Commons Sitting of 23 June 1994

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

  COMMONS REGISTRATION (EAST SUSSEX) BILL [Lords]
  Order for Third Reading read.
  Queen's consent, on behalf of the Crown, signified.
  Read the Third time and passed, without amendment.

  LONDON DOCKLANDS DEVELOPMENT CORPORATION BILL [Lords] (By Order)
  Order for consideration, as amended, read.
  To be considered on Thursday 30 June.

  FEDERATION OF STREET TRADERS UNION (LONDON LOCAL AUTHORITIES Act 1990) (AMENDMENT) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Thursday 30 June.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Moorlands
    Mr. Matthew Banks: To ask the Minister of Agriculture, Fisheries and Food what steps are being taken to promote the new moorland scheme.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack):The details of the scheme are under active consideration and we hope to be able to launch the scheme before the end of the year.
    Mr. Banks: I am grateful to my hon. Friend. Is not the moorland scheme an excellent example of an environmental dimension to farming? Does not the Government's approach contrast starkly with that of the Labour party, which seems all too obsessed with having councillors in charge of farms in the countryside, rather than the farmers who know something about the subject?
    Mr. Jack: My hon. Friend has been assiduous in his reading of the Opposition's propaganda on the matter, and his interpretation of it is correct. We attach much importance to the environmental dimension in agriculture, but we want farmers to respond to our many schemes positively.
    Mr. Bennett: How much extra public access to moorland will there be under the scheme? Is not it scandalous that vast sums of public money are given to landowners who deny the public access to areas such as the forest of Bowland or the north Yorkshire moors?
    Mr. Jack: If the hon. Gentleman has studied the vast number of environmental options available he will know that there are two specific schemes aimed at increasing access, particularly to districts such as environmentally sensitive areas—a subject on which he has probed me at the Dispatch Box. The moorlands scheme is designed to help the regeneration of heather moorland, thus making it much more pleasant for the hon. Gentleman and his friends to walk on.

    Food Law Deregulation
    Mr. Brandreth: To ask the Minister of Agriculture, Fisheries and Food what representations she has received concerning the food law deregulation plan; and if she will make a statement.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Nicholas Soames): Officials in my Department have received a wide range of representations from industry, consumer and enforcement interests regarding the food law deregulation plan.
    Mr. Brandreth: Will my hon. Friend confirm that the central purpose of the plan is to protect and inform the British consumer and, at the same time, to ensure that British producers and manufacturers are not disadvantaged by unfair practices?
    Mr. Soames: I am grateful to my hon. Friend, who gives the exact extent and nature of the plan, which is to ensure that regulation and enforcement are sensible and pragmatic, and in direct proportion to the risks involved without compromising essential public health standards. My hon. Friend is also right to mention the great importance of not allowing business to be swamped with entirely unnecessary, overweening and over-arching bureaucracy.
    Mr. Flynn: Is the Minister aware that, as part of the relaxation of regulations, a genetically engineered virus which is contaminated with scorpion venom is to be released in a wood in Oxford to improve the growth of cabbages by attacking moths that feed on them? That experiment has greatly upset the Butterfly Conservation Society, which believes that the virus will spread to butterflies. Would not it be safer and more sensible for an experiment to be carried out in which the scorpion venom was fed to members of the Cabinet? Even if that experiment failed, the country might benefit greatly.
    Mr. Soames: I have always considered the hon. Gentleman the first genetically modified organism I ever saw. We would never want to do anything to harm butterflies, let alone their societies.
    On a more serious note, the hon. Gentleman should be aware that our rules governing experiments to do with genetic engineering of any sort are probably the strictest in the world. The public can have supreme confidence not only in our regulations but in the fact that they are extremely vigorously enforced.

    Pigs
    Mr. Martyn Jones: To ask the Minister of Agriculture, Fisheries and Food what representations she has had concerning the trade in pigs and related products in the United Kingdom.
    Mr. Jack: My right hon. Friend and I are in frequent contact with representatives of the farming industry, including those representing pig producers. Most recently, we have had meetings with representatives of the British Pig Association on 19 April and 9 May and with the National Farmers Union on 19 May. On both occasions a wide range of matters was discussed.
    Mr. Jones: When the Minister had those talks he must have heard representations about the illegal state aids paid by the French Government to their pig producers. When can United Kingdom producers expect a level playing field vis-a-vis their French counterparts?
    Mr. Jack: I can assure the hon. Gentleman, who is right to raise that question, that my right hon. Friend has vigorously taken up the matter with the European Commission. It is investigating all the aids that the French Government were paying their pig producers. We await the outcome, but this is an extremely important matter, and we shall take up any examples of what are deemed to be illegal payments in the Community in this or any other sector.
    Mr. Hicks: I hear what my hon. Friend says about the Commission's inquiry, but may I emphasise to him the urgency of the situation? The longer we wait for the outcome of the inquiry—whatever recommendations emerge from it and are subsequently implemented—the longer the United Kingdom pig industry will go on suffering.
    Mr. Jack: I certainly understand that. I reiterate that my right hon. Friend has pursued the matter as vigorously as possible. The time that the Commission takes to investigate such matters is always disappointing. Meanwhile, this year we are spending about £14 million on research and development to aid our pig industry.
    Mr. Morley: The whole House will be aware of the public concern about standards of transportation for pigs and other animals. I welcome the Government's opposition to the Greek compromise proposals on welfare standards at the Agriculture Council on Monday, but last week the Minister himself described the proposals as a great step forward. Have the Government been converted on the road to Damascus, or have they found themselves, as usual, isolated in the Council?
    Mr. Jack: Once my right hon. Friend reached the road to Luxembourg, and had listened to what the fellow travellers on that road had to say, she became convinced that, although the proposals represented some improvement, they were not enough of an improvement. Once she had listened to the debate, she found herself unable to support the proposals in the Agriculture Council.
    Mr. Nicholls: Will my hon. Friend accept that another reason why pig farmers are disgruntled is that they have been obliged to implement welfare measures which do not have to be implemented in Europe until after the year 2000? Is not there a case for saying that, if we are to go hand in hand with Europe, we should move in step with Europe and not substantially disadvantage our pig farmers?
    Mr. Jack: My hon. Friend may recall that the original private Member's Bill would have allowed no transition period in which to phase out the stall and tether system, to which I think he refers. Because the Bill was amended,
    344
    there is now a period for adjustment. Many pig farmers have made representations to us about the financial implications. There could be tax implications, but they are a matter for my right hon. and learned Friend the Chancellor.

    Common Agricultural Policy
    Sir Thomas Arnold: To ask the Minister of Agriculture, Fisheries and Food when she next expects to meet her EC counterparts to discuss the further reform of the CAP.
    Mr. Jack: At this very moment, my right hon. Friend is negotiating in the Council of Ministers on this very subject.
    Sir Thomas Arnold: Will my hon. Friend confirm that the proportion of the European Community budget taken up by the common agricultural policy has significantly declined since the late 1980s? However, is not the cost still far too high and should not it be reduced?
    Mr. Jack: I entirely agree with the line that my hon. Friend takes. The cost has dropped in recent years—from about 80 per cent. to about 54 per cent. of the Community's budget. The United Kingdom is in the vanguard of those seeking further reforms of the agricultural policy and to reduce the costs to Community taxpayers, to increase competition and to bring down food prices.
    Mr. Tyler: Is the Minister ready to repeat the pledge given by the former Minister, the right hon. Member for Suffolk, Coastal (Mr. Gummer), that the total cost of the common agricultural policy in the current year, next year and the year after will fall progressively, and, if so, by how much?
    Mr. Jack: Once the proposals for reforms have worked through over their three-year period, the cost of the Community's agricultural policy will have dropped by £8 billion—a saving to this country of £1 billion.
    Mr. Enright: Will the Minister ensure that the Minister also takes into account the agricultural situation of the Maghreb, the Mashraq and the Lomé countries, in reforming the CAP? He has given half that assurance before and I should be grateful if he would give it fully.
    Mr. Jack: I know that the hon. Gentleman takes a great interest in those important matters. As far as I understand it, those issues are not on the agenda for this Agriculture Council, but I shall certainly draw the hon. Gentleman's remarks to the attention of my right hon. Friend on her return.
    Mr. Dafis: Given that there is a need for the reform of the CAP, and in, view of the issues already raised, does the Minister accept that that must take the form not simply of swingeing cuts but of redirection of support? Does he accept, at the same time, that we need a policy that will strengthen the countryside and at least maintain the present level of the agricultural population? Does not he see a system of assistance for the entry of young farmers as absolutely integral to that?
    Mr. Jack: The hon. Gentleman may be interested in the answer to a subsequent question on the entry of young farmers, because it is germane to agricultural tenancy reform. He talks of swingeing cuts, but perhaps he has not looked at exactly what is happening. Under the present

    345
    reform package, there is a shift away from direct payment, through schemes such as the intervention fund, for example, to direct payments to farmers especially, which have an encouraging environmental factor. In response to an earlier question, I alluded to the fact that the United Kingdom Government, with their own agri-environment package, will be spending something like £100 million by the financial year 1995–96.

    Agriculture Science
    Sir John Gorst: To ask the Minister of Agriculture, Fisheries and Food what assessment she has made of the part science is to play in the future competitiveness of British agriculture.
    Mr. Soames: We regularly review our research programme and in February we published a research strategy, which describes how science will contribute to the Ministry's aim of improving the economic performance of the agriculture, food and fishing industries.
    Sir John Gorst: Can my hon. Friend give an assurance that everything possible is being done to foster a productive relationship among industry, the Government and the academic world?
    Mr. Soames: I am happy to give my hon. Friend such an assurance and I am grateful to him for the phrasing of his question. We foster that relationship through the adoption of clear and foresighted technology and research, largely through the link programmes—the institution through which we seek to improve relationships between industry, academia and Government. The Ministry of Agriculture, Fisheries and Food has seven link programmes—three in food and four in agriculture—involving almost £25 million a year. We take seriously our obligation in that matter and I assure my hon. Friend that the situation is exactly as he would wish it to be.
    Mr. Skinner: Does the Minister agree that, if science is not properly harnessed, it can work both ways? Is he aware that, this morning, on the M1 near Bolsover, not far from the Coalite factory, once again, a chemical cloud resulted in danger to motorists and problems for the agriculture in the area? Will he contact the senior inspector of pollution to ensure that he has all the facts and that the incident is dealt with, and that all possible steps are taken to ensure that it does not happen again? It is not the first time.
    Mr. Soames: Of course I will certainly undertake exactly what the hon. Gentleman asks. He and I have already been round this course once together as a result of Coalite and I very much hope, and I am sure, that that incident will not be anything like as serious as the previous one, but I shall report to him as soon as I have made inquiries.
    Mr. Paice: Does my hon. Friend agree that British competitiveness is seriously affected by whether decisions are made on the strength of genuine scientific knowledge or on emotional claptrap? Will he congratulate the Commission on using scientific evidence, correctly, to prevent the Germans taking further their attack on British beef? Will he encourage it also to use precisely the same scientific approach to such issues as nitrates in lettuce and pesticides in water?
    Mr. Soames: As we would expect, my hon. Friend goes to the very core of the problem for the future of science in that sector, which is becoming more and more sophisticated and complex. More and more profound ethical and scientific decisions must be taken with clear-headed foresight and by using the clearly laid down rules that have served us and the Community extremely well. If we move away from science and allow politics to hijack the issue, we will be on a rocky road indeed.
    Mr. Alton: Will the Minister ask his departmental scientists to reconsider the use of anabolic steroids for cattle, especially as new evidence from gynaecologists and obstetricians shows that the emission of oestrogen from those substances is causing male infertility? It is one of the major reasons why there has been a 50 per cent. reduction in male fertility over the past 40 years.
    Mr. Soames: I shall certainly draw the hon. Gentleman's remarks to the attention of our scientists. The use of hormones and residues in meat is strictly governed. As the hon. Gentleman is aware, Britain has one of the most sophisticated surveillance programmes in the world. I assure him that, if there is any wrongdoing, we clamp down on it quickly. He has asked a straight scientific question; we shall investigate his remarks and I shall report back to him.
    Mr. Hawkins: Will my hon. Friend confirm that his Department is contributing to the technology foresight programme? Will not the partnership among agriculture, industry and the Department be crucial, especially for constituencies such as mine that are heavily involved in both food and confectionary manufacture? Will he further confirm that his Department is happy to work with the Food and Drink Federation in studying the involvement of science in both agriculture and food production?
    Mr. Soames: I am happy to give my hon. Friend the categorical assurances that he seeks. His constituency includes an impressive array of companies that would be concerned about such research. The link programme is studying food processing sciences and advanced and hygienic food manufacturing techniques, all of which are critical to the competitiveness of the food and farming industries. We should be proud of those industries which do best of all, and in which we are genuinely world leaders.

    Beer Imports
    Mr. Gapes: To ask the Minister of Agriculture, Fisheries and Food if she will make a statement on imports of beer from European Union countries and the effect on the British brewing industry.
    Mr. Jack: I understand that the industry estimates that commercial imports fell last year.
    Mr. Gapes: Why, then, are tens of thousands of bottles of imported French lager on the shelves of Sainsburys and Tescos throughout the country? People are buying that beer, presumably because the tax level is much lower than it is on our domestically produced beer.
    Are not British jobs being put at risk by the dual policy that allows a flood of cheap imported beer—which is good for the consumer, something that I generally favour—

    347
    while imposing a regressive tax on domestically produced beer? Just as the Government impose a VAT increase, they are also clobbering ordinary people through the beer tax.
    Mr. Jack: It always amazes me when Labour Members want to indulge in knocking the British brewing industry. The hon. Gentleman did not want to tell the House that United Kingdom beer exports rose by 10 per cent. in 1993.
    On the first part of the hon. Gentleman's question, I cannot think that there would be any difference in the tax levied, at whatever rate it may be, on French, German or whatever beer sold in the United Kingdom—yet that is what he said. In the second part of his question, the hon. Gentleman alluded to some of the arguments about cross-border shopping. The duty and excise matters relating to that are the province of my right hon. and learned Friend the Chancellor of the Exchequer. However, the hon. Gentleman should keep the matter in perspective. The total amount of beer involved in that trade is the equivalent of just 3.5 per cent. of total UK consumption.
    Sir Ivan Lawrence: As the subject is something in which my hon. Friend is closely concerned, can he say what would be the cost to the Exchequer of reducing the tax differential on alcohol between ourselves and the French and the Germans to the same level as is enjoyed in those two countries? What realistic chance is there of bringing the two levels of 32p and 4p closer together so that minimum harm is done to the British brewing industry?
    Mr. Jack: My hon. and learned Friend's question touches on a wider issue that is beyond the responsibility of the Ministry of Agriculture, Fisheries and Food. However, I shall certainly write on his behalf to my right hon. Friend the Paymaster General to seek his worldly advice.
    Mr. Strang: How complacent can the Government get in respect of personal beer imports? Can the Minister contemplate the reverse situation, in which French nationals were able to cross the channel to England and buy wine at much-reduced prices? How long does the Minister think that the French Government would tolerate that? Is not it time that the Government acted to defend Britain's brewing industry and the thousands of jobs that depend on it, directly or indirectly?
    Mr. Jack: I entirely agree with the hon. Gentleman that we should take action to help the British brewing industry, which is precisely why we spent about £2 million on the link programmes to which my hon. Friend the Parliamentary Secretary referred earlier, which improved the competitiveness of British brewing, increased exports 10 per cent. in 1993 over 1992 and helped to safeguard jobs. As to the tax issues, it is not a question of complacency. My right hon. Friend the Paymaster General has dealt with those issues in extenso in public.
    Mr. Nigel Evans: My hon. Friend said that the percentage of beer illegally imported into this country is small at present, but it is increasing dramatically. Will my hon. Friend join me in visiting Calais next weekend, to examine that problem? It appears to be growing and is having an impact on the British brewing industry, and will continue to do so unless immediate action is taken to stem illegal beer imports.
    Mr. Jack: I much appreciate my hon. Friend's generosity in offering a free trip to Calais, but he will understand that the needs of my constituents in Fylde must come first. I have been to Calais in the past 12 months and seen the phenomenon to which my hon. Friend referred. Another trip would not necessarily educate me further in that respect. I say again that we must keep the matter in perspective. It is estimated that cross-border shopping for beer represents the equivalent of only 3.5 per cent. of total UK beer consumption. My Department has done what it can to strengthen the competitiveness of British brewing, in the ways that I outlined earlier.
    Mr. Hoon: The Minister sought to pass responsibility to the Paymaster General, but he must surely feel concerned about the impact of the growth of personal imports on British hop farmers and on hop production. If the present rate of increase continues, that will have a dramatic effect on the Minister's responsibilities for hop farming.
    Mr. Jack: I am obviously concerned, but I hope that the hon. Gentleman supports the attempts being made by my right hon. Friend the Paymaster General, through the work of Customs and Excise, to ensure that people play by the rules. There have been changes in import arrangements for the personal consumption of beer, wine and spirits. They are sensible easements in terms of the completion of the single European market, but robust action is taken against those who abuse the rules and who are the main cause of the problem at the heart of the hon. Gentleman's question.
    Mr. Fabricant: My hon. Friend will be aware that a number of directors and workers of the Bass brewery live in the leafy lanes of Lichfield. They are also most concerned about the amount of imported beer entering the United Kingdom for onward sale, when it should be for personal consumption only. However, will my hon. Friend congratulate my right hon. Friend the Paymaster General on a number of recent successful prosecutions? My hon. Friend mentioned a 10 per cent. export sales increase, but is he aware that Bass and a number of other breweries are now producing beers specifically for sale in France, with French consumer tastes in mind?
    Mr. Jack: I shall certainly pass on my hon. Friend's congratulations to my right hon. Friend the Paymaster General on his successful prosecutions. I congratulate Bass, which recently opened a £61 million brewery for the production of premium and export beers. British brewers are hitting back against the competition.

    Common Agricultural Policy
    Mr. Spellar: To ask the Minister of Agriculture, Fisheries and Food what proposals she has to reduce fraud in the CAP.
    Mr. Jack: The Commission has proposed the introduction of sanctions against intervention and export refund fraud. We already have such sanctions for direct payments to farmers. Subject to some clarification and textual changes, we will support this proposal, which aims to penalise fraudsters and reduce fraud.
    Mr. Spellar: Has this not taken an inordinately long time, during which thousands of millions of pounds have been ripped off from taxpayers right across the

    349
    Community? Does the Minister accept that his reply is extremely complacent in the face of enormous problems, particularly in the southern part of Europe? What does he propose to do about the scandalous behaviour of the tobacco industry, which has produced a product that even I would not smoke and ripped off £500 million a year, a considerable amount of it due to fraud?
    Mr. Jack: The hon. Gentleman asks what we intend to do about this, but it is a Community matter. If he cares to read the report of a debate in the Scrutiny Committee about the tobacco regime, he will discover that the United Kingdom has been in the lead in proposing measures to deal with the absurdities of that regime. We are in the lead in backing the work of the Court of Auditors and requesting more Community effort to combat fraud. That is why 50 more people are employed at the Department to deal with fraud and why in the past two years the number of frauds and irregularities reported has doubled.
    Mr. Garnier: Will my hon. Friend ensure that the 50 people to whom he referred and he and his colleagues give every support to the work of the European Court of Auditors, so that the fraud being noticed throughout the Community is dealt with forcefully and impartially not only at the centre of the Union but by every member of it?
    Mr. Jack: I will certainly do that. One of the important features to note from the work of the Court of Auditors is the role that the Commission can now play in ensuring that member states play by the rules because of the imposition of disallowance—the recovery of moneys which should not have been paid out. That certainly concentrates the minds of member states and we strongly support further action in that area.

