interested in deregulation.
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  I shall speak about deregulation and bureaucracy, and the debilitating effect that the latter has on society. In 1952, a film called "The Titfield Thunderbolt" was made at Ealing, starring Stanley Holloway and John Gregson. Shortly after nationalisation, it told the story of a branch railway line faced with closure, which the local people wanted to take over as a private concern. They needed permission and a man from the Ministry was accordingly dispatched. The villagers' preparations were detailed and his eventual arrival was somewhat vice-regal in style. After they had presented their case, they awaited a decision from that powerful man in awestruck and expectant silence.
  I saw the film on television, as a little boy in the 1960s. I could not figure out why the villagers were so frightened of him. Why were fellow Englishmen so cowed by a bureaucrat? Englishmen, who decades previously had commanded a quarter of the earth's land mass and one third of its population; Englishmen who had changed the face of continents with their cities, railways and other great engineering projects; Englishmen who had changed the way of life of entire peoples and stamped their values on civilisation—[Interruption.] —including the Scots—why were men who had created several fully fledged new nations now so timid in the face of a civil servant?
  The answer to that question lies in the growth of the power of the state during the 20th century. The power of the state is exemplified by its power to regulate, and is underpinned by our English willingness to be regulated and our inherent respect for the law. It is a power personified by the civil service.
  Mr. Alex Salmond: I am fascinated that the hon. Gentleman was inspired into politics by "The Titfield Thunderbolt". Is he arguing that deregulation will get back England's empire?
  Mr. Sykes: Certainly not. I am arguing for a commercial empire nowadays. The hon. Member comes from a country which receives an awful lot of English taxpayers' money. He should remember that. He should also note that the British empire—one of the greatest in the world—was built by the fusion of English, Scottish, Welsh and Irish blood. That is what has made this country so great, and it is also why he is one of the few Scottish nationalists in this place.
  In the private sector, man's inclination to build departmental empires is constrained by the bottom line —the balance sheet and, not least, the bank manager. No such restriction tempers the bureaucrat, so he is always looking for new areas over which to exercise his influence. He can do so through a large number of agencies.
  Let us consider one—local government. I served on Kirklees council for some years. Kirklees was spawned by the absurd Local Government Act 1974, since when its vast gridlock structure has clamped itself securely to almost every aspect of local life. Kirklees is a council with more than its fair share of Labour councillors. [Interruption.] I hear Opposition Members cheering. They should instead regret the fact that, because we have so little to fear from Her Majesty's Opposition, my hon. Friends are induced to direct their fire at their municipal cousins.
  Across a bewildering range of everyday activities we all have to deal with bureaucracy. It can be a frustrating experience hacking one's way through the permafrost of

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  officialdom—except that in Kirklees the permafrost is harder and colder and its icy grip has frozen Huddersfield town centre.
  A good example: in the late 1980s, the private sector proposed to build a modern undercover shopping centre, to be ready by 1993, so that we could compete with other towns; but the Labour council decided that it could manage things better itself and used the regulations then in force to do so. The result was all talk and no action, and no shopping centre yet or for many years to come. That is what an over-regulated municipal Labour council can do.
  Since I moved to the North Riding, I have found other regulatory bodies that stifle progress. The national park in my constituency, where the famous series "Heartbeat" is produced, is in danger of becoming a jurassic park. The planers are choking the life out of the farmers, who find themselves bogged down in a morass of refusals and red tape whenever they propose improvements to their farms. The planners want to freeze the national park in the past, so that townies will come and admire it, forgetting that it is the people who farm the land and live and work on it who have made it worth visiting in the first place.
  Other regulatory forces are at work too. My family firm of manufacturers has a factory in Filey, near Scarborough. We have an excellent record which we are always anxious to uphold. We paid for someone to come and talk to us about the COSH—control of substances hazardous to health—requirements. We wanted to talk about materials and handling.
  Instead of showing us how to lift the panels that we had been manufacturing and handling for 25 years, he proceeded to tell us what we are allowed to lift in our own factory, as if our entire work force were a bunch of wimps. Worse, he then proclaimed that no one could use any of the machinery in the joiners shop unless he was a joiner—understandable in the case of complex machinery, but not when someone wants to cut a length of four by two.
  All in all, trying to comply with health and safety regulations has cost us £19,000 this year. I do not complain about that, but every week there appear to be more and more regulations to comply with. This comes at a time when small businesses are struggling to keep people employed, even without the social chapter and its effects.
  Small businesses are trying to win orders abroad, where regulations either do not exist or are ignored. Small business men are frightened to death of the health and safety Gestapo, with its perceived powers to close down factories. The paperwork, the rules, the regulations, the guidelines—often misrepresented as law—and officialdom generally are all just as much a disease today as strikes were in the 1970s.
  If our regulators get fed up with home-grown rules, there are plenty more to be found in directives from Brussels, such as the European fresh meat directive. On the surface, it seemed innocent enough when it left the Commission in Brussels, but by the time it leaves Whitehall and is provisions have been magnified a hundredfold, it gives frightening new powers to enforcers up and down the land, and imposes hugely inflated costs on butchers and slaughterhouses that come within its scope.
  Many decent businesses have been forced to close, and we should be angry about that—angry about the livelihoods that have been lost, the more so when we recall that some countries in the EC do not obey even their own laws, let alone laws from Brussels, as the RSPCA film taken in a Spanish abattoir showed only last week.
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  One such decent company in my constituency was the F. H. Wilkinson and Sons slaughterhouse, which, like my family firm, had been trading successfully for 150 years. I believe that every single one of those years should count for something. Neither the firm nor its customers nor its employees could understand why the Ministry of Agriculture, Fisheries and Food wanted to design the company out of the future.
  When it eventually went to the wall, it went quietly with no fuss, believing as we all do that the law exists ultimately for the good of us all. The real reason why it went to the wall, however, was that Ministers and Members of Parliament did not stand up for the firm when it really mattered—when the bureaucrats were laying their plans in 1990.
  Mr. Derek Fatchett: The hon. Gentleman is clearly passionately in favour of deregulation, but 71 per cent. of current regulations were introduced by his party since it came to office, 10 per cent. of them while the hon. Gentleman has been a Member of this House. How many of those did he vote against?
  Mr. Sykes: I dispute those figures. I happen to believe that many regulations that start out with good intent are maladjusted by people working further down the line. The hon. Gentleman well knows that many regulations from this place are misinterpreted further down the line—
  Mr. Fatchett rose—
  Mr. Sykes: I will give way in a minute.
  Mr. Fatchett rose—
  Madam Deputy Speaker: Order. It is well known that, if the Member who has the Floor does not give way, other hon. Members must resume their seats.
  Mr. Sykes: When I wrote to MAFF asking for help for my constituent, I received a reply from Whitehall written by a bureaucrat with a safe Whitehall job and a nice Whitehall pension. He told me that my constituent's business was closing down because of market forces. It was not. This decent family firm was closing down because of dark, blind and foolish forces with all their destructive powers.
  These were the same dark forces that led to a small grocer in Saltburn who had failed to display a health and safety notice in his shop being fined £750. They were the same forces that fine someone £1,000 for dropping a crisp packet, the same forces that forbid people to fly their own country's flag and which seek to prosecute brave soldiers who have fought for their country in defence of freedom. Yet the same forces allow criminals and thugs to roam the streets, because it is said that gaol does not work.
  Mr. Peter Butler: My hon. Friend has referred to slaughterhouses having to close down. We are always told by the European Commission that the same rules are applied with equal rigour throughout Europe. Might it therefore be helpful to arrange for an exchange of our inspectors with those from Italy, Spain, France and Germany so that we can be sure that they are imposing the same regulations with the same force?
  Mr. Sykes: My hon. Friend makes a good point, to which Opposition Members would do well to listen. The Spanish regulate themselves according to the doctrine of mañana, which could usefully be adopted here.
  Mr. Charles Hendry: Is my hon. Friend aware that many of the veterinary inspectors in this country have been imported from Spain because we do not have enough to check on what is happening in our slaughterhouses, as a result of which there are no vets in Spain to carry out inspections there? So the abuses that have been vividly portrayed on television recently can go on unchecked.
  Mr. Sykes: My hon. Friends are making my speech for me—I can always rely on those behind me to do that.
  Mr. Fatchett: The hon. Gentleman has not answered my question. He says that he feels strongly on behalf of his constituents, so will he tell us how many regulations he has voted against since becoming a Member of this House?
  Mr. Sykes: I should prefer the hon. Gentleman to listen to the debate with his ears, not his mouth. I have explained that many of the regulations from this place are misinterpreted further down the line. That is part of the psychology of bureaucracy.
  Mr. Heald: Does my hon. Friend agree that the committee of which he is secretary and which is powering forward the whole idea of deregulation is likely to mean that the Government scrap 3,500 regulations this year, which is at least as many as have been brought into force since he became a Member of Parliament? Does he agree that that is not bad for the second year of a Parliament?
  Mr. Sykes: My hon. Friend makes my point again.
  The effectiveness of any political idea depends on the skill with which it can be integrated into the practice of government. This Government proved that throughout the 1980s, and in the 1990s deregulation is a political idea whose time has come. I believe passionately in deregulation. It goes to the root of my political beliefs and of the realities of political life, both in the United Kingdom and in Europe, as we approach the year 2000. The Bill flows naturally from the Prime Minister's success in securing the opt-out from the social chapter. It flows from the idea that deregulation means more investment, more jobs, more prosperity and more success for Great Britain in Europe and in the world at large.
  Several hon. Members rose—
  Madam Deputy Speaker: Before I call the next speaker, may I remind the House of Madam Speaker's ruling that there will be a 10-minute limit on speeches between the hours of 7 and 9 pm.
  7.9 pm
  Mr. Alex Salmond: After listening to the hon. Member for Scarborough (Mr. Sykes), I was unsure whom he disliked most—people from Scotland, men from the Ministry or bureaucrats from Brussels. Surrounded by all those "dark forces", I must say that it is miraculous that his family firm has managed to survive. If he ever finds out who is running this shambles of a country with regulations that have inflicted so much disaster on companies in his constituency, he should tell the House.
  It is highly appropriate that we are debating trade and industry, because two important Scottish industries have been lobbying hon. Members today. The Salmon Farmers Association has been arguing that a great deal more is needed from the Government in terms of looking for effective European Community action to stop the
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  Norwegian dumping of farmed salmon, which is destabilising the market. The salmon industry is critical to many rural areas in Scotland.
  The farming and food processing industry in Scotland has been lobbying hon. Members from north of the border about the statistical blunder of the Department of Agriculture and Fisheries in Scotland, which is causing a crisis in both cereal and livestock farming in Scotland. The industry is looking for effective action to redress some of the damage, which will cost it up to £20 million in farm income unless something is done.
  The connection between those two industries is that, in one case, the industry has found Government action to be useless and in the other case, the industry has found the Government's action to be positively damaging. In both cases, I hope that Ministers will pass on to their colleagues the urgent need for effective action in those vital Scottish industries.
  I shall concentrate my remarks on the energy industry, especially the activities of British Gas. I suggest to the Government that, before they proceed with any further privatisation in the energy market, they should clear up some of the mess that previous privatisations have left in the energy industry.
  When the President of the Board of Trade returned from his recent illness, he found his desk groaning under the weight of the report of the Monopolies and Mergers Commission's inquiry into British Gas. In response to the commission's inquiry, British Gas is talking about shedding one third of its work force—some 20,000 jobs throughout the United Kingdom—and restructuring its gas business. An announcement was supposed to be made on Monday, but it has been delayed. However, I can give the details of it to the House.
  British Gas intends to restructure its business into five functional areas—gas transportation and storage, contract trading, public gas supply, installation and contracting, and a retailing division. It is interesting that that reorganisation is being made before ever British Gas has heard the comments of the President of the Board of Trade on the commission's report. That suggests that British Gas already knows the President's conclusions, or it does not care, and will restructure its business anyway.
  As part, and as a result, of that functional restructuring of business, British Gas will eliminate the regional tiers of management. That includes the elimination of British Gas Wales and British Gas Scotland, and its chairman and management board. The consequence of that for the Scottish economy is that perhaps an additional 2,000 jobs in the gas industry north of the border will be lost. The removal of the Scottish management tier will also result in the loss of further decision-making jobs.
  At this stage, there is no guarantee that any of the headquarters of the new functional divisions that will be created will be in Scotland. Indeed, initial signs are that, at least in the property management division where decisions have been announced, the Scottish division headquarters will be located in Manchester.
  My point is that there can be absolutely no confidence in the attitude of senior management in British Gas to their responsibilities to their Scottish employees and Scottish customers. I would not say that the senior management of British Gas do not know where Scotland is—they know that it is that area to the north that supplies the resources which are used to produce a profit of about £1 billion a

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  year. However, there is no indication that any concept of Scottish interests has any bearing whatever in decisions that are being made by the company at present.
  About two years ago, I was able to turn on the gas supply in St. Fergus village. As many hon. Members know, that village is the largest gas terminal in Europe, yet for some 15 years it had no domestic gas supply. Two years ago, that wrong was rectified when a gas supply was at last brought to St. Fergus and the villages surrounding it. At that time, British Gas gave a public commitment that the gas supply would be extended to further villages in the Buchan area in my constituency. Indeed, some of my constituents invested in gas appliances, looking forward to the day when they would be connected to a gas supply.
  People in these villages are now being offered the gas supply, but at a cost of £1,200 to £1,300 per household. In villages such as Rosehearty, Sandhaven and Longside—the flares from St. Fergus light up the evening sky in all those villages—people can see the gas platforms where the resources come from to generate gas profits. Yet people in those villages are being offered connections to a gas supply at a price that is well beyond the reach of the average family in my constituency.
  People in those villages, and many other people up and down Scotland and beyond, are falling victim to the game of commercial chicken that is being played between British Gas and its regulator, Ofgas. British Gas does not want to extend its gas network at present, because it believes that it might fall into the hands of another company. Nor does it want to extend its domestic gas network while regulations ensure that it can be used by any one of its competitors. The casualty in all that is customers who cannot be connected to a gas supply at a reasonable cost.
  During my investigation of the problem, I found that British Gas in London had instructed the Scottish division to change its marketing allowances in an unfavourable way. Previously, its marketing allowances reflected the fact that Scotland was an underconnected gas area. However, by diktat of its London headquarters, British Gas in Scotland was forced to change its marketing allowances to make it even more expensive for people north of the border to be connected to a gas supply. The eventual effect is that, in the part of the country that will suffer most from value added tax on domestic fuel, many people are being denied access to the cheapest form of energy for domestic heating.
  Before the Government embark on any further chaos and confusion in the energy market, they should sort out the chaos and confusion that they have already created. Not content with exploiting Scottish staff and Scottish customers onshore, British Gas is also involved in anti-Scottish behaviour offshore.
  It has a controlling interest in the central area transmission system pipeline which currently pipes gas from the central North sea to Teesside. That pipeline was built by public subsidy. Indeed, £200 million was used to subsidise the CATS consortium to build the pipeline over the past three or four years. Scotland became the first country in history to pay a consortium of oil companies to take away its most valuable natural resource. That resource was then used through the CATS pipeline to undercut and undermine England's indigenous natural resource—its coal.
  Now there is debate about the destination of Britannia gas. Britannia is the largest of the new gas condensate developments. My concern is that British Gas will have not
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  only a controlling interest in the CATS pipeline but a minority interest in Britannia. It is also the potential buyer for gas at St. Fergus or, indeed, a Teesside landfall point.
  It is difficult not to believe that it is in the interest of British Gas to ensure a Teesside landfall point for Britannia gas, although that will be substantially against the Scottish interest. It is difficult not to believe that British Gas will use its position in the marketplace, and all sides of this bargain, to send Britannia gas through the CATS pipeline network to Teesside.
  My argument is that many previous privatisations have given companies virtually a licence to print money at the public expense. British Gas is being given a licence to exploit the Scottish people.
  If there is to be a private-sector reorganisation of that company, it should be along regional lines. There should be a regionally integrated company in which Scotland will be properly represented. It would be far better, however, if the Government were to legislate to bring the public utility of gas back into the public sector in Scotland and so allow the energy resources of our country to be used for the benefit of our people and Scottish companies.
  7.19 pm
  Mr. David Martin: It has been difficult for me to select exactly the right day to catch your eye, Madam Deputy Speaker, because I wish to raise one or two matters of particular relevance to my Portsmouth constituents and to the Gracious Speech, which do not necessarily fall into today's debate on trade and industry. I shall have to mix into today's set menu a little a la carte.
  It is a truism which cannot be too often repeated that, above all else, trade and industry, whether manufacturing or service industry, want and need the maximum freedom to make profits and to invest, as well as to be helped in every way possible by the Government rather than to be hindered by Government.
  I had great sympathy with the remarks of my hon. Friend the Member for Ludlow (Mr. Gill) when he said that, when somebody decides to start a business, too many other people make it their business to check him on this or that. He is assailed from all sides with bureaucratic forms and demands. That must make him feel, as it did me when I was in business, and my late father when he was building that business, as if he has a mother who, always harassed by her children, shouts, "Whatever you are doing, stop it".
  That is sometimes how business men feel when their efforts are met by regulations from central and local government. Often many just feel like stopping. Indeed, in recent years many have been impelled to stop by the burden of regulation and by demands made on them, particularly in difficult economic times.
  As we have been reminded again and again through bitter experience in recent years without profitable business, employment suffers, taxes do not meet public expenditure, borrowing soars, growth stutters and insupportable pressures bear down on every aspect of Government expenditure—the good, the bad, the necessary and the unnecessary.
  Everyone understands that there must be proper health and safety standards in employment, and that the law has a part to play in enforcing employment and consumer rights. But it must be recognised that every regulation beyond essential matters is a regulation too many. It was profoundly depressing to hear that the Opposition are