    Potato Marketing Board
    Mr. Butler: To ask the Minister of Agriculture, Fisheries and Food what progress is being made concerning the future of the potato marketing board; and if she will make a statement.
    Mr. Jack: Following my right hon. Friend's announcement that the potato marketing scheme will end in 1997, the board is pressing ahead with the changes to the scheme which will allow growers to prepare for the free market.
    Mr. Butler: Is my hon. Friend aware that a number of growers are seeking a poll under the terms of the Agriculture Marketing Act 1958 to revoke the potato marketing scheme? Does he view with equanimity the prospect of our being one of the few large potato-growing countries in Europe without an organised market for potatoes and potato products? Does he have any suggestions that growers might like to consider in terms of how they proceed in this matter?
    Mr. Jack: I view with enthusiasm the change to the potato marketing regime as a result of the Agriculture Act 1993. My right hon. Friend proposed an orderly change in the present arrangements. Some potato growers have said that they want to conduct a poll and there are procedures for that. It is for growers to decide whether they wish to vote. If they vote for the removal of the board, it will go out of existence straight away. If they vote against, there are
    350
    further options for the existing potato marketing board to propose successor schemes to the present arrangement—for example, a development council for the industry.
    Mr. Foulkes: May I tell the Minister that the proposal is not welcomed by the potato growers in Ayrshire in my constituency, who produce some of the finest early potatoes in the shops now? [Interruption.] The ones grown by the sea come ready salted, which is a great advantage. Since the proposal will not come into effect until 1997, will the Minister give an assurance that nothing irrevocable will be done in the next two years, so that the Labour Government can ensure that the potato marketing board continues as at present?
    Mr. Jack: If that is the best first early that the hon. Gentleman can produce, I suggest that it should stay in the ground. He should realise that the world has moved on and that Britain's potato growers and producers of potato products have been disadvantaged by the existing marketing arrangements. The flexibility that my right hon. Friend the Minister introduced as a result of the Agriculture Act 1993 has shown itself in the way in which potato growers have already modified the area under cultivation this year, in the light of market conditions. They have also taken advantage of the processing contracts available. That reveals the way in which potato consumption is going and such change benefits all those in the potato industry.
    Mr. Clifton-Brown: May I urge my hon. Friend to press ahead with the reorganisation of the potato marketing board? He will be aware of the 500,000 tonnes of processed product that is imported into this country every year, which means that farmers could produce an extra 20,000 acres of potatoes in this country and there could be considerable extra jobs in the processing industry. Therefore, I ask my hon. Friend to proceed with the reorganisation as soon as possible.
    Mr. Jack: I thank my hon. Friend for his perceptive and commercially based comments. They stand in stark contrast to the views that we have heard from the Opposition, who seem not to be concerned about the interests of farmers or those who work in the industry producing potato products. I endorse strongly what my hon. Friend has said.
    Mr. John D. Taylor: Is not the reform of potato marketing really preparing the way for the European Union, through the common agricultural policy, to create a new regime and to control potatoes in the European Community?
    Mr. Jack: I understand the right hon. Gentleman's concern about that. If there were to be anything at Community level, the most that one could expect would be something dealing with common standards and that is a long way off. We must press on with these reforms for the benefit of the entire potato industry.
    Sir Peter Tapsell: Is my hon. Friend aware that it is not only in Ayrshire that the potato growers are keen to keep the potato marketing scheme, but also in Lincolnshire? Growers there are under the impression that when the scheme comes to an end in 1997 it is likely to be followed by a European potato regime. Is any progress being made in the establishment of that?
    Mr. Jack: We do not want to see some sort of command economy regime to replace what the potato marketing board represented. If there is not a vote to remove the PMB straight away, the future of the scheme is a matter for members of the potato industry to decide in consultation with the board.

    Agriculture (Eastern Europe)
    Mr. Dunn: To ask the Minister of Agriculture, Fisheries and Food what effect the development of agriculture in eastern Europe will have on the European Union.
    Mr. Soames: Technical improvements, and the development of market-oriented production systems could enable the farming industries of central and eastern European countries to pose a significant competitive challenge. Preferential access to EU markets under the Europe agreements will contribute to this.
    Mr. Dunn: Can my hon. Friend confirm that it would be impossible to extend the common agricultural policy as it now stands to eastern and central Europe? Is that not a further good reason for seeking to reform the CAP so as to bring it nearer to the market?
    Mr. Soames: I agree with my hon. Friend. Enlargement of the European Union to the east would involve unsustainable budgetary costs if the CAP remained in its present form. I hope that my hon. Friend will accept that the United Kingdom Government are leading efforts within the European Union to continue to bring the CAP closer to real world markets. I think that there is increasingly a more general understanding within the Community that unless those steps are taken, the CAP will disappear up its own fundamental.

    Agricultural Exports
    Mr. Clappison: To ask the Minister of Agriculture, Fisheries and Food what plans she has to improve the competitiveness of United Kingdom agricultural exports.
    Mr. Jack: Help to improve the competitiveness of UK agricultural exports will come through our continuing support of "Food From Britain," MAFF's continental challenge, our export promotion division, and the programmes outlined in the White Paper, "Competitiveness—Helping Business to Win".
    Mr. Clappison: Does my hon. Friend agree that although the British food industry has reduced the food trade gap by half since the 1960s, many opportunities remain for the industry to close the gap still further and should not the industry receive every encouragement to do so?
    Mr. Jack: We are certainly trying to give a lot of encouragement to the food and farming industry to help close the trade gap. It is interesting to note that in the last decade the value of our exports of food, animal feed and drink has increased by 50 per cent. and the schemes that I outlined in my initial reply are all available to those in food and farming to assist with exports. We are backing this up as a ministerial team by going to some of the most rapidly expanding markets in the world, such as China and India, to promote our exports.
    Mr. Grocott: Given that the Government's record in promoting trade in industrial products has been one of turning a huge surplus under Labour in 1979 to a massive deficit in the latest figures under the Tories, does the hon. Gentleman share my severe doubts about the Government's competence to do anything about agricultural exports?
    Mr. Jack: Absolutely not. The hon. Gentleman was clearly not listening to the argument that I advanced a moment ago, so I will repeat it: exports of food, animal feed and drink have increased in value over the past decade by 50 per cent. As a result of MAFF's trade promotion activities, we alone in recent years have done something like an additional £55 million worth of business by going out and pathfinding our way to new markets.
    Mr. John Greenway: Does my hon. Friend agree that we should be concerned to ensure that opportunities in the United Kingdom's agricultural sector are not closed by too strict an application of quotas through the common agricultural policy? We have the most efficient sugar regime and probably the most effective and efficient dairy regime, but our quota is less than our national consumption.
    Mr. Jack: I very much agree with my hon. Friend. He will know that my right hon. Friend the Minister has continually emphasised our objective, which is to see the quotas and restrictions on production removed. We have an extremely efficient agriculture industry, especially in the spheres that my hon. Friend mentioned, and we should very much like them to have the opportunity to prove what they can do in world markets.

    Animal Exports
    Dr. Lynne Jones: To ask the Minister of Agriculture, Fisheries and Food what plans she has to reduce the international trade in live animals for slaughter.
    Mr. Soames: Trade in live animals is a commercial matter, subject to the necessary safeguards for animal welfare and health. The question of further safeguards for animals in transport was discussed at the Agriculture Council on 20 June, when the United Kingdom received an undertaking from the Commission to bring forward further proposals on journey limits.
    Dr. Jones: Most people in this country will be disappointed by the Minister's reply. Why do not the Government support the proposal made by the Royal Society for the Prevention of Cruelty to Animals, which is now apparently also advocated by Germany, to impose an eight-hour journey limit for animals and so put a stop to this evil trade?
    Mr. Soames: The hon. Lady should not make the mistake of simplifying the matter beyond what is reasonable in difficult and technical negotiations. The Government have always acknowledged that journey times have a relevant role to play, but they are not the be-all and end-all of animal transport. We are beginning to make significant progress within the Community. The Commission has come up with new plans which we believe will significantly improve the proposals that we first saw on the table at the beginning of the week. I believe that my right hon. Friend the Minister took absolutely the right

    353
    decision to vote with the Germans and the others, pending the proposals from the Commission which will be received early next year.
    Mr. Marland: Is this not is a good opportunity to remind the House that all farmers and others in this country dealing with animals have the greatest respect for their own livestock and that problems with the transport of live animals occur not in this country but elsewhere? Will he remind the House of our very high standards and encourage the RSPCA and others not to peddle their views with the aid of appalling photographs which were obviously taken overseas but to carry out their activities where they can do some good instead of trying to suck up to their members in this country?
    Mr. Soames: My hon. Friend is quite right. The standard of animal welfare in this country is probably the highest in the world. It is a matter of pride to the British people that they have such attitudes, and it is their wish and that of their Government that we should improve the lot of travelling animals throughout the European Union. That can happen only if there is a cultural and attitudinal change in the Community. My hon. Friend is right to say that the RSPCA and others have a great deal of work to do in Europe and we remain convinced that their task is in Europe.
    Dr. Strang: Returning to the Luxembourg Council meeting this week, is it not true that last weekend Ministers were minded to vote for the Greek presidency's compromise, which would allow animals to travel for no fewer than 22 hours before being rested and fed—[Interruption.] Hon. Members should listen to this. The Government changed their mind only on the Monday morning after the Belgian Government said at the meeting of permanent representatives that they would join Germany, Denmark and Holland and vote against it. The Government changed their mind because there would have been a blocking minority vote of 23. Does that not prove the Government's duplicity and scant regard for the welfare of animals?
    Mr. Soames: Even by the hon. Gentleman's standards of rant, that is going a bit far. [Interruption.] The Opposition have made a fine choice in the hon. Member for Newcastle upon Tyne, East (Mr. Brown). Perhaps I may rehearse the truth of what actually happened. My right hon. Friend the Minister asked me to see the animal welfare bodies ahead of the Council as a courtesy, to outline to them the state of the negotiation on the paper submitted by the Greek presidency. Accordingly, at the negotiation, my right hon. Friend listened with great care to the way the negotiation was going and, seeing an opportunity to better what was on the table, and accepting the Commission's offer to develop the idea and work on journey limits, my right hon. Friend went along with what was proposed. To my mind, she took an important step forward for animal welfare. The hon. Gentleman must do better than that if he hopes to convince anyone.

  PRIME MINISTER

    Engagements
    Mr. Quentin Davies: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
    This morning, my right hon. Friend the Prime Minister presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. This afternoon, he is travelling to Corfu for the European Council. I understand that the right hon. Member for Derby, South (Mrs. Beckett) is also in Corfu attending some kind of fringe meeting.
    Mr. Davies: On the eve of the Corfu summit, does my right hon. Friend agree that Great Britain is leading the way in Europe in deregulation, privatisation, competitivity and growth, and, above all, the vital task of bringing down unemployment but that the Labour party would reverse all those things in very short order?
    Mr. Newton: I very much agree with my hon. Friend. Those issues are very much at the top of the Corfu agenda as a result of the British Government's efforts to advance those causes in Europe over a long period of time. I am glad to say that the forthcoming German presidency will be pursuing the British objectives of competitiveness and deregulation in its policies towards Europe.
    Mr. Nicholas Brown: Given that more than a million of our fellow citizens are on national health service waiting lists, can it really be the Secretary of State for Health's vision for the future to get rid of 50,000 hospital beds?
    Mr. Newton: The hon. Gentleman knows very well that the effect of the Government's reforms on the health service has been greatly to increase the number of people treated and that NHS hospitals now treat 121 patients for every 100 treated before. My right hon. Friend the Secretary of State for Health drew attention to the possible continuation of those trends in future years, building on advances in treatment to treat yet more people.
    Mr. Nicholas Brown: The Leader of the House has not really answered the question. Would it not be better to get rid of the waiting lists rather than getting rid of the hospital beds? Are not the cuts being driven by the Government's failure properly to manage public finances?
    Mr. Newton: The changes are being driven by the Government's determination to get more patients treated more effectively with shorter waiting times, and the policies are succeeding; if there is a failure, it is the failure of the Opposition to recognise the success of those policies.
    Mr. Nicholas Brown: That will not do. We have had massive tax increases under the Conservatives since the last general election and the British people now face massive cuts in services. Why is it that in Tory Britain we have to pay a lot more to get a lot less?
    Mr. Newton: The Government have consistently put additional resources in real terms into Britain's national health service. The result of those increased resources is an improving service treating more and more patients more effectively with shorter waiting times.
    Mr. Clifton-Brown: Can my right hon. Friend recall whether at any time in the past 15 years any Opposition Front-Bench spokesman has condemned any public sector strike?
    Madam Speaker: Order. I gave a little homily only a few days ago, but I think I shall have to ask the Whips to hold weekend seminars to instruct Members on what Question Time is all about: it is to seek information on Government policies and to press for action.
    Mr. Clifton-Brown: Can my right hon. Friend tell us whether any public sector strike which would damage this country, and which has been condemned by the Government, has also been condemned by the Opposition? If not, should not the British public remember that at the next general election?
    Mr. Newton: On behalf of my right hon. Friend the Prime Minister, I can perhaps offer that the Whips will run a seminar on Corfu for the right hon. Member for Derby, South (Mrs. Beckett) in the hope of getting from her the answer that we have conspicuously failed to get in the House.
    Mr. Pickthall: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Pickthall: Does the Leader of the House share the general pleasure that justice has been done in the case of Professor Tim Brighouse, who is to receive substantial damages from the Secretary of State for Education? Will he assure the House that not one penny of the damages or the costs will come from the taxpayer? Before his right hon. Friend leaves office shortly, will he urge him to apologise to all the other people involved in education whom he has gratuitously insulted over the past couple of years?
    Mr. Newton: My right hon. Friend has straightforwardly apologised and agreed reparation for the remarks to which the hon. Gentleman refers. In my judgment, at least, the matter should be left there. It does not in any way affect my right hon. Friend's ability to advance the Government's very successful education policy.
    Mr. Thurnham: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the reply I gave some moments ago.
    Mr. Thurnham: Does my right hon. Friend agree that one of the Government's most successful policies is the right to buy, which has enabled more than 1.5 million former tenants to enjoy the benefits of owner-occupation? Is he further aware that over the past five years a further 250,000 homes have been privately let? Would it not be an excellent long-term investment if the Prime Minister exercised the right to buy No. 10 Downing street?
    Mr. Newton: I certainly share my hon. Friend's view that the right to buy has been a hugely successful policy over more than a decade now, together with the Government's successful policies to increase the amount of rented accommodation, and to tackle the problem of rough sleepers in London. As for my right hon. Friend the Prime Minister, I do not know about the right to buy, but I am sure that he will exercise his right to extend the lease.
    Mr. Mackinlay: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Mackinlay: Will the Lord President draw to the attention of the Prime Minister the problem—indeed, the scandal—of court cheats who have been instructed by judges to compensate the victims of their crimes, but who refuse to pay? Is he aware that about two thirds of victims who have had awards of compensation made in their favour against the criminal are not receiving a penny? Is it not time that the Government ceased to be mealy mouthed about the problem and took action to ensure that the victims get compensation and the courts pursue the criminal?
    Mr. Newton: The hon. Gentleman will be aware of the general steps that the Government are taking to improve the detection of crime and the enforcement of the law. However, he made a slightly separate and very serious point, to which I shall respond appropriately. The right course is for me to invite the Home Secretary to examine the hon. Gentleman's remarks and to consider what response might be made.
    Mr. Clappison: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Clappison: On the subject of the pursuit of the criminal, is my right hon. Friend aware that there has been a reduction of 16 per cent. in residential burglaries in the Metropolitan police area? Should not the good work of the police be supported by the courts handing down stiff prison sentences to house burglars? Is that not the message that we should be sending out, rather than arguing about whether prison works as the Opposition home affairs team do?
    Mr. Newton: I whole-heartedly endorse the thoughts of my hon. Friend in terms of what needs to be done to continue and strengthen the fight against crime, not least burglaries. Happily, there are beginning to be some encouraging signs that the increase in crime is not irreversible. Alongside other things, there have been some welcome cases of a drop in the number of insurance claims—another sign of police success in the fight against crime.
    Dr. Lynne Jones: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Dr. Jones: Talking about fringe meetings, will the Lord President now answer the question put by my hon. Friend the Member for Lancashire, West (Mr. Pickthall) and give the House a categorical assurance that not one penny of taxpayers' money will go to bail out the Secretary of State for Education, although Labour Members believe in the redistribution of wealth and would have no objection to the Cabinet having a whip round for their no doubt soon to be ex-colleague?
    Mr. Newton: I have already commented on that and made it clear that it was a private matter.
    Sir Michael Neubert: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Sir Michael Neubert: Should we not pause to pay tribute to the astonishing turn of events that has brought the former Soviet Socialist Republic of Russia into a partnership for peace with NATO? Is there not a lesson to be drawn to the effect that our national security must be defended at all times by resolute and resourceful defence and that the best guarantee of that is a Conservative Government?
    Mr. Newton: I very much agree with my hon. Friend. The agreement signed in Brussels yesterday is an important step forward and symbolises, if further symbolisation were needed, the changes that have been going on in the former Soviet Union and sets a new framework for peaceful co-operation between Russia and NATO. Russia is the 21st nation to sign the partnership for peace agreement. I agree with my hon. Friend that it illustrates the rewards that have come from the resolute stance that the Government have adopted.
    Mr. Loyden: Will the Leader of the House remind the Prime Minister that the letter regarding MV Derbyshire that I sent to him about three weeks ago has not yet been answered? Does he agree that there is widespread concern in the House about the continuing absence of a Government response to questions and early-day motions on that matter? Will he convey to the Prime Minister the urgent need for a decision to be made so that the work now started can continue and, one hopes, result in a final exposition of the reasons why the MV Derbyshire sank?
    Mr. Newton: The hon. Gentleman is probably aware of the position. As I said in business questions last week, I well understand the concern of those involved. The chief inspector of marine accidents is to request findings and results of the search from the International Transport Federation. On examination of that material, the chief inspector will advise my right hon. Friend the Secretary of
    358
    State for Transport whether there is justification for reopening the investigation. That measured way is the right way in which to proceed.
    Mr. Brazier: To ask the Prime Minister if he will list his official engagements for Thursday 23 June.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Brazier: Is my right hon. Friend aware that, at a time when our regular armed forces are facing yet another round of reductions, many of us are deeply concerned that we may also be looking at a further substantial cut in the Territorial Army? Is it not true that the last two major conflicts in which we have been involved—the Falklands and the Gulf—both came from nowhere and both happened at short notice and without any warning? Surely the most cost-effective way of maintaining a reserve for the unexpected at a low level of cost is by maintaining strong, well-equipped and well-trained volunteer reserve forces.
    Mr. Newton: The Government whole-heartedly agree with my hon. Friend about the need for increased use of the reserves and share the importance that he attaches to them. That is why my right hon. and learned Friend the Secretary of State for Defence has instituted a pilot scheme, under which he is addressing the possibility of bringing the reserve forces legislation up to date. On the wider issue, I can only repeat what my right hon. and learned Friend and others have said on a number of occasions: that the purpose of the exercise on which the Government are engaged is generally to ensure the maximum emphasis on our front-line forces, and the capabilities about which my hon. Friend the Member for Canterbury (Mr. Brazier) is concerned, and to ensure that we do not spend unnecessary amounts on support services at the expense of those front-line forces.
    Mr. Tony Banks: Referring back to those soon to be ex-colleagues, does the Lord President believe that the right hon. Member for Huntingdon (Mr. Major) will still be leader of the Conservative party at Christmas and that he himself will still be in the Cabinet?
    Mr. Newton: I have already referred to my expectation that my right hon. Friend will renew his lease, as I put it, on No.10 Downing street. On the other matters, I am always confident of my right hon. Friend's judgment.

Non-State Pensions
3.30 pm
The Secretary of State for Social Security (Mr. Peter Lilley): With permission, Madam Speaker, I should like to make a statement about the White Paper that I am publishing today, which will, I believe, strengthen the whole pensions industry by providing the three basic essentials of security, equality and choice.
Pensions are one of the most important ways in which people and families hold a stake in this country. They are part of the fabric of a property-owning democracy—a fabric which we extended during the 1980s to cover large numbers left out before. I want to encourage more provision by more companies, by men and women, by young and old.
We need legislation to help that process. We have three factors to deal with. First, confidence in occupational pension schemes was hit by the Maxwell affair; we are going to restore it. Secondly, European Court rulings require schemes to give equal pension rights for men and women; we intend to assist schemes do just that. Thirdly, we are committed to making personal pensions more attractive to a wider age range by bringing in age-related rebates. Now is the time to honour that pledge. And we shall also give those who invest in personal pensions greater choice about when they convert their investments into annuities.
My top priority is to restore confidence in the security of pension funds. Following the Maxwell affair, I set up the pension law review committee under Professor Goode. Its report has been widely welcomed—and rightly so. I have since been consulting on its recommendations. As a result, I have decided to implement all the committee's main recommendations. We will reinforce trust law as the basis for pensions law; we will bring the management of all schemes up to the level of best practice; we will give members more influence in the running of their schemes; we will introduce a minimum solvency requirement to ensure the adequacy of pension fund assets; we will appoint a strong regulator; and we will set up a compensation scheme.
As the Goode committee and the Social Security Select Committee recognised, the great majority of schemes are secure and well run. We must not burden them with over-complex administration or unnecessary extra costs. The arrangements that I propose will achieve the security that the pension law review committee intended, while minimising burdens on pension schemes.
I do not believe that any single measure can provide a satisfactory defence against fraud. It is better to strengthen every possible line of defence. The first such line is the scheme members. They have the greatest interest in ensuring that their scheme is well run, so I will give members the right to clear and relevant information, the right to select at least a third of the trustees and access to a procedure to resolve disputes.
The second line of defence is the trustees. Pension funds will continue to operate under trust law, so the role of trustees is crucial. I will make it clear that their role is quite distinct from that of the employer and will set out clearer guidelines for their day-to-day management of schemes. I will give the pensions ombudsman new powers to resolve
360
disputes between employers and trustees. Trustees who are scheme members will be entitled to paid time off for training and trustees' meetings.
The third line of defence lies with the professionals—such as the auditors and actuaries. They will report to the trustees, not the employer, and will have a duty to whistleblow to the regulator.
The fourth line of defence is solvency. I agree with the pension law review committee that a minimum solvency requirement is needed to make sure that funds are available to provide the pensions promised to employees. The Institute and the Faculty of Actuaries have suggested modifications of the pension law review committee's proposal for valuing pension scheme liabilities. After consulting widely, I have taken the actuaries' approach on board. The vast majority of schemes already meet such a solvency requirement. I propose a transition period of five years to help other schemes adjust. From then on, any scheme that falls below the requirement will have three years to reach 100 per cent. solvency. I think that that is fair, prudent and right.
The fifth line of defence will be the new regulator. It would be neither feasible nor desirable for any regulator to police more than 150,000 schemes on a daily basis. A regulator should not have to dissipate energy on unnecessary bureaucracy among the vast majority of well-run schemes. Instead, a regulator should focus on schemes where there is some reason for unease, ready to take swift and decisive action. The regulator that I propose will have powers giving the full force of the pension law review committee's recommendations: the power to make schemes comply with their statutory obligations; the power to impose sanctions; the power to carry out spot checks; and the power to suspend and disqualify trustees. The regulator will be tough, incisive and able to act at the first sign of trouble.
If, despite all those measures, fraud occurs and the employer is insolvent and cannot meet the loss, members will none the less be protected by a compensation scheme. It will be administered by an independent compensation board, chaired by the pensions ombudsman. The regulator and the compensation board will be completely independent of each other. Both will be funded by a levy on pension schemes.
A more insidious threat to the value of pensions than fraud or theft is inflation. The best cure for that is low inflation. Inflation is now at its lowest for a generation and the Government are determined to keep it low. At present, there is no obligation to protect the whole pension against inflation. I propose that the whole of any occupational or appropriate personal pension rights built up after 1997 must be in line with inflation, up to 5 per cent. a year. As now, schemes may choose to go further. Early leavers from salary-related schemes will have the whole of their deferred pension revalued on a similar basis and we will require more consistent valuation and more efficient administration of transfer rights.
In salary-related schemes, the employer is responsible for making good any deficit that may emerge in a scheme, to enable it to fulfil the pension promise. So it is reasonable that employers should still be able to receive payments from any surplus that builds up. But the circumstances in which that is permitted will be strictly defined in legislation and members will have a right of appeal to the regulator.

361
The proposals that I have just described relate primarily to occupational pensions. There have also been concerns over the way in which personal pensions appear to have been sold. The Securities and Investments Board has been investigating the problem and will announce its findings in the next few weeks. The board has already made it clear that it will require those responsible for mis-selling to remedy the consequences. For some people who were badly advised to transfer to a personal pension, one possible remedy would be to transfer back into their former occupational scheme. However, even if the scheme is willing to accept them back, it cannot legally restore their protected rights. I will lay regulations shortly to enable those occupational pension schemes who wish to do so, to do just that.
In December, I announced plans to equalise the state pension ages for men and women by the year 2020. Many occupational pension schemes mirror the different state pension ages. It would be natural and easiest for them to equalise in parallel with the state scheme. Indeed, the 1986 European directive on equal treatment explicitly permits private occupational pension schemes to retain unequal ages as long as the state scheme does. However, in 1990, the European Court of Justice overruled that, and required occupational schemes to equalise pension rights immediately. It is very difficult for contracted-out schemes to equalise because they are also required to provide guaranteed minimum pensions mirroring the pensions payable in the state earnings-related pension scheme which, of course, will remain unequal until the year 2020.
I, therefore, propose to make it easier for contracted-out occupational schemes to achieve equality. I propose to replace the current requirement to provide a guaranteed minimum pension with a simpler test of overall quality. Schemes will have to provide benefits at least as good as SERPS. In the long run, that will also simplify and reduce the burden of regulation. SERPS will no longer provide top-up indexation for contracted-out schemes. To reflect that, the rebate will be set higher than it otherwise would have been. SERPS expenditure will be lower in the long term because of those changes and because I will also correct an anomaly in the way that SERPS is calculated. I am also protecting women's pension rights for paid maternity leave. Those steps will bring equal treatment to occupational schemes while minimising complexity for employers.
Our pension reforms in the 1980s did a great deal to extend choice. I intend to widen choice further in two areas. At present, someone with a personal pension who wants to take their tax-free lump sum from it must convert the whole of the rest of the fund to an annuity at the same time. As a result, they may be forced to take out an annuity when terms are unfavourable. I intend to allow people to defer taking an annuity up to the age of 75, even if they have taken their lump sum or drawn an income from the fund.
I can also announce today the fulfilment of our manifesto commitment to make personal pensions more attractive across a broader age range. I intend to introduce a system of age-related rebates, which will give people the opportunity to maintain personal pensions for the whole of their working life. I will also introduce age-related rebates for contracted-out occupational money-purchase schemes.
I intend to bring forward legislation at the first available opportunity, to allow schemes time to prepare for the new arrangements. My aim is that the changes should mostly
362
come into effect in April 1997. The views of the scheme members, employers and the pension industry will be vital in deciding the best way of implementing those policies. My Department will, therefore, continue to discuss the details with interested parties.
Funded private pensions are another field in which Britain is a world leader. Funds invested by British pension schemes on behalf of British people exceed those of all our European partners put together. As a result, we are far better placed to face the growth in the number of retired people next century without imposing a huge tax burden on this country. Our proposals pave the way to the next century. They implement the substance of the pension law review committee's recommendations. They allow occupational schemes to provide equal treatment between men and women in a way that minimises complexity. They extend choice and flexibility. They will encourage more people to invest in their own future and, in doing so, invest in the future of the nation. I commend them to the House.
Mr. Donald Dewar: The White Paper undoubtedly deals with important and, self-evidently, complex issues. No one in the House will deny the need for urgent reform. It was, after all, public anxiety in the aftermath of the Maxwell tragedy which, rightly, demanded a tougher regulatory structure, especially for occupational pensions. Can the Minister confirm, subject to the inevitable caveats about the legislative programme, that he intends to introduce the necessary legislation later this year?
Will the right hon. Gentleman perhaps say a word or two of explanation about why implementation has to wait until the spring of 1997? Is it not possible to introduce at least some of the essential safeguards in 1996? There is a need to reassure the public who want to know that they can make provision for their retirement with confidence.
The Government claim to have taken the essence of the Goode report and, to use the White Paper's phrase, to have "distilled" it. It might be better to say that they have boiled it down. Does the Minister recognise that there will be concern, as Professor Goode and his colleagues saw their recommendations as a package? We have, to some extent, something that is akin to pick and mix—[HON. MEMBERS: "Where?"] The White Paper is full of generalisations designed to reassure, but it lacks specification. To take just one example, what are the strictly defined circumstances in which employers may withdraw a surplus from an occupational pension scheme? What new safeguards will there be to improve what is generally seen as an unsatisfactory position, particularly as trustees will no longer have to consult the regulator, as Goode recommended? Can the Minister understand our reservations when good practice is preferred as a principle to prescriptive legislation? Does he recall that Goode's aim was to put best practice into legislative form? That has simply not happened.
I welcome the decision that, in salary-related schemes, active members will be able to appoint a minimum of one third of trustees. But, given Goode's wish to build in best practice, should there not be a further debate about the right balance and whether the proposal represents a shift in control, implicit in the acceptance of pensions as a form of deferred pay? Can the Minister explain why the Goode recommendation that active members should appoint two thirds of trustees in money purchase schemes has been abandoned, given that the members bear the risk?

363
I welcome the provisions for time off with pay for the training of trustees. I recognise that a range of sensible suggestions from the Goode report have been accepted and I, too, congratulate the members of that committee on their work.
However, I express reservations about the White Paper's approach to the role of the regulator. In a recent speech, the Secretary of State made it clear that while the regulator will survive, his role will be much diminished; the office will be there, but not the powers that the Goode committee wanted. Why should the regulator not be directly involved in policing the minimum solvency requirement? Is it not a mistake to abandon the proposal that the regulator be funded by the Government? Does it buttress the independence of the post to leave the regulator dependent on a levy of the industry?
Is it not a comment on the way in which the regulator's powers have been emasculated that the Secretary of State can relegate the post, in a dismissive sporting metaphor from the White Paper, to the role of long stop? To swap metaphors, is not the regulator engaged in fire fighting, not fire prevention? He can act, in the Secretary of State's words,
"at the first sign of trouble."
But he is not being invited to try to prevent trouble before it happens—that seems to be a key distinction.
Will the Minister note our firm view that a strong minimum solvency requirement is an essential safeguard to the pension promise? We will want to look carefully at the departure from the Goode formula. I recognise that the decision was, to some extent, based on the advice of professional organisations representing actuaries, but that is not necessarily the last word on the matter. The White Paper talks of "exceptional action" if the solvency requirement, the 90 per cent. mark, is breached, but it is remarkably vague on what that means.
As the new formula is clearly weaker than that currently in place in many schemes—the Secretary of State mentioned that in his statement—is there not a danger that the minimum will become the norm and standards may fall? Does the Minister share our concern that the new definition based on cash equivalents will mean, particularly for many younger people, significant reductions in transfer values?
Does the Minister accept that the timid paragraph dealing with pension rights and divorce is a disappointment? It is extraordinary that research into the extent of the problem is apparently only now being instigated. I may have got the wrong impression, but I thought that the Lord Chancellor's Department had been beavering away for some years on the problem. What has happened to the Pensions Management Institute report, which was published after the institute had studied the subject with great care? When does the Secretary of State expect a report to emerge from his research which will allow the issue to be further considered, with early action to follow? Difficulties and disputes over pension policies will become more and more difficult and common in the years ahead.
We all appreciate the need to simplify and to encourage equal treatment for men and women, but does the Secretary of State appreciate that we will want to look carefully at the implications of breaking the link between contracted-out, salary-related schemes and SERPS, and at the adequacy of the overall quality test that is to be introduced? It is, after
364
all, only a few years since requisite benefits were abandoned as a test of adequacy by the immediately retiring chairman of the Tory party, then in another office. Now it appears that they are reappearing in our midst.
We are also concerned about the ending of the guaranteed minimum pension—the GMP—which has been a safeguard of some significance. Without it, for example, Maxwell pensioners would have been in an even weaker position when the crash came. Will the right hon. Gentleman accept that the arrival of the compensation scheme, which I whole-heartedly welcome, can fill the gap left by the abolition of the GMP only in cases of fraud or misappropriation? If those factors are not present, pensioners will be left without that safeguard.
We also want to be sure that there is not a hidden agenda and that the Government's uncritical commitment to encouraging personal pensions does not mean that SERPS and the state's role in pension provision will again be under attack. The deregulation working party recommended the ending of SERPS. Can the right hon. Gentleman rule that out and confirm that there are no further plans to weaken or undermine it?
I strongly welcome the long-delayed implementation of indexing of up to 5 per cent. for rights accrued after 1997, although here again the small print will be important. Does the Minister recognise that for some, particularly those for whom a fully indexed GMP was an important element of their pension provision, this will be bad news? It may also be bad news for all, if inflation rises again above 5 per cent. I do not imagine that the Secretary of State will give a guarantee that it never will.
The move towards age-related rebates for personal pensions and contracted-out money purchase schemes may be inevitable, but the White Paper once again prompts many questions. Perhaps the Minister can help us here. Does it mean, as I assume it does, the end of the 1 per cent. incentive for those over 30, which is estimated to cost about £165 million a year? Have the Government any intention of increasing the contracting-out payments above the current 4.8 per cent?
We are told in the White Paper that changes in contracting out from 1997 will reduce Government revenue by £1 billion a year. Does the Minister intend to recoup that loss, or will it be met by a straight Treasury subvention to the national insurance fund? Does the £1 billion in lost revenue include any provision for a greater weighting of the arithmetic in favour of personal pensions?
The discussion paper sets out three options for operating aged-related rebates. Typically, the White Paper merely offers further details in due course. Why the long wait, when the decision was anticipated in March 1992, announced in April 1993 and the consultation exercise has been completed? Will the Minister say a word or two about the timetable?
The White Paper has a grand title and is full of buzz words: "security", "equality", "choice". The Labour party believes in choice and we recognise the contribution of private pensions, especially occupational pensions. Our concern must be about the fact that the Government are committed to weighting the system towards their favoured options—in the private sector. The mis-selling of pensions, the scandal of the many thousands tempted to abandon occupational schemes, the 2 million-plus people persuaded to leave SERPS against their better interests—all these underline the need for tougher and effective regulation.

365
If the Secretary of State is not prepared to act on these problems—he has signally failed to do so in the White Paper, in which there is only a brief reference to the Securities and Investments Board inquiry—confidence will continue to be a scarce commodity and much sadness for pensioners will lie ahead.
Mr. Lilley: I am grateful to the hon. Member for his welcome for many components of this package of measures and I will endeavour to respond to his questions, which were detailed and lengthy. I do not complain about that, as they are very important questions, but if I see that you, Madam Speaker, are hesitant about the length of my replies, I will certainly respond later more fully to the points that the hon. Gentleman has made.
The hon. Member asked whether I could confirm that there will be a Bill this year. Under the conventions, which mean that I cannot pre-empt what may be in the Queen's Speech, I certainly hope that a Bill will be introduced at the earliest possible opportunity. He asked why the changes will not, by and large, come into force until April 1997. That is because the Bill will not be completed until well into 1995. There will then need to be secondary legislation, once the primary powers exist in law, to deal with the detail. It is normal to give employers 12 months' notice of changes whenever we possibly can, so April 1997 is the optimum starting date.
In the meantime, I am certain that the whole industry remains aware and concerned in the wake of the Maxwell affair and is on its guard against fraud. We are trying to establish a system that will last in the longer term, when the immediate memory of the Maxwell affair has faded.
The hon. Gentleman suggested that we have indulged in a pick and mix of the Goode committee report. That simply is not the case. We have accepted every major proposal and most of the minor proposals that Professor Goode and his colleagues put forward in that excellent report. I listened for any suggestions of other measures that the Labour party wishes to undertake, which were not in the package that I announced, and I listened in vain. The proposal is to lay down in law a tightening up of what are, essentially, the existing criteria for surpluses to make them clear and rigorous, and to make it obvious that this cannot be abused.
The hon. Gentleman asked why we did not go further than a third of trustees being appointed by members. That was the broad recommendation of the Goode committee and, obviously, individual schemes will be able to go further. If they want some different system of representation of their members—some have successful schemes involving pension committees, their various subsidiaries, and so on—they would have to get that agreed by the members as a whole before the new scheme was introduced. Obviously, if people made their objections known to the regulator about a particular scheme, he could repudiate it.
We did not go for two thirds of member trustees in the case of contracted-out money purchase schemes, partly for reasons of simplicity, partly because of the complexity that that would cause to hybrid schemes, which were part one and part the other, and partly because we did not want to convey the impression that trustees, when appointed, are purely representatives of an interest. They may be appointed by the members, but once they act as trustees, they have to act on behalf of the whole fund.
The hon. Gentleman suggested that the role of the regulator was much diminished below that recommended
366
by the pension law review committee. That is not so. It will have all the powers in full, which were, in essence, recommended by the Goode committee. What the regulator will not be is encumbered by certain bureaucratic procedures, which could have flowed from some of the recommendations of the PLRC and he will, therefore, be more effective by being better focused on areas of concern, rather than spending all the time responding to forms coming in from 150,000 different pension schemes, the vast majority of which are well managed. It is right that that role should be funded by the industry, rather than by the general taxpayer, because the benefit of a well-regulated system is a benefit that accrues to members of pension schemes themselves.
I was grateful for the strong support that the hon. Gentleman offered for a minimum solvency requirement. I agree that it is essential and it is hard to see how we could operate a proper scheme of regulation without that basic measure, which means that assets necessary to meet the liabilities are available. He suggested that we should have reverted to the original formula suggested by the pension law review committee. I know that that would not be welcomed by the industry, which will look askance at the suggestion from the Opposition Benches that we should return to that. We consulted widely on that issue and the suggestion put forward by the Institute and the Faculty of Actuaries gained considerable support and I believe that it is the right way to proceed.
The hon. Gentleman asked me to confirm that there will be substantial reductions in transfer values as a result of the changes. That is not the case. He asked why we are not immediately proceeding with action on the proposal by the Pensions Management Institute on divorce. The pension law review committee suggested that it was a very complex issue, which needed looking into further.
We have already commissioned research, which is under way. It involves interviewing some 4,500 people and will be completed in October 1995. We hope that that will give us a clearer gauge of the size of the problems that result from the inability of the courts in England, but not in Scotland, to split the pension rights between a divorcing couple. It is far from certain that the problem is as large or the solution is as simple as some have suggested.
The hon. Gentleman is correct to say that the compensation scheme will provide compensation in respect of fraud and theft of assets, but not in respect of failure to provide the assets. The minimum solvency requirement ensures that companies provide the assets and that they are available to meet the liabilities.
I am grateful for the hon. Gentleman's welcome for indexation. No doubt the extension of indexation of pensions in payment to the whole of pensions and not just the guaranteed minimum pension will be widely welcomed. As he said, if inflation exceeds the cap that will not be good, and pensioners will no doubt take that into account at election time, when they consider the records of different parties. Everyone knows that the Labour party is the friend of inflation, and any friend of inflation is no friend of the pensioner.
With the introduction of age-related rebates, we will no longer have need for the specific 1 per cent. premium that was introduced as a temporary measure the April before last.
The hon. Gentleman ended his remarks by giving us the welcome and somewhat surprising news that the Labour

367
party believes in choice and supports occupational and personal pensions. For many of us, it was the first time that we had heard that.
Several hon. Members rose—
Madam Speaker: Order. That initial exchange has taken longer than 30 minutes. We shall return to the issue again and I now insist on brisk, direct questions. I am sure that the Minister will oblige with brisk answers.
Mrs. Marion Roe: I congratulate my right hon. Friend on implementing all the Goode committee's major proposals. Will he confirm that that will provide a major boost of confidence to occupational pensions? Does he agree that all those who predicted that he would severely water down the Goode proposals must now be feeling very foolish?
Mr. Lilley: I am grateful for my hon. Friend's support. She is right to say that the package of measures that I have announced will be widely welcomed by all those with an interest in the pensions sector, especially the 20 million people who have an interest as present or future pensioners of occupational schemes. I cannot account for the speculation beforehand, but I am certain that those who indulged in it will have to revise their opinions, because we have provided a strong and powerful response to the Goode committee report.
Mr. Archy Kirkwood: I am certainly prepared to give the White Paper our cautious welcome. It enshrines all the Goode recommendations and will provide a much more secure system of pension provision in a balanced way that will not prejudice the providers of pensions. That is very welcome.
Is there anything in the White Paper that will bring any sort of comfort to the victims of the Maxwell schemes? I want also to ask the right hon. Gentleman about unisex annuity rates. It is important, in terms of money purchase, that women receive equal treatment. What provisions are there in the White Paper to enable women to get guaranteed pensions for equal contributions?
Mr. Lilley: I am cautiously grateful for the hon. Gentleman's cautious welcome. There will be no retrospection in the measures introduced, so they cannot apply to the Maxwell pensioners. We have taken steps, including the establishment of the Maxwell pension unit and others of which the House is well aware, to ensure that all pensions are in payment for the pensioners of the Maxwell schemes. Progress is being made towards recouping the assets. We fully support the attempts to achieve a global settlement and all attempts to recover the assets. I believe and hope that that will result in pension liabilities being fully met by those schemes. As I said, there is nothing in the White Paper to deal with unisex annuity rates.
Mr. John Greenway: Can my right hon. Friend tell the House whether his imaginative announcement on the deferred annuity aspect of personal pensions, which will revolutionise the personal pension market, will apply to existing personal pension contracts? Does he agree that it is yet another example of the Government introducing every sensible measure for the personal pensions industry—unlike the Labour party?
Mr. Lilley: Yes, I can confirm that when the regulations are introduced in 1997, they will apply to existing personal pensions. That considerable change will mean that individuals will no longer find themselves forced to take out an annuity at a moment when they may not need to do so, and when the terms may not be appropriate for them.
Mr. Frank Field: I thank the Goode committee, through the Secretary of State, for all the work that led to today's White Paper. Will it embarrass the Secretary of State if I draw attention to his considerable public relations success over the past few weeks, in informing the media that he had lost most of the battles to establish the Goode recommendations in the White Paper? That allowed him to stand up today and claim such a success.
Is not the danger in so destabilising the media that they may miss the central weakness of the statement that the right hon. Gentleman just made? He failed to establish an independent regulator. Does the right hon. Gentleman accept that this country's financial services sector is at such a low ebb among voters that most people believe that they would get a better deal buying a second-hand car from the Government than entrusting their pensions to a regulator who is not independent of the industry?
Mr. Lilley: I will certainly transmit the hon. Gentleman's thanks, which I am sure are echoed throughout the House, to the committee. I thank in turn the Select Committee for its valuable report, of which we were able to take account in framing the proposals.
The hon. Gentleman is wrong to suppose that I set about a project of news management. I have no idea why speculation took the path that it did. It must now be acknowledged that we have, among other things, established an independent regulator. The proposed regulator will be independent. He will be funded by a levy on schemes, which will in no way prejudice his independence—any more than if the levy were imposed on taxpayers. It is more appropriate that it should be imposed on schemes because they will enjoy the benefits. There will be no discretion, and no one will be able to opt not to pay or to impose conditions in paying. I hope that that canard will not spread.
When the hon. Gentleman sees the legislation that comes before the House in due course, he will acknowledge that the regulator will be both independent and powerful.
Mrs. Elizabeth Peacock: What action does my right hon. Friend propose in the White Paper to ensure that companies—many of which are well run—cannot take money from their pension funds, to make their end-of-year results and profits look good?
Mr. Lilley: They will be inhibited from doing so by the minimum solvency requirement, whereby they will be regularly checked to make sure that they have the assets, and by the rules against taking out surpluses, in the event that there are surpluses. The trustees will have a duty to ensure that the funds are there and that companies abide by the rules. The trustees will have the right to go to the regulator if they believe that any wrongful use is being made of a scheme's assets.
Mr. Tam Dalyell: On the issue of auditors or actuaries reporting to trustees and not to the employer, how will the "duty to whistleblow" to the regulator be