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  likely to fight the Government every inch of the way on a Bill which will tackle regulations that should not exist or should be altered. I have no doubt that we will hear the sort of ludicrous, ridiculous, petty-minded tirade that we have heard today from the hon. Member for Livingston (Mr. Cook).
  I do not for the life of me understand how yet higher total taxation than we already have can be thought to help our economic problems. When did it again become fashionable to believe that the Government filching money from the hard-won earnings of individuals or businesses was better for us than leaving that money with individuals and businesses to make their own decisions on spending, saving or investing? When did it again become fashionable to believe that Ministers and bureaucrats make better decisions for us than we can do for ourselves?
  Principally, it is growth in a low-inflation, competitive economy, such as we now have and such as we had in the 1930s, 1950s and 1980s, which will settle public debt and fund public services, not the growth promised by higher taxation, so beloved of Socialist Oppositions but never delivered by them when in government. The only growth ever to be delivered in that way has been a growth in debt and in inflation.
  Competitiveness in domestic and overseas markets, and stringent attitudes and actions on regulations are precisely what are needed. That is this Government's policy, as set out in the Gracious Speech and developed so energetically and well today by my right hon. Friend the President of the Board of Trade.
  On deregulation, I should like to raise some matters of concern to those running private nursing and rest homes in my constituency—each one a small business. The ministerial announcement earlier in the year inviting suggestions for reducing red tape in this area was generally welcome.
  Some regulations are vital. For example, independent inspection should apply equally to local authority and privately owned and run homes, and there should be proper fire precautions and regulations on room size. The Registered Homes Act 1984, while meeting matters of genuine concern, sometimes went a little far. We must look again to see how matters have worked out in practice. We must not let low standards flourish again or cowboys re-enter a business which in recent years has successfully expelled them. Nevertheless, we need to consider how things can be improved.
  Let me give the House some examples where action should be taken. It is not necessary for a home to have a test of all electrical circuits and appliances every six months. Generally, it should be possible for a home to be given a certificate of general competence: not the BS 5750—that is not appropriate to rest and nursing homes—but something along those lines. Once it is granted, there should be a period, for example of three years, when those running the home are trusted to maintain good and safe standards and when such rigorous, frequent and detailed inspections as are carried out at present are not required.
  There should be a close study of the number and content of forms required when an individual patient or resident is admitted. One must speak and listen, as I have done, to
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  those who run these homes to understand what a problem this is to those who are attempting to supply a service that is vital in today's world.
  A much clearer definition is required of what appliances, such as incontinence pads and special mattresses, can and should be supplied by health authorities free to the individual patient or resident, and what requires payment. There is considerable variation in practice and considerable confusion as different rules apparently apply to a BUPA hospital and a private nursing or rest home. That certainly needs to be looked at closely, and clarification introduced where confusion reigns.
  The Gracious Speech also contains a promise of legislation for the reform of student unions. This will affect Portsmouth university. I welcomed hearing yesterday from my right hon. Friend the Secretary of State for Education that, while student membership will be voluntary, core student union services will be protected. There have been worries that sport, for example, will be under threat. It is most important that we make it clear that that is not the case, and that all types of sport will be recognised as an essential part of university life.
  Finally, I welcome the promise of further action on law and order. Money and ingenuity have been showered at the problem of lawlessness in every year that the Government have been in office, and rightly so. It is not for lack of effort that so many problems remain. The general public recognise that, and know that further measures, which I hope will be successful, will come from this side of the House, as set out in the Gracious Speech.
  The need to provide better protection for the public, more consideration for the victim, better organised police forces and better help for the police to detect crime, arrest criminals and see them properly punished when convicted is well understood by those I represent. The Government deserve every support in pursuing those welcome objectives this Session.
  7.28 pm
  Mr. Barry Jones: I am pleased to follow the hon. Member for Portsmouth, South (Mr. Martin), but he will understand that I disagreed with a large part of his eloquent speech.
  The President of the Board of Trade gave us a rip-roaring, truly ripping, high-decibel, provocative diversion of a speech. It was a "Mike the Ripper" speech. Clearly he has returned as a healthy contender in British parliamentary politics.
  There was a steelworks some 10 miles from my home in my constituency, called Brymbo. The smelter is now closed; indeed, it no longer exists—I last saw it earlier this year on a large convoy of trailers being transported towards Birkenhead docks, and I believe that it is now being erected in the Republic of China.
  The Deeside titanium smelter used to stand at the heart of my constituency. It was the only smelter of its kind in western Europe and was a strategic industry. It has been allowed to close and is currently being dismantled, labelled and bagged. Early next year, I shall probably see it on low loaders in convoy, heading towards Birkenhead docks where it may be exported to Korea or Malaysia. I hope that I am wrong, but the work force there are broken-hearted at the closure of a successful smelter.
  Also in my constituency, 700 people made an executive jet. They are the finest plane makers in the world, but the

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  Government allowed that production process—some of the finest manufacturing in Britain—to be sold, lock, stock and barrel, to an American company.
  There are successes in my constituency: we have Toyota and Sharp and, wider afield in south Wales, there is Sony and Bosch. However, the rate of loss in manufacturing in Wales has been huge. The mining industry has been decimated; the textile industry no longer exists; the brick industry has virtually disappeared; and the cement industry has been pruned back harshly. The steel industry has only two centres of production, although those are fine centres. Our railways have been starved of investment and virtually no apprenticeships are to he had. That is the manufacturing record.
  Britain's greatness was always rooted in our manufacturing industry and capacity for manufacturing. We were paramount in engineering and innovation. We were a great industrial nation with apprenticeships, technology and scientific know-how. We had the investment, manpower, skills and record. We were a power in the world and were looked up to as a manufacturing state, and we were all proud of our status.
  The Queen's Speech is devoid of a strategy to defend or promote our manufacturing base, which is much smaller than it was but 10 years ago. I want to see my country, Britain, at the top of the world league of manufacturing nations and I want her to reclaim her industrial greatness. Large-scale unemployment could be ended by manufacturing and the profits from successful manufacturing could be invested in jobs, schools, hospitals, homes and pensions so that our fellow citizens could have civilised, dignified and happy lives rather than, as is the position for many millions now, lives of worry and humiliation.
  My charge against the Government and my criticism of the Queen's Speech is that the Cabinet lacks a strategy for Britain to secure her industrial future for the next century. Our country faces a serious situation. In the early 1980s, Prime Minister Margaret Thatcher, Chancellor Geoffrey Howe and the Secretary of State for Industry, Keith Joseph, acted disastrously for our nation and manufacturing industry. By their obstinate and misguided policies, they allowed the catastrophic loss of more than 2 million manufacturing jobs, which is why we lack capacity in manufacturing today. It is the tragedy of our society and our nation's status against its competitors in the world.
  I am deeply disappointed in the record of the President of the Board of Trade. He did well in tackling the problems in Merseyside and had something to show for his commitment and energy, but he has failed as Secretary of State for Trade and Industry. Although he is in rude health—good theatrical health—he is now an extinct volcano in the Cabinet. He should look at the attempts made by the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), who had been a Minister responsible for labour and for the regions. When unemployment rose in the mid-term of his premiership, he reversed policies and tried to cope with a rising crisis. The present Prime Minister should try to do the same and adopt a strategy.
  The outlook for manufacturing in Britain is grim. I am sorry to say that we have an almighty Executive dedicated to market forces and neglectful of manufacturing. The same overmighty Executive has squandered all the revenues from North sea oil and failed miserably to invest them in manufacturing to secure the future of our society and economy in the next century. The Government have no
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  strategic policy for our economy. Successive Conservative Cabinets have betrayed Britain's industrial future. Perhaps the present Cabinet should be lodged in the Tower of London for its betrayal, because it has a great deal to answer for.
  7.37 pm
  Mr. Anthony Steen: Having listened to most of the debate, I have noticed the difference between the speeches on the two sides of the House. The speech by the hon. Member for Livingston (Mr. Cook) was all doom and gloom—one of the most depressing speeches that I have ever heard—whereas the speech by my right hon. Friend the President of the Board of Trade was really stimulating, very enthusiastic and gave us hope for the future. All the speeches that I have heard from Opposition Members have been depressing, while those from Conservative Members have expressed hope for the future. The public outside will judge the Labour party by their depression. I was extremely depressed by what Labour Members said.
  Mr. John Garrett: Well, cheer us up, then.
  Mr. Steen: I shall cheer the House up. During the last Session, I sought leave to introduce three Bills to deal with deregulation, all of which drew attention to bureaucratic absurdities. My arguments were the same on each occasion —that bureaucracy is getting the better of business and enterprise is being stifled by over-zealous officialdom. I suggested that it was the most debilitating disease in the nation and was delaying our recovery. My analysis concluded that many rules were innocuous, even those from Brussels, but the problem was the massaging of directives from Brussels by Whitehall officials, of which there are far too many. They deploy their talents in putting sharp teeth in fairly harmless guidelines coming from Brussels. In that respect, our problems are often self-inflicted.
  Another aspect of the same problem is the over-zealous interpretation of legislation from Parliament and byelaws from local authorities, not to mention the rules arid regulations from SEFRAs—self-financing regulatory authorities. That is the backdrop against which I approach and welcome the Government's deregulation initiative.
  When the Bill is introduced, no doubt the Opposition will suggest that it reveals how defective the Government are, as they should not have passed the rules arid regulations in the first place. It is important for the Opposition to realise that rules and regulations that we wish to bury have become irrelevant in the fast-moving society in which we live. It is better to repeal them than to allow them to remain on the statute book if they are n o longer relevant.
  Is deregulation so different from repealing statutes? Deregulation picks out items from a number of Acts and puts them in a composite deregulation package—I do not understand what the fuss is about. It seems normal that Governments of either political party should repeal Acts of Parliament when they are no longer relevant. We are merely picking out a few rules and regulations from various Government Departments and putting them into a package in a Bill—there is nothing much in that.
  The new aspect of the matter is the way in which the Government are going about the process. The Government

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  are taking such action because the House of Commons is passing too many laws. The amount of bureaucracy generated in the House is enormous. Therefore, for the first time, we are reducing the number of rules and regulations to balance the scales. I am in favour of the deregulation Bill announced in the Gracious Speech. I hope that we shall have a bumper deregulation Bill every Session.
  Deregulation is nothing more than repeal. A progressive and flexible Administration will constantly try to perfect the statutory framework by repealing legislation that is no longer relevant. The speed of change and the pressures of everyday life require a constant awareness by the Government of the need to throw out antiquated and irrelevant bureaucracies. There will always be too many regulations.
  The problem may not just be the rule, but the way that rule is interpreted, as can be seen with the legislation on royal parks. Section 1(9) of the relevant Act states that one must first obtain the Secretary of State's permission before using any apparatus for the transmission, reception, reproduction or amplification of sound by electrical means. Over-zealous interpretation of that byelaw resulted in my being asked to stop using my portable telephone while walking my dog across St. James's park. A polite official said that I could not use a portable phone inside the royal park as I was in breach of the byelaw. If that is not an example of over-zealous interpretation, I do not know what is. I have been overwhelmed by letters from all over the nation following the incident when my car was removed because one of its tyres was straddling the next bay. I mentioned that in one of the speeches I made on deregulation.
  Rules and regulations should exist to help the public. Officials should try to serve the public, not use the rules as an oppressive way of damaging public relations. Over-zealousness has become the hallmark of a new British disease that attacks the public in an aggressive and hostile manner.
  Ticket collectors on British Rail have a job to do. Last Sunday, I came up from my constituency—one of the most beautiful in Britain, in south Devon. Within 30 seconds of my boarding the train, a ticket collector had presented himself. He was on the spot before I had put away my luggage or taken off my coat. He politely asked me for my ticket. Half an hour later, another ticket collector appeared and tapped me on the shoulder while I was having a well-earned snooze after a hard weekend's work in my constituency—beautiful though it is. He tapped me on the shoulder and asked to see my ticket. I said that I had been asleep and asked him to leave me alone. He said that he could not do so as he had not seen my ticket, which I then gave him.
  Later, when I was having another snooze after we had passed Reading, the same ticket collector tapped me on the shoulder again and asked to see my ticket. I said that he had already seen it once—in fact, twice. He said that he had seen it only once, as another ticket collector had seen it on the first occasion. I asked him what had happened to my ticket as I had been travelling on the train for only two hours. I did not think that it could have become out of date or invalid in that time.
  There is a further intrusion on the comfort of British Rail passengers. Before each train arrives at the station,
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  there is an announcement of the immense number of connections possible if one leaves the train at that station. One can imagine all the wonderful places that could be visited if one took the various connections. To crown it all, there are endless announcements about safety. Before a train arrives at a station, an announcement tells passengers not to open doors and to take luggage off the train carefully.
  There are three buzz words, of which one is "safety"; every time the word "safety" is used, it triggers endless announcements by British Rail. The three buzz words are security, hygiene and safety. We need look no further than the Palace of Westminster. If one mentions security and hygiene, people's eyes glaze over and their cheque books come out. I presume that is why there are 24 security attendants at St. Stephen's entrance and £30,000 was spent on new machines in the name of security.
  There are so many officials in some parts of the Palace of Westminster that it is difficult to get into the building. The corridors of the Palace are full of fire officers, who are presumably increasing the number of safety measures. So many new fire doors have appeared that it is difficult to get into the Chamber—one's entrance is also obstructed by the thick carpet. There are so many officials that I sometimes have difficulty in getting into my office in Dean's Yard. When I open the front door, I am confronted by a myriad of officials whom I have to ask, "Excuse me, may I get by?"
  I have never seen so many people checking things. If a new valve is put on a radiator, somebody checks it. The television screen in my room is cleaned, the windows washed, and another group of people change the light bulbs. More people arrive to say that the light bulbs are not the right ones. I have never seen so many people checking and rechecking at the public's expense.
  Another buzz word is "hygiene". It is said that the kitchens in the Palace of Westminster are out of date and need to be renewed. The amount of money required to do so is, apparently, approximately the same as that needed to build a new hospital in a middle-sized town. It is as if the officials have seized control of the place so that it is run by them and for them, rather than for us—to provide a service for Members.
  The existence of buzz words, together with overzealous enforcement locally, is at the root of the problem. However, there is another overriding problem—one of attitude. We can change the attitude of public officials only if they start to see themselves in a different way—as servants, not inquisitors, of the public. For that reason, the United Kingdom fails to make the progress that it deserves. Our energies are drained away from increasing wealth and jobs in order to handle the demands from officials—not to mention finding the money required to assuage their thirst for enforcement. It is as if bureaucracy has gone mad, and its principal task has become building obstacles rather than bridges.
  We have not schooled our public officials to understand their role in British society and their task of helping industry and private individuals. Too often, public officials see the public as enemy number one and view the business man as dishonest. How many business men have said to me that the VAT man treats them—
  Madam Deputy Speaker: Order. I am sorry, but bureaucracy is now falling on the hon. Gentleman. I call Mr. Paddy Tipping.
  7.47 pm
  Mr. Paddy Tipping: When the now noble Lord Parkinson told the Tory party conference that he was going to privatise the coal industry, he heralded the decision as dealing with the last great bastion of nationalisation. "Last" is the key word, as the timing was not fortuitous, but the result of a deliberate strategy. That strategy was: first, privatise the principal customers by creating a duopoly; secondly, ensure that the market is rigged, and only then extract vengeance; as the momentum towards legislation develops, keep talking down the coal industry and highlight its lack of prospects; when the mutterings in the Conservative party about the course being followed become louder, issue a White Paper, commission studies, but do nothing. The Government did nothing.
  Vengeance is a powerful emotion, and when it becomes a vendetta, nothing less than total destruction will satisfy it —that is what is happening to the British deep-mine coal industry. Over the past year, since October 1992, the closure of 24 collieries has been announced, and approaching 20,000 men have lost their jobs at those and other pits. It is no wonder that all over the United Kingdom, and especially in Nottinghamshire where promises were made, miners feel that the Government have turned their back and broken promises. There are fears that worse is to come.
  Does coal have a future at all? The short answer must be yes. The long-term prospects are brighter, but those will follow a painful period of readjustment in the short term. A hurried and botched privatisation will destroy the industry before the 21st century. The generators' market for coal will be 30 million tonnes next year. That contract expires at the end of March 1998—three years after the possible vesting date of new, privatised coal companies, which I understand the Government plan to occur on 1 April 1995.
  Even after allowing for other variables—the production of coal from opencast mines and the market for domestic and industrial coal—in the current year, British Coal has been over producing to the tune of 20 million tonnes. It has been stockpiling coal at 250,000 tonnes a week. That is exemplified by the 50 million tonnes of coal held in stock by British Coal and the generators. A market of 30 million tonnes could be satisfied by the output of, at most, 15 collieries. That figure does not allow for any significant reduction in British Coal stocks. It is clearly an output that any private sector pit owner would want. How the stocks will be dealt with is the key issue of coal privatisation.
  The Government look set to close half the coal industry as quickly as possible. They may take actions that will destroy more than 15 collieries, which would be sad because, in the long term, in 15 years' time for example, the prospects for coal will be brighter. By that time, gas supplies in western Europe will be much tighter and significantly more expensive. Whatever happens as a consequence of the much promised and delayed nuclear review, it is unlikely to result in a crash programme of nuclear power station construction, the environmental consequences of which must be considered.
  What about decommissioning and disposal costs? In 15 years' time, the big, pulverised-fuel, coal-fired power stations of today will be coming to the end of their natural lives. In 10 to 15 years' time, we will see an emerging shortage of electricity generating capacity and a shortage
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  of anything other than coal to feed it. At that time, there is good potential for minehead, combined cycle coal-fired plants, which will be highly efficient and non-polluting.
  To exploit that long-term potential, we must retain our coal industry. Some have argued that the coal reserves will always remain even if the collieries close. That is a complete fantasy. Energy prices would have to go through the roof before it is commercially viable to sink new mines.
  The real danger is over-dependence on gas. That dependence is destroying coal and could destroy the nuclear industry. A further danger is the neglect of research and investment into new, clean-coal technology. I have heard that Tory Back Benchers are planning to revolt over a possible £1 billion defence cut that they believe will put the security of the country at risk. That £1 billion could be used to provide our energy supplies. To put 25 pits on a full care and maintenance basis would cost £100 million per annum—£4 million per pit per year. All 25 pits could be saved for 10 years at the cost of that defence cut. Ten years will be sufficient to realise the folly of our action. We shall be held to ransom over gas contracts and the international market.
  To arrive at that long-term realisation, we must manage the short term. We must also navigate the medium term —the period after 1998—which will be the most difficult and crucial. In the short term, we can live off the productive capacity that already exists in our pits. In the medium term, deep mining must be capable of earning and retaining sufficient profitability to justify the continual reinvestment in replacement capacity, which is an important feature of the deep coal mining industry. Unless we can earn and retain profit, coal mining in the United Kingdom will not be economically viable on a sustained basis.
  I am utterly convinced that a fragmented coal industry —the Government's desire to sell off British Coal in five packages is a fragmented industry—will not survive into the medium to long term, for four main reasons. First, there would be a grotesque imbalance of market power between the generatorsvthe big players—and the new, privatised coal industry. Generators can purchase their fuel wherever they like, but United Kingdom coal producers have no other market than the generators.
  The massive overhang of stocks at the pits makes their position even more weak. All the generators have to do is play one coal producer off against another and they will be able to dictate the price of coal and capitalise on any savings that are made in the industry. Those benefits will not be passed on to consumers because the electricity generating market is not truly competitive. The only way to prevent privatised coal from being eaten alive by the generators is to sell the industry in one piece. Even then., life would be rough.
  Keeping the industry together would also spread the risk. A fragmented coal industry of 15 pits would result in companies with one, two or three collieries as well as perhaps some opencast mining. A business composed in such a way would not survive or have the strength to ride the inherent difficulties in coal mining.
  In a fragmented industry, there would be a risk in doing anything new. Old practices would prevail and new, exciting techniques would not be tried by small companies which owned one or two pits. A unitary industry would ensure that the best safety practices were preserved.
  We must fight for the coal industry. It is a strong and good industry facing its last chance. The miners have done