369
enforced? What protection will whistleblowers have? I can tell the Secretary of State frankly that a whistleblowing auditor would not have remained the late Bob Maxwell's auditor for many moons.
Mr. Lilley: There are precedents in legislation governing the rights and duties of auditors and other professionals to whistleblow. I seem to recall from my Treasury days that we introduced such an obligation in bank law in the wake of the Johnson Matthey debacle. That has worked quite well.
Concern had been expressed because professionals felt a professional obligation to those who employed them, which meant that they were professionally inhibited from going to the authorities, even if they saw something that filled them with concern and unease. Secondly, they might have felt that they stood to be subject to some legal disadvantage if they expressed their concerns. They will now have a clear statement of a duty and, as a result, they will run no legal risk if they go to the regulator in good faith and give information gained in confidence as a result of their professional duties. That will be a powerful defence—exactly as it might have been, as the hon. Member said, in the circumstances to which he referred.
Mr. David Shaw: This is one of the best bits of news that pensions and occupational pensioners have had for many a year. It is an excellent statement. Can my right hon. Friend confirm that there will be increased provision of information for pensioners and that a compensation scheme will be introduced for the first time? Will he also confirm that trustees will be subject to better selection and training as a result?
In relation to whistleblowers, my right hon. Friend should consider that a number of directors and bankers connected with the Maxwell empire, who were in possession of information, were not technically professional advisers. We should consider enforcing and tightening the whistleblowing provisions in relation to such people.
Mr. Lilley: I am grateful to my hon. Friend for his support. He has been a powerful advocate of pensioners' interests, in the Select Committee and in the House. I can confirm that the measures will introduce for the first time a compensation mechanism in the event of fraud taking place. Trustees will be subject to better training because they will be able to take paid time off to be trained, which will enhance the position of funds generally. We will consider in the secondary legislation how widely the whistleblowing provisions should extend.
Mr. John Denham: Personal pensions can be an appropriate choice for some individuals, but for about 2 million people who have opted out of SERPS into personal pensions their contributions are far too low to guarantee them a rate of return as good as it would have been in SERPS. The inquiry into that and about how those people should be compensated—if they are to be compensated at all—is still continuing.
Would it not have been more sensible for the Secretary of State not to make any more commitments about the extension of opting out until the position of individuals who had opted out had been resolved? It would have been better if people who were mis-sold policies by opting out of SERPS knew that they were to be compensated. Such compensation should apply to anyone who makes a similar mistake in the older age group in the future.
Mr. Lilley: I remind the hon. Member that the Securities and Investments Board is considering this matter and so far it has received no evidence of wrongful mis-selling to persuade people to opt out of SERPS into private pensions. It is looking to establish the extent of any possible problem. If it establishes that one exists, it will ensure that a remedy is available for those who were mis-sold pensions. There is no reason for concern by those people. There is, therefore, no reason for us to delay taking action that will ensure security in the different area of occupational pensions. There is not the slightest case for delay.
Mr. Michael Bates: Will my right hon. Friend accept that the flexibility in taking annuities will be one of the most beneficial of all the proposals put forward? It will remove the burden that is artificially placed on people who want to take their pension, when they are asked to pick and choose on one day the annuity rate that will last for the rest of their lives. Is there any proposed limit on the amount of money that can be taken in that way from schemes in the future?
Mr. Lilley: I am sure that my hon. Friend is right that the greater flexibility offered will be welcomed. It will be possible to take out the tax-free lump sum and, on top of that, annual income—treating it as if it were an annuity—before the final conversion of the remaining sum into an annuity, if people wish to do so. The Inland Revenue will lay down the limits on the maximum amount that can be taken out in that form of income each year.
Mr. Clifford Forsythe: I welcome the Secretary of State's statement, but we will have to look at the details of the White Paper. Why did he not make it an obligation on pension funds to provide an annual statement by right rather than having to have it requested? That would have provided even greater protection to pensions funds.
Mr. Lilley: It was decided that every member should have the right to the information, but it would not necessarily be an obligation to send all the information to every member each year. I do not think that everybody reads all the bumph that comes through their doors, but they should have the right to the information if they are interested in it. It should be clear and relevant information and that is what the regulations will ensure. We did not want to impose the unnecessary burden of the cost of disseminating information, much of which would go straight into the wastepaper basket.
Mr. David Willetts: I congratulate my right hon. Friend, particularly on abolishing the complicated guaranteed minimum pension which will make it a lot easier for employers to administer occupational pension schemes. Is not the overall test of quality a much better way of protecting the interests of scheme members?
Mr. Lilley: My hon. Friend has recognised an important aspect of the proposals. The abolition of guaranteed minimum pensions will benefit the industry and make it simpler in future to handle the opting out of people from SERPS. It will be simpler to operate a quality check that ensures that the pension rights that people acquire when they leave SERPS are better than they would have had, had they remained in SERPS, without the burdensome and cumbersome calculations involved in the GMPs.
Mr. Dennis Skinner: Is the Secretary of State aware that it is nothing short of an outrage that, after all the fine words we have heard over the past half an hour or more, the Maxwell pensioners will not be a penny piece better off? Also, other victims such as the miners who have had £800 million stolen from their pension fund by the National Coal Board and British Coal successively will not have any money distributed to them.
What do we expect from a Government who have just told the railway workers that they will pinch half of their pension funds as a result of privatisation and steal half the miners' funds as a result of coal privatisation? We should have known better than to think that we would get anything.
Mr. Lilley: I am grateful to the hon. Gentleman for what, by his standards, constitutes warm support for my statement, although he had some objections to things that I did not include in it.
Mr. Skinner: The Secretary of State has done nothing.
Mr. Lilley: Considerable progress has been made as a result of changes that we have made. Some £84 million of assets have already been returned to the fund this year and progress is being made in securing funds that the trustees have said they hope will enable all the liabilities of the schemes to be met in due course. We must all hope that progress continues to that end.
Mr. Richard Page: As my right hon. Friend knows, I have several hundred Maxwell pensioners in my constituency. May I say how much I welcome the White Paper, particularly the compensation scheme? However, as my right hon. Friend knows, the dividing line between fraud and mismanagement of funds is sometimes finely drawn. How are the terms and conditions of the compensation fund to be drawn and will it provide any cover for maladministration?
Mr. Lilley: We are establishing a compensation board which will handle this, and it will decide in particular cases whether there has been fraud or abuse. It will be up to the board to analyse the circumstances. It is right that that should be the approach rather than trying to specify to the umpteenth detail in legislation.
Mr. Paul Flynn: Does not the Secretary of State agree that the only people who will benefit from the changes in the annuity rules are those who can postpone their pensions for 10 or 15 years—the very rich? The real problem with the annuity rules is that the value of a pension taken out in 1990 is a quarter less than a pension taken today. The annuity rule proves that personal pension schemes are a gamble. The amounts paid out depend on interest rates, the price of gilts and other things that will take place in 20, 30 or 40 years.
Is not the Secretary of State simply exposing millions more people to overselling and to exploitation by the personal pensions industry? He has today loaded more people into a lifeboat that is already sinking.
Mr. Lilley: That is a bit of a change of heart from the hon. Gentleman who, in an Adjournment debate, called for more flexibility. Why did he want us to entice people into this sinking lifeboat then but not now? I believe that everyone else will think that he was right the first time and wrong the second.
Mr. Alan Duncan: Will my right hon. Friend commend the foresight and hard work put into the preparation of the pensions document by the Government's youngest Minister, my hon. Friend the Member for Richmond, Yorks (Mr. Hague)? Will he admit that he has accepted not only the main recommendations of the Goode committee but those of the Social Security Select Committee and that the regime introduced in the White Paper is strict and simple and will not run the risk of deterring employers from wanting to start an occupational pension fund?
Mr. Lilley: I can certainly confirm that a great deal—indeed, the vast bulk—of the credit for the effort that has gone into preparing the statement and the White Paper lies with my hon. Friend the Minister responsible for pensions, who has done much of the work.
I can also confirm what my hon. Friend says about the effectiveness of the arrangements that my colleague has ensured will be put in place. They will be simple and effective and will incorporate the main recommendations of the pension law review committee.
Mr. George Foulkes: I do not welcome the statement at all. Is not it simply another bonanza for con merchants? What is wrong with expanding a good Government scheme which has some stability and security, instead of siphoning off more money in commission, profit and the proliferation of administration in which these arrangements will result—or am I the one old-fashioned sentimentalist left?
Mr. Lilley: I shall not comment on the hon. Gentleman's self-description. Of course, far from providing a field day for con merchants, these arrangements are designed to prevent fraud and abuse. I believe that they will be effective in doing so and, as such, they will be welcomed by the 20 million people who have interests in pension schemes and who can now rest assured that those schemes will be properly regulated and protected.
Mr. Anthony Coombs: In the light of the difficulties with the Coloroll pension scheme experienced by many of my constituents, is my right hon. Friend aware of how welcome these proposals will be, especially those relating to the minimum solvency requirements? Given that many of my constituents delayed transfer values on their pensions when they wished to transfer out of the Coloroll scheme, will he do all that he possibly can to ensure that the European Court makes a judgment soon, as we have already been waiting more than a year?
Mr. Lilley: Yes, I think that the experience of my hon. Friend's constituents bears out the importance of the changes that we are introducing. I certainly hope that the long-awaited judgment on Coloroll comes soon, although I am not sure that I can bring pressure to bear on the court. As my hon. Friend says, we have been waiting more than a year.
Dr. Lynne Jones: Will the regulator have the powers retrospectively to disqualify trustees for past misdemeanours? I have in mind Messrs Michael Spiers and Kenneth Shaw who made themselves sole trustees of Teampace Holdings pension fund and then committed clear breaches of trust—if not fraud—which

373
have deprived many of my constituents who paid into Burmans pension fund, which was subsequently taken over by Teampace Holdings, of their full pensions?
Mr. Lilley: I cannot comment on that specific case, although if, by one means or another, the hon. Lady can give me more information, I will, naturally, study it. There cannot be retrospective disqualification, but disqualification arrangements can take into account whether someone is a fit and proper person to be a trustee in future. That will be a feature of the new regime.
Mr. Richard Burden: Does the Secretary of State accept that any lack of public confidence in the Government's commitment to carry through some of the recommendations of the Goode report is coloured by their failure to do anything about outstanding cases?
The issue raised by my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones)is not unknown to the Government. The Department of Trade and Industry has had a full dossier on that case for some considerable time and there is still no sign that anything is being done about it. Is it not time the Government cleared up the issues that they know about and that need action, rather than just making promises for the future that few of us are confident they will carry through?
Mr. Lilley: I understand that there is to be an Adjournment debate next week to which my hon. Friends in the Department of Trade and Industry will respond. I am sure that their response will be satisfactory to the hon. Members who are raising it.
Mr. Mike O'Brien: Will the Secretary of State clarify his comments to the hon. Member for Hertfordshire, South-West (Mr. Page), on the workings of the compensation board in circumstances such as those facing my constituents who used to work for Burlingtons at Atherstone and whose pension fund had become depleted as a result of the behaviour of those running it, which perhaps fell short of fraud, but represented serious mismanagement? There was insufficient evidence to prosecute, but questionable activities were certainly taking place.
Mr. Lilley: I should make it clear that the compensation arrangements that we are proposing will not be retrospective. They will not apply to fraudulent activities or thefts in the past. We shall try to learn from the experience of the past in framing the legislation to make sure that it catches the cases we want to catch.

Business of the House
4.26 pm
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): With permission, I should like to make a statement about the business for next week.
MONDAY 27 JUNE—Until seven o'clock, debate on "The Role of Select Committees" on a motion for the Adjournment of the House. Details will be given in the Official Report.
Followed by motion on the Appropriation (No. 2) (Northern Ireland) Order.
TUESDAY 28 JUNE—Consideration of Lords amendments to the Coal Industry Bill.
Motions on the Ports (Northern Ireland) Order and the Ports (Northern Ireland Consequential Provisions) Order.
WEDNESDAY 29 JUNE—Opposition Day (15th allotted day).
There will be a debate entitled "Failure of the Government's Housing and Urban Policy" on an Opposition motion.
THURSDAY 30 JUNE—Motion on the Northern Ireland Act 1974 (Interim Period Extension) Order.
Motion on the Civil Service (Management Functions) (Northern Ireland) Order.
Motion on the Welfare of Livestock Regulations.
Debate on information technology and data and video services for Members, on the basis of reports from the Information Committee and the Broadcasting Committee. Details will be given in the Official Report.
FRIDAY 1 JULY—Private Members' motions.
MONDAY 4 JULY—Opposition Day (16th Allotted Day).
There will be a debate on "The Child Support Agency" on an Opposition motion.
The House will also wish to know that European Standing Committee B will meet at 10.30 am on Wednesday 29 June to consider European Community document No. 5074/94 relating to energy and economic and social cohesion.
[Monday 27 June
Debate on the role of Select Committees
Documents:
Second Report from the Select Committee on Procedure Session 1989–90 on the Working of the Select Committee System.
The Working of the Select Committee System—Government's response to the second report of the House of Commons Select Committee on Procedure session 1989–90. CM 1532
Wednesday 29 June European Standing Committee B—Relevant European Community document: 5074/94, Energy and Economic and Social Cohesion; Relevant reports of the European Legislation Committee: HC 48-xv (1992–93) and HC 48-xxi (1992–93).
Thursday 30 June Information Committee—First Report of Session 1993–94, HC 237; The Provision of a Parliamentary Data and Video Network. First Report of Session 1992–93, HC 737; The Provision of Members' Information Technology Equipment, Software and Services.
Broadcasting Committee—First Report of Session 1991–92, HC 323; The Provision in Members' Offices of Access to Clean Televsion Feed.]

375
I regret that I am still not in a position to give the House the date that is perhaps uppermost in hon. Members' minds. I can, however, give them another useful date for their diaries: my right hon. and learned Friend the Chancellor of the Exchequer proposes to introduce his Budget statement on Tuesday 29 November. I hope that that date is a little further ahead than the summer recess.
Mr. Nicholas Brown: I know that we have been asking for statements and business to be scheduled a little ahead of the usual announcements, but the Leader of the House has excelled himself on this occasion, and I thank him for it. I also thank him for his statement and for the two Opposition days.
The Chancellor will be publishing the second of the two Industry Act forecasts next Tuesday—slightly nearer to the present day than November—yet we still do not know whether a statement in the House will accompany the publication of that forecast. It is very much our view that there should be a statement. An historical precedent exists—there always has been a statement—and I hope that the Leader of the House will be able to say that there will be one on this occasion. In any event, can the right hon. Gentleman confirm that there will be a day's debate in Government time on the second of the two Industry Act forecasts before the summer recess?
Can the right hon. Gentleman also confirm—I accept he cannot announce it before next week—that there will at some stage be a debate on the individual departmental public spending plans? That is important in any case—it is an annual event which the House has a right to expect—but, given the discussions now going on in the Government, it is surely all the more important.
I accept that the Leader of the House cannot tell us the date of the recess today. But a request to know the date of the recess is not a request for an early recess; it is simply a request to know the date. So I hope that the right hon. Gentleman will be able to tell us soon when the House is to rise and when we are expected to come back in the autumn.
Mr. Newton: I cannot add to what I have said, but I note the request, and also the continuing tension between the number of demands for debates of various kinds and the hopes in some parts of the House—even if those are not shared by the hon. Gentleman—for a reasonably early start to the recess.
On the hon. Gentleman's specific points about statements, debates and the like, I cannot say anything further about departmental reports, but I can tell him that I expect the summer economic forecast to be available to hon. Members from the Vote Office at 11 am on Tuesday 28 June. I do not anticipate a need or a justification for an oral statement, because the present arrangements are not on all fours with the situation in the old days of the autumn statement. However, the summer economic forecast can be discussed during the summer economic debate that I certainly expect us to have before the recess.
Mr. Andrew Rowe: Is my right hon. Friend aware that, amid the otherwise admirable arrangements that now govern the national health service, the continuance of the Whitley system works strongly against
376
the notional freedom of trusts to set their own wages? Can he assure us that he will allow us an opportunity to debate that important matter before the recess?
Mr. Newton: I am afraid that I cannot undertake to provide an opportunity for a debate on that precise matter, but I can bring my hon. Friend's point to the attention of my right hon. Friend the Secretary of State for Health.
Mr. Archy Kirkwood: Is the Leader of the House aware that the Treasury is requiring the Department of Transport to make efficiency savings of up to 20 per cent. across the Department, and that an important part of the Department's work covers the Coastguard Agency? Is he aware that in coastal communities throughout the United Kingdom there is great concern that if a 20 per cent. cut were made in the Coastguard Agency, safety at sea could be prejudiced? Will the right hon. Gentleman arrange for an opportunity to raise the matter on the Floor of the House before the summer?
Mr. Newton: Once again, I cannot respond specifically to the request for what I would call a dedicated debate on that matter, but I assure the hon. Gentleman that my right hon. Friend the Secretary of State for Transport will give great weight to considerations of safety. He will certainly want to consider the hon. Gentleman's remarks.
Mr. Barry Field: May I tell the Lord President of the Council that I have just received from the Ministry of Defence a written reply telling me that the royal yacht Britannia is to be decommissioned in 1997? That is horrendous news for my constituents and myself—and, I am sure, for many other people throughout the country. Britain without Britannia is like the Tower of London without the crown jewels. May we have an urgent debate on the subject? [Interruption.]
Mr. Newton: I sense that there is some support for my hon. Friend. As it happens, I was aware of that answer. Indeed, I have it here, and in the light of what my hon. Friend has said perhaps I should put on the record for the House the latter part:
"In view of the success of Britannia in her representational role during state visits, and on other state occasions, and of the part played by the royal yacht in trade promotion, the Government believe it right to consider, without commitment, whether there should be a replacement at some future point, together with other options for meeting the tasks presently fulfilled by Britannia."
That puts the matter into some perspective.
Mr. Alfred Morris: The right hon. Gentleman will be aware that a statement has long been expected and awaited on the Government's policy in regard to the renewal of the BBC's charter. Shall we be receiving the statement next week, or at least before the summer recess?
Mr. Newton: I do not at present expect a statement to be made next week, but of course my right hon. and learned Friend the Home Secretary will make a statement at the earliest possible moment when it is practicable to do so.
Mr. Michael Brown: May I say to my right hon. Friend how disappointed I was about the business that he announced for next Wednesday? It is appalling that, on a day when we are yet again to have an industrial dispute on the railways, he has arranged for an Opposition day. May we have a debate in Government

377
time on industrial relations? At least then, the Opposition, if they wish to participate—and in particular the three candidates for the Labour party leadership—could confirm whether they support the view of the hon. Member for Cunninghame, North (Mr. Wilson), the junior Labour spokesman on transport, who has made it clear that he believes that strike action is acceptable.
Mr. Newton: What a very good question! During his Trappist period, my hon. Friend's talents and remarks were—I had better not say "wasted" so let me say "much missed"; I particularly welcome his comments on this matter. I cannot undertake immediately to change the business in the way that he suggested, much as I should like to do so. I must observe, however, that, were we to schedule such a debate and to seek a clear expression of views from the Opposition, we might end up with six hours' silence.
Ms Janet Anderson: May I remind the Leader of the House of the exchange about child care provision in the Palace of Westminster that took place on Monday during questions to the House of Commons Commission? May I refer him to early-day motion 1350?
[That this House believes that in-house childcare provision combined with the provision of childcare vouchers would enhance the opportunities as well as the productivity of parents who work at the Palace of Westminster.]
Will the right hon. Gentleman give an assurance that time will be provided for a debate on that important issue on the Floor of the House before the summer recess?
Mr. Newton: There are a number of matters affecting the House on which I hope to arrange debates before the summer recess, one of which—proposals for the parliamentary data and video network—I announced this afternoon. I cannot, however, undertake to arrange a debate on the issue raised by the hon. Lady or add to what was said on Monday by the right hon. Member for Berwick-upon-Tweed (Mr. Beith), who speaks for the House of Commons Commission.
Mr. John Butcher: May I draw my right hon. Friend's attention to early-day motion 1369 standing in my name?
[That this House endorses the proposals of the Association of British Counties to reinstate the ancient and historic counties to the maps of England and Wales for all purposes other than local government except where the county is small enough to be constituted as a one-tier authority and for the ancient counties to be confirmed in all cases as the units for heritage, postal, cultural, sporting and boundary signage purposes; and urges the Department of the Environment not to confirm any proposals for one-tier administrative authorities which cross the boundaries of the historic counties.]
The motion asks for the restoration of ancient and historic British counties for all purposes other than local government. Bearing in mind the great anger that was felt in the 1970s when many of those counties were abolished in an act that was almost Stalinist in its abolition of history and heritage, would not it be more acceptable if, under the new local government reviews, those counties were restored for all purposes other than local government? Would not a debate be topical in the light of recent controversies involving Wales, Huntingdonshire and Rutland?
Mr. Newton: That was another very ingenious and interesting question. The House may not be short of
378
opportunities to debate such matters in the foreseeable future. I cannot respond precisely to my hon. Friend's ingenious request, but it may be of some encouragement to him, if I get the drift of his question, that the long-standing abolition of Middlesex as an administrative entity has not prevented it from continuing to have a cricket team.
Mr. David Winnick: In view of the direct Government intervention in the current industrial dispute taking place every Wednesday, is the Leader of the House aware that a statement from the Government would be welcome? Is not it clear that, far from blaming the Opposition, the vast majority of passengers know and understand that it is the Government who are at fault and who have made it clear that they would interfere if the agreement were not to their liking? As a letter in The Daily Telegraph makes clear, people appreciate the responsibility of those engaged in the dispute, the work that they carry out and their desire for a living wage.
Mr. Newton: At least that came closer to some sort of statement than anything that we have managed to extract from the Labour party leadership contenders. I construe the hon. Gentleman's remarks as an expression of support for the strike. I hope that my interpretation is correct, in which case he had better try to explain to the British public how he thinks it is justified to strike on an 11 per cent., no-strings-attached increase in basic pay in the present circumstances.
Mr. Jacques Arnold: May we have a debate next week on the commuter railway, because that would give me a chance to express the anger of thousands of my commuting constituents who yesterday had no train service on the north Kent line or any other line through Gravesham—at a time when they are having to pay an extra 6 per cent. in fares out of increases in pay that are level with or below the rate of inflation—as a result of a bid by the railway unions for an 11 per cent. pay increase at those commuters' expense and without even any strings attached?
Mr. Newton: My hon. Friend is precisely right. I am sure that the views that he expressed on behalf of his commuting constituents will be shared by my commuting constituents. Were the strikes to be successful, they could have only one of three consequences: to increase taxation, to increase borrowing or—and in some ways this is the most likely—further to increase fares.
Mr. John Austin-Walker: Is the Leader of the House aware of the increasing anxiety about the future of the Post Office? Government statements have increased that anxiety rather than reducing it in relation to Crown Post Offices, the network of post offices, sorting offices and the Royal Mail. I draw his attention to early day motion 1326 on the Abbey Wood sorting office.
[That this House is opposed to the proposed closure of the Royal Mail Sorting Office at Abbey Wood and relocation in Thamesmead; notes that the present office is easily accessible to Abbey Wood residents and is served by both buses and British Rail, whereas the Thamesmead Sorting Office is only easily accessible to people with their own private transport and that it is not served by public transport and is located on a dual carriageway which has no footpath; believes that the relocation would cause great hardship, particularly to elderly and disabled people and parents with young children and that the proposal is motivated purely by financial reasons to increase Post Office profits at the expense of a service to the public; is concerned that if the sorting office closes, the Crown Post Office will soon follow; expresses support for the

379
Union of Communication Workers in its campaign to save these services; and calls for the immediate withdrawal of the closure proposals.]
May we have a debate before the recess on the Government's intentions for the Post Office?
Mr. Newton: The hon. Gentleman will be well aware of the assurances that the Government have given on their approach to the network generally, and not least to the network of sub-post offices. He will know that the Government intend to produce a Green Paper, which I expect to be published before too long. That, no doubt, will answer some of his questions and provide him with an opportunity to express his views and those of others.
Dr. Liam Fox: Will my right hon. Friend allow time for a wide-ranging debate on the need to maintain, if not extend, the Government's trade union legislation? Within a few days of the Labour party's doing well in the European elections, a major public sector union once again felt able—indeed, encouraged—to go on strike, showing that, beneath the veneer, nothing has changed in the Labour movement.
Mr. Newton: My hon. Friend is precisely right. He and others will be entitled to continue to press until we have some clear statement from the Opposition on their view of what is widely regarded as irresponsible and damaging action.
Mr. Mike O'Brien: In the week in which the second public inquiry into the Birmingham northern relief road begins, may we have an urgent ministerial statement on why the Government have chosen to suppress the report of the first and very expensive public inquiry into the relief road?
Mr. Newton: The hon. Gentleman is no doubt familiar with the details of the history of the matter, which goes back over a long period to the time when I was the Minister responsible for inner cities at the end of the 1980s. I will bring his point to the attention of my right hon. Friend the Secretary of State for Transport.
Lady Olga Maitland: Will my right hon. Friend consider arranging a debate on Iraq? Is he aware that, more than three years after the war ended, Iraq still holds 625 Kuwaiti prisoners of war, in firm defiance of United Nations resolutions? Is he aware that three Kuwaiti Members of Parliament are coming to Britain next week? It would be heartening for them to hear that this Parliament has not abandoned the Kuwaiti prisoners of war.
Mr. Newton: Again, while I cannot promise a debate, I acknowledge my hon. Friend's concern, which will be widely shared and which I will ensure, once again, is drawn to the attention of my right hon. Friend the Foreign Secretary.
Mr. Robert Ainsworth: Will the Leader of the House arrange a debate on, or give us an opportunity to investigate, the recruitment methods and procedures used when appointing regulators to the public utilities? The right hon. Gentleman will be aware of the widespread concern about the Director General of Gas Supply, and a debate would allow us to shed some light on this recess of Government decision making.
Mr. Newton: I did, of course, see the fairly extensive publicity that attended the inquiries of the Trade and Industry Select Committee some weeks ago. In so far as it is appropriate to deal with some aspects of that publicity, it is appropriate to leave it to the Select Committee.
Mr. Edward Garnier: Will my right hon. Friend find time for an early debate on grant-maintained schools, of which there are three excellent examples in my constituency, so that we can discuss the educational advantages that they achieve—advantages which are appreciated by the hon. Member for Sedgefield (Mr. Blair), who sends a member of his family to a grant-maintained school in Fulham, some distance from his constituency and his London home?
Mr. Newton: I do not object to the hon. Member for Sedgefield (Mr. Blair) or anybody else taking advantage of the many excellent grant-maintained schools but on this, as on a number of other matters, we could do with some clearer explanation of the policies that he appears to espouse—in so far as one can judge what policies he espouses—which would seek to deny other people that right.
Mr. Tam Dalyell: Professor Tim Brighouse is not only chief education officer of Birmingham but a deeply serious educationist. Do the Government realise that some of us were absolutely appalled and embarrassed when a senior Minister of the Crown let go such a gratuitous insult? Should not a serious statement be made next week on where the £50,000 will come from, because whereas normally most Members of Parliament would agree that Departments of State should meet compensation awards, this was a gratuitous insult? The principle is this: are taxpayers to pay for the gratuitous insults of Ministers?
Mr. Newton: I think that I said twice when answering at Prime Minister's questions that this is a private matter, but perhaps I could amplify that. At all stages, the matter has been dealt with by my right hon. Friend the Secretary of State for Education in a personal capacity. The Government have not been involved in the proceedings either financially or legally. Indeed, my right hon. Friend made that clear as long ago as 19 January in answer to a parliamentary question, when he said:
"This is being treated as a personal, not a Government matter."—[Official Report, 19 January 1994; Vol. 235, c. 609.]
Mr. Ian Bruce: My right hon. Friend will be aware that at this weekend's meeting of the Council of Ministers in Corfu the Prime Minister and other heads of state will discuss the Delors report and the new draft Bangemann report on information technology and the super-highway and how it should create jobs. May we have an early debate on the subject, as that report and others call on the rest of Europe to follow the United Kingdom's example of fast tracking to get the market in information technology working well?
Mr. Newton: Again, perhaps in a more specific way, my hon. Friend echoes something that I said at Prime Minister's Question Time about the proceedings at Corfu. I cannot promise a debate, but I anticipate that my right hon. Friend the Prime Minister will make a statement on his return, and reference to that matter might be in order and appropriate.
Mr. Paul Flynn: In Monday's debate on Select Committees, does the Leader of the House think that it would be helpful to reflect on the fact that in two recent debates—on the Trade Marks Bill and on pensions during an Opposition day—virtually every Conservative Member declared a financial interest in the subject under consideration? Although there is no suggestion that anyone acted improperly, would not it be better for the authority of Select Committee reports and the respect that they are given outside the House if hon. Members with a financial interest in the subject that the Select Committee is investigating were excluded from its membership?
Mr. Newton: If the hon. Gentleman thinks that that is a useful point to make, no doubt he will make it in Monday's debate. I would point out, in the immediate aftermath of a statement on non-state pensions, that, as an occupational pension scheme operates for all Members of Parliament, the hon. Gentleman's suggestion would prevent every hon. Member from speaking on the subject in the House.
Mr. David Shaw: Will my right hon. Friend find time for a debate on great political con tricks? Does he think that an appropriate subject for the debate would be the way in which Labour Members have denied that there was anything wrong in Monklands in the past 18 months? Is he aware that only this Tuesday the Labour candidate in Monklands confirmed that everything that I have been saying about corruption and wrong-doing in Monklands was absolutely true and correct?
Mr. Newton: I am a little uncertain whether the Labour candidate in Monklands would accept the interpretation that my hon. Friend has placed on her remarks. Nevertheless, she has acknowledged the need to make some inquiries, which is a significant vindication of the campaign—as I suppose it must be called—which my hon. Friend has waged on that matter.
Mr. Michael Bates: Is not it time that we had a debate on the value for money that trade unions get through sponsoring Members of Parliament? This is the second week of a national dispute that has caused massive disruption to millions of people on the basis of an 11 per cent. inflation-busting pay claim by the RMT, but we have yet to hear a word from the 11 Labour Members and four senior members of the shadow Cabinet who are sponsored by the RMT.
Mr. Newton: We might get into a debate about the definition of what is regarded as value for money, so perhaps I should stay out of that.
Mr. Alan Duncan: Will the Leader of the House find time for an urgent debate on the state of democracy in Nigeria—or rather, the lack of democracy there? In the early hours of this morning, Chief Mashood Abiola, who is widely regarded as the duly elected President of that country, was arrested by the military regime, bundled into an aircraft and taken from Lagos to Abudja. Is not it high time that the House was given an opportunity to express its opinion and call for the return of civilian democratic rule in that country?
Mr. Newton: I am afraid that the information immediately available to me is not quite as up to date as that reported by my hon. Friend. In the light of what he has said, however, his concern is understandable and I will bring it to the attention of my right hon. Friend the Foreign Secretary.
Mrs. Gwyneth Dunwoody: Will the Leader of the House find time next week for a debate on railway safety and inquire into whether, during the present industrial dispute, members of British Rail management have been operating signal boxes without the right certificates of safety? Will he also note that I raised that point on another occasion?
Mr. Newton: The hon. Lady will be aware that comments have been made on that matter to the effect that there is no reason to suppose that danger has been incurred by anybody for the reasons that she seeks to imply. Of course, I will bring the question to the attention of my right hon. Friend the Secretary of State for Transport.

Statutory Instruments, &c.
Madam Speaker: With permission, I shall put together the motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.)

Statutory Instruments, &c.
  MONOPOLIES AND MERGERS
  That the draft Fair Trading Act (Amendment) (Merger Prenotification) Regulations 1994 be referred to a Standing Committee on Statutory Instruments, &c.

  COMPETITION
  That the Anti-Competitive Practices (Exclusions) (Amendment) Order 1994 (S.I., 1994, No. 1557) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Robert G. Hughes.]
  Question agreed to.

UK Exporters
Motion made, and Question proposed, That this House do now adjourn—[Mr. Robert G. Hughes.]
4.51 pm
The Minister for Trade (Mr. Richard Needham): The House has had several debates on exports over the past few months, but, as I have been away trying to get business for the United Kingdom, I have unfortunately been unable to attend them. I welcome this opportunity to take part in such a debate because I believe that there is now an enormous chance to rebuild Britain's share of world trade.
The United Kingdom's present position is one both of hope and of opportunity because, in the past 15 years, two revolutionary changes have transformed the opportunities that now confront us. The first is the transformation in industrial relations. I am sure that the present dispute is purely a hiccup in Britain's advance from the appalling problems of the 1950s, 1960s and 1970s. The number of working days lost due to labour disputes in 1993 was 600,000 compared with 29 million in 1979. Fewer days were lost during the whole of the past nine years than in the single year of 1979 alone. I am also glad to say that the message is getting through to the most important trade unions in the country.
I mentioned to the House yesterday a brochure produced by the Amalgamated Engineering Union called "The Dawn of a New Era: Improving Industrial Relations". One of the first statements that it contains is:
"The new age of industrial relations in Britain means a more common-sense approach to trade unionism is needed if companies are going to prosper."
That is a fundamental change from the 1970s, when management spent most of their time closeted with their shop stewards while union bosses spent most of their time, having lost total control of their membership, in No. 10 Downing street trying to run the country.
All that has changed. We are not returning to Victorian-style management, but are achieving a genuine wish by everyone in business and industry to work together for a common cause. The effects of that can be seen in our economy. Manufacturing industry invested a greater proportion of its output in the 1980s than in the 1970s. Profitability of manufacturing since 1980 has averaged 5.2 per cent., compared with 3.4 per cent. between 1974 and 1979. Growth in business investment in the 1980s was faster than in any other major industrialised country except Japan. Compared to 1979, investment in plant and machinery is nearly 50 per cent. higher. Over the last economic cycle, manufacturing investment increased by nearly a fifth and business investment by more than half. We have attracted the lion's share of inward investment into the EC—more than 40 per cent. from Japan and nearly 40 per cent. from the United States.
Even in the constituency of the hon. Member for Livingston (Mr. Cook), there have been six investment projects in 1993–94, involving a total plan investment of £15 million and some 500 jobs. With one or two notable exceptions, Labour Members say that there is a decline in manufacturing. That is nonsense. Since 1981, output has risen by a quarter, productivity by nearly three quarters and exports by three quarters.
So that is the first revolutionary change that has occurred. The second, which has been just as important, has been the privatisation of our public monopolies and
384
basic industries—the water industry, British Telecom, British Gas, the electricity industry, the nuclear industry, British airports and British ports. None of those either exported or invested abroad before 1979. British Steel, British Leyland and British shipbuilding were all in terminal decline. They had appalling labour relations, poor quality and out-dated products, and were under-invested. Those companies are now becoming major contributors to Britain's export effort and invisible trade surplus.
Mr. Donald Anderson: The Minister mentioned two profound changes in the landscape over the past 10 years. Will he add a third—the profound swathe of destruction over much of manufacturing industry, which happened just over 10 years ago as a result of the Government's exchange rate policy?
Mr. Needham: The hon. Gentleman did not listen to what I said about manufacturing output, which has risen by 25 per cent., and about the success that Britain's manufacturing industry has had in increasing its productivity, efficiency and investment. The hon. Gentleman is right to say that there was a decline in Britain's manufacturing in the early 1980s. The reason for that was that, in the 1960s and d 1970s, Britain's management could not manage. It could not make profits, and managers spent their life in endless debate with shop stewards. The Government, particularly the Labour Government, had no control over the trade union movement, which did enormous damage to Britain's image and industrial infrastructure. Only when the Conservatives returned to power in 1979 did investment from overseas start to flow back into the country and British manufacturing companies start to re-invest here rather than go overseas.
Had the Labour party been in government since 1979, would trade union labour relations have been reformed? Would a Labour Government have reformed the labour relations system, as we have? I spent the first four years of my time in this House listening to Labour Members oppose every measure that the Government brought on to the Floor of the House.
Mr. Michael Fabricant: Is not the Opposition's true interest in how well our industry is doing shown by the fact that, at the opening of this important debate, only two Labour Back-Bench Members are present?
Mr. Needham: I shall discuss my hon. Friend's argument later, because indifference towards exporting characterises the Labour party, with the honourable exception of the hon. Members for Middlesbrough (Mr. Bell) and for Warley, West (Mr. Spellar), who are in the Chamber.
Does anyone suggest that, had the Labour party been in power, we would have had privatisation? Would we have made that enormous change, which has allowed our former public monopolies—now our private companies—to go overseas to trade and export? Are any Labour Members saying that they would have followed the privatisation route? If they are saying that now, they will have to answer the charge that they opposed every privatisation measure that we have ever brought before the House.
Mr. Jacques Arnold: Is not one of the many fascinating side effects of the privatisation programme of public utilities the £2 billion worth of

385
contracts that the privatised water companies have brought back from Latin America—a result of what can be done by our utilities if they are freed from the dead hand of Government control?
Mr. Needham: My hon. Friend mentions one example; I shall mention more later. That is exactly the type of thing that would never have happened if the Labour party had been in power in that period. Britain would have been to the Europe of the 1980s what Spain was to the Europe of the 1780s if the Labour party had had anything to do with our affairs. To use a phrase of the mid-west of America, if the Labour party had been in power we would have been "hollowed out".
It is not enough to have achieved what we have. Now, we must seize the chance to devise and implement a strategic partnership with industry and business and to build on the opportunities that we have created for ourselves, and we are doing so. In the past two years, we have attracted into the Department of Trade and Industry from the private sector more than 90 export promoters. They are experts in the markets in which they have worked. They are the hinge on which the Government are building the partnership with business. With their help, we now have about 80 country market plans. We have considered the strengths, the weaknesses, the opportunities and the threats in the markets and what Britain can bring to those countries that we do not currently bring.
We have identified sectors in each of the countries. We have linked the sector opportunities to companies in this country. We are using the most senior people in British industry and British business—British management—to help to godfather our staff in the DTI and to work with the export promoters to ensure that every opportunity that presents itself in those countries is transmitted to the companies in the United Kingdom that could benefit. We have linked the holders of posts overseas—the commercial attachés, the ambassadors—into the market plans through the Joint Export Promotion Directorate so that we have a seamless, coherent policy in each major market of the world.
My hon. Friend the Member for Gravesham (Mr. Arnold) mentioned South America. I shall take India as an example. In the past eight months, we have signed more than £2 billion worth of orders for infrastructure projects in India. Four export promoters are in place. We have identified 15 sectors of the Indian economy in which British companies can do more than they are currently doing.
We have increased export credit guarantee cover. We have ensured that that export credit guarantee cover is competitively priced with export credit agencies anywhere in the world. In fact, we are in danger of running out of the cover because we have used so much of it. We are talking not only about the big companies in infrastructure but the little companies—companies such as Mr. Brown, who has developed a system of new types of grass seeds which could revolutionise the growing of grass in India. He has even come up with a brand new form of begonia, which is taking the Indian market by storm. There are 200 million middle-class Indians, capable of spending their money and wanting to spend it on high-quality British products.
We have considered the city of Bangalore, one of the most exciting cities in India. Together, the Singaporeans and the British will make Bangalore one of the great cities of the next century. We are flying Concorde out in
386
November with 100 British business men on board and we shall bring Concorde back with 100 Indian business men on board, to consider the opportunities for Indian companies to invest in the United Kingdom and to discover how we can help India to expand its economy by exporting through the United Kingdom and into Europe.
Our exports to India are now more than £1 billion, as are India's exports to us. Through the organisational structure and infrastructure that we have set out in the Indo-British partnership initiative, we have created opportunities in that country, which, after China, is the most exciting opportunity anywhere in Asia. That would not even have been thought of, let alone possible, two, three or five years ago. Throughout the world, whether it be with Japan, the United States, Korea, Malaysia or Thailand, we are working to establish closer, bilateral trading relationships, against the market strategy that I have just described.
We must get that message through to small and medium-sized British companies. I ask all Members in the Chamber, including Opposition Members, if they have companies in their constituencies that are good exporters but do not necessarily have the support and back-up to tackle every major market, to tell them about the DTI plans. If those companies are told about what the DTI is doing, we will ensure that we envelop them in the strategy that we are following so that those opportunities are brought direct to their doorstep.