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  everything they have been asked, and more. The wheels of time are turning; it is their last chance and we should not destroy the industry.
  7.57 pm
  Dr. Liam Fox: After the successful summit in Brussels in 1988, my noble Friend Baroness Thatcher said:
  "The creation of the single European market by 1992 is regarded by the British Government as the most important objective of the European Community".
  It was important then, but it is doubly important now. Conservative Members believe in the single market because we believe profoundly in the importance of free trade and we want Europe to be at the centre of a free-trading world. We believe in the power, supremacy and wisdom of the free market and that commerce—not politics—is the greatest unifying force available.
  At present, Europe faces both a crisis and a challenge. There is a crisis of decreased competitiveness in world trade and an increase in regulations. It has a reduced share of the world market and a higher share of world unemployment. I sometimes think that we have an obsession with nationality in the Community. We talk of French models of Europe, or what the Danes or the Germans want. There are only two models: a free-trading Europe at the centre of a free-trading world—a Conservative Europe—or a socialist, harmonised, regulated, inward-looking Europe. Our challenge is to compete and create a meaningful place for Europe in the free trading world.
  I congratulate President Clinton on his success in pushing through the north American free trade agreement. The agreement gives Europe both a clear signal and a clear warning. It signals the declining importance to the United States of European trade; it shows the President's personal increased commitment to free trade. It also shows Europe —as Europe must be shown—that it should rely on world competitiveness if it is to survive.
  We must, as a European Community, reaffirm our commitment to competition, free trade and deregulation; we must make Europe work. There is no point in some of my colleagues, both in the House and outside, saying that they wish we were not in Europe, because we are in Europe, and we must make it successful. We cannot be in NAFTA, we are not on the Pacific rim, and the Commonwealth is not a viable trading entity. We must also make it clear, however, that Europe cannot survive on internal trade alone, as the French Government might wish to believe. We must trade outside.
  We in the House of Commons must state both what we want and what we do not want for Europe. We certainly do not want what the Labour party wants—a social dimension. Beneath the veneer of concern for workers' rights expressed by Opposition Members is the fear—especially in foreign countries with socialist Governments —that deregulated markets will take a bigger share of the world market: a bigger share of what trade is going. The fear is that those countries will be left behind.
  Increasingly, a number of European politicians are inclining to the British view of Europe, believing that we are correct—that we will secure more inward investment and a bigger share of world trade, because ours is the country that is deregulating in Europe. Sooner or later, they
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  will realise that we are right and they are wrong. We must not be deflected by smokescreens that have been created to obscure anti-competitive behaviour.
  One example is the proposed ban on tobacco advertising. Our competitors in Europe are desperate for such a ban. When they are willing to turn their backs on the millions of pounds of common agricultural policy money that have been used to subsidise tobacco growing in southern Europe, when they are willing to abandon their nationalised tobacco industries, when they are willing to use price mechanisms as successfully as we have in reducing tobacco consumption—then, just perhaps, they can have the gall to lecture us on the need for a ban on tobacco advertising. We must never be lured into a willingness to sacrifice our domestic industry simply to satisfy the nationalist aspirations of some of our European partners.
  I believe that, not only in the United Kingdom but in the whole of Europe, the Prime Minister is seen to be increasingly far-sighted in opting out of both the European social dimension and—perhaps even more important—the single currency. Economic and monetary union is not about the politics of trade, the politics of prosperity or the politics of competitiveness; it is about the politics of political union. We in the United Kingdom can have no truck with that, because it is not at present based soundly on competitive free-trading principles.
  If there is one area in which the challenge to Europe is seen particularly clearly, it is that of one of our leading manufacturing industries—the pharmaceutical industry. As in other sectors, the challenge is whether we can develop in a free market, allowing consumers maximum freedom while ensuring harmonisation, but only with the highest possible standards and the least pro-industry bias.
  If harmonisation is to be acceptable, it must do two things. First, it must provide consumers—in this instance, health services—with the benefit of a greater choice of medicines becoming available more quickly. Secondly, it must benefit the industry with less duplication and inconsistency between the regulatory processes of member states, because that burdens business with unnecessary costs. Moreover, it must always be shown that harmonisation can be achieved at the highest possible level of quality, rather than at the lowest common denominator. In Europe's development so far, harmonisation has taken place at that lowest common level; that has simply meant the best trap being available for everyone, rather than the best being allowed to go forward freely.
  In the pharmaceutical industry, we have seen a fairly constant evolution in legislation since 1965. Now, at last, Europe has made the quantum leap of allowing an application for a pharmaceutical licence to be in only one language rather than 12. The United Kingdom also welcomes the better patent protection that we have experienced recently. The United Kingdom sector has immense profitability and impressive research and development records, which must be maintained; the promotion of postgraduate education in our medical schools is also extremely important. We want to protect the areas in which our businesses are ahead. We in the United Kingdom must be in the business of protecting our market leaders, and allowing them to function in a free market without interference from substandard competition in Europe.
  We are helping that process in two ways. One involves drug licensing. The current multi-state and concertation

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  procedures do not work well. The new future systems legislation, with one regulation and three directives, will work much better—to the benefit of British companies. The European Medicines Evaluation Agency will also provide technical and administrative support, and will co-ordinate pharmaco-vigilance. Perhaps most important for our industry, it will monitor manufacturing sites.
  I am delighted that the EMEA is coming to London rather than going to Spain, for example. I believe that we shall be rigorous in monitoring manufacturing standards, and that the problems that we have experienced with parallel imports will therefore be minimised. We do not mind competition, but we want fair competition, and we want proper quality when it is brought into our national health service.
  The implications should include quicker and cheaper access to European markets for our business, with a single application giving access to all of them. There should also be cheaper medicines for the national health service, better medicines for our patients and a wider range in a shorter time scale. This is a real example of the direction in which Europe ought to be going.
  We should not concern ourselves with the minutiae of political integration. There is a way forward for Europe. I believe that commerce is the most unifying force. If we allow commerce to take its course—and if there is a real case for further integration into Europe—the case will be made by the markets alone. If we try to force harmonisation and unification on the peoples of Europe for the sake of political timetables rather than what commerce, the markets, industry and trade need, we shall be potentially sacrificing all the gains that we have made so far in Europe.
  As possibly the youngest Conservative Member in the House, I believe that the next generation will have the most to lose if we make mistakes now in the way in which Europe moves forward. If we hold true to our faith in a free-trading, deregulated Europe, that will give us our best chance of grasping the future for the next generation. We have everything to gain if we succeed, and no one but ourselves to blame if we fail.
  8.7 pm
  Dr. Tony Wright: My mind turns, as it often does, to the Conservative party's 1979 election manifesto, a perennially interesting document. I was distracted, when reading it, by sentences such as:
  "Value Added Tax does not apply, and will not be extended, to necessities like food, fuel, housing and transport."
  Ploughing on, however, I found at the beginning of the first paragraph:
  "This election is about the future of Britain—a great country which seems to have lost its way. It is a country rich in natural resources—in coal"—
  I could not read beyond that point and continue to take the manifesto entirely seriously.
  This week, the miners of Littleton colliery, most of whom live in my constituency—they were told a matter of months ago that they worked in a core pit and had a future in the coal industry that had been carved out, or the remains of it, in the coal review—were informed that their pit would close in the first week in December. I met them the other night. They said, "What more can we do? We are prepared to work in the public sector or the private sector. We have done everything and more that anyone has ever asked of us. You said that we were a core pit; now you say
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  that we have no future." Five hundred men and their families, and a whole community, are affected. I simply pass that on to whoever might listen. There might still be somebody who is prepared to give people like that the kind of chance they have asked for.
  I will address most of my remarks to deregulation. The context in which we have to consider it is, quite simply, the growth of Government. Again turning to the 1979 manifesto, it says:
  'The traditional role of our legislature has suffered badly from the growth of Government over the last quarter of a century.
  We will see that Parliament and no other body stands at the centre of the nation's life and decisions, and we will seek to make it effective in its job of controlling the Executive."
  Then there is more about the attack on over-Government, regulations and bureaucracy.
  What have we had? We have had the biggest growth in Government in modern times. We are now having to deregulate because the Government have invented the regulatory state; everything that they have touched they have sought to regulate. The whole thrust of the Government's privatisation programme has produced massive regulator strictures—most recently with the privatisation of British Rail. Those strictures were replicated across the whole range of utilities, and are to be replicated in the education system—"Death by ringbinder" as it has been called in the profession. I will not refer to what has been happening inside the health service, where managers, bureaucrats and accountants multiply by the day.
  There is a sensible approach to all this. I prefer good regulations to bad ones; simple ones to complex ones; and sensible ones to silly ones. There are many regulations that the business community would like to see but the Government have not delivered. One that has been mentioned in the debate is late payment problems for small businesses. Small business men have been pressing the Government to do something about that, and it would be a sensible regulation to introduce.
  Regulation has become the hallmark of the Government. The Department of Trade and Industry's report on the implementation and enforcement of European Community law in the United Kingdom, shows that both Government and officials are largely responsible for the problems that we have. Failure properly to integrate EC directives with domestic legislation has produced a maze, and it is that maze that the Government are now trying to sort out.
  We have seen the development of the extended state, the regulatory state, the contract state, the market tested state and the quango state. Soon, by the end of this Government, that will account for almost a quarter of public expenditure, tripling the number of quangos that Mrs. Thatcher, in her great quango cull, was going to get rid of. That is the crime of regulatory regime that the Government have created.
  The volume of legislation introduced by the Government is telling, and is a backcloth to everything that we are doing today. Since 1979, the total number of Acts passed was 861; the average number of Acts passed each year is 61·3. The total number of pages is 29,811; the average number of pages per year is 2,466. The total number of statutory instruments is 33,382; the average number per year is 2,335. The total number of SI pages is 70,088; the average number per year is 7,008.
  Mr. James Pawsey: Would the hon. Gentleman give way?
  Dr. Wright: I would give way, but other people wish to speak and the 10-minute rule applies.
  In 1988 the extraordinary number of 15,403 pages of legislation were produced. People should not think that that figure is par for the course, because 10 years earlier in 1978 under, dare I say it, a Labour Government, there were 1,481 pages. The Government came to power determined to roll back the state; it would not be possible to find a bigger rolling forward.
  If we look at not only the volume of legislation but its character, we find that the Government have increasingly introduced framework legislation, with great holes in it which they wished to fill by order. Everyone who has looked at this issue has said that it is one of the great trends of the times, and that it has become more so under the Government. Henry VIII clauses abound, which enable Ministers effectively to legislate. We do not know what the form of the deregulation Bill will be, but in one form it would be a constitutional outrage.
  We have serious problems in both the volume of legislation and its increasingly complex character. Lord Wakeham, when talking about this in the House of Lords the other day, said:
  "The truth of the position is that there is now around five times as much legislation as there was in the days when others remember how we did things."—[Official Report, House of Lords, 3 November 1993, Vol. 549, c. 1084.]
  Unless the Government and the Conservative party confront the fact that they used to be a conserving party, that it once wanted to conserve things, and that if too much legislation is introduced, bad legislation and legislation that is insufficiently scrutinised, eventually there will be a problem of burdensome legislation which will have to be attacked, undone and undressed. That is what is happening now.
  Along with other Members, I received this week—in addition to an invitation to a rather expensive lunch—a report from the Food and Drink Federation. Under the heading "Deregulation" it said:
  "Whilst firmly supporting the Government's stated commitment to deregulation the Food and Drink Federation is concerned that the initiative is carefully presented to consumers as a means of increasing choice and competitiveness and not of reducing levels of safety and consumer protection.
  I heard the former Chancellor, Lord Lawson, say the other day, in a notable speech, that the hallmark of the Government had become presentation. He went further than that, but I will be delicate for the moment. Many major trade organisations are saying that they are concerned—
  Madam Deputy Speaker: Order. Mr. Mark Robinson.
  8.17 pm
  Mr. Mark Robinson: This debate has been characterised by the fact that Conservative Members have accentuated the positive and Opposition Members have accentuated the negative. That has been noticeable in every speech that we have heard from them.
  I will further accentuate the positive by giving a wann welcome to the legislative programme for the year, which will cover law and order, Sunday trading and deregulation. The Bills which will come forward in those areas are in response to things for which my constituents have been asking for many months. If ever there was a programme coming before the House which has been asked for by the people of this country, it is the programme of Bills before us in the coming Session.
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  I was pleased to hear my right hon. Friend the President of the Board of Trade, in his sparkling return to the Chamber, emphasise the importance of seeking a successful conclusion in the next few weeks to the general agreement on tariff and trade negotiations. Nothing could be more important for business men in my constituency and businesses in the United Kingdom.
  Britain is currently well placed to lead Europe out of recession. Interest rates and inflation, as a combination are at their lowest for many years. Business costs have been forcibly but by the recession, leaving our exporters in an extremely competitive position from which they can take advantage.
  My constituency may not naturally be associated with the manufacturing industry, but it is home to several companies involved in that activity. One of the better known is Cuprinol, which specialises in wood preservatives. Last year, it increased its exports by 30 per cent. It can be done. That company exports to European markets, but at least it has been able to respond to the slowdown in traditional European export markets by achieving success primarily in the middle east and the far east. My right hon. Friend the President of the Board of Trade will be pleased to know that Cuprinol's export manager says that the DTI's support for export potential is "improving all the time."
  As Cuprinol has shown, British industry must not be over-wary of previously untapped markets, because they represent a useful source of new opportunities. South America, for example, is another market that deserves special attention by those exporters in adventurous mode.
  There is no doubt that the conditions for exporters have improved and that today's prevailing economic circumstances will encourage that trend still futher. Our current exchange rates mean that our exporters can sell goods at about 20 per cent. below the cost incurred in 1992. Britain has the lowest interest rates in Europe and inflation is now well below the European Union average. Our business taxation is the lowest in the industrial world and I hope that that will remain the case even after 30 November. Unit wage costs in Britain are falling faster than at any time since 1970 and I hope that that, too, will remain the position. Certainly it should do so as long as the European socialst manifesto never has the chance to be implemented.
  I listened to a strange broadcast one Sunday morning from the Leader of the Opposition who tried to explain why he had signed up to the European socialist manifesto. At the same time, however, he went to great lengths to try to make it clear to people that, although he was a signatory, that did not amount to assent because it would not be implemented in the United Kingdom. I do not, however, believe that that signature would amount to nothing, nor do the British people.
  When one listens to the Opposition one might think that this country exports little and manufactures less than anywhere else in the world. However, we export a higher percentage of our GDP than Japan and we export more per head than Japan or the United States. We have already heard today about Rover, and it is worth mentioning that, because of its efforts and those of other car manufacturers, the trade deficit in car production may well be removed by 1996. That is a considerable achievement.
  The Government can take specific action in three areas to enhance our competitive advantage. The first and perhaps the most obvious action is high-profile Government backing for potential exports. My right hon. Friend the Prime Minister and his colleagues have already

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  shown the way by backing United Kingdom Ltd. in their overseas tours. The Prince of Wales has made and continues to make an important contribution to the export drive. I am glad that my right hon. Friend the Prime Minister has given full public recognition of that and confirmed that his Royal Highness' role will continue and will be enhanced.
  Secondly, the Government should reduce the burden on industry brought about by national and local government. That can be achieved through increased market testing, because the competitiveness that that secures leads to cuts in the underlying costs of Government services to business. That result is nothing but beneficial to businesses in their bids to win orders.
  Thirdly, the Government can do much, as we have already heard today, through deregulation. I listened without surprise but with plenty of disappointment to the hon. Member for Livingston (Mr. Cook). Under Labour, Britain might not be so good at winning export orders but, my goodness, as the hon. Gentleman said, it would be at the top of the league of European regulators. That is obviously what the hon. Gentleman wants.
  The deregulation Bill is about common sense. It is not about getting rid of sensible and necessary health and safety legislation. It is about getting rid of outdated, useless regulations, for which no proper legislative procedure exists. It is not about throwing babies out with the bath water, wholesale, as the hon. Member for Livingston would have us believe. It would not create wide-ranging powers to remove regulations without reference to Parliament. The Bill will, however, help companies in my constituency which are confronted by mountains of forms. Earlier this year, one printing firm in my constituency, Butler and Tanner, had to deal with vast paperwork because of the regulations contained in an Act passed in 1947.
  Another local company, Wincanton Ltd., has a turnover of £200 million a year. It has to deal with regulations covering health, hygiene and safety. It does not object to that burden, provided it is sensible and reasonable. The Bill is designed to ensure that regulations will be sensible, reasonable and up to date, and that the cost of their implementation will not be out of all proportion to their effect.
  The Queen's Speech is welcomed by many people. It is certainly welcome to businesses. It is good for business, good for exports and will certainly ensure that Britain is able to capitalise on the extremely favourable competitive position in which it finds itself.
  8.26 pm
  Mr. John McAllion: The hon. Member for Woodspring (Dr. Fox) said that he would have no truck with the idea of political union. He said that without even a hint of embarrassment despite the fact that he stands at the heart of a political union—the political union of Scotland, England, Wales and Northern Ireland. The fears that he expressed for Britain in relation to European union have already been realised in relation to Scotland and its union with the United Kingdom. Conservative Members should sometimes stop to think when they demand the application of the principle of subsidiarity from Europe to Britain while at the same time they deny the application of
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  subsidiarity from the United Kingdom to Scotland. Their argument is utterly hypocritical and cannot be defended logically.
  The hon. Member for Woodspring went on to argue that he believes in a free-market, free-trade, deregulated Europe in which money can be moved at will across national boundaries by those in control of the financial markets. He did not mention that this is the Europe with 17 million unemployed people and that, in the short term, that unemployment will rise to 20 million. It is also a Europe in which the fascist right is on the march across the continent. It has failed its citizens because it is a free-market, free-trade, deregulated Europe.
  Dr. Liam Fox: Will the hon. Gentleman give way?
  Mr. McAllion: I have just 10 minutes, so I will not give way.
  I wish to concentrate on one part of the amendment tabled to the Queen's Speech in the names of my right hon. and learned Friend the Leader of the Opposition and other colleagues which deals with the reduced protection to the public and employees arising from legislation included in the speech: legislation which will increase the powers of Whitehall at the expense of accountability to the House. The legislation to which the amendment refers relates to that part of the Queen's Speech which promises:
  "Legislation will be introduced to facilitate deregulation and to remove obstacles to contracting out by central and local government."
  In other words, the Bill makes it easier for the Government to continue their programme of market testing in the civil service. In that respect, I am glad that the Chancellor of the Duchy of Lancaster is in his place, as I want to refer to a speech that he gave in June 1992. I believe that the speech launched the Government's market testing initiative. The Minister made the speech to a conference that was organised by The Sunday Times for industrial and financial leaders. It may seem a long time ago, as it was made shortly after the general election. The Minister even began his remarks by saying that Britain had a new Government, and he went on to describe that Government as perhaps the most permanent and most secure Government anywhere in Europe.
  I am sure that the Minister came to regret using that phrase. He used it before black Wednesday, and the Government's panic withdrawal from the exchange rate mechanism, before the pit closures fiasco, before the Maastricht debacle, and before the public sector borrowing requirement was revealed to be standing at £50 billion as a result of the Government's policies. In the course of his speech, the Minister referred to the PSBR as being £28 billion in that year. Is it not marvellous how within a matter of months the PSBR can jump from £28 billion in a speech by a Cabinet Minister to £50 billion? I wonder why the figure jumped so quickly, and why it was out of all proportion to what the Minister was saying.
  The Minister went on to talk about a revolution in the way in which public services were organised and delivered. Of course, he was announcing the launch of the market testing initiative in the civil service. He said that the emphasis in market testing is on free and open competition. He said:
  "In promoting the extension of market testing and competitive tendering, we are endeavouring to ensure that all in-house costs are calculated and taken properly into account. Our aim is to ensure competition is both free and fair."