I am delighted to say that when we decided to go to Members of the House of Commons to explain that, about 60 Conservative Back Benchers came along and showed interest and commitment. However, I am afraid that, although the hon. Member for Middlesbrough did his best to try to interest his colleagues, we only managed to find six of them. I hope that that message of indifference will be reported back.
We are setting up 200 Business Links offices to provide a single access point for companies throughout the country. Every one of those offices will have proper information databases about opportunities for exporting and will have available to it the full range of overseas trade services. The larger Business Links offices will have export support services attached. We shall appoint 70 export development counsellors to work in those areas, who will be able to help companies to begin exporting and to become involved with the other DTI opportunities.
Mr. Michael Stephen: Will my right hon. Friend accept my congratulations on the excellent practical content of his speech? It makes such a refreshing contrast to the vague, idealistic waffle that we have heard so often from the two socialist parties. I have no doubt that we shall hear more of it from them this afternoon.
Mr. Needham: I am grateful to my hon. Friend. I shall discuss some of that vague waffle later.
We are developing closer relationships with the clearing banks, including a pilot service for referring potential exporters. We recently announced the language for export initiative. The need for it and the response of business have surpassed our wildest estimates. British business now knows what needs to be done in terms of competitiveness, management skills and the learning of languages and it is taking advantage.
We are also ensuring that the Departments in Whitehall that are responsible for the sectors of British business and British industry for which the DTI is not responsible, such

387
as agriculture, construction, health and education, have their own export strategies and export units, and that each of them has a Minister who is responsible for exports. We are co-ordinating between ourselves the missions that go abroad. We are ensuring that we support the exhibitions overseas that are most likely to deliver the targeted approach and that we bring out to the markets the companies that are most likely to benefit from participating in such exhibitions.
We are ensuring that people in the regions have an opportunity to understand what is happening in their regions through the celebration of industry years. We are designating 1995–96 a major celebration of industry year in the west midlands, which will proselytise and promote what the west midlands has done, what it is doing now and what it can do in future. It will bring to the west midlands all the major potential inward investors to see for themselves what the west midlands is still capable of. It is the home of the British industrial revolution and is still one of the proudest and most successful industrial manufacturing bases anywhere on earth.
We are looking separately at how we can maximise those strengths that Britain has in the capital goods sector. We exported £9 billion worth of capital goods in 1990. We brought the major companies and major banks together with the Export Credits Guarantee Department to examine our strengths and weaknesses in the highly important sectors of the advancing world to see how we could achieve a much greater rate of success. The companies have decided that, with the right sort of support and organisation, we can increase our sales from £9 billion in 1990 to £27 billion by the year 2000.
We have groups in health, education, power, oil and gas, telecommunications—where GPT recently picked up an order for £40 million in Wuhan in China—water and the environment—which my hon. Friend the Member for Gravesham mentioned—airports and transportation. All those groups include a national promoter to chair them—Sir Wilfrid Newton of London Transport chairs the transportation group and Sir Desmond Pitcher chairs the airport group. Their job is to bring together contractors, consultants, subcontractors and major companies, such as National Grid and PowerGen, to ensure that we have a British consortium capable of winning business for United Kingdom plc.
Of course, we understand that there will sometimes be competition between the groups and it will not always be easy, but we have put in place a system that rivals anything that is being offered by the Germans, French, Italians, Japanese or Americans. That is undoubtedly starting to show in the sort of orders mentioned by my hon. Friend the Member for Gravesham.
Mr. Tam Dalyell: On the issue of power and capital goods, I am unashamedly in favour of Sizewell C and Hunterston C. A problem was acutely outlined to those of us who went to the nuclear forum yesterday. The NNC and others asked how on earth we could continue to improve our levels of exports in the nuclear industry unless the home industry had major projects allowing continuity, either by Nuclear Electric or Scottish Nuclear. What are the Government's reflections on that?
Mr. Needham: I speak as the Minister for Trade. Clearly, in order to sell the nuclear power industry overseas, whether Nuclear Electric, Scottish Nuclear or British Nuclear Fuels, we have to be prepared to support our industry here strongly and openly.
I do not want to make any more party political points, but some Opposition Members make it easy to do so. When we consider Nuclear Electric's proposals for Taiwan it obviously helps, as has been said, to be able to mention successful and continuing developments in the United Kingdom. Therefore, I agree that the basis of a strong export strategy has to be a strong home market. That is why it is vital to pull together the companies to ensure that we are better organised to stand and fight, in our home markets, the competition from outside that is an inevitable consequence of the single market.
We must take that organisation or system vertically and horizontally into the overseas markets. That is true for the water, power, airports, oil and gas and telecommunications industries. The other day, we took to India the telecommunications group, which comprises Cable and Wireless, British Telecom, Racal and GPT, all of which gave presentations on how they felt that they could assist in the telecommunications industry. It was a much more impressive exercise than taking each organisation individually so that each was scrapping with the other.
Of course, some companies will be in existing markets, with existing confidentiality structures, so that they will compete with one another, but there are many opportunities in the world. Britain must organise itself across the capital goods sector. One of the most exciting sectors is education, where Baroness Pauline Perry has done an extraordinary job in bringing together universities, management schools, grammar schools, higher education establishments and technology colleges, and has started to promote and sell the best of British educational quality.
We are now establishing the national vocational qualification system en bloc in Oman. We have opportunities to do the same in Saudi Arabia. We are also looking at opportunities to introduce national vocational qualifications in Malaysia and across the far east. At present, the training is primarily job related; we want to look at skill-related training. If we can achieve and maintain our own quality and keep to our standards, there will be many opportunities for us in the educational sector.
About two weeks ago, we signed a memorandum of understanding to build a British university in Thailand—there may be two British universities in Thailand. The university of London is setting up in Malaysia. The number of students coming here from Taiwan in the past three years has gone up by a factor of three. Across the range of British businesses, there are groups and organisational systems that can deliver aspects of Britain in a coherent way.
Mr. Tom King: May I say to my right hon. Friend—it is a great pleasure to address him in that way—that the hon. Member for Linlithgow (Mr. Dalyell) mentioned the opportunity for export. That is one of 126 different nuclear projects that are either going ahead or are likely to proceed. The nuclear industry is one of the industries in which Britain is a world beater. Will my right hon. Friend accept my absolute support for what he said about making possible through the privatisation of the water industry, the presence of world-class activities in industries from Britain? They can now go into markets

389
where a British presence simply did not exist before and where other countries, particularly France, used to have the field far too much to themselves. There are now huge opportunities for Britain, provided that there is bipartisan support for the activities of those organisations, whether in the nuclear or water industry.
Mr. Needham: I agree with my right hon. Friend. When I deal with the hon. Member for Middlesbrough, I have no doubt that bipartisan support exists. I could not ask for more support than that which I receive from the hon. Gentleman for the proposals and strategies that we are putting forward. I do not want to flatter him too much—he can do without that—but he is almost unique in that capacity. I wish him all power to his elbow in trying to persuade more of his colleagues not only to listen to such debates but to participate in them.
We must, as other countries have done, put across the message and the strategy. All of us, including industry and the trade union movement, must work towards the common cause. The requirements for Britain to survive in the next century include quality, competitiveness and productivity—we must all agree with that.
The Labour party displays indifference, sometimes ignorance, too much carping and, occasionally, contradiction. I hope that the hon. Member for Middlesbrough will not mind my saying that I took time to look in depth at the policies set out in "Winning for Britain", which the hon. Gentleman's boss recently produced. It began with an executive summary—the Labour party is beginning to get the wording right. It stated:
"This document is the result of a year long nationwide consultation by Labour's Trade and Industry Team with those who work in British industry. Its conclusions reflect a consensus about the importance of industry to the British economy and to the future prosperity of the British people."
In the whole document the word "export" is used only once. I do not know to whom in British industry the Labour party spoke, but I find it astonishing that exports should be mentioned only once in a strategic policy document.
It is not only the lack of Labour Members present for this debate that betrays the indifference of the Labour party to these matters. There is also considerable ignorance in the Labour party—again, I exclude the hon. Member for Middlesbrough. The other day, I had occasion to write to the hon. Member for Livingston, who had claimed that the ECGD made a profit of £750 million in 1992–93, and that that money should be used to reduce the premiums. That certainly shows a lack of knowledge and experience on the part of Opposition spokesmen on industry. The fact is that the losses accumulated by the ECGD amount to £3.6 billion. Like any other insurance business, it has to pay off that deficit. It may run up a surplus at times, but the surplus from one year must go to reduce the enormous deficit.
I, therefore, wrote to the hon. Gentleman on 4 May pointing out his mistaken ways and asking him what he would do to the ECGD system and the portfolio management system that we have in place. I asked:
"Is it Labour policy to scrap or change the present system?"
I appreciate that the hon. Member for Livingston is a busy man—the fact that he is not here today is evidence of that. He is busy helping all sorts of people around the country. However, I should like an answer from him; perhaps the hon. Member for Middlesbrough would remind him of his pending tray.
Last week, I listened to the hon. Member for Livingston speaking on "Question Time", when he tried to curry
390
favour with my right hon. Friend the Chief Secretary by saying that he would help to reduce public expenditure by introducing a minimum wage, thereby doing away with family credit. I was pretty cross when I heard that. The hon. Member for Middlesbrough may take an interest in what follows, as he used to be my opposite number for Northern Ireland. What will happen to the women who work in the shirt factories of Derry if we introduce a minimum wage and do away with their family credit? Will the shirt factories be able to pay the minimum wage, so that family credit can be abolished in line with the hon. Gentleman's suggestion?
The answer, of course, is that the ladies in question will lose their jobs. It is arrogant to suggest that those companies can afford to take over the burden, or that the workers will find alternative employment under what the hon. Member for Livingston describes as some form of training for high-technology, high-skill jobs. Of course we all want such jobs, but we cannot put the burden on employers who would then have to put hundreds of thousands of people on low pay out of work. I deplore the arrogance of those who say, "We will retrain them in some fictional skills that will find them alternative work."
Perhaps the hon. Member for Middlesbrough could explain to me why "Winning for Britain" contains no mention of Northern Ireland, even though Wales and Scotland are mentioned. Perhaps the answer is that the Opposition—again I exclude the hon. Gentleman—would like to see Northern Ireland packaged and floated off elsewhere. It is a disgrace to the people of Ulster that the document does not mention Northern Ireland.
Mr. Dalyell: What is the hourly wage of the women in the shirt factories in Derry?
Mr. Needham: Two years ago, it was about £120 a week; with bonuses they got £150 a week. If the minimum wage required a minimum payment without bonuses of £150, and it also had to be paid to part-time workers working, say, three days a week and at present topping up their wages with family credit, differentials would be forced up all along the line and the company would become wholly uncompetitive. I have spoken to people in the garment factories of Northern Ireland, and I know that the companies would go out of business—the Opposition should make no mistake about that. Where would the workers find jobs then? It is not good enough for the Labour party to come up with generalised policies without working out their effects on ordinary working people.
"Winning for Britain" contains another extraordinary passage:
"The strong individualism of the Anglo-Saxon business ethic may also inhibit the development of a corporate long-term perspective. British business culture is vulnerable to the vision of the chief executive as hero."
I could understand all that in the context of the hon. Member for Livingston standing for the leadership of the Labour party—but has someone told the hon. Member for Sedgefield (Mr. Blair) that British business culture is vulnerable to the vision of the chief executive as hero? How does Labour propose to change the culture of British business? What do the hon. Members for Livingston or for Sedgefield know about British industry? Has either of them ever worked in it? The answer of course is no—
Mr. Donald Anderson rose—
Mr. Needham: I accept that the hon. Gentleman may have worked in British industry, which makes him exceptional in his party, but there is one suggestion in "Winning for Britain" with which I have some sympathy: the idea of establishing a university for industry. The first two people who need to attend it and who could learn the most from it would be the hon. Members for Livingston and for Sedgefield.
Mr. Anderson: As someone who has worked in export promotion both in the United Kingdom and abroad, may I appeal to the Minister to make up his mind about whether he wants to enlist the non-partisan support of the whole House for UK plc, or whether he wants to indulge in this sort of party-political knockabout? We can have the latter if he wants it, but it will do nothing for Britain.
Mr. Needham: I understand that point, but on the day the hon. Member for Sedgefield has released his "Change and National Renewal" document, an endless attack on what he sees as the incompetence of the Government in running industrial policy for the past 15 years, he cannot expect me not to reply in kind. The hon. Gentleman should be on the Opposition Front Bench to speak for industry. Meanwhile, he must allow me to explain what the effects of Labour policy would be on British industry.
The hon. Member for Sedgefield claims for his goals:
"We are not going back to the past, nor drifting without purpose, as Britain is at present."
It is the Labour party which is drifting. Then comes the astonishing phrase:
"Labour will open up greater opportunities for the retraining of those in work by ensuring that every company invests in upgrading the skills of the work force."
There could be no stronger statement than that, but he continues:
"the objective will be to encourage."
Would someone explain to me how greater opportunities will be opened up by mere encouragement? That is yet another statement of policy not backed up by any realistic ideas for action. The Opposition berate us continually about the importance of the manufacturing base and throw extraordinary statistics at us. The other day, the hon. Member for Livingston said that our manufacturing investment is now one tenth of what it was in the 1970s. That is just not true. The document says:
"The old debate whether manufacturing or services is the more virtuous is pointless and sterile. In the first place, the dividing line between them is increasingly hard to define. The highest value added in computer application is now software programing. It is simply meaningless to go on drawing a distinction between the production of hardware as a manufacturing process and design itself."
What do Opposition Members want? Either manufacturing is that important or it is not. They cannot continue having it both ways. The hon. Member for Livingston said:
"The turn of the century could make or break Britain. If we are not by then making the things that the world wants to buy we will not be making a living in the world."
How on earth are we to make a living in the world with a minimum wage and the social costs of the social chapter wrapped round our necks? If we are to succeed with Britain in manufacturing we have to create, on the back of the policies that the Government introduced in the 1980s, the sorts of strategy for partnership that I have just been suggesting to the House.
To return to the issue of bipartisanship, I accept that there are people such as Bill Jordan and the Amalgamated Engineering Union who have got that message. It said:
392
"British industry is undergoing a period of change, of growing prosperity."—
this was the AEU talking, not me talking. That was not a Conservative party broadsheet. It continued:
"This has been directly attributable to the influx of inward investors wishing to use our plants and our labour."
How many times have we heard that from the Labour party? [HON. MEMBERS: "Never."] Never. What about the policies of the Labour party? One of its policies is to support trans-European networks in transport and telecommunications. Trans-European networks are enormously expensive and costly and mean that British taxpayers' money would be used to improve Greek and Portuguese roads. It would not do not anything here.
The second part of the Labour party's policy is to establish a network of regional development agencies to empower local business and community leaders to take local decisions that shape their regional economy. Is that Dolly Kiffin? Is that Mr. Stafford? Who are those community leaders who shall determine the regional economy? Is that the best that Labour party can do? I am sorry if it upsets the hon. Member for Swansea, East (Mr. Anderson), but I am not going to sit here and say that the criticisms that the Opposition Members make, the knocking comedy that they write and the policies that they come up with are anything other than amateur. That is the nicest thing that I can say.
We are in a position where we can take advantage. Since 1981, the volume of manufactured exports in Britain has grown faster than in France, Germany, Italy or Japan. Our share of world trade has now stabilised. We are exporting 20 per cent. per head more than Japan and 85 per cent. more than the United States. Our visible deficit has improved since the start of 1993. Our exports for the quarter ending May 1994 are 9.5 per cent. up by value in comparison to May 1993. Over the past 15 years, the Conservative party has put in place the revolutionary changes that give us the platform from which British exports can take off in the 1990s. The only party that has any concept of how to do it and any plan for doing it is the one that forms the Government, and we intend to ensure that it stays that way.
5.32 pm
Mr. Stuart Bell: I am grateful to see you, Madam Deputy Speaker, in the Chair again. One of the great difficulties in debates that deal with subjects which are important but, nevertheless technical is the tendency to try to make them lively rather than like a funeral oration. One can hardly say that the speech of the Minister for Trade was anything like a funeral oration. As Charlie Chaplin once said, "Enthusiasm is the thing." We have long admired the Minister's enthusiasm and we witnessed a great example of it again today.
The Minister mentioned a number of issues, such as hope, opportunity, and the two revolutionary changes. He also managed to bring in the subject of the railway strike. Opposition Members are constantly peppered and bombarded with views on the railway strike. I can give the Minister a view clearly, simply and without hesitation. After all the changes in the Thatcher years, after all the changes and reforms in the trade unions, the management of a company is unable to avoid a strike, and after 13, 14 or 15 years, we have a Government who intervene. Then they ask us who is to blame and where we stand. Honestly and categorically, the management has failed if it has got

393
itself into a strike situation under the legislation of the Thatcherite years. The failure is a failure of management; my hon. Friends and I clearly state that.
Mr. Jacques Arnold rose—
Mr. Bell: I do not intend to give way to the hon. Gentleman at this point and I will tell him why. I have sat with him during many debates on Fridays, Mondays, and so on and he begins to intervene about one minute into a speech and he continues to intervene throughout the debate. I am sure that he will find another point in my speech when he may intervene and I shall be glad at that stage to give way to him.
The Minister talks about the dawn of a new era—a statement made by Bill Jordan, for whom I have a great deal of sympathy, respect and support. The great dawn of a new era, which is frightening the wits out of the Conservatives in the House and in the country, and even Conservative central office, is the possible election of my hon. Friend the Member for Sedgefield (Mr. Blair) as leader of the Labour party. At business questions time earlier, we heard questions about the education of my hon. Friend's children. It shows how deeply the fear runs through the Conservative party when it has to try to score a point by bringing in the children of a future leader of the Labour party in that way. The dawn of a new era, to which Bill Jordan referred, will come about quickly with the election of my hon. Friend the Member for Sedgefield as the leader of the Labour party. The changes that will come about as a result of his leadership will be every reason for concern to the Conservatives.
Several hon. Members rose—
Mr. Bell: I shall go through the points made by the Minister for Trade on an ad hoc basis, if the Minister and the House do not mind. Later in my speech, I shall be glad to give way to Conservative Members.
The Minister for Trade mentioned trade union leaders running the country. There was beer and sandwiches at No. 10 Downing street on just one occasion—in 1965, when there was a railway strike. There was only one occasion, and it was nearly 30 years ago. The Conservatives have had wonderful mileage out of that over the years. We may talk about trade unions leaders running the country, but now we have nobody running the country. That is one of the consequences of 15 years of Conservative rule.
The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin): The hon. Member is rewriting history.
Mr. Bell: I am not rewriting it at all; I am responding to the Minister for Trade. I shall make my own comments later.
The Minister talked of the first revolutionary change, which was to deal with trade union reform and trade union law. It was my noble Friend Lady Castle who tried to reform the trade unions with the document "In Place of Strife" way back in the 1960s. We have sought constantly to change trade union relationships with Government. The President of the Board of Trade, in his book entitled "Where there's a Will", supported the concept of the National Economic Development Office—a relationship between trade unions, Government and management. It was his concept and he wanted to support it, but the former Chancellor of the Exchequer abolished it as soon as the
394
President of the Board of Trade took his post so as to be sure that the Department of Trade and Industry did not gain any pre-eminence over the Treasury.
Labour Members are happy to go along with trade union reform. We are happy to accept those reforms that have been put on the statute book by the Government over the years and which are accepted by the trade unions themselves. We will reform the relationship with the trade unions by putting into that relationship a package of rights for part-time workers.
The Minister also referred to the subject of a national minimum wage, so I will move it up a little on my agenda. It was a travesty for the right hon. Gentleman to use his experience as a Northern Ireland Minister to threaten those who work in the shirt factories of Derry with our national minimum wage as he has perceived it, conceived it and interpreted it, and to say that they will lose their jobs. The onus is on the Opposition in the two to three years ahead to consider the concept of a national minimum wage to help the low-paid workers and those who are sweated labour in our society and to give them a proper minimum wage. How we do that is a matter for us to work on so that it does not not put low-paid workers out of work and does not affect piece-rate workers adversely. We can do it and we will do it.
The Minister said that we had maintained our level of world trade, but he did not mention the fact that the French have increased their share of world trade—and they have both a national minimum wage and the social chapter. We shall not have such a diversity of interpretation—
Mr. McLoughlin: Will the hon. Gentleman give way?
Mr. Bell: No. I am answering all the points made by the Minister for Trade. I shall then come to my speech, when I shall be happy to give way.
Mr. Needham: The point that I was making—and I should like the hon. Gentleman's view on it—was that the hon. Member for Livingston (Mr. Cook) said that one of the ways in which he wanted to reduce public expenditure was through employers taking up the minimum wage costs, which would reduce the costs of family credit. The introduction of the minimum wage, which would minimise family credit, would inevitably put the lower paid out of work. There is no question about that.
Mr. Bell: I understand the Minister's point. I did not see the programme to which he referred earlier, but I was told that the Chief Secretary to the Treasury said that my hon. Friend the Member for Livingston (Mr. Cook) was the best of all the candidates for the leadership of the Labour party. My hon. Friend the Member for Sedgefield has made it clear that our minimum wage will be worked out on a common-sense basis. There is no question of its threatening the jobs of the low paid or of piece workers and it will not interfere with training schemes. Between now and the general election, we shall not allow the Conservative Government—who will then become the Conservative Opposition—to dictate and define what Labour's national minimum wage will be.
My hon. Friend the Member for Swansea, East (Mr. Anderson), whom I am glad to see in the Chamber, mentioned exchange rate policy. We could discuss that for some time. There was a devaluation on 15 September two years ago and the value of the pound has been modified. The exchange rate policy between 1979 and 1981 pushed

395
up the pound's value to $2.50. That decimated our industry. We have not heard from the Minister, in his first revolution, about how 1 million jobs were lost between 1979 and 1981 as a consequence of an exchange rate policy which damaged our exports and destroyed or almost destroyed many of our manufacturing companies. It left us at the end of the recession not leaner and fitter, but worse off and, years on, still struggling to achieve anything.
The Minister was carried away by his own enthusiasm, saying that the Labour party was like something from 1780. I remind him that that was even before the time of Napoleon.
Mr. Donald Anderson: Another major deterrent to our exporters is the discordant note being sounded by the Cabinet and members of the Conservative party on European policy. One thing is crystal clear: the Americans and the Japanese view Europe as one market, but they are not sure whether Britain wants to be part of that single market or not. While diverse voices come from the Government because of their internal contradictions, that will be a major constraint on our export efforts.
Mr. Bell: I am always grateful for my hon. Friend's interventions. My hon. Friend the Member for Sedgefield has spoken of drift and we see it in the Government's position on Europe. On the one hand, Britain is in the heart of Europe; on the other, it supports a two-speed Europe. The Government speak with one voice in this House and with another in Brussels. The Foreign Secretary must be seriously depressed when he has to say one thing at an international conference and then return here and say something different. On the last occasion, he simply said that he would leave it to the Cabinet to decide. That smacks of really firm government. It is certainly evidence of the drift referred to by my hon. Friend the Member for Sedgefield.
The Minister for Trade was happy to refer to 1780, but he failed to refer to the trade balance in manufactures in 1979 compared with 1993. The Minister knows that I have the utmost respect for him both as an individual and as a Minister. We are pleased that 90 people from the private sector are working at the Department of Trade and Industry. We welcome the sector by sector approach. The Minister's use of the term "godfather" was possibly a little out of place in relation to staff at the DTI, but we can get over that. We welcome grandfathering, which is better than godfathering—
Mr. Stephen: The hon. Member for Swansea, East (Mr. Anderson) said that he feared for Britain's position as a destination for foreign investment. Does the hon. Member for Middlesbrough (Mr. Bell) accept that Britain attracts more inward investment than any other Community country? The over-bureaucratised, over-centralised, over-socialised Europe that the hon. Gentleman and his hon. Friends foresee is certainly not the kind of place where our Japanese, American or other friends would wish to invest.
Mr. Bell: The hon. Gentleman illustrates one of the difficulties of believing one's own propaganda. It is often said that inward investment from countries such as Japan and the United States is greater in Britain than in other Community countries, but that is not so. There is massive investment in France and there will be massive investment
396
in Finland and other countries—[Interruption.] We shall not fall for the myths and shibboleths of Conservative Members.
The hon. Member for Shoreham (Mr. Stephen) referred to the socialisation of Europe, the social chapter and social laws. Can he explain why Germany has the strongest economy in Europe although it has the social chapter? Why is France doing so well when it has both a national minimum wage and the social chapter? It is because the framework is right. Those who are in work invest their time in their place of work and they understand the need for productivity, output and security.
The Minister for Trade gave us welcome information about India and the £2 billion worth of orders coming from 15 different sectors. We welcome the fact that the export credit guarantees are being used. I almost made a trip to Bangalore with the Minister. The programme was extremely strenuous. He spent a day there, but that was obviously sufficient for him to build it up as the city of the next century. We welcome the use of Concorde to carry 100 British business men to India and to carry 100 Indian business men back. We also welcome the programme for the capital goods sector, seeking to move orders from £9,000 million to £27,000 million by the year 2000.
The Minister referred to UK plc. When he looks again at "Winning for Britain" he will see a number of paragraphs on that. He spoke of Britain competing on level terms with Germany, France, Japan and America. We must ask whether the packages are the same. Do we have the right package to enable us to compete with the French and the Germans? Our exporters tell us that that is not the case and that the French and the Germans have better packages.
The Minister comes to the House and pleases his Back Benchers and I wish him well. However, exporters still tell us that Britain's package is not so good as—
Mrs. Cheryl Gillan: Will my hon. Friend give way?
Mr. Bell: I have not reached my speech yet, so I will not give way. The debate is about the opportunities for exporters, but the Minister spent at least 25 minutes making a political attack on the Opposition. I intend to respond to every point of his attack before I get to my speech on the opportunities for exporters.
Mr. Donald Anderson: There is some concern about export promotion agencies. France and Germany are organised differently in terms of chambers of commerce and so on. Is my hon. Friend aware that there is now a real danger of a substantial cut in the number of our overseas diplomatic posts due to Government policy failures? That is bound to have adverse repercussions on the ability of our exporters to continue to get the assistance to which they have become accustomed.
Mr. Bell: Such cuts also have an impact on the country where they are made. When I visited Australia last summer, I heard it said that past cuts had sent a signal to the Australian Government that we were not so enthusiastic about Australia as we might have been. It is the language of the Minister to support our exports, but it is the language of the Treasury to cut back. We have yet to hear what will be the impact of the latest spending plans which were discussed at No. 10 Downing street today. How will they affect export credit guarantees and export posts?
Mrs. Gillan: I thank the hon. Gentleman for giving way, but I do not apologise for calling him my friend earlier.
The hon. Gentleman said that he does not believe Tory party propaganda on inward investment. Does he accept the United States survey which showed that of current business prepared by MITI more than 39 per cent. of all inward investment into European Community countries from Japan comes to the United Kingdom? We also enjoy a similar proportion of US investment. The nearest country to the UK in this respect is Germany, where inward investment from Japan is well under 20 per cent. The hon. Gentleman may accept that information from an independent source.
Mr. Bell: I am always grateful to hear from the hon. Lady, but she did not distinguish between manufacturing and service investment. She had better take a good look at those figures and establish whether financial services are included. One thinks, for instance, of the Paris and Frankfurt exchanges. Using sound bite figures on the Floor of the House is dangerous.
The Minister referred to the nuclear industry—
Mr. Jacques Arnold: Oh no.
Mr. Bell: If the hon. Gentleman will listen, he may learn something. If he insists on making sedentary interventions, he will learn nothing. The House may find that I am writing Labour party policy as I go along, much to the benefit of the House and the country. The hon. Gentleman must be patient.
We accept the Minister's point that a strong, viable and expanding UK nuclear industry can link with technology which helps to increase exports. We are aware also that Sizewell C would create 10,000 jobs. However, we are still waiting for the Government's nuclear review. It is a bit hard to ask the Labour party for its policy when there is no Government policy. It is difficult to give answers when the Government have not yet stated their own policy.
I shall now move on to my own speech.
Hon. Members: Hear, hear.
Madam Deputy Speaker (Dame Janet Fookes): Order. I point out to the hon. Gentleman that he has been making a speech for the last 20 minutes. I presume that he was referring to the way in which his speech was prepared—off the cuff or prepackaged.
Mr. Bell: At least the package is my own work. I do not have four civil servants in the Box behind me. When we debated insurance the other day, there were 12 civil servants in the Box. My speech in answer to the Minister is my own work, but it was also partly prepared earlier. Nevertheless, it will refer to many of the points made by the Minister.
We have twice debated exports and the Minister was absent on both occasions. We saw this afternoon the fervour and enthusiasm that we missed. His speech today was enthusiastic and critical of the Opposition, and I hope that it will serve to keep him in his job. However, I can reveal that the Minister need not worry so much. He does not have to attack the Opposition to keep his job as Minister for Trade. The reshuffle has already happened and the names are already decided. They have all been put in a safe at No. 10, and they will be taken out at the appropriate time. If the number of Government seats in the
398
European elections had fallen to seven or eight, those names would have been produced the next day and Ministers would have been put out of their misery. As it is, they will probably hang on until July. I have said publicly—I put my two pennyworth on the table—that I hope that the Minister will keep his job because of his enthusiasm, energy and attacking approach to exports.
It was not always thus. The Minister said that the word "exports" appeared only twice in our document, "Winning for Britain," which is about 40 pages long. I invite him to read Lord Lawson's book, "The View from No. 11," which runs to about 1,100 pages. He will not find the word "exports" anywhere in its index. The book by the President of the Board of Trade, "Where There's a Will," shows in its index entries for "Eggar", "energy", "English Development Agency" and "environment"—but none for "exports". We welcome the Government's change of attitude since 1992 with the appointment of the Minister for Trade, but what were they doing in the 13 years before that? The view was never held in the last Parliament or the penultimate one that emphasis must be placed on exports. They were seen as important, but not that important, and the same applied to industry. The prevalent view was that our balance of payments was not a constraint on macro-economic policy. The Government were able to take that view because of North sea oil and a drop in demand for imports. The current account stayed in surplus until 1986, even though unemployment was rising throughout that time, reflecting a drop in gross domestic product. The current account went into deficit as a consequence of the Lawson-induced boom to win the 1987 general election.
I add in parentheses that our North sea oil account is again in surplus. In the first five months of this year, there was a £36 million oil surplus, compared with a £1.38 billion deficit in the 1993 calendar year. North sea oil masked the progressive deterioration in our trade balance in manufactures throughout the 1980s. When the Minister spoke of his two revolutions, he did not mention the two revolutions of the recessions of 1979–1981 and of 1991. Those were difficult times for business men trying to stay in business during a recession.
Regardless of the Minister's energy, which we applaud, and his commitment to improving Britain's export performance, the lack of overall Government policy means that while our share of world trade remains the same, that of France increases—notwithstanding that country's social chapter and its continued presence in the exchange rate mechanism. France is still part of that mechanism in Europe and Britain is not. The failure of the 1980s remains the most persistent obstacle when the Minister seeks to improve Britain's share of world trade.
We have seen a failure to pay sufficient attention to investment and the encouragement of excessive dividends even in time of recession, as opposed to investment. We have seen a failure to pay sufficient attention to training, and to create a framework for research and development. What kind of economy must we have to provide the wherewithal for our exporters? The Minister did not say that we have a lopsided and destabilised economy which survives on a wing and a prayer. It has external deficits, is debt ridden and has slow growth and high unemployment. That is what the Government describe as a success story. If the economy is as it should be in accordance with the gospel according to the Minister, why has it not been

399
perceived as such by the electorate? Why have the Government lost both local government and European elections?
I was rather surprised to note that the Minister spent more time on the Opposition document, "Winning for Britain" than on the White Paper, "Competitiveness: Helping Business to Win".
Mr. Needham: It is very good.
Mr. Bell: The only good things about it are the index and the glossary of terms.
The White Paper attempts to mask the Government's massive failure. It attempts to scatter its shot far and wide. It seeks to mask the fact that if we are to improve our ability to sell goods and services abroad, a change in economic policy is required. We need a policy that provides more skills and training, is designed for the long term rather than the short term, creates a proper and more appropriate balance between investment and dividends, directs itself through training to the problem of skill shortages, and which believes in Britain rather than hoping for the best for Britain. I remind the Minister that Charles Dickens and Mr. Micawber are dead: hoping for something to turn up does not represent the best economic policy on which to create our so-called opportunities for exporters.
Yesterday, my hon. Friend the Member for Leeds, Central (Mr. Fatchett) revealed his concern for environmental protection when he pointed out that the White Paper cost £600 per page. He hit the nail on the head equally well when he said that it contained
"no new ideas on investment, research and development or training, and no strategy to restore the strength of Britain's manufacturing industry"—[Official Report, 22 June 1994; Vol. 245, c. 226.]
The Labour party has argued that there is a theoretical case for free trade in that it is meant to provide the most efficient producers with access to world markets. That creates lower prices and forces domestic producers to be more efficient. Consumers and the most efficient companies benefit and therefore there is a public interest in offering choice through free trade. I was interested to note that the White Paper calls for "fair and open markets". That is a better definition than free trade. The Opposition and the Government are almost in agreement on that because fair and balanced trade is not far removed from "fair and open markets".
Mr. Jacques Arnold: How would it help free trade if we pursued the Labour party's calls for action against what it describes as social dumping, which means the export from the third world of products produced more cheaply than the developed world can produce them? Surely if we block such social dumping we shall be doing a disservice to the developing world. Will the hon. Gentleman explain Labour party policy on that?
Mr. Bell: I am always grateful for the opportunity to explain Labour party policy to the hon. Member.
Mr. Needham: The hon. Gentleman makes it up as he goes along.
Mr. Bell: No, I do not. It is all written down in my speech. The hon. Member for Gravesham asked a question and then answered it himself. Social dumping has nothing
400
to do with workers' rights and I shall make that distinction when I get to that part of my speech. The hon. Member will not be forgotten.
Mr. McLoughlin: What about social dumping?
Mr. Bell: We shall get to that; there is no need to worry—this is called a structured speech.
A section of the White Paper refers to trade, but the Minister for Trade did not refer to it. I have read the entire document and consigned it to my heart. It refers to trade policy, export promotion, measures to combat unfair subsidies, state aid and inward and outward investment. It is all there. We welcome the emphasis that is placed on those considerations. No doubt the other half of the team—two Ministers are here, in tandem—will refer to them in replying to the debate.
We also welcome the initiatives that are referred to in the document—but which, once again, the Minister failed to mention—to link the Department of Trade and Industry with the Foreign and Commonwealth Office to provide United Kingdom business with help overseas.
Mr. Needham: I mentioned that.
Mr. Bell: Not in relation to the White Paper.
We welcome the Treasury's grudging admission that trade might matter after all—that it is not simply a matter of financing deficits across the exchanges—and its involvement in attempts to win overseas contracts. We welcome the fact that Overseas Trade Services has reached thousands of small firms through the publicity about new opportunities for business with India. I noted what the Minister said about the initiatives listed in the White Paper for trade with India in 1994, including plans for a major promotional event in Delhi in November focusing on smaller firms producing high-technology products. I assume that that is what the Minister had in mind when he referred to Concorde flying back and forth to India.
The Opposition have noted that the United Kingdom is the second biggest foreign investor in the United States and accounts for more than 20 per cent. of the $419 billion invested by foreign enterprises. I do not get around as much as the Minister, but I managed to get to Australia last year and I was in Washington recently. I can testify to the seriousness that the commercial section at our embassy attaches to trade. I note that within the manufacturing sector United Kingdom investment stands at more than $40 billion, making it the biggest foreign investor in the United States.
The Labour party accepts that we are in a global economy, as the hon. Member for Chesham and Amersham (Mrs. Gillan) made plain. We accept that large-scale investment in the United States is necessary as part of that global economy. The Opposition accept that other considerations must be taken into account over and beyond simply investing in our country. Those considerations are important to outward investment and such investment is linked to inward investment, as the hon. Member for Chesham and Amersham said. In turn, it is ultimately linked to fair and open trade in fair and open markets.
The Minister was kind enough to refer to my attempts to involve myself, as a member of Her Majesty's loyal Opposition, with his office. He has been courteous enough to invite me over to explain many of the Government

401
initiatives. He has also given me various documents about those initiatives to study. I thank him for his gracious behaviour.
The Minister said that he had a strategy, but we cannot discern where it is. We understand where he wants to go and how he wants to do that, but where is that over-arching strategy? The efforts of the Minister and his Department must be considered against the fact that our non-oil trade deficit is likely to increase. This is when we come to the facts, not the myths—the reality, rather than the perception of it in which the hon. Member for Gravesham seems to like to live.
Our exports will not benefit fully from an increase in world trade. Even the devaluation of the pound will not prevent our trade position from deteriorating. Even the benefits that arose from the competitive devaluation in September 1992 are already fading. If our exports are to pick up in relation to imports, our growth rate will have to be slower than that of our overseas competitors.
Conservative Members should listen carefully to this part of my speech because, given the rosy description of our exports and our economy, they must wonder why the Governor of the Bank of England is talking about raising interest rates. If things are looking so good, surely they must wonder why interest rates may have to go up. That is the dilemma that the Government face, because they cannot create sustainable and non-inflationary growth through their policies. They cannot break out of the stop-go cycle. We are already suffering from the threat of slower growth or at least growth being curtailed—that will mean that it cannot reduce our unemployment rate—because of the threat of interest rate rises.
At least the Governor of the Bank of England is no longer saying that if interest rates are increased it will all be because of the workers. In the past, the workers got the blame for everything. In this case, he has said that it is not a question of pay rises, but the fact that the economy is over-heating. The fact that the Government cannot even sustain modest growth in the economy without running into balance of payments constraints and having to talk about increasing interest rates is a measure of the failure of their policies overall. I am not talking about the Minister, but about his right hon. and hon. Friends at the Treasury. I am not alone in that view. Nomura Research Institute Europe Ltd. points out clearly what the Opposition have known all along, which is that the current account does matter. A current account deficit can be financed—that is obvious—but it can be financed only by leading to slower growth, higher inflation, weaker exchange rates and higher short and long-term interest rates. That will happen in our country, but not in countries with current account surpluses. The proof of the pudding is Germany.
The Minister was right to touch, albeit briefly, on the emphasis on opportunities for exports. He was right to exhort those in the export business to more effort. He knows in his heart of hearts that if the United Kingdom Government cannot bridge or reduce the current account gap, the economy will remain unstable. The Minister is right to bring to the attention of the House the opportunities that he is making available through the Government. He is right, by implication, to distance himself from the so-called Thatcher years.
Is it not truly astonishing, even at this time, that more help is not available to our exporters from our banks? I pray in aid, if not in comfort, the second survey of international services provided to exporters commissioned
402
by the Institute of Export and NCM Credit Insurance Ltd. The 1994 survey of exporters shows that one in four businesses does not use banks to finance its export business. It shows that banks remain the initial source of general advice for exporters, but that the quality of service provided has improved only marginally. It shows that 49 per cent. of those surveyed remain unhappy with the attitude of the banks and that three out of four companies with turnovers below £10 million fail to receive an advance from their bankers.
The failure by banks to finance overseas debts was commented on by many companies. The banks have lost their identity, if not their soul. They have certainly lost the focus of their business, which has been destroyed—like so much else in the Thatcher years—so that they look to profits from the capital markets rather than assisting small businesses. It is that lackadaisical approach to exports that the Department of Trade and Industry must tackle if the Minister wishes to maintain the impetus of his initiative.
I must tell the Minister that there is some unease about the creation of 11 regional offices with 185 staff. The plethora of export information in the past has caused some confusion among companies and they are wondering where it will all lead with the reorganisation of regional centres. Small businesses do not like confusion, especially when it relates to a Government Department or affects export potential. The existing regional offices of the Department of Trade and Industry receive commendations and are used by two out of three existing companies. However, some effort of communication, information and even reassurance will be needed to maintain that confidence in the new regional centres.
I now come to the point made by the hon. Member for Gravesham. The Government have not achieved all that they might have done through financial services and the general agreement on tariffs and trade. That was the point that I wanted to make to the hon. Member for Chesham and Amersham. It is convenient to base the investment on manufacturing investment, but as hon. Members know, investment in the service industries is equally important. We had a canter around that paddock earlier in the week when we debated GATT. At that time, we were reminded that 23 per cent. of our exports come from services, which amounts to about £23,000 million a year. We were also reminded that we are the fourth exporter of invisibles in the world. We had a little bit of that yesterday when we were told by the Minister that

the President of the Board of Trade is in the land of the midnight sun".—[Official Report, 22 June 1994; Vol. 245, c. 217.]
We are happy for him to be there to discuss invisible exports.
Why were we not able to make greater progress in financial services in the latest round of GATT negotiations? Why did not the Minister refer to that? Perhaps his hon. Friend the Under-Secretary of State will refer to it later. What were the Government up to? What representations did they make to Sir Leon Brittan? What representations were made by the City of London—that great bastion of enterprise? I am glad to see the hon. Member for Gloucestershire, West (Mr. Marland) in his place. I hope that he will make a contribution.