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  No one could ask for a fairer attitude from a Minister. Later in the speech, the Minister went further:
  "1 want there to be parity of esteem between public and private, based on the rival and complementary excellences of each sector."
  Those, again, were laudable remarks from a Minister who was trying to be even-handed between the public and private sectors. Of course, those words were uttered before the onset of the sea of troubles that have beset the Government in the past 12 months.
  I move on from the speech given by the Chancellor of the Duchy of Lancaster last June to that given by the Financial Secretary to the Treasury in September this year to the Chartered Institute of Public Finance and Accountancy. That speech had a different emphasis altogether. He said:
  "When once Government asked what shall we sell? We now ask what must we keep?"
  In other words, there is to be a bias towards getting rid of Government services or privatising them in some form. The Financial Secretary went on to say:
  "I believe there is significantly more scope for privatisation or contracting out of central Government functions than has previously been envisaged."
  The Financial Secretary went on to describe the discussions that he had had with Ministers of every Department.
  Mr. Heald rose—
  Mr. McAllion: If the hon. Gentleman wants to raise the point that I am sponsored by the National Union of Civil and Public Servants, he is free to do so.
  Mr. Heald: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to make a speech in which he heavily criticises market testing without declaring his interest as a paid consultant for a civil service union?
  Mr. Deputy Speaker (Mr. Michael Morris): Order. It is entirely up to hon. Members to disclose such interests as they believe to be appropriate.
  Mr. McAllion: The hon. Gentleman will know that such interests are contained in the Register of Members' Interests. I declare that interest in most speeches that I make. If I were to do so in every speech, hon. Members would complain that I was continually referring to the union. Of course I am a parliamentary consultant for the union, and I am happy to declare that fact.
  Mr. Deputy Speaker: Order. For the benefit of the House, I will say that any hon. Member who has an interest to state should state it at the beginning of every speech where it is relevant.
  Mr. McAllion: I shall certainly do so in future. I shall return to what I was saying before I was interrupted in an attempt to drive me off the point.
  During the discussions held between Ministers, it was agreed that in future what they called prior options would be applied when making decisions. The Financial Secretary said that of each departmental activity they must ask themselves the following questions in order of priority. The first is, "Can it be abolished?" If the answer was no, they would move on to the second question, which was, "Can it be privatised?" If the answer was again no, the
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  third question would be asked, which was, "Can it be contracted out?" If the Minister was told that that could not be done, only then would the fourth question, "Can it be market-tested?" be asked.
  The Chancellor of the Duchy of Lancaster told the conference in June 1992 that there would be free and fair competition and even-handedness between the public and private sectors, but there is nothing of the kind. The public sector is not even getting an opportunity to take part in market testing because Ministers are asking the prior questions. Only when the questions have been asked do they bother with market testing or matching the civil service departments against their competitors in the private sector. It is a complete stitch-up in favour of the private sector. The Minister knows that, as does every other Minister and every hon. Member.
  I understand that the messenger service for the Office of Public Service and Science has been contracted out. There was no market testing, and the Department was not given a chance to test its bid against the private sector bid. The contract went straight to a leading private sector company which put in a loss-leader bid. It is honouring the Transfer of Undertakings (Protection of Employment) Regulations 1986. It will pay the same wages and will have the same holidays and pensions conditions. It will do so for less money than the public sector can do it because the company is anxious to have the prestige of being the messenger service for the Department.
  In other words, the Minister is putting up the prestige of his own office by selling it off to the private sector. The company will then use the prestige to win contracts against its competitors. That is a contemptible part of the Government's strategy. The phrase used by the Financial Secretary—
  Mr. Deputy Speaker: Order.
  8.36 pm
  Mr. Peter Ainsworth: Today's debate has been interesting, and we heard the hon. Member for Cannock and Burntwood (Mr. Wright) make a passionate plea for further deregulation. I was wondering how he intended to square that with the opinion of the hon. Member for Kingston upon Hull, East (Mr. Prescott) who has said of deregulation that the Government are introducing new killing fields into industry.
  The House was then tempted by the peculiar and bizarre vision of a European future by the hon. Member for Dundee, East (Mr. McAllion). I do not wish to lead the House down either of those routes. Instead, I shall return firmly to basics. With the Budget a week away, we will be hearing a great deal from economists; and we shall be hearing a lot of economics from politicians.
  I used to be scared by economics, and I used to think that it was some type of complicated science. A few years ago I got wise about the subject and discovered that it was an art, where an enormous amount of energy, analysis, and sophisticated computer equipment is followed up by a series of enormous guesses. I am fond of economists—some of my best friends are economists, as they say—but it is important that we understand that economics is simply an analysis of what other people produce.
  Trade and industry are, and always have been, the foundations of economic life. Industry is the cornerstone of our developed world. Men and women go out to work to do what they do best for the best return they can achieve.

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  Those people generate the money which sustains, among other things, all our public services, including health, education, and defence. In that sense, important as those services are, they must always be secondary considerations. It is only trade and industry which make them possible. I fear that Opposition Members sometimes forget that. That is why this debate is so important. We are often led to believe that it is Governments who create wealth, but they do not. They spend the wealth that other people create by making and selling things, by offering services, and by creating the economy in the first place.
  I think that the benign influence which politicians have over economic affairs is often overstated—not least by politicians. That is particularly true as markets have become increasingly international, even supranational. That was one of the lessons that we all learned from the effective collapse of the exchange rate mechanism.
  It is important that we recognise as politicians the limitations under which we work when dealing with trade and industry and economic affairs. When we forget those limitations, we generally cause trouble. While our capacity as politicans to influence trade and industry matters for the better through intervention is limited, the capacity to cause trouble is virtually limitless. It should—it must—be our object to set the framework which enables all those who work in trade and industry to do what they want to do, which is to prosper.
  That means doing an awful lot of things that the hon. Member for Livingston (Mr. Cook) did not mention in his doleful speech. It means keeping a lid on inflation. It means, however difficult, not listening to those who say that an inflation rate of 5 to 10 per cent. will be all right. We all know that once inflation takes a hold it is extremely difficult to control.
  It means keeping interest rates as low as possible. We did not hear about that from Opposition Members, and certainly not from their principal spokesman. We are doing that. At 5·5 per cent., interest rates are the lowest that they have been for 16 years. It means a tax regime that enables people and businesses to keep more of what they earn to spend in the way that they choose. It means an exchange rate that recognises the reality of markets and the relative position of individual economies. We have such an exchange rate and it is perhaps in part because of that that our exports are now at record levels.
  It means doing all that we can to resist the destructive forces of protectionism and to foster free markets which unlock doors to worldwide prosperity. No Government are doing more to help the GATT round come to a successful conclusion than this Government. I was delighted to hear what the President of the Board of Trade said about that.
  Setting the framework means reducing the share of GDP taken by the state—that is something to which we are committed. It means developing in our schools the skills that industry needs. That does not necessarily mean developing the public sector borrowing requirement at the same time. It means listening to, and working with, industry. There is now a real partnership betwen the DTI and industry aimed at developing the skills that the country will need in the years to come.
  Setting the framework means encouraging good labour relations as well. It comes as no surprise that we have recently enjoyed the lowest level of strikes since records began 100 years ago. [Laughter.] The hon. Member for Liverpool, Garston (Mr. Loyden) laughs, but it is no laughing matter—it is a great Government achievement.
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  I spoke earlier of the problems which arise when politicians forget their limitations. There can be no better example of that than the social chapter. We should not interfere with the terms and rates of pay that private sector companies agree with their employees. To do so is arrogance. It is also ignorance, because it ignores the intensely competitive conditions in which our businesses have to fight for their living.
  I was recently in Leipzig, in eastern Germany, where I was listening to local politicians and business men talking. The subject of the social chapter came up. Did they nod wisely and mutter about workers' rights? No, they laughed. One said to me, "Look, wages and social costs have soared since unification, and so has unemployment. The average daily wage in this part of Germany is 40 deutschmarks. Thirty miles away in Poland, it is 8 deutschmarks and a little further to the east, in Russia, it is 15 pfennigs. Talk to me about skills, technology or privatisation, but don't talk to me about the social chapter."
  The social chapter and other forms of bureaucratic regulation have no part to play in Europe's battle for world markets. They are devised by politicians, but that battle is being fought day after day by people in business, trade and industry. Therefore, I welcome the Bill on deregulation. I hope that it will be radical, brave and far reaching in its consequences. Nothing less will do if we are to unshackle our businesses and enable them to get on with the job of developing our economy and generating the prosperity that people want and which our society has come to expect.
  8.44 pm
  Mr. Anthony Coombs: I congratulate my right hon. and hon. Friends on the Government Front Bench on their anti-red tape—that is a better phrase than deregulation—Bill. I agree with my hon. Friends the Members for Ludlow (Mr. Gill) and for Portsmouth, South (Mr. Martin) on its importance to small businesses. Equally, the national manufacturing council of the CBI has specifically said in its document "Partners for Success" how important that deregulation and anti-red tape initiative will be for manufacturing industry. Important as it is, the Bill pales into insignificance in comparison with the huge improvement in the productivity and efficiency in British industry that has resulted from the sea change in British industry brought about by the Government's policies on low inflation, low interest rates and low taxation.
  Earlier today, I reminded the House that, since 1979, manufacturing has risen by about 30 per cent. and overall output by about 25 per cent. Sadly, both fell under the last Labour Government. What is more, manufacturing industry is becoming more competitive. We are the only country in Europe to show a significant rate of growth this year. Productivity is rising and unit wage costs, which are increasingly important in an increasingly competitive world, are falling—small wonder that, as a result, our exports are up by about 15 per cent. compared to last year. When we take exports outside Europe—inside Europe, it is extremely difficult to work out because of the introduction of Intrasat—our increase on last year is even more. 'The United Kingdom's share of main manufacturing countries' exports—our share of world trade—has shown an improvement from 7·5 per cent. in 1984 to about 8·5 per cent. recently. That is the best figure that we have had since the mid and early 1970s.

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  It is significant that, in my constituency, a carpet company called Master Weavers is importing German equipment that cannot be used effectively over there because of the high social costs, and is making a profit here. Another company is importing heavy wheel-making equipment from near Dusseldorf in Germany. The German firm wants to concentrate its production here because of the competitiveness of British industry and work forces, rather than remaining in Germany. The managing director of that company said to me, "Mr. Coombs, if we cannot compete on the basis of low inflation, low interest rates and greater certainty than we have had for many years, we never will."
  I find it amazing that, given that massive improvement in competitiveness and confidence, which is emphasised by the west midlands business survey last month, the Labour party should be seeking to weigh British industry down with the social chapter, minimum wage regulations and union recognition agreements, the like of which we have not seen since the early 1970s, and now, a socialist super-state with a 35-hour, four-day week. Those are the costs that industry most wants to avoid. I have not found one business man who welcomed the social chapter and the Labour party's adherence to it.
  As my right hon. Friend the President of the Board of Trade reminded the Institute of Directors yesterday, in the land of reality, we live in a competitive world. Although productivity has improved dramatically, we still have some way to go, except in manufacturing, where we are among the world's leaders. Even the CBI recognises that, although 2 per cent. of our manufacturing companies are world class and 40 per cent. are near that, more than half our manufacturing companies have a long way to go before they reach a level of efficiency that would allow them to compete with the rest of the world.
  Over the next two years, we as a country, and we as a Government, need to give to two other points even more attention that we have been giving. The first is that, in this country, although we have 400,000 new small firms every year, we do not have a sector for medium-sized firms as large as those of our competitors, particularly France and Germany. If we are to encourage them, we must consider their training needs—we are looking at that through the national vocational qualifications initiative.
  There has been an improvement in the number of people staying on at school—record numbers of people are going to university and taking technical qualifications. We must look also at how they are managed so that, in the proper culture of management, that investment is used most effectively. I hope that the new one-stop shops will lead to a significant impact for small and medium-sized firms.
  Compared to our European neighbours, our small and medium-sized firms rely far too much on short-term overdraft finance. As a result, they do not have the confidence to invest that those abroad have. They have dividend policies, particularly on the market, which, given their earnings, are often irresponsible—double the rate of those for the competition overseas. Too often, business angels, who might have come in and injected business capital, are deterred by unrealistically high levels of capital gains tax. We need a means of financing medium-sized companies on a long-term basis.
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  I should like to suggest—it was last mooted by my hon. Friends in 1986—long-term industrial revenue bonds, which would give such companies a source for long-term, or at least medium-term, finance at a reasonably fixed rate.
  Obviously, low inflation will assist in providing such finance, because it drives down interest rates and makes people more certain about their future investment decisions. Nevertheless, I believe that something like the industrial revenue bond, which could quite easily replace the business expansion scheme for small companies, should be considered seriously by the Government.
  My second point is that, to maintain our improvement in world trade and competitiveness, we need fair competition. I am delighted that the DTI has set up a single market compliance unit. I hope that it will do something about the barriers that particularly affect the textile industry. That industry employs 400,000 people—more than 4,000 of whom are in my constituency. Germany has the Gut scheme, which is meant to be a standard scheme but is effectively used as a way of restricting foreign imports.
  Carpet companies trying to sell on contract to hoteliers in Germany find that they must be inspected for every single contract—not just overall—by regional governments who not only insist on inspecting in situ but whose representatives come to England and walk around the factories to make sure that they are doing everything right there. In terms of barriers to trade, those are the matters at which the SMCU should look.
  On subsidy, particularly hidden subsidy, the Belgian Government, and to a lesser extent the French Government, have been getting away with murder for too long in subsidising, through the back door, their carpet companies. I know that the DTI is well apprised of that. I think that the SMCU should be pro-active with trade associations such as the British Carpet Manufacturers Association in investigating the kind of costing that contributes towards the entirely unrealistic pricing of which carpet companies in Europe, which are subsidised by their Governments, are capable. In that way, we would stop that practice and, as a result, move towards fairer competition in that sector.
  GATT and the importance of NAFTA and other free trade agreements have been mentioned. The textiles industry in particular suffers because although it exports £4·8 billion-worth of goods every year, only £1·8 billion of that is outside Europe. Why? The answer is that there are very high tariff rules outside Europe. When exporting goods, the average tariff in Europe is about 14 per cent. In India, there is a ban—even if one can get past that ban, the tariff is 100 per cent.—in Pakistan, the tariff is 125 per cent.; in China, it is 130 per cent.; and, even in the United States, it is 60 per cent. for some goods.
  I know that GATT has called for a halving of some of the tariff barriers and a lesser reduction for the higher ones. Nevertheless, more needs to be done by the compliance unit in the DTI to ensure that those tariff barriers come down as quickly as possible. If not, appropriate reciprocal action should be taken by the British Government to ensure that they come down in future.
  8.54 pm
  Mr. Nicholas Brown: Like the hon. Member for Wyre Forest (Mr. Coombs), whose speech I have enjoyed, I, too, would like to put in a word for fair trading practices.
  Today's debate, which has focused on the manufacturing industry and deregulation, is of enormous important to my constituents. Indeed, it is of enormous importance to the entire industrial community on Tyneside. My constituency has two key pillars to its private sector economy—NEI Parsons, which makes turbine generators, and Swan Hunter, shipbuilders, which is now in receivership.
  The level of male unemployment of the shipbuilding community in the Walker ward of east Newcastle is now 38 per cent. That is before the receiver has shed the work force, who are still employed at Swan Hunter constructing two frigates for the Royal Navy. Tragically, 500 men lost their jobs in the announcement last week. If something is not done very soon, the other 1,000 will lose their jobs.
  It is with enormous sorrow that I take part in the debate on Britain's manufacturing base to plead with the Government that they do something to save what is left of the shipbuilding manufacturing base on Tyneside. No community deserves better from the Government. At the time of the Falkland conflict, Swan Hunter was full. Men were willingly working overtime to provide the hardware that the Royal Navy needed. Civilian workers even went to sea with the fleet to complete outfitting work as it sailed down to the south Atlantic. The shipyard workers of Tyneside have served Great Britain well, in war and in peace.
  In the tragic circumstances that now confront the yard, surely the workers have a right not only to be heard in the House but to have a response from the Government, particularly from the DTI. I think that we all accept that the warship building programme will not be in future what it has been in the past, but two key procurement decisions have put Swan Hunter into its present tragic plight: the first being the procurement of auxiliary oiler replenishment vessel No. 1 at Harland and Wolff.
  The hon. Member for Wyre Forest mentioned fair competition. Whatever else that decision was, it could not possibly be described as fair competition. Behind Harland and Wolff was the Northern Ireland Office and some £58 million-worth of subventions from the public purse; behind Swan Hunter was a management buy-out with no sizeable commercial resource at all.
  The landing platform helicopter carrier order—the second great procurement decision that has put Swan Hunter into its present plight—was won by VSEL at Barrow-in-Furness. The National Audit Office has now told us that between £25 million and £30 million-worth of reserves were used by that company to underpin its bid. There were no such reserves for the privatised management at Swan Hunter. The LPH battle is now over and I am certain that the work force at Barrow will be able to provide the Royal Navy with a perfectly suitable vessel. However, unemployment looms for the community that I represent. We are entitled to ask the DTI to do something to safeguard what is left of Tyneside's manufacturing base.
  I make this plea because everything that we have asked for so far seems to have met stony silence from the Government Benches. The Government could do several things. They could sit an economic package alongside the
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  redevelopment of the yard for merchant ship building or for related work, such as fabrication in another area. However, so far the Government have said nothing.
  I understand that, in the past day or so, the Minister for Industry has pressed the case for intervention funding for Swan Hunter so that the yard can diversify into merchant ship building. That is all very well, but the yard has been in receivership for six months. The Government should have acted as soon as the receiver moved in. They should not have decided finally to make a bid to Europe some six months later as redundancy round has followed redundancy round and when the conclusion has become all too clear to those who follow these matters on Tyneside.
  We are not talking simply about the destruction of a community and a way of life which has formed a substantial part of the way in which Tyneside has worked since the turn of the century. We are talking about the lack of an alternative. The shipyard workers at Tyneside have only ever asked for a fair chance to compete and for the famous level playing field. If they are not to have that, surely the DTI—which is our sponsoring Department—has a duty to encourage alternative employment or a private sector purchaser to take over the business and provide a new or renewed employment base. However, we have heard nothing of the sort from the DTI.
  All that has been announced so far is a relatively small sum of money—about £2 million—for the urban development corporation. Frankly, that sum will do hardly much more than grass the yard over. The people of Tyneside do not want to be park keepers or the custodians of a once proud industrial heritage and a kind of shipbuilding theme park. They want the right to work and they expect the DTI to stand in their corner and to assert that right with them.
  We have looked with admiration at the way in which the Northern Ireland Office stood up for Harland and Wolff. We looked with admiration at the way in which the Scottish Office stood up for at least two major shipbuilding yards in Scotland. They were our direct competitors. Who has stood up for the people of Tyneside? The DTI should have done that, but to date there has been no significant announcement from the Department about support for the existing shipbuilding industry or about an economic regeneration package for the region.
  Work is running out at Swan Hunter. The future for the work force looks extraordinary grim. Surely it is now right for the Government to come to the House—perhaps the Minister will do this when he replies to the debate—and say what assistance will be provided to the people of Tyneside and to a community that deserves better from the Government than just the neglect and plain ignorance which are currently all that is forthcoming.
  9.2 pm
  Mr. Oliver Heald: We have heard yet another speech from the hon. Member for Newcastle upon Tyne, East (Mr. Brown) in the dismal Johnny litany which began with the hon. Member for Livingston (Mr. Cook), who opened the debate. From that speech, one would have thought that there were no grounds for optimism. We have heard about redundancy round after redundancy round. It has not been stated that, as we all know, unemployment is falling in Britain. One hundred and thirty thousand more people in Britain are in work now than a year ago.

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  The one glimmer of hope among the Opposition speeches seemed to be that of the hon. Member for Alyn and Deeside (Mr. Jones). He started rather well when he said that my right hon. Friend the President of the Board of Trade had made a ripping speech. There was a ripple on the Conservative Benches, as we thought that a little bit of credit was going to be given. However, the hon. Member for Alyn and Deeside ruined it all by describing my right hon. Friend as "Mike the Ripper." That took all the gloss from his previously hopeful comment.
  Mr. Ian Taylor: My right hon. Friend might have enjoyed that.
  Mr. Heald: Yes, he might have. However, if one were looking for an analogy, a much more favourable impression would have been made by Munching Mike from the Letterland series of books. The point about Munching Mike is that he eats the unnecessary and wasteful things in Letterland. I hope that my right hon. Friend will make a meal of over-regulation in this country.
  I wish to make two main points. First, over-regulation greatly damages this country's interests. To deregulate is not an optional extra; it is something that we must do if we are to compete. With the Employment Select Committee, I recently visited Japan and met inward investors who are coming to this country. Forty per cent. of inward investment into Europe comes into Britain. Inward investors are not painting the dismal picture that we have just heard. They are talking about a country which has real opportunities to offer manufacturing industry, a country with the right language, a country which gives a warm welcome to inward investors, a country with political stability, and a country with an inventive work force.
  Nissan representatives will say that the Nissan product that is made in this country is the best in the world. The reason is that the company's programme of asking people for ideas on how to improve the industrial process is working much better in this country than anywhere else. Each year, 300 ideas come from the work force in Sunderland to improve the product. It is the same story at Honda. Companies that are investing in Britain praise our work force, and that shows optimism for the future. They say that almost all the conditions in Britain are right. They welcome the fact that we are in the European Community, but they sound a note of caution.
  The note of caution that those companies sound is that in the EC there is a danger that we will over-regulate to the point at which we are not competitive with the rest of the world. There is a danger that in this country, where we implement regulations to the nth degree, we will not only take on what Europe is doing but make matters so restrictive that we will not have the edge that we have at the moment. No one should imagine that we can afford to lose the competition—we cannot.
  We have only to look at the geography of Europe to realise that there is a core. The European Community has recognised that there is a core, through its funding for the periphery. In those areas—part of Britain is no doubt in them—one might be able to afford to be a little inefficient and have the social dimension, but what about the rest of Europe? What about the periphery that is having burdens put on it? Those burdens mean that part of Europe will not
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  be able to compete with the other part of Europe if that continues—something which is damaging to poorer nations.
  It amazes me: that socialists or people who claim to have some feeling for poorer countries that need to develop are the ones who are suggesting putting restraints on competition within Europe. We want a deregulated Europe which can compete. We have 20 million unemployed people in Europe, and estimates for the future are not good. Britain is the only country that is successfully tackling the problem. Let us look at the lessons which Britain can give.
  Secondly, I refer to privatisation. From Opposition Members and trade unions we hear constant criticisms of privatisation, but we must consider what our trade unions are doing in eastern Europe. They are helping the free trade unions which have just started in those countries. Those free trade unions do not stand for anti-privatisation, old-fashioned restrictive practices or the mess that our union movement is in; they stand for apolitical trade unions. Their first act is to sign conventions on privatisation, just as the new trade unions have done in Russia. They stand up for free trade capitalism because they know from experience exactly what would happen if they did not. It would be a disaster. We need to look at eastern Europe to see what over-regulation and state industry do.
  It is extraordinary that our trade unions are going to eastern Europe and helping trade unions that know all the right things because they have learnt them from history, yet they come back to this country and argue against privatisation and they are affiliated to the Labour party —all the old claptrap. The time has come when trade unions need a new language of activism, to use John Monk's words. The sooner they get it and start selling good services to their members, and doing what everyone in employment law recognises is needed, the better.
  9.9 pm
  Mr. Michael Meacher: This has been a rather uneven debate. After a measured and highly effective introduction by my hon. Friend the Member for Livingston (Mr. Cook), we heard some passionate speeches by some of my other hon. Friends. At the risk of being rather invidious, I must pick out the speeches by my hon. Friend the Member for Alyn and Deeside (Mr. Jones) on the decline of manufacturing industry; by my hon. Friends the Members for Sherwood (Mr. Tipping) and for Barnsley, West and Penistone (Mr. Clapham) on the destruction of the coal industry; by my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) on the problems of small businesses; and by my hon. Friend the Member for Cannock and Burntwood (Dr. Wright) on the multiplication of quangos and the rise of the unelected state. I must also mention the speech of my hon. Friend the Member for Dundee, East (Mr. McAllion) on the dangers of market testing, about which I shall say a good deal more in a moment.
  My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) made a moving speech on the collapse of the shipbuilding industry and the Government's complete failure to take any remedial action for that stricken area.
  I now come to the speech by the President of the Board of Trade, who opened the debate. He may be restored to health, but he certainly lost no time in going straight into overdrive. I suppose that one might say he went from the

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  sickbed to a leadership bid in one astounding leap. He told us nothing about the subject that we are supposed to be debating—his forthcoming Bill. Rather as a cuttlefish conceals his retreat by exuding clouds of ink, the President of the Board of Trade spewed out personal abuse, insults, fictions, froth and lather in a great farrago of rhetorical claptrap.
  As I listened to him, I was reminded of the wise words of one of my hon. Friends, "Never wrestle with a chimney sweep." Unfortunately, the right hon. Gentleman's hyperactivity—stabbing the air like a demented dervish on several occasions—was in inverse proportion to his consistency.
  I see the right hon. Gentleman coming into the Chamber straight on cue. I am glad that I was referring to him. We are glad to see him restored to health, even if he has gone straight into overdrive. Given all the deregulation ardour that he exhibited tonight, one might wonder whether this was the same man who wrote a personal manifesto a few years ago entitled, "Where There's a Will", which advocated intervention in industry, or the same man who was going to intervene before breakfast and at every other minute of the day. All one can say is that one hopes that his latest craze will last no longer than his previous ones.
  The first thing to be said about the Government's proposed deregulation Bill—what we know of it—is that it is a misnomer. It is not about lifting burdens but about removing protections. It will not lift burdens if one makes temporary workers buy their own hard hats, steel-capped footwear or other necessary clothing, but it will undermine their protection and it could put their lives at risk. The removal of regulations on lifting loads, independent inspection or internal consultation procedures will not lift significant burdens, but it may give ignorant and unscrupulous employers a licence to kill.
  If food safety regulations are now described by the Secretary of State for Health as "over zealous nit-picking", why was it in 1990, just three years ago, the then Agriculture Minister described those same regulations as designed
  "to outlaw the cowboys of food safety."
  If they protected the public then, why do they suddenly cease to do so today?
  It is no use Ministers pretending that health and safety will not be undermined by the Bill. We have only to look at their record. They have already cut the Health and Safety Executive's budget by £13 million this year. They have already cut the public grant supporting safety rep training, and they say that they will abolish it completely in 1995. They have already signalled their complacency about health and safety by making the chair of the Health and Safety Commission a part-timer; and they have already begun to subject the HSE to market testing, which will seriously threaten its consistent and discretionary approach to enforcement.
  There is, however, a much more insidious and disturbing aspect to the Bill—the generalised and sweeping powers that Ministers propose to take to themselves for an open-ended expansion of privatising or contracting-out functions now covered by statutory regulation.
  We have three fundamental objections to the proposal. First, it vests enormous and unaccountable power in the hands of Ministers, power which they can use to repeal an endless stream of legislative provisions simply by issuing
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  a statutory instrument, with minimal parliamentary debate. That undermines the role of Parliament, and it takes another major step down the road to an elective tyranny.
  These are the same Ministers who have set up a host of unelected quangos, as my hon. Friend the Member for Cannock and Burntwood eloquently pointed out a few moments ago. Those quangos, beyond any public accountability, now control almost a quarter of total public expenditure. These are the same Ministers, too, who over the past decade have pursued the biggest centralisation of state power this century—and now they want the power, if not with the stroke of a pen, then with the stroke of an affirmative resolution, to indulge their dogma of privatisation without having to submit to the discipline of detailed parliamentary scrutiny. We say that that is not only unhealthy for parliamentary democracy but downright wrong, and we oppose it absolutely.
  Our second objection derives from our doubt about whether this move is even constitutional. Characteristically, the President of the Board of Trade simply deflected any consideration of that important issue. Our view is, however, shared by the Minister's chief officials, I have with me a letter—[HON. MEMBERS: "From The Guardian?"]. No, this is a management-in-confidence letter from the efficiency unit in the Department of the Chancellor of the Duchy of Lancaster, and it is written by the deputy director. I can understand why the right hon. Gentleman might by slightly worried about it.
  The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave): I am not.
  Mr. Meacher: That is odd, because the letter is about a subject on which the right hon. Gentleman has had months of aggro with his fellow Ministers. The letter states:
  "A common theme which has emerged is the risk of there being an unlawful sub-delegation of power arising from the contracting-out of certain statutory functions entrusted to Ministers."
  The deputy director goes on to use some jargon about the Carltona doctrine, which dates back to 1943 and which allows civil servants, and only civil servants, to act on behalf of Ministers. The letter continues:
  "The Carltona doctrine does not extend beyond civil servants in Government Departments … The legal advice is that the case law, including a decision of the House of Lords in 1990 … indicates that the doctrine cannot be extended beyond its present scope without legislation. It would not, therefore, extend to contractors whom the Minister might wish to authorise to carry out work on his behalf."
  That is the strict legal advice offered by a senior official in the Minister's Department. The letter goes on to say:
  "A general power of sub-delegation would be a constitutional innovation, and it may necessarily involve a wide order-making power to amend primary legislation which could in itself be controversial."
  I am sure that the Minister remembers it well, but I would be glad to give him a copy of the letter.
  The matter was taken up by the Minister in another letter that he wrote to Ministers on 2 April seeking their assistance. I quote:
  "The suggested provision would have allowed a Minister to sub-delegate any function"—
  we know from the other letter that that is illegal—
  "to an authorised person who is not a Crown servant, by secondary legislation, as and when the need to do so is identified. Such a proposal was always bound to be particularly controversial".

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  That is an understatement. Indeed, the Minister got short shrift.
  I am pleased to say that such behaviour tends not to be contained and is more widely disseminated. I have another letter written by the Secretary of State for Scotland in April. It states:
  "I can fully appreciate that a general provision to deal with the statutory constraint of delegation by Ministers to non-Crown servants might prove controversial."
  That must be the understatement of the year, given the Minister's revealed penchant for giving himself sweeping and untrammelled powers against legal advice.
  Tonight, we expect him to make it absolutely clear what route he intends to follow. He should make it clear whether he has bowed to the advice of his officials or whether he is in the same category as the Home Secretary, who likes to think that he knows better than all those who are paid to advise him. We want to know what he proposes to do about the vires of his proposed legislation.
  Our central objection to the proposed Bill is the substance and its effects. It will undermine quality standards. That is not simply the Labour party's view; it is the view of the independent National Audit Office. Recently, that body criticised the Ministry of Defence for its contracting-out programme. The points emphasised by the National Audit office are relevant to the Bill. It emphasised the overestimating of the savins produced, the failure to lay down proper quality standards, the inadequate monitoring of the performance of contractors and the insufficient training for Ministry of Defence staff involved in contracting out. Those are serious objections.
  I move on to a matter that I regard as more serious. The Bill will severely undermine confidentiality. The search for deregulation and privatisation will end the citizen's right to privacy in areas such as tax records, drivers' records, medical details, family maintenance transactions and, if the police national computer is privatised, information about criminal convictions.
  Mr. Waldegrave: As the hon. Gentleman has just read out a lot of stolen leaked letters, does he think that it is a bit rum to then complain about confidentiality?
  Mr. Meacher: I understand the right hon. Gentleman's embarrassment because the way in which he intended to advance has been shown by his advisers to be illegal and unconstitutional. It is another matter to talk about the effects of his proposed Bill to citizens.
  Next year, computer tax details of all United Kingdom citizens and businesses will be handed to an international computer company for processing. Judging by the information in the newspaper today, it appears that the contract has been awarded to the United States company, EDS. That is being done despite the fact that tax records were mishandled when work was handed to a private contractor and 84,000 annual tax advice packs were sent to the wrong addresses. Now we are to get a great deal more.
  Furthermore, the market testing of typing and secretarial work, and the information technology office in the Inland Revenue, could mean that all letters to and from tax offices will go through temporary work agencies. That must increase the risk of people's personal affairs being known in the private marketplace. The truth is that, despite the guarantees of confidentiality that the Government are only too pleased to give, the private banking and financial
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  sector already operates a secret market in personal data, and many breaches of privacy and confidentiality have already taken place. The Bill will grossly compound an already deeply unsatisfactory situation.
  That is not just our view. Three recent reports by independent and highly respected bodies drive home the danger that, in private hands, tax returns could become public knowledge. Sir John Bourn, the Comptroller and Auditor General, exposed in a recent report the failure of the Data Protection Act 1988. Mr. Eric Howe, the Data Protection Registrar, criticised the banks for failing to protect customers' confidentiality. Sir Bryan Carsberg, the Director General of Fair Trading, has called for new rules to be incorporated into the banking code to prevent customers' confidentiality from being breached. All are highly critical of the corrupt way in which personal financial information can be traded just like any other commodity. The Bill will make an already deplorable situation a great deal worse.
  Individual taxpayers certainly need to be worried. They face a major increase in the risk of snooping on their personal lives. Businesses need to be worried. Their most sensitive confidential records could be available to their rivals, at a price of course, as could information on profit projections, how much they pay their employees, their research programmes, their cash flow projections and other information that could affect their creditworthiness.
  For decades, civil servants, for all the criticisms that we often make of them in the House, have handled that sort of information with integrity and discretion. Ministers do not realise that public service values cannot be written into a contract. I know that there has been a lot of talk about the need for a level playing field in competition for contracts and market testing. The Government need to understand that there is no level playing field when data protection standards in the commercial world are so inferior to those in the civil service.
  Another fundamental problem is the loss of public accountability. That is not just the view of the Labour party. The National Audit Office in its 1993 annual report, which was published a month ago, pointed out strongly that civil service reforms, such as market testing and contracting out, threaten standards of public honesty and accountability.
  In the light of recent experience, the NAO drew attention to four weaknesses. First, it noted weak financial monitoring and controls. It instanced what it called the major failings—I take that to be a euphemism for corruption—in the management of the £43 million computer project of the Wessex regional health authority. Secondly, it noted a lack of clear lines of responsibility and accountability. It pointed to the Welsh Development Agency where redundancy payments were made without Welsh Office approval.
  Thirdly, it identified conflicts of interest. A member of Wessex regional health authority was apparently connected with a company tendering for the computer equipment. Fourthly, it discovered the improper application of financial controls when the Ministry of Defence made more than £1 million of irregular payments under an incentive award scheme. That is a bad record for market testing. As those criticisms come from the NAO, one expects that the Government might just think again.
  All this arises because the private sector operates under a different ethos. That is the point that the Government simply will not grasp. The private sector does not adapt

  541
  naturally to public sector rules of handling money. It is not driven by the need to be accountable for its activities and the professional ethic is not reflected in the system of merely contractual obligations.
  There are lessons which the President of the Board of Trade has yet to grasp. A month ago at Question Time, my hon. Friend the Member for Newport, West (Mr. Flynn) asked the Parliamentary Secretary, Office of Public Service and Science, who is responsible for the citizens charter:
  "Is not there a grave danger that, by market testing, contractorising and privatising the civil service, we shall end up with a civil service, such as those in many countries, run by Group 4 and Mega-greed plc?"
  The Minister's reply was instructive. He said:
  "It is perhaps best answered by the fact that the First Division Association, which knows our civil service as well as anybody, has said quite clearly that it is not against market testing."— [Official Report, 25 October 1993; Vol. 230, c. 573.]
  That is certainly news to the First Division Association. I have a letter—
  Mr. Waldegrave: Another letter?
  Mr. Meacher: Yes, I am glad that the Minister takes such an interest in the precise sources of information, because I would not want to misrepresent the view of the FDA as his hon. Friend did. The FDA said:
  "We remain very concerned about the, in our view, dismissive attitude of Government Ministers to the real problems there are surrounding confidentiality, impartial service, equality of standards, conflicts of interest, and corruption."
  On ministerial accountability, far from saying that it was against market testing, the FDA said the opposite:
  "To replace ministerial accountability for services by accountability through litigation may seem to be a preferable option to some Ministers, but for those citizens who are unable to buy legal advice in the first place"—
  after the changes in legal aid, that will be the great majority—
  "it is doubtful whether it is an attractive one, or even a possible one."
  On corruption and conflicts of interest, the FDA believes that market testing is utterly deficient, which is why it says:
  "Any company which bids successfully for civil service work should be able to satisfy the 1986 Directors Disqualification Act on persons fit to run a public company."
  Will that requirement be implemented? The President of the Board of Trade has been silent on the matter so far. I should be glad to give way to him if he will say whether he intends to implement that important requirement. As he does not get up, I shall continue.
  The FDA also says:
  "It is our unequivocal view that all MPs should forego their right to sit on the board of directors, in any capacity whatsoever, of a company which may tender for public work."
  Will the President of the Board of Trade legislate to require that to be so? The FDA continues:
  "It has also been drawn to our attention that at least one ex-Government Minister has moved very rapidly, on giving up ministerial office, to take up directorships with a company that has won contracts within the civil service."
  Mr. Robin Cook: At least one?
  Mr. Meacher: Yes, I think that it is considerably more than one.
  Is not there a whiff of corruption about that? What will the President of the Board of Trade do to stop it? We want answers to those specific questions tonight.
  In the cabaret-style, Victorian music hall knockabout that passed for a speech at the beginning of the debate, the
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  President of the Board of Trade threw out the silly jibe that the Labour party wanted to regulate everything. That is ridiculous.
  Of course the Government should dispose of outmoded regulations or update those that are no longer appropriate, but there is a world of difference between that and adopting sweeping deregulation as a blunt instrument across the board. It is one thing to go back to basics, but quite another to go back to the dark ages of unregulated sweatshops, unprotected building sites and uncontrolled markets. Freedom for businesses has to be balanced—a term that the Government do not understand—by securing employees' safety, protecting the consumer against dangerous products, stopping environmental pollution and ensuring decent conditions in the workplace. It is because the Government despicably place cutting red tape above all else, including the lives and the health and safety of ordinary employees and citizens, that we shall vote against the measure in the Lobby tonight.
  9.37 pm
  The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave): I join those, including some generous souls on the Opposition Benches, in welcoming my right hon. Friend the President of the Board of Trade back to the House in his most sparkling form. The hon. Member for Livingston (Mr. Cook), with whom I had the pleasure of debating in a previous post, made a characteristic, prickly speech. His relationship with my right hon. Friend the President of the Board of Trade today was a little like that of a hedgehog to a juggernaut—there was not much left of him after the President had passed over.
  I do not know whether it struck my hon. Friends or perhaps even Opposition Members, but the speech of the hon. Member for Oldham, West (Mr. Meacher) seemed to have an eccentric thesis at its heart. He was determined to prove that the public sector had higher standards of confidentiality than the private sector, and he had a leaked letter from the public sector with which to do so. He used not only one leaked letter, but another—there seemed to be something odd about that thesis.
  I warn the hon. Member for Oldham, West that it is dangerous to study matters by working only on the basis of stolen letters. The first letter from which he quoted was written in February 1993. It was subsequently shown by parliamentary counsel that the point raised in the letter was wrong—we do not need the powers set out in it to do what we want to do. The hon. Gentleman's use of that letter demonstrated nothing about the debate, but merely countered his own thesis on confidentiality.
  There were some extremely good speeches from both sides of the House. The hon. Member for Newcastle upon Tyne, East (Mr. Brown) made a speech that was all the more effective for being quiet and courteous, and obviously coming from the depths of his experience of the constituency. I can assure him that my right hon. Friend the Minister for Industry is, and has been for some months, in genuine and direct contact with the Commission to see whether funds can be made available to the hon. Member's constituency from the shipbuilding intervention fund. I think that the hon. Gentleman knows that, like him, the Government and my right hon. Friend the Minister are taking the matter seriously.

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  I want to give an assurance to my hon. Friend the Member for Meriden (Mr. Mills). He made an extremely good speech that opened up the debate. He reminded us of the transformation in British industry over the past 10 to 25 years which means that, in two or three years, we shall again be a net exporter of motor cars—a fantastic achievement. As my hon. Friend said, new methods of co-operation between management and work force are being developed by a forward-looking industry.
  My hon. Friend raised the issue of the trademark Bill, on which he is an expert. It is the Government's intention that the Bill should deal with the counterfeiting problem that he mentioned. I know that he will want to study the Bill closely when it is published. I was a bit depressed—as, I believe, was my right hon. Friend the President of the Board of Trade—by the fact that, in their speeches, virtually none of the Opposition Members raised their eyes to the wider world scene—for example, the issues of the general agreement on tariffs and trade. One or two Opposition Members did so, but they were very few. They did not mention the development of the great, new free trade area in north America or issues that are far more important than many of the parochial ones dealt with today—
  Mr. Garrett: We are interested in British jobs.
  Mr. Waldegrave: British workers' jobs depend on those wider issues far more than on some of the whingeing that we have heard from Opposition Members today. My hon. Friends did not make those mistakes, nor did the hon. Member for Gordon (Mr. Bruce) who acknowledged that we are talking about issues that are at the heart of the future of our country, though he disagreed in other respects.
  My hon. Friend the Member for Woodspring (Dr. Fox) and, in a characteristic speech, my right hon. Friend the Member for Shropshire, North (Mr. Biffen) conveyed most eloquently the fundamental point of the debate: that, as world trade opens up and we fight for free trade, if we in Europe undermine it all by rebuilding our own extra costs and controls on a European basis, we will destroy jobs in Europe and in Britain. Although it is right to look at what goes on in Whitehall and in town halls here, it is essential that when we talk about regulation we consider all the extra burdens that can and do come from Europe. My right hon. Friend the Member for Shropshire, North wanted a Euro inferno of controls—a phrase that resounds nicely. My hon. Friend the Member for Surrey, East (Mr. Ainsworth) made the same point in relation to GATT.
  Let us consider, as did some of my hon. Friends, the junction at which the country finds itself. We are out of recession for the sixth successive quarter. Forecasts from the European Community, the Organisation for Economic Co-operation and Development and the International Monetary Fund all say that the United Kingdom will have the fastest growth rate of any EC country in 1993–94. In the three months to September, industrial production was almost 3 per cent. higher than in the same period in the previous year, while our partners in Europe—it is nothing in which to rejoice—are still going sharply backwards. The year-on-year figures for falls in industrial production are minus 1·7 per cent. in Italy, 3·2 per cent. in France, minus 8·2 per cent. in Germany, minus 10·1 per cent. in Belgium and minus 3·3 per cent. for Japan. Remember
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  when the Opposition used to say that there was something uniquely British about the recession, as we had caused it? I suppose we have somehow also caused those far deeper recessions in other countries.
  As my hon. Friend the Member for Hertfordshire, North (Mr. Heald) reminded us, we now have falling unemployment that is below the European Community average. The figure for our employment is 10·3 per cent. —far too high, but falling. The European Community average is 10·6 per cent. on the same basis and rising.
  The economist Gavyn Davies, whose opinion I believe is respected as independent by the Opposition as well as by the Conservative party, described what the recession in retrospect has turned out to be in an article in The Independent on 25 October. He said that it did not fit the cliché of being the longest or deepest recession since the 1930s, a recession of similar length to that of the period from 1979 to 1981 and about half as deep.
  With unemployment still far too high, the concern is now that the recovery is well based and that it lasts. That is why a debate now about competitiveness is well timed, as my hon. Friends the Members for Wyre Forest (Mr. Coombs) and for Somerton and Frome (Mr. Robinson) re-emphasised. The export performance has been very good over the past year, but we must work to maintain it.
  The economy is growing steadily, with inflation at a 30-year low, productivity at record levels and unit wage costs—ultimately the most important aspect in terms of trade—are falling. Inflation stands at 1·4 per cent. and it is hard to remember that the average inflation achieved by the last Labour Government was 15·5 per cent. Our inflation rate has been below the EC average for more than two years and since December 1992 it has been below the G7 average for the first time in 10 years. Inflation has been below 2 per cent. throughout 1993.
  The productivity of the whole economy is at a record level and rose by 4·4 per cent. in the year to the second quarter and in the first quarter of 1993, manufacturing productivity grew faster in the United Kingdom than in any other G7 country—by 4·9 per cent. Strikes are at their lowest since records began. Unit wage costs fell by 0·6 per cent. over the past year.
  All those figures give us hope that the Government's work over the past 10 years is paying off in long-term gains to competitiveness. Our firms and our managers are playing their part, although, as my right hon. Friend the President of the Board of Trade said last night, there is still much more to do. There is much more to be done in research and development by the private sector. Only the few best invest at the levels we would like to see in the long-term.
  Even during the current recession, however, there have been some good signs. Research and development have been cut by less than in any previous recession in British industry, and the so-called R and D scoreboard showed a 6 per cent. increase in private-sector spending over the past 12 months. It is on that basis of a new approach to R and D on the part of British industry that our White Paper proposals build a new partnership between Government and industry. The hon. Member for Wolverhampton, North-East (Mr. Purchase) recognised the importance of that development: he welcomed the White Paper, and congratulated us on it.
  The private sector's work is vital; our whole future rests on it. It is not enough, however. People must manage their firms properly, generate wealth and go out to win orders

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  around the world. The first Lord Stockton, Harold Macmillan, once said, in a famous phrase, "Exporting is fun." I suspect that it is not all that much fun to win orders around the world from the Taiwanese, the Japanese and the rest and then to come back and find that the British Government are wasting your money by running their own organisations less efficiently than you are running your companies. That is why we must have a relaunched and re-energised campaign to save money in our management of the public sector—and my Department is taking the lead.
  As my hon. Friend the Member for Surrey, East pointed out, it is no use the private sector generating the wealth if we in the public sector do not spend it properly. It is not that we are not spending enough: we are spending £250 billion a year, which is 40 per cent. of gross domestic product—too high a proportion—and more than £10,000 per household. It is vital, therefore, that we obtain the best possible value for money.
  The hon. Member for Dundee, East (Mr. McAllion) announced the Government's policy position as though it were a dreadful thing. The more he read out, however, the more common sense it seemed that we should first examine every function and establish whether it is necessary. If something is not necessary, let us not do it: let us not take money from the taxpayer and waste it. If it is necessary, let us ask ourselves whether the function should best be privatised and put into a market where the benign forces of competition will produce the best outcome, or whether it should be contracted out. If we need to retain responsibility for it, must we use our own people, or can we obtain better value for money by contracting it out to the private sector? If the answer is not clear, let us test. That—as the hon. Gentleman rightly said—is what market testing is all about.

  As the hon. Gentleman fairly said, and as I emphasised again today, in a market test the playing field should be level. The in-house teams should have a fair crack of the whip—and they do. In the first year of market testing, which saved the taxpayer £100 million, in-house teams won more than half the tests.
  The hon. Gentleman talked a great deal of inaccurate rubbish about the small matter of the office services market test in my Department. It was a perfectly ordinary market test, with an in-house and an out-house bid. If the hon. Gentleman is going to be a paid consultant on these matters, perhaps he should check the basic facts before giving them to the House.
  The programme that we have launched—privatisation where that is right, contracting out where it will produce better value for money and market testing to establish whether the best supplier is in-house or out-house—has now been built into a formidable system of public-sector reform. The Times—which, I am sorry to say, is not always a supporter of the Government nowadays, although we hope for better in the future—wrote recently:
  "Considered together, these reforms are the most comprehensive overhaul of British administration since the Northcote-Trevelyan reforms of the 1850s."
  The reforms are already bringing great benefits in terms of cost-effectiveness to the public sector and to the taxpayer, as my hon. Friend the Member for Somerton and Frome pointed out.
  I can give one or two examples. Customs and Excise, for example, market-tested VAT debt management. The contract was won by the in-house team—the civil servants
  546
  —with savings that were suggested to be £3 million per annum. That is enough to deploy 150 customs officers in the fight against drugs or in the fight against illegal arms shipments. I am sure that the whole House will wish to congratulate Customs and Excise on today's success in Northern Ireland.
  I can give an example from my Department. The in-house team won the contract for the printing and distribution of Hansard—which is close to the heart of everyone in the House—with savings of £400,000 per annum. That has enabled Her Majesty's Stationery Office to declare a price freeze on Hansard and other routine policy papers during the life of the present Parliament.
  I have to ask the Opposition, under what possible argument is it wrong to achieve those kinds of gains in efficiency and cost-effectiveness for the taxpayer and the people who use such services?
  Mr. Garrett: Will the right hon. and learned Gentleman confirm that yesterday the head of the civil service told the Select Committee on the Treasury and Civil Service that market testing is currently running at half its target level? Although the Minister can talk about cuts in expenditure, is it not the truth that he has not cited a single case which has shown an improvement of service as a result of market testing?
  Mr. Waldegrave: I have given the hon. Gentleman some examples, and I will give him some more if he so desires. Is not a price freeze that enables the authorities in the House to spend money on other valuable things a gain in quality? I think that it is.
  As to the former matter, hon. Members of the Opposition have not yet made up their minds whether this is a huge and dangerous programme or one that is not going anywhere. From their point of view, they would do better to recognise that it is a huge and important programme.
  That was re-emphasised yesterday by the fact that the Inland Revenue has chosen its preferred supplier for its information technology for what is arguably the biggest piece of out-sourcing ever by a Government in the western world, certainly in Europe—£1 billion or so over a number of years. That out-sourcing had the most stringent confidentiality tests attached to it, including a condition that no data should be handled outside this country.
  As to the argument that the hon. Member for Oldham, West used in relation to confidentiality, it is extremely unwise to assume that those in the private sector who owe a duty of confidentiality—and who are still covered by the law and the criminal offence of the release of any information—are less likely to behave properly than those in the public sector. Most people in this country work in the private sector. They are as honourable and behave as well as people in the public sector. I do not belittle those in the public sector by saying that.
  We have often given examples, which have never produced any serious response from the Opposition, that many of the most dangerous and valuable secrets in the defence field have been generated by the private sector, and held there quite safely. The hon. Member for Oldham, West should not pursue those arguments that seem to imply that there is something inherently untrustworthy about those who work in the private sector.
  In the eccentric part of his speech where he demonstrated the confidentiality of the public sector by reading from leaked letters, the hon. Gentleman seemed to

  547
  say that there was something odd about the fact that we appeared to say that if we needed to change the law to do something, we should bring forward an Act of Parliament to do so. That is what we will be proceeding to do in due course, and it will be debated by the House. If something is not currently within the law, and we need new legal powers to deal with it, that is how we should set about it; we should pass a law and debate it before Parliament. I am not sure what point the hon. Gentleman was trying to make in that respect.
  I have said many times that we will seek to extend the Carltona principles in order that we can delegate. It is not clear at the moment whether we can delegate only to civil servants. As I have said many times before, in the House and in public, for the purpose of clarity we should extend those principles. There is no particular rhyme or reason why work on payroll can be delegated, but not in regard to some pensions. That should be looked at individually, to see what is best for those who use the services and best for the taxpayer. That is a change in the law that we will propose, and which will be debated before the House.
  The Labour party is in a muddle on contracting out and market testing, except for the hon. Member for Oldham, West, who is in no muddle. He has always been against it. I pay tribute to him on his complete consistency on the matter. He said from the start that all the contracts in the health service, which have enabled it to save £150 million a year for patient care, should be cancelled. Perhaps he still believes that. He is, however, more and more out of step with those in his party who are rather more forward-looking.
  The hon. Member for Blackburn (Mr. Straw) is on record as saying:
  "There is a wide acceptance that the division between contractor and provider that compulsory competitive tendering has produced is sensible. It has meant that in areas of basic services there are now clear definitions of what services should be provided."
  According to Dr. Lawrence Silverman, who is the Labour leader of Berkshire county council, albeit temporarily—[Interruption.] From his sensible comments, he sounds a good Tory. The hon. Member for Oldham, West should learn from him, because he speaks common sense. He has said:
  "If the private sector can provide computing, payroll and other financial services cheaper than the in-house bureaucracy, then we owe it to the people of Berkshire to make these savings and put the money saved into direct services."
  That is what rather more up-to-date Labour people than the hon. Member for Oldham, West have said. As Joe Rogaly said in the Financial Times:
  "Labour continues to be perceived as the party of bureaucracy. Labour's mission appears to be the maintenance of bureaucracy. It is as if it has not only missed the public sector reform bus, it never saw it coming."
  I believe that is right.
  As Lord Jay, my colleague at All Souls, once said, Labour remains the party that believes in its heart of hearts that
  "The gentleman from Whitehall knows best."
  One notes the use of the word "gentleman". That is what the Labour party still believes in its heart of hearts, but that is not surprising since a large number of Opposition Members are sponsored by the unions concerned with deregulation. That point was made robustly by my hon. Friend the Member for Scarborough (Mr. Sykes).
  548
  It is obvious that the Labour party will miss the bus once again on the deregulation campaign, just as it missed all the buses to do with privatisation, market testing and efficiency in the 1980s and the early 1990s. The Labour party is now getting itself into position to defend every last regulation brought forward by every last pressure group.
  Mr. John Cummings: This is rubbish.
  Mr. Waldegrave: All the work done by Christopher Booker, all the examples written about in the Sunday Telegraph and all the examples given by my hon. Friends the Members for Ludlow (Mr. Gill) and for Scarborough have simply passed the Labour party by. It will go into the trenches to defend every single regulation when it comes to it. There is one exception to the trend, the right hon. and learned Gentleman the Leader of the Opposition. [Interruption.] That causes groans from those below the Gangway, but then the right hon. and learned Gentleman often does that.
  Mr. Cummings: I am not the Leader of the Opposition and this is all rubbish.
  Mr. Waldegrave: The Leader of the Opposition said recently that the burden on British industry from regulation was putting jobs and businesses at greater risk. He went to the Confederation of British Industry and said much the same.
  That rather reminds me of the famous occasion when Harold Wilson went to Portsmouth to make a speech and said, "And why am I speaking about the Navy?" He paused and he said, "Because I am in Portsmouth." [HON. MEMBERS: "The speech was given in Chatham."] I am sorry, it was Chatham. I was just seeing whether the Opposition were awake and they have confirmed the story. Why was the Leader of the Opposition talking about deregulation? Because he was talking to the CBI. When he comes back to the House he will oppose everything that we propose, along with the rest of the Labour party.
  The campaign that the President of the Board of Trade has launched is mirrored around the world. I read today about the German campaign on deregulation. The Germans have correctly noted that the advantage that Britain, the United States and other countries have gained over the location of industry is now putting them under extreme pressure. The same thing is happening in Japan.
  My hon. Friends the Members for South Hams (Mr. Steen) and for Ludlow made it absolutely clear that we will push this measure through under the leadership of the President of the Board of Trade. We will face opposition all the way from the Labour party, which will stand for public bureaucracy, red tape and for the man from Whitehall or the town hall knowing best.
  The Opposition's stance will be of great help to us in the years ahead, as we will be able to remind the population that the Labour party has not changed one whit. It is still the same old Labour party representing the public sector unions against the interests of the consumer, representing the bureaucracies of the past against modern management methods and representing everything that the hon. Member for Oldham, West so passionately believes in. He remains the antique, ancestral voice that believes in all of that.
  Question put, That the amendment be made:—
  The House divided: Ayes 276, Noes 319.

  Division No. 2]

  [9.59 pm

  AYES

  Abbott, Ms Diane

  Eastham, Ken

  Adams, Mrs Irene

  Enright, Derek

  Ainger, Nick

  Etherington, Bill

  Ainsworth, Robert (Cov'try NE)

  Evans, John (St Helens N)

  Allen, Graham

  Ewing, Mrs Margaret

  Alton, David

  Fatchett, Derek

  Anderson, Donald (Swansea E)

  Field, Frank (Birkenhead)

  Anderson, Ms Janet (Ros'dale)

  Flynn, Paul

  Armstrong, Hilary

  Foster, Rt Hon Derek

  Ashton, Joe

  Foster, Don (Bath)

  Austin-Walker, John

  Foulkes, George

  Banks, Tony (Newham NW)

  Fraser, John

  Barnes, Harry

  Fyfe, Maria

  Barron, Kevin

  Galloway, George

  Battle, John

  Gapes, Mike

  Bayley, Hugh

  Garrett, John

  Beckett, Rt Hon Margaret

  George, Bruce

  Beith, Rt Hon A. J.

  Gerrard, Neil

  Bell, Stuart

  Godman, Dr Norman A.

  Benton, Joe

  Godsiff, Roger

  Bermingham, Gerald

  Golding, Mrs Llin

  Berry, Dr. Roger

  Gordon, Mildred

  Betts, Clive

  Gould, Bryan

  Blunkett, David

  Graham, Thomas

  Boateng, Paul

  Griffiths, Nigel (Edinburgh S)

  Boyce, Jimmy

  Griffiths, Win (Bridgend)

  Bradley, Keith

  Grocott, Bruce

  Bray, Dr Jeremy

  Gunnell, John

  Brown, Gordon (Dunfermline E)

  Hain, Peter

  Brown, N. (N'c'tle upon Tyne E)

  Hall, Mike

  Bruce, Malcolm (Gordon)

  Hanson, David

  Burden, Richard

  Harman, Ms Harriet

  Byers, Stephen

  Harvey, Nick

  Caborn, Richard

  Hattersley, Rt Hon Roy

  Callaghan, Jim

  Henderson, Doug

  Campbell, Mrs Anne (C'bridge)

  Heppell, John

  Campbell, Menzies (Fife NE)

  Hill, Keith (Streatham)

  Campbell, Ronnie (Blyth V)

  Hinchliffe, David

  Canavan, Dennis

  Hoey, Kate

  Carlile, Alexander (Montgomry)

  Home Robertson, John

  Chisholm, Malcolm

  Hood, Jimmy

  Clapham, Michael

  Hoon, Geoffrey

  Clark, Dr David (South Shields)

  Howarth, George (Knowsley N)

  Clarke, Eric (Midlothian)

  Howells, Dr. Kim (Pontypridd)

  Clarke, Tom (Monklands W)

  Hoyle, Doug

  Clelland, David

  Hughes, Kevin (Doncaster N)

  Clwyd, Mrs Ann

  Hughes, Robert (Aberdeen N)

  Coffey, Ann

  Hughes, Roy (Newport E)

  Cohen, Harry

  Hughes, Simon (Southwark)

  Connarty, Michael

  Hume, John

  Cook, Frank (Stockton N)

  Hutton, John

  Cook, Robin (Livingston)

  Ingram, Adam

  Corbett, Robin

  Jackson, Glenda (H'stead)

  Corbyn, Jeremy

  Jackson, Helen (Shef'ld, H)

  Corston, Ms Jean

  Jamieson, David

  Cousins, Jim

  Janner, Greville

  Cox, Tom

  Johnston, Sir Russell

  Cryer, Bob

  Jones, Barry (Alyn and D'side)

  Cummings, John

  Jones, Ieuan Wyn (Ynys Môn)

  Cunliffe, Lawrence

  Jones, Jon Owen (Cardiff C)

  Cunningham, Jim (Covy SE)

  Jones, Lynne (B'ham S O)

  Dafis, Cynog

  Jones, Martyn (Clwyd, SW)

  Darling, Alistair

  Jones, Nigel (Cheltenham)

  Davidson, Ian

  Jowell, Tessa

  Davies, Bryan (Oldham C'tral)

  Kaufman, Rt Hon Gerald

  Davies, Rt Hon Denzil (Llanelli)

  Keen, Alan

  Davies, Ron (Caerphilly)

  Kennedy, Charles (Ross,C&S)

  Davis, Terry (B'ham, H'dge H'l)

  Kennedy, Jane (Lpool Brdgn)

  Denham, John

  Khabra, Piara S.

  Dewar, Donald

  Kilfoyle, Peter

  Dixon, Don

  Kirkwood, Archy

  Dobson, Frank

  Leighton, Ron

  Donohoe, Brian H.

  Lestor, Joan (Eccles)

  Dowd, Jim

  Lewis, Terry

  Dunnachie, Jimmy

  Litherland, Robert

  Dunwoody, Mrs Gwyneth

  Livingstone, Ken

  Eagle, Ms Angela

  Lloyd, Tony (Stretford)

  550

  Llwyd, Elfyn

  Redmond, Martin

  Loyden, Eddie

  Reid, Dr John

  Lynne, Ms Liz

  Rendel, David

  McAllion, John

  Robertson, George (Hamilton)

  McAvoy, Thomas

  Robinson, Geoffrey (Co'try NW)

  McCartney, Ian

  Robinson, Peter (Belfast E)

  McKelvey, William

  Roche, Mrs. Barbara

  Mackinlay, Andrew

  Rogers, Allan

  McLeish, Henry

  Rooker, Jeff

  Maclennan, Robert

  Rooney, Terry

  McMaster, Gordon

  Ross, Ernie (Dundee W)

  McNamara, Kevin

  Rowlands, Ted

  McWilliam, John

  Ruddock, Joan

  Madden, Max

  Salmond, Alex

  Maddock, Mrs Diana

  Sedgemore, Brian

  Mahon, Alice

  Sheerman, Barry

  Mandelson, Peter

  Sheldon, Rt Hon Robert

  Marek, Dr John

  Shore, Rt Hon Peter

  Marshall, David (Shettleston)

  Short, Clare

  Marshall, Jim (Leicester, S)

  Simpson, Alan

  Martin, Michael J. (Springburn)

  Skinner, Dennis

  Martlew, Eric

  Smith, Andrew (Oxford E)

  Maxton, John

  Smith, C. (Isl'ton S & F'sbury)

  Meacher, Michael

  Smith, Llew (Blaenau Gwent)

  Meale, Alan

  Snape, Peter

  Michael, Alun

  Soley, Clive

  Michie, Bill (Sheffield Heeley)

  Spearing, Nigel

  Michie, Mrs Ray (Argyll Bute)

  Spellar, John

  Milburn, Alan

  Squire, Rachel (Dunfermline W)

  Mitchell, Austin (Gt Grimsby)

  Steel, Rt Hon Sir David

  Moonie, Dr Lewis

  Steinberg, Gerry

  Morgan, Rhodri

  Stevenson, George

  Morley, Elliot

  Stott, Roger

  Morris, Rt Hon A. (Wy'nshawe)

  Strang, Dr. Gavin

  Morris, Estelle (B'ham Yardley)

  Straw, Jack

  Morris, Rt Hon J. (Aberavon)

  Taylor, Mrs Ann (Dewsbury)

  Mudie, George

  Taylor, Matthew (Truro)

  Mullin, Chris

  Thompson, Jack (Wansbeck)

  Murphy, Paul

  Tipping, Paddy

  Oakes, Rt Hon Gordon

  Tyler, Paul

  O'Brien, Michael (N W'kshire)

  Vaz, Keith

  O'Brien, William (Normanton)

  Walker, Rt Hon Sir Harold

  O'Hara, Edward

  Wallace, James

  Olner, William

  Walley, Joan

  O'Neill, Martin

  Wardell, Gareth (Gower)

  Orme, Rt Hon Stanley

  Wareing, Robert N

  Paisley, Rev Ian

  Watson, Mike

  Parry, Robert

  Welsh, Andrew

  Patchett, Terry

  Wicks, Malcolm

  Pendry, Tom

  Wigley, Dafydd

  Pickthall, Colin

  Williams, Rt Hon Alan (Sw'n W)

  Pike, Peter L.

  Williams, Alan W (Carmarthen)

  Pope, Greg

  Wilson, Brian

  Powell, Ray (Ogmore)

  Winnick, David

  Prentice, Ms Bridget (Lew'm E)

  Wise, Audrey

  Prentice, Gordon (Pendle)

  Worthington, Tony

  Prescott, John

  Wray, Jimmy

  Primarolo, Dawn

  Wright, Dr Tony

  Purchase, Ken

  Young, David (Bolton SE)

  Quin, Ms Joyce

  Radice, Giles

  Tellers for the Ayes:

  Randall, Stuart

  Mr. Eric Illsley and

  Raynsford, Nick

  Mr. Dennis Turner.

  NOES

  Ainsworth, Peter (East Surrey)

  Baker, Nicholas (Dorset North)

  Aitken, Jonathan

  Baldry, Tony

  Alexander, Richard

  Banks, Matthew (Southport)

  Alison, Rt Hon Michael (Selby)

  Banks, Robert (Harrogate)

  Allason, Rupert (Torbay)

  Bates, Michael

  Amess, David

  Beggs, Roy

  Ancram, Michael

  Bellingham, Henry

  Arbuthnot, James

  Bendall, Vivian

  Arnold, Jacques (Gravesham)

  Beresford, Sir Paul

  Arnold, Sir Thomas (Hazel Grv)

  Biffen, Rt Hon John

  Ashby, David

  Blackburn, Dr John G.

  Aspinwall, Jack

  Body, Sir Richard

  Atkinson, David (Bour'mouth E)

  Bonsor, Sir Nicholas

  Atkinson, Peter (Hexham)

  Booth, Hartley

  Baker, Rt Hon K. (Mole Valley)

  Boswell, Tim

  551

  Bottomley, Peter (Eltham)

  Gale, Roger

  Bottomley, Rt Hon Virginia

  Gallie, Phil

  Bowden, Andrew

  Gardiner, Sir George

  Bowis, John

  Garel-Jones, Rt Hon Tristan

  Boyson, Rt Hon Sir Rhodes

  Garnier, Edward

  Brandreth, Gyles

  Gill, Christopher

  Brazier, Julian

  Gillan, Cheryl

  Bright, Graham

  Goodson-Wickes, Dr Charles

  Brooke, Rt Hon Peter

  Gorman, Mrs Teresa

  Brown, M. (Brigg & Cl'thorpes)

  Gorst, John

  Browning, Mrs. Angela

  Grant, Sir A. (Cambs SW)

  Bruce, Ian (S Dorset)

  Greenway, Harry (Ealing N)

  Budgen, Nicholas

  Greenway, John (Ryedale)

  Burns, Simon

  Griffiths, Peter (Portsmouth, N)

  Burt, Alistair

  Grylls, Sir Michael

  Butcher, John

  Gummer, Rt Hon John Selwyn

  Butler, Peter

  Hague, William

  Butterfill, John

  Hamilton, Rt Hon Archie (Epsom)

  Carlisle, John (Luton North)

  Hamilton, Neil (Tatton)

  Carlisle, Kenneth (Lincoln)

  Hampson, Dr Keith

  Carrington, Matthew

  Hannam, Sir John

  Carttiss, Michael

  Harris, David

  Cash, William

  Haselhurst, Alan

  Channon, Rt Hon Paul

  Hawkins, Nick

  Churchill, Mr

  Hawksley, Warren

  Clappison, James

  Hayes, Jerry

  Clark, Dr Michael (Rochford)

  Heald, Oliver

  Clarke, Rt Hon Kenneth (Ruclif)

  Heath, Rt Hon Sir Edward

  Clifton-Brown, Geoffrey

  Heathcoat-Amory, David

  Coe, Sebastian

  Hendry, Charles

  Colvin, Michael

  Heseltine, Rt Hon Michael

  Congdon, David

  Higgins, Rt Hon Sir Terence L.

  Conway, Derek

  Hill, James (Southampton Test)

  Coombs, Anthony (Wyre For'st)

  Hogg, Rt Hon Douglas (G'tham)

  Coombs, Simon (Swindon)

  Horam, John

  Cope, Rt Hon Sir John

  Hordern, Rt Hon Sir Peter

  Cormack, Patrick

  Howard, Rt Hon Michael

  Couchman, James

  Howarth, Alan (Strat'rd-on-A)

  Cran, James

  Howell, Rt Hon David (G'dford)

  Currie, Mrs Edwina (S D'by'ire)

  Howell, Sir Ralph (N Norfolk)

  Curry, David (Skipton & Ripon)

  Hughes Robert G. (Harrow W)

  Davies, Quentin (Stamford)

  Hunt, Rt Hon David (Wirral W)

  Davis, David (Booth ferry)

  Hunter, Andrew

  Deva, Nirj Joseph

  Jack, Michael

  Devlin, Tim

  Jackson, Robert (Wantage)

  Dickens, Geoffrey

  Jenkin, Bernard

  Dicks, Terry

  Jessel, Toby

  Dorrell, Stephen

  Johnson Smith, Sir Geoffrey

  Douglas-Hamilton, Lord James

  Jones, Gwilym (Cardiff N)

  Dover, Den

  Jones, Robert B. (W Hertfdshr)

  Duncan, Alan

  Jopling, Rt Hon Michael

  Duncan-Smith, Iain

  Kellett-Bowman, Dame Elaine

  Dunn, Bob

  Key, Robert

  Durant, Sir Anthony

  Kilfedder, Sir James

  Dykes, Hugh

  King, Rt Hon Tom

  Eggar, Tim

  Kirkhope, Timothy

  Elletson, Harold

  Knapman, Roger

  Emery, Rt Hon Sir Peter

  Knight, Mrs Angela (Erewash)

  Evans, David (Welwyn Hatfield)

  Knight, Greg (Derby N)

  Evans, Jonathan (Brecon)

  Knight, Dame Jill (Bir'm E'st'n)

  Evans, Nigel (Ribble Valley)

  Knox, Sir David

  Evans, Roger (Monmouth)

  Kynoch, George (Kincardine)

  Evennett, David

  Lait, Mrs Jacqui

  Faber, David

  Lamont, Rt Hon Norman

  Fabricant, Michael

  Lang, Rt Hon Ian

  Fairbairn, Sir Nicholas

  Lawrence, Sir Ivan

  Fenner, Dame Peggy

  Legg, Barry

  Field, Barry (Isle of Wight)

  Leigh, Edward

  Fishburn, Dudley

  Lester, Jim (Broxtowe)

  Forman, Nigel

  Lidington, David

  Forsyth, Michael (Stirling)

  Lilley, Rt Hon Peter

  Forsythe, Clifford (Antrim S)

  Lloyd, Peter (Fareham)

  Forth, Eric

  Lord, Michael

  Fowler, Rt Hon Sir Norman

  Luff, Peter

  Fox, Dr Liam (Woodspring)

  Lyell, Rt Hon Sir Nicholas

  Fox, Sir Marcus (Shipley)

  MacGregor, Rt Hon John

  Freeman, Rt Hon Roger

  MacKay, Andrew

  French, Douglas

  Maclean, David

  Fry, Peter

  McLoughlin, Patrick

  552

  McNair-Wilson, Sir Patrick

  Smith, Sir Dudley (Warwick)

  Madel, David

  Smith, Tim (Beaconsfield)

  Maginnis, Ken

  Smyth, Rev Martin (Belfast S)

  Maitland, Lady Olga

  Soames, Nicholas

  Malone, Gerald

  Speed, Sir Keith

  Mans, Keith

  Spencer, Sir Derek

  Marland, Paul

  Spicer, Sir James (W Dorset)

  Marlow, Tony

  Spicer, Michael (S Worcs)

  Marshall, John (Hendon S)

  Spink, Dr Robert

  Marshall, Sir Michael (Arundel)

  Spring, Richard

  Martin, David (Portsmouth S)

  Sproat, Iain

  Mates, Michael

  Squire, Robin (Hornchurch)

  Mawhinney, Dr Brian

  Stanley, Rt Hon Sir John

  Mayhew, Rt Hon Sir Patrick

  Steen, Anthony

  Mellor, Rt Hon David

  Stephen, Michael

  Merchant, Piers

  Stern, Michael

  Milligan, Stephen

  Stewart, Allan

  Mills, Iain

  Streeter, Gary

  Mitchell, Andrew (Gedling)

  Sumberg, David

  Mitchell, Sir David (Hants NW)

  Sweeney, Walter

  Moate, Sir Roger

  Sykes, John

  Monro, Sir Hector

  Tapsell, Sir Peter

  Montgomery, Sir Fergus

  Taylor, Ian (Esher)

  Moss, Malcolm

  Taylor, Rt Hon John D. (Strgfd)

  Needham, Richard

  Taylor, John M. (Solihull)

  Nelson, Anthony

  Taylor, Sir Teddy (Southend, E)

  Neubert, Sir Michael

  Temple-Morris, Peter

  Nicholls, Patrick

  Thomason, Roy

  Nicholson, David (Taunton)

  Thompson, Sir Donald (C'er V)

  Nicholson, Emma (Devon West)

  Thompson, Patrick (Norwich N)

  Norris, Steve

  Thornton, Sir Malcolm

  Onslow, Rt Hon Sir Cranley

  Thurnham, Peter

  Oppenheim, Phillip

  Townend, John (Bridlington)

  Ottaway, Richard

  Townsend, Cyril D. (Bexl'yh'th)

  Page, Richard

  Tracey, Richard

  Paice, James

  Tredinnick, David

  Patnick, Irvine

  Trend, Michael

  Patten, Rt Hon John

  Trotter, Neville

  Pattie, Rt Hon Sir Geoffrey

  Twinn, Dr Ian

  Pawsey, James

  Vaughan, Sir Gerard

  Peacock, Mrs Elizabeth

  Viggers, Peter

  Pickles, Eric

  Waldegrave, Rt Hon William

  Porter, Barry (Wirral S)

  Walden, George

  Portillo, Rt Hon Michael

  Walker, A. Cecil (Belfast N)

  Powell, William (Corby)

  Walker, Bill (N Tayside)

  Redwood, Rt Hon John

  Ward, John

  Renton, Rt Hon Tim

  Wardle, Charles (Bexhill)

  Richards, Rod

  Waterson, Nigel

  Riddick, Graham

  Watts, John

  Robathan, Andrew

  Wells, Bowen

  Roberts, Rt Hon Sir Wyn

  Wheeler, Rt Hon Sir John

  Robertson, Raymond (Ab'd'n S)

  Whitney, Ray

  Robinson, Mark (Somerton)

  Whittingdale, John

  Roe, Mrs Marion (Broxbourne)

  Widdecombe, Ann

  Ross, William (E Londonderry)

  Wilkinson, John

  Rowe, Andrew (Mid Kent)

  Willetts, David

  Rumbold, Rt Hon Dame Angela

  Wilshire, David

  Ryder, Rt Hon Richard

  Winterton, Mrs Ann (Congleton)

  Sackville, Tom

  Winterton, Nicholas (Macc'f'ld)

  Sainsbury, Rt Hon Tim

  Wolfson, Mark

  Scott, Rt Hon Nicholas

  Wood, Timothy

  Shaw, David (Dover)

  Yeo, Tim

  Shaw, Sir Giles (Pudsey)

  Young, Rt Hon Sir George

  Shepherd, Colin (Hereford)

  Shepherd, Richard (Aldridge)

  Tellers for the Noes:

  Shersby, Michael

  Mr. David Lightbown and

  Sims, Roger

  Mr. Sydney Chapman.

  Skeet, Sir Trevor

  Question accordingly negatived.
  Debate to be resumed tomorrow.

  Trade, Industry and Deregulation

    WELSH GRAND COMMITTEE
    Ordered,
    That, during the proceedings on the Matter of the implications of the Budget for Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall

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    not commence before Four o'clock nor continue after the Committee has considered the Matter for two hours at that sitting. —[Mr. Robert G. Hughes.]

  PETITION

    VAT (bus and coach fares)
    10.18 pm
    Mrs. Llin Golding: I wish to present a petition—[Interruption.]
    Mr. Deputy Speaker (Mr. Michael Morris): Order. Will hon. Members please leave the Chamber peacefully and quietly?
    Mrs. Golding: I wish to present a petition, supported by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), which expresses the fears of many thousands of our constituents that the imposition of VAT on bus and coach fares would be an intolerable burden for them.
    Many of those people pay fares to travel to colleges, to work, to visit relatives, to shop and to help out in the voluntary sector. Any increase in fares would cause them hardship and would also result in a loss of business and probably jobs in our local bus services, especially the Potteries Motor and Traction Company.
    'To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament her assembled. The Humble Petition of the people of Newcastle sheweth That the case for VAT on bus and coach fares is unsound on financial, transport, planning and environmental grounds. Wherefore, your Petitioners pray that your Honourable House will take care to reject any moves to impose VAT on bus and coach fares and to ensure the maintenace of zero rating on public transport.
    And your Petitioners, as in duty bound, will ever pray'.
    To lie upon the Table.

  Set-aside (Scotland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
  10.20 pm
  Mr. Archy Kirkwood: I hope that the House will agree that, albeit short, this debate is a timely opportunity to allow the House to make some representations and to seek clarification from the Government on a subject which is causing concern on both sides of the House. I hope that, if they catch your eye, Mr. Deputy Speaker, the hon. Members for Tayside, North (Mr. Walker) and for East Lothian (Mr. Home Robertson), a well-known constituent of mine, will add their voices and make my submission an all-party one.
  There is great concern because cereal producers in non-less-favoured areas of Scotland face potential swingeing penalties this year and possibly even greater losses in subsequent years. Those losses are harder to contemplate because they were completely unexpected and came after a very difficult harvest.
  I hope that the Under-Secretary of State for Scotland will agree that there has been much comment in the recent past about the issue, some of which has generated more heat than light, and some of which has been unfortunate from our point of view. Unfortunately, such comments have come from both sides of the argument. I should like to try to draw a line under that rather emotional approach, put it firmly behind us and look forward rationally to what can be done to deal with the difficulty. None of us wants to be in the present situation. We must try to find a way out of it.
  As the House will know, area aid payments were put in place to compensate for the drop in farm income expected as a result of the 30 per cent. drop in price support. The general set-aside scheme offers assistance to cereal producers who are willing to leave untouched 15 per cent. of their productive land in order to be eligible for area aid payments in compensation.
  It was always accepted by policy makers that the overall costs of that package would increase in the short term in order that supply and demand could be better balanced in the longer term. Indeed, the Minister himself was reported this year expressing satisfaction that the support funding paid by his Department would be increased this year.
  The deal that was struck in Brussels—the MacSharry proposals for the three-year period until 1996—was welcomed by the industry because it was regarded as a reasonable package of measures that would provide some stability for the foreseeable future. It was hardly surprising then that such great concern was expressed when the full implications and extent of the 5·4 per cent. penalty for the majority of Scotland's arable land became known.
  Of course, that concern is not restricted to the farming industry. A detrimental effect will be felt by all sectors of the cereals sector, whether it be growers, merchants or processors. There will also be further knock-on effects in downstream industries such as road haulage. There have been estimates of up to £20 million as the full cost of the present penalties to the industry if the measures are implemented in full. Of course, that pays no regard to the longer-term effect of loss of markets to places and producers outside Scotland.
  The irony is that Scotland has been very successful in taking cereal areas out of production—successful

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  compared with other European countries. The figures show that clearly. The crux of the problem is the way in which the base area was originally calculated. Census figures for the years 1989, 1990 and 1991 have been invested with a significance that they were never designed to bear. To suggest that farmers have overshot by 5·4 per cent. assumes that 20 per cent. of Scottish farmers have an average 27 per cent. additional arable land.
  Various permutations of the figures can be arrived at, but it stretches credibility to suggest that this is what has happened. I must therefore tell the House that the industry has no confidence in the calculation of the base reference area. Census forms may well be statistical tools that can identify and confirm trends, but they have suddenly been used for a crucial financial calculation, and that calculation is seen by the industry as deeply prejudicial to Scotland.
  No one should doubt that this penalty discriminates against Scottish cereal producers in the Community. We must find some mechanism to mitigate the financial consequences of these penalties. If we do not, we may risk driving producers out of the system altogether. The Minister knows that it is voluntary. They will then resort to large-acreage, high-yield, high-input crops, thus destroying the whole objective that set-aside was put in place to achieve.
  We must therefore get Ministers to accept that there is a problem and to agree to use their best endeavours, within the rules, to find ways of mitigating the proposals and penalties, especially next year.
  I understand that the president and officers of the National Farmers Union for Scotland, who lobbied this place effectively earlier today, met the Secretary of State for Scotland this afternoon. Interpreting the statement issued by the Secretary of State after the meeting, it looks as though the industry will get nothing more than tea and sympathy.
  Mr. Menzies Campbell: My hon. Friend is presenting his case with considerable restraint and responsibility, but is he aware of the depth of frustration and anger felt by the farming community in his constituency and mine because of the apparent intransigence on the part of the Scottish Office? Does he agree that, unless this matter is properly resolved, there may be such a crisis of confidence that any reasonable relationship between the industry and the Scottish Office may break down for ever?
  Mr. Kirkwood: I do indeed. That point has also been made to me by my right hon. Friends the Members for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) and for Berwick-upon-Tweed (Mr. Beith): a real head of steam is building up, and if the Government do not recognise that, they will get their just desserts in the form of retribution later on.
  Early press reports suggest that the Secretary of State believes that the industry is already receiving large sums of taxpayers' money. That is to ignore the tiny profit margins and negligible returns on capital earned by most farm businesses in the arable sector. It also ignores the fact that the rural economy depends on a viable farming industry for survival. It further ignores the fact that there are ramifications for processors, who will in future be forced to buy grain and proteins from other countries.

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  In any case, it is not so much a question of money; it is more a question of simple justice. There is a great deal at stake. There is a growing perception that Scottish Ministers are simply not willing to fight for Scottish farmers. As the Minister will know, a precedent has already been set in Germany, where an admittedly smaller overshoot has already been accommodated without penalty, and most other EC countries have not even submitted preliminary returns and may be quietly cooking the books to their own advantage.
  Neither the industry nor I suggest that anything underhand should be done but I want to put two questions squarely to the Minister and I hope that he will have the chance to answer them this evening. First, will he review the validity of the census data from which the base area was calculated? Secondly, will he agree to make urgent approaches to the Commission to explore ways of getting around the effects of this penalty?
  In conclusion, I firmly believe that, with significant political will, a way around the problem can be found. I hope that the Minister will give the House an assurance and a clear undertaking that he will use his best endeavours to sort out the mess quickly.
  10.29 pm
  Mr. Bill Walker: I thank the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for giving me the opportunity to speak in this short debate. I am sure that my hon. Friend the Minister is well aware that there is a large cereal-growing sector in Tayside. People in that sector are deeply concerned, because they do not understand how the figures were calculated. As they received information that told them effectively to ignore the set-aside data previously supplied, it would seem that there is a strong case for re-examining the figures and making suggestions that will restore the confidence not simply of the National Farmers Union but of all the farmers in the good relationship that they have enjoyed with the Government in the past.
  10.30 pm
  Mr. John Home Robertson: I am grateful to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for allowing me a few minutes of his time. I join him and the hon. Member for Tayside, North (Mr. Walker) in appealing to the Minister to intervene even at this late stage to avoid a serious injustice in rural Scotland. I must declare a personal interest in this problem.
  My main concern is for the 374 lowland farmers in my constituency and the tens of thousands of other people whose jobs depend on cereals—maltsters, millers, road hauliers and many other people throughout Scotland. It is important to emphasise that many of them depend on spring crops which are now in jeopardy as a result of the present crisis. All those people are vital to the Scottish rural economy.
  They face an immediate and serious crisis because of the failure of the Scottish Office to declare accurate baseline cereal production statistics to the European Commission. That statistical discrepancy is 23,000 hectares, which is equivalent to one third of the whole area of East Lothian. The discrepancy is the only reason for the 5·4 per cent. penalty that rural Scotland now faces.

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  Scottish farmers have not broken any rules, but they, alone in the whole of the European Community, now face discriminatory penalties. It is bad enough that the mistake was made in the first place. But frankly, it beggars belief that Scottish Office Ministers do not appear to be lifting a finger to put things right. They can, and they must do so. If the problem had been in Norfolk rather than in northern Scotland, it would have been dealt with long ago.
  The 5£4 per cent. cut will hit rural Scotland hard in 1993–94. But my worst concern is that there will be bigger discriminatory penalties in subsequent years unless the baseline is corrected urgently. So the Scottish Office must acknowledge that the original figure declared to the European Commission was badly flawed, and the baseline area must be corrected immediately to avoid permanent damage to the Scottish rural economy. It is up to the Minister. I hope that he will say something positive tonight.
  10.32 pm
  The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): I welcome this debate. I congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on initiating it. It gives me an opportunity to answer various points that have been made in the press over the past few weeks and, of course, among farmers themselves. As hon. Members said, it is important for farmers to know the true position. It is detailed and complicated, but I will try to explain it.
  First, I want to put the matter in perspective. We need to be clear where the overshoot fits into the whole arable area payments scheme and exactly what sums of money are involved. I appreciate that in the east of Scotland, especially in the Roxburgh and Berwickshire constituency, farmers had a rotten harvest. I understand that they feel upset about this matter, but they must appreciate that we are tightly constrained by the regulations of the common agricultural policy.
  To give an indication of the sums of money that we are talking about, it is probably easiest to give an illustration. A typical arable farm of 600 acres is a reasonable illustration for many constituents of the hon. Members for Roxburgh and Berwickshire and for East Lothian (Mr. Home Robertson), and my hon. Friend the Member for Tayside, North (Mr. Walker). Let us say that, of the 600 acres in the non-less-favoured area, cereals account for 425 acres and oilseed rape for 85 acres. That means setting aside 90 acres. If there were no penalty and the overshoot had not taken place—
  Mr. Home Robertson: There was no overshoot.
  Sir Hector Monro: The hon. Gentleman should wait and listen.
  —the cereal income under the new payment scheme would have been £22,700, the oilseed income £17,100 and the set-aside £8,700. The farmer would have received £48,500 on a 600-acre arable farm.
  With the overshoot penalty—I will explain why it is there—the payment, subject to final approval from the Commission, would total £46,000, so there would be a loss under the present scheme of £2,500.
  Everyone must please remember that this is a new grant. We are talking about £46,000 that was not available last year, but is this year because of the change in the common agricultural policy. It is a very large sum indeed.
  Mr. Andrew Welsh: The Minister's measures will take £20 million out of Scottish agriculture. Can he explain why he is more constrained than the Germans? Will he make clear the basis of his figures in these calculations, which are in extreme doubt?
  Sir Hector Monro: That is what I am about to do, if the hon. Gentleman would contain himself.
  If there is no overshoot next year, the increase on the same farm for the same crops would be up to £56,800. If there is an overshoot, the farmer would receive £53,900. These large sums are coming under the arable aid payments scheme. I welcome that, and hon. Members must realise that the sums are so large that we must be extremely accurate about what we are talking. If farmers are receiving that sort of extra income, they must not go round saying that this is disastrous for the rural economy. It will not be so.
  The hon. Member for East Lothian made a valid point. To meet the overshoot next year there must be a 5·4 per cent. penalty that is uncompensated. That is why I have included that figure in the £53,900 that the farmer with 600 acres will receive. The calculation is simple. If the hon. Gentleman has a friend with 200 acres or 1,000 acres, the total is plus or minus on the £53,900. That is a big and important sum for farming. A good number of farmers in the east of Scotland will receive over £100,000, including some in the hon. Gentleman's constituency. Hon. Members should not be so critical of the sums that farmers will receive under this scheme.
  Under the penalty scheme that I have explained, income next year will be 17 per cent. up on this year.
  Mr. Welsh indicated dissent.
  Sir Hector Monro: It is no good the hon. Gentleman shaking his head. The figures have been carefully checked and are correct.
  The reductions in payment, in effect because of the overshoot, are due to one fact only, and that is the extra cropping this spring. That is the significance of the 23,000 hectares. This is brought out not only in the integrated administrative control system form but in this year's summer agricultural returns. There has been a substantial increase in cropping this year. That is why the baseline has been exceeded and overshot by the 5·4 per cent.
  Mr. Welsh: The figures are cooked.
  Sir Hector Monro: Will the hon. Gentleman stop saying that the figures are cooked? They are absolutely accurate.
  The increase in arable area payments will be combined with other increased payments to Scottish farmers so that the total direct agricultural support available in 1993–94 will be some £300 million, an increase of almost 60 per cent. on this year's support of £188 million.
  It is therefore true to say that there has been a substantial increase. Farmers have been on far too low an income for far too long, and I welcome the substantial increase this year. That should be acknowledged. With interest rates now down to 5·5 per cent. and inflation down, farmers should feel more confident about the future.
  I shall now go into the figures in more detail so that hon. Members can understand how they have been compiled and why they are accurate. I can give a categorical assurance that the figures used by my Department in relation to the overshoot are accurate. My officials take

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  considerable care and expend considerable efforts in their statistical work. I regret that others, sometimes in the press, misrepresent and misunderstand the figures.
  CAP reforms were introduced in May 1992, following vigorous opposition by the Government to the MacSharry proposals, which Opposition Members accepted. The reforms were a victory for my Department, which was much criticised over that event.
  During the summer of 1992, we discussed with the NFU and others how best to introduce the arable area payment scheme to the benefit of Scottish farmers. With the NFU's agreement and encouragement we secured an LFA/non-LFA split so that the grain-growing areas—non-LFA, represented by Opposition Members—would receive more grant, to reflect their higher yields, than grain growers in the LFAs.
  The compensation is substantially in excess of that required to overcome any fall in prices. The scheme was introduced to compensate for falling grain prices. I appreciate that there has been a bad harvest, but, on the whole, grain prices have remained remarkably steady, and far above expectations when the policy was introduced.
  The Commission required member states to submit their average cereal acreage for 1989, 1990 and 1991 by September 1992. The only means of knowing what the acreage had been was our agricultural returns. So we averaged them out, and that was what the Commission accepted and put into the regulation. That made a total base area of 551,192 hectares, which was split giving LFAs 160,348 hectares and the rest—390,944 hectares—to non-LFAs.
  A difficulty arose in the spring, because farmers have increased their cropping by 23,000 hectares over the base figure. That sounds an enormous sum, but by adding it on as five hectares here, 10 hectares there, over a large number of farms, it has brought the increase. The substantial increase in the cultivation of grassland and a switch to oilseed rape has made the difference between the base area and the accurate figure of what was actually sown this summer, which was proved by the IACS forms and backed up by the agricultural returns in the summer of 1993.
  Mr. Home Robertson: How can the Minister possibly say that there has been such a massive discrepancy as 23,000 hectares? That is a third of East Lothian. Is he saying that Scottish farmers failed to set aside their 15 per cent. as required? If so, he is right that they should be penalised. But as the accurate IACS figures plainly show what the real figures are, that is what we should be working on. It cannot be justified that Scottish farmers, alone in Europe, must face those penalties in uncompensated set-aside next year. Surely he must do something about it.
  Sir Hector Monro: I think that the hon. Gentleman will find that a number of other countries are in trouble with the Commission about overshooting the figures given. If we overshoot again in the coming cropping season, we shall be in worse trouble. It is important that farmers understand that they must either come out of the scheme and do what they like or stay in it and be responsible, not overshoot as much as they did last year.
  The difficulty has arisen this spring because of the increase in 23,000 hectares over the base figure. That has been backed up by the agricultural returns of this
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  mid-summer. That is a statement of fact. The only way that we could conceivably have obtained the figures in the autumn of 1992 was from the agricultural returns averaged over the previous three years. We have every reason to think that those figures were accurate, and that it was right to propose them as the baseline for this country. If we do not accept that, the position will get worse.
  The object of the CAP is that, in return for restricting grain acreage, large sums of compensation are offered. The object is to reduce the amount of grain grown. The compensation was designed both to counter that reduction, and to offset the fact that the price over three years was to drop by 30 per cent.
  Mr. Kirkwood: The Minister is talking about difficult technical matters. If I am following his argument, the Minister seems to be saying that he has some evidence that farmers have not been taking 15 per cent. set-aside out of production. Has he evidence of that? If he has no evidence, the farmers have not been breaking any rules.
  Sir Hector Monro: I am not saying that our farmers have not been setting aside land—they have been, and they have been compensated for doing so. But a great deal more grain has been put into the ground than was anticipated by the baseline of August 1992. England is different in that respect, because a number of farmers in England have decided that they can go by market forces and grow much more grain, particularly for malting, over and above the market price that they receive for feed barley, perhaps being grown ineffectively in Scotland.
  The system is entirely voluntary. If farmers do not wish to use it, they are entitled to grow as much as they wish. Farmers can even do both—they can apply for the compensation under set aside, and still grow more grain, uncompensated, if they wish to make up the tonnages that they feel are necessary, for sale or for stock feed.
  I am keen that we should resolve the problem. I have some sympathy for those with problems, but we must accept that the baseline is accurate. We have substantially increased our cropping. With the large sums of money that are coming to the farming community through the scheme, there will be no threat to the rural economy. The maltsters and the grain merchants will have adequate stocks of grain. There is every sign that the countryside and the farming industry will benefit substantially from the scheme and from the rest of the money, which has been put into the farming industry during the current year and is guaranteed for next year under the common agricultural policy.
  My right hon. Friend the Secretary of State and I have made clear our willingness to look at any hard information that the industry puts forward. We will watch our position in Brussels carefully. There is no sign yet that the Commission is considering a general dispensation for the application of penalties.
  The full position of all member states is not yet known. Six or seven member states are having difficulty convincing the Commission of the acceptability of their figures. I hope to have the Commission's final approval to pay the revised rates and to start making the payments next month. Even with the revised payment rates, considerable sums of money will go into both the LFA and the non-LFA sectors.
  It has been a successful scheme, and all the farmers who participate in it are glad that they do so. I know that they are cross that some of them are losing perhaps 5 per cent.

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  of the gain they obtain from the new grant that is available to them. But as the sums of money are so large, the farmers should be able to accept that the additional sowing of crops this spring has been the root cause of the trouble. We must be careful what we do next spring, so that we do not overshoot again, and then overshoot still further the next year.
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  As I have said, we are anxious to find a solution. But hon. Members should not be optimistic that the Commission has yet found a way forward to make——
  The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at ten minutes to Eleven o'clock.