Why did we not make a greater point about financial services? Why did we fail to make greater leeway in the GATT accord on a matter that touches 23 per cent. of our exports? We have been told often enough in the Chamber that Sir Leon Brittan is running for the presidency of the

403
European Commission. As a former Member of the House we wish him well. But where was our case on financial services? What were we afraid of? Where are we going now? Perhaps we shall get to that when we learn from the President of the Board of Trade—
Mr. John Butcher: On a point of order, Madam Deputy Speaker. I require your guidance. I commend the brave attempt by the hon. Member for Middlesbrough (Mr. Bell) to speak alone for the Labour party. However, you will have noticed that there are many Conservative Members who wish to make a brief contribution to the debate. Would it not be advisable if, unusually, the hon. Member for Middlesbrough were allowed to speak again halfway through the proceedings to give us the second half of his speech? Then, instead of having to speak with a modular expandable speech which may go on for two hours to compensate for the total of one and a half hours of speeches from Conservative Members, we would have a more orderly debate and a wider variety of contributions. I say this in all sincerity and flattery for the hon. Gentleman. He should get a medal for what he is doing tonight. I am sure that my hon. Friend the Minister will send a memo to the leader of the Labour party to say that, unsupported, the hon. Member for Middlesbrough has done a sterling job. However, in the interests of the House, could we have an unorthodox procedure in terms of calling people to speak?
Madam Deputy Speaker: In contrast to the flamboyant remarks of the hon. Member for Coventry, South-West (Mr. Butcher), the short answer is no.
Mr. Bell: I am always grateful for an intervention from the hon. Gentleman, even though it was on a point of order. I know that he works well and closely with the Institute of Directors and I have had dealings with him on that subject. I simply wish to remind him of the maiden speech of Benjamin Disraeli, who was also heard by an almost empty House. He ended his speech by saying, "You will remember me." I am sure that when we fight the general election in 1997, Conservative Members will be astonished and, I hope, pleasantly surprised to see how much Labour party policy they find in my speech tonight.
To return to the pre-packaged part of my speech, financial services are important. During the GATT debate my hon. Friend the Member for Rotherham (Mr. MacShane), in his second speech in the Chamber, referred to the Minister for Industry who had been to Marrakesh to sign the GATT agreement. My hon. Friend asked why the Government had sent a grocer to Marrakesh. I found that amusing.
Mr. Needham: It was offensive.
Mr. Bell: It was not offensive; it was amusing. It reminded me of what Winston Churchill once said: some chicken, some neck—it takes a lot of gall for an Opposition Member to refer to Benjamin Disraeli and Winston Churchill in the same speech—and I thought: some grocer, some Minister.
The Minister for Industry was right in his speech the other night to refer to the benefits that come from the GATT round. The Government will need to pursue vigorously the question of financial services. They will need to pursue the issues of banking, insurance, securities,
404
telecommunications, maritime services, aerospace and steel. Attention will have to paid to these matters in relation to GATT for some time, certainly for the next two to three years.
We often hear the question—and we shall hear it increasingly in relation to my hon. Friend the Member for Sedgefield—"Where's the beef?" The beef is, of course, in the hamburger. During the GATT negotiations, did the Government know what they wanted in terms of exports? Where was the overarching strategy? Where was the beef in the Government's policy? The document entitled, "Competitiveness: Helping Business to Win" is not a policy document—it is pious aspiration dressed up as a policy document.
Mr. Jacques Arnold: What about social dumping?.
Mr. Bell: I shall come to that in a moment.
What the Government should do but are not doing is arrest the decline in our exports. They cannot increase exports, only maintain them. GATT might be said to provide an opportunity, and that opportunity will come through the World Trade Organisation. The Minister did not refer to our trade dispute with Malaysia, although he has been there. I hope that such disputes in future will be handled through the new WTO. Incidentally, we are pleased to note that in May our exports to Malaysia were £161 million; in April they were £110 million and in January £78 million. We shall, however, need to examine ways of democratising the WTO and how we can make it more accountable.
The President of the Board of Trade's visit yesterday to Helsinki has already been mentioned. We shall be looking for an early statement from him and we shall be asking whether his meeting there was consultative or indicative, whether it affected the WTO, whether it arose out of the Uruguay round of GATT, whether it affects bilateral trading in services between nations and, indeed, whether financial services such as banking, insurance and securities were topics of discussion. We know how the President of the Board of Trade respects the House and his Department's Question Time, and we shall be anxious to hear his views at an early date—not too early, however, as I shall not be here on Monday.
The hon. Member for Gravesham has been very patient in waiting for a response for his comment on social dumping. This is rather like a television series where one has to wait until after the advertisements—we are getting there now. We need to strengthen the environmental aspects of GATT, although that is not a matter dear to the Government's heart. Over the years, we shall write into GATT an appropriate chapter or clause on workers' rights. The hon. Member for Gravesham seems to confuse social dumping with workers' rights, but there is no comparison between the two.
The Labour party, the Americans, the French and the Government—I shall deal with them in a moment—are saying that a nation's economy can be developed within a framework of workers' rights which not only assists that nation's exports, but improves its standards of living and makes it a nation of consumers, as well as producers, so that it can import goods that we manufacture. The hon. Gentleman should therefore get away from the idea of social dumping and consider a proper framework of workers' rights going hand in hand with fair and balanced trade.

405
When he wound up our recent debate on GATT, the Under-Secretary of State for Corporate Affairs revealed something that I, however, knew already because the American Administration had told me. If they had not done so, I do not know how long I should have had to wait to hear it from the Government, but, in any event, I heard it from the Government on Monday night. I heard that the Government have agreed to promote proper analytical work by the Organisation for Economic Co-operation and Development to examine workers' rights and ascertain where there are problems that need to be dealt with. That means that the Government are examining workers' rights in relation to trade and that we are beginning to move towards the position held by France and the United States, no matter how the Government dress it up.
Over and above the practical opportunities for exporters, which we welcome as a change from the so-called Thatcher years, the Department will have to work harder on a strategy. They cannot simply hope that this document represents a strategy. It places little importance on the difference between high and low technology. The Government appear to believe that competitiveness is a matter of price, not quality. They will have to work much harder on a strategy if they want to persuade us that they know where they are going.
As I have already said, we accept that there has been a change in attitude since 1992, since the Minister took on his portfolio. It is now accepted that exports count, that the external deficit counts, that manufacturing counts and that the economy cannot for ever continue on a wing and a prayer. His own vigorous efforts should be matched by a properly thought out, overarching strategy as well as tactics.
The hon. Member for Coventry, South-West (Mr. Butcher), who is taking such an interest in the length of my speech, might like to know that I am on the last page of the first instalment. With the leave of the House, I shall later wind up on behalf of the Opposition.
When I was preparing my contribution to the debate on GATT, I referred to the line:
"Though the mills of God grind slowly, yet they grind exceeding small".
Most Conservatives recognised the line, but did not, of course, know the following line, of which I am happy to remind them. The poem continues:
"Though with patience He stands waiting, with exactness grinds he all".
The Minister can have tactics and initiatives. but at the end of the day he still has to face the voters and when he and his party do so he will meet the same fate because, with patience, the public and the electorate stand waiting and with exactness they will grind all.
6.26 pm
Mr. Paul Marland: The hon. Member for Middlesbrough (Mr. Bell) is held in very high regard by Conservative Members. There was therefore a tingle of anticipation on this side of the House when he said that he was going to talk about Labour party policy and make up much of it on the hoof. He told us several times and with pride that it was all his own work—my speech, too, is all my own work—but we were disappointed to hear so little about Labour party policy.
The only thing that we managed to prise out of the hon. Gentleman was something about social dumping, a line
406
that he was thrown by one of my colleagues. It was a disappointing speech, because it did not tell us more about what the Labour party has in mind for us.
Mr. Fabricant: It took 55 minutes.
Mr. Marland: Yes, it was a long speech.
I begin by complimenting my right hon. Friend the Minister for Trade on all the energy that he has expended in trying to stimulate trade for this country. His travel schedule has been punishing and has earned him the respect not only of the people who travelled with him but that of many hon. Members of all parties. I hope that he will have the health and strength to keep going.
It will probably come as no surprise to my right hon. Friend to know that it is my intention not to speak about Lloyd's. [Interruption.] It probably will come as a surprise, in fact. I wish to speak about the problems facing the recycling industry. My interest in its efforts are well catalogued, and my right hon. Friend the Minister has shown considerable interest in the difficulties facing the industry. I have talked to him about them several times. What are the problems facing the United Kingdom's metal, textile and paper recyclers? How do I want the Department of Trade and Industry to help?
The problem, simply put, is one of definition. Well-intentioned legislation is placing unnecessary and ill-considered regulation in the way of developing businesses in this sphere. That regulation is beginning seriously to hamper their development, jeopardising their exports and adding considerably to their costs and paperwork. In short, the European Union's definition of waste needs to be amended.
Before I outline the problem in more detail, let me give the House some idea of the scale and breadth of the metal recovery industry in the United Kingdom. Each week, the industry collects 175 tonnes of reusable metal, 30,000 old motor cars, 30,000 refrigerators, 20,000 washing machines and a further 20,000 assorted white goods—items such as cookers, dryers and deep freezes. In addition, it collects huge quantities of industrial, demolition and constructional reusable material, as well as ships, torpedoes, telephones, old bicycles, discarded House of Commons metal chairs and paper clips.
That reclamation activity saves in energy terms the equivalent of 140,000 gallons of petrol for each 1,000 tonnes of new steel produced from recovered metal rather than refining original ore.
The environmental advantages are also obvious, yet the important recycling business, along with the textile and other recycling and exporting businesses, is now under threat from ill-defined and ill-considered legislation, which insists that, irrespective of evidence to the contrary, the metal recovery industry is merely a waste disposal industry, and that those businesses are merely handlers of waste.
The misconception spreads throughout Europe and beyond. Last year, the ferrous reclamation industry collected, processed and sold more than 9 million tonnes of iron and steel. Nearly 4 million tonnes of that recovered metal was sold abroad; hence my interest in today's debate on exports. The trade was market driven, and brought more than £300 million to the United Kingdom in overseas earnings.
Today, however, the United Kingdom metal recycling industry, together with other recycling interests, faces the

407
greatest threat to its activities since the era of export controls pre-1979. The heart of the problem is the misconception that valuable recovered metal, prepared and sold for melting into new steel, is waste and that it should be controlled in the same way as harmful waste for disposal.
It is not merely a domestic problem, as I shall explain. The recycling industry needs help from the Government at home and abroad to change the definition of waste.
So where did that well-intended, but ill-considered, legislation come from? It was the Basel convention. Quite rightly, the Basel convention seeks to control and reduce the export of hazardous waste from developed countries to developing countries. Furthermore, at its second conference, the Basel convention banned all movements of hazardous waste destined for recycling or recovery from OECD to non-OECD countries from 1 January 1998. On the face of it, that sounds a good idea, but the definition of waste under the Basel convention is very broad, as is the classification "hazardous", and that brings problems to the industry.
In a forum dominated by Greenpeace International, and with civil service experts from participating countries' environmental departments only, there is a real risk that the balance will swing too far, so that recovered and processed material could be considered as hazardous waste. I have examples of just that happening.
The OECD proposed a separate regime for the trans-frontier shipment of wastes for recovery, dividing such wastes into red, amber and green lists. Why should recovered and processed metal, together with other material, be regarded as waste, when these products have been bought by the recipient and are to be reused as a raw material? The difficulty is that some countries may and do place restrictions on the trade, simply because the material appears as waste, irrespective of which category of waste it is.
The European Union seeks to regulate the movement of waste into, out of and within the Community along the same lines as the OECD, using the categories green, amber and red. While green wastes are subject only to normal commercial regulations, non-OECD countries can insist that such wastes are controlled as if they were amber or red-listed. That means that, after 1 January 1998, exports of green-listed recovered metals, papers and textiles could be banned.
It is interesting, if horrifying, to note that, only last month, at an international reclamation and recycling convention, a senior official of the Spanish Government spoke with some passion of his country's refusal to import waste. Quite obviously, he had not done his homework and did not understand his own regulations, as Spain currently imports 3.2 million tonnes a year of reprocessed metal, which is classified as waste, for its own steel industry. I am pleased to tell my right hon. Friend the Minister that 1.1 million tonnes of that furnace feed comes from the United Kingdom.
Is it any wonder that United Kingdom business men and politicians are sceptical about our European partners enforcing European regulations, when their own senior civil servants do not even seem to understand them?
Further afield, the Indonesian Government, failing to understand the ramifications of the waste lists, advised the
408
European Union last month that they had imposed a ban on the importation of all waste. That meant that a large cargo of recovered ferrous metal classified as waste, which at that time was on the high seas bound for Jakarta, was therefore illegal and would not be accepted.
However, thanks to pressure from the United Kingdom—and, I suspect, from my right hon. Friend the Minister for Trade—the Indonesian Government realised the potential harm to their own steel industry and reversed their earlier decision. They, too, did not understand the regulations.
Now India and Turkey, which between them import nearly 1 million tonnes of furnace feed per year—the bulk of it from the United Kingdom—have announced that they will not import waste.
The House will be aware of the difficulties faced by the industry with regard to exports. Those of India and Turkey were further cases of not understanding the waste regulations.
There was also the case of the lorry from Swinnerton Brothers, a company based somewhere in the United Kingdom. It was carrying a load of secondary raw material from Britain across Belgium to Italy. The cargo was described as waste and stopped, by Belgian customs officials, who delayed the load for 10 days, causing much frustration and expense for those involved. That was another case of the Belgians not understanding their own legislation.
In the past few weeks, the following countries have demonstrated that they do not understand the waste regulations: Indonesia, Turkey, India, Spain and Belgium.
What must be done is clear, and the United Kingdom Government can show some real leadership at the heart of Europe. Those responsible for the regulations must realise that the material we are talking about is not waste, but a valuable secondary resource, for which buyers are willing to pay large sums of money.
Mr. Fabricant: Hear, hear.
Mr. Marland: I appreciate my hon. Friend's support. The waste regulations must be changed.
Madam Speaker—I am sorry, Mr. Deputy Speaker: if that is the worst error I make in my speech, I will be all right.
Mr. Alex Carlile: It is flattery.
Mr. Marland: As we are in the business of quotes, thanks to the hon. Member for Middlesbrough, Oscar Wilde said, "Flattery will get you anywhere."
To give credit where credit is due, my right hon. Friend the Minister for Trade and my hon. Friend the Minister for the Environment and Countryside have recognised the problem and are trying to help.
The impact of international legislation spills over onto the United Kingdom domestic scene and it is intended that United Kingdom recycling should be brought under the auspices of Environmental Protection Act 1990 and the United Kingdom waste management regulations.
The regulations and the licensing regime were due to apply to the metal recycling industry from 1 May, but, thanks to the interest shown by my hon. Friend the Minister for the Environment and Countryside, who took the time and trouble to look at the industry at first hand, he has recognised that metal processors should be licensed as metal recyclers and not as waste managers. In the light of

409
his first-hand experience, he has given the industry a further five months—until 1 October—to apply for exemption from the current waste management licensing regulations.
A further problem, however, is that the competent authorities in the United Kingdom for licensing and inspection, as well as for export purposes, are the 140 waste regulatory authorities. I believe that in describing material for export and interpreting the Government's regulatory guidance, there would be a standardisation problem, with 140 different authorities throughout the country. Furthermore, those authorities would have great difficulty in ascertaining whether the countries of destination had the appropriate and authorised facilities to receive processed metal cargoes described as waste.
I assure you, Mr. Deputy Speaker, that no one in the recycling industry fears appropriate regulation and licensing. On the contrary, that would be welcome, for there are still far too many unscrupulous operators, who do nobody any good, in the market.
We are talking about a high-tech industry which has invested millions of pounds in its plant and machinery. In all its different guises, it employs thousands of people and brings enormous wealth and massive environmental benefits to this country. That industry is in danger of being over-regulated and unnecessarily regulated, so it warmly welcomes the Government's determination to deregulate.
Today, too much well-intentioned national and international legislation is introduced as a result of activity by well-funded and determined single-issue politicians and pressure groups. I urge my right hon. Friend the Minister for Trade, and my hon. Friend the Under-Secretary of State for Trade and Industry, who is to reply to the debate, to understand that recycled material for sale is not waste, but a valuable secondary raw material. In recognising that, and in redefining waste, they will release the stranglehold that regulation could exert on much of British industry and its export potential.
6.40 pm
Mr. Tam Dalyell: The hon. Member for Gloucestershire, West (Mr. Marland) has done the debate, and the House, a service by raising the important issue of the recycling industry. The House is in his debt. From our constituency experience, we all know that that is indeed an urgent problem.
I should like to talk quietly to the Minister for Trade on six subjects—very succinctly on five of them. First, the right hon. Gentleman referred in his speech to Livingston. I used to represent part of Livingston—it is in the West Lothian area—and I thought that the right hon. Gentleman was rather hard on British Leyland. Honestly, it was not industrial relations that brought the Bathgate operation to an end, but the great difficulty of having a motor industry located away from the centres for the ancillary industries.
As my hon. Friend the Member for Warley, West (Mr. Spellar) knows, there were deep-seated problems and, at least over the past few years, the British Leyland management were in no way critical of the co-operation that they had received from the work force. Hon. Members who represent Birmingham and Coventry seats will know what the problems were. I owe a great deal to the late George Park, my colleague from Coventry, who used to give me much expert advice on the real problems of the
410
parts of the motor industry that had moved out of the midlands. Perhaps the mistake was ever taking them out of the midlands in the first place.
Another question arises, and I want to address it to the Minister for Trade. Are we sure that we have the balance right between the money that the British state puts into attracting industries from the United States, Japan and elsewhere, and what we do to help our own industries? There is a great feeling that if only more money had been invested in, for instance, the North British Steel Foundry, that would have been far healthier than spending those huge sums on attracting industry from abroad.
I shall never forget visiting a famous Japanese company, accompanying a ministerial visit by the right hon. Member for Mole Valley (Mr. Baker) when he was Minister for Technology. I asked him, "How much grant are they getting?" and the right hon. Gentleman gave me the figure. It was confidential, but I was taken aback. The sums that our indigenous industries receive do not bear comparison with what goes to incoming industry from abroad.
Also on that issue, I give a gentle warning to the Minister for Trade that in areas such as mine people are most concerned about the effect of local government reform. He said that prosperity had come to the area represented by my hon. Friend the Member for Livingston (Mr. Cook), and he was right; there is a good story to tell. But part of that story is the way in which Lothian region has been able to react quickly to packages suggested to it—for instance, by Motorola. I doubt whether smaller unitary authorities could have acted in that way, and even at this 59th minute of the 11th hour I tell the Government that they will get into terrible difficulty over local government reform in Scotland. I am not an English Member, but I understand that there may be problems in England as well, with all the orders that are now to be introduced. I really believe that the Government should think again.
My second main question concerns the quarrying industry. I shall start with two facts. To build the new Scottish Office building for the ancient monuments board and other branches of the Scottish Office at Longmore in Edinburgh, Ullapool marble is being used. But that has to go to Carrara to be processed and then come back to Edinburgh. For the new work at the Broomielaw in Glasgow, not Aberdeen granite but Brazilian granite is being used, and that has to be processed in Portugal.
We used to be a country with a thousand quarries, but now we have very few. Off the top of my head, I would say that in Scotland there are now six sandstone quarries, one marble quarry, one flagstone quarry—in Caithness—and no slate quarry. That may be a matter for import substitution, but, we must ask how the Department of Trade and Industry can resolve a chicken-and-egg situation so as to rejuvenate the British quarrying industry.
That industry is all the more important because 50 per cent. and more of the building being undertaken by the construction industry is not new build but repair and renovation, so traditional materials are that much more important. Another reason for concentrating on traditional materials is that the people employed in quarrying are often over 40, and the Minister and I know that those are the most difficult people for whom to find alternative work.
I ask for some reflection on the state of the British quarrying industry, and especially to what extent snatch quarrying can be encouraged. That describes what happens

411
when a certain amount of stone is urgently needed for new buildings in the centre of cities, or for new public works such as the national museum of Scotland or the science museum in Exhibition road.
I can say quickly what I have to say on my third issue. The Minister and I served on a Standing Committee that dealt with the question of markets ouverts. In that connection, I must mention the export of art. In the light of what has happened at Floors, at Scone and at Abbotsford, the Scottish heritage is in peril. Those places attract hundreds of thousands of visitors, and artefacts have been stolen from them and quickly disposed of. I cannot expect an immediate answer, but I know that the Government are working on the problem. Markets ouverts are a real problem, and I hope that they will be able to do something about that.
The fourth issue, like the next two, concerns countries abroad. What is happening to our exports to Iran? Our political relations with Iran have been difficult enough, but they are becoming even more difficult because, for some reason or another, which has not been made clear to the House, we are asking for Iranian diplomats to be withdrawn from this country. That leads to a tit-for-tat situation. On the surface, the reasons seem trivial, but Iran used to be an important market and I ask the Department of Trade and Industry to ask the Foreign Office whether it has the right sense of proportion and whether it should be developing appalling relations with a country that is a good market.
My fifth point takes me next door to Iraq. This is not the occasion to parade my views on how we should react to sanctions against Iraq, but does the DTI realise the extent to which the French have gone back to Baghdad? Last May, in controversial circumstances, I stayed in the only major hotel in Baghdad, where it was almost impossible to get breakfast—I shall put it that way—for the want of people from Elf Aquitaine and other French companies, who said that they were not breaking sanctions, but preparing for the time when sanctions would be lifted. Dutiful as I am, I gave a full report to our embassy in Amman as soon as I crossed the border into Jordan. On the night of my return, the Foreign Secretary courteously saw me in his office and I made the same point.
Remembering that Iraq was one of our best markets—for instance, we undertook massive graduate training there—I believe that operating sanctions may present a problem. The DTI should reflect on what our competitors are doing in Iraq, which has the second biggest, if not the biggest, oil reserves in the world. I do not want to trespass on other matters and I realise that there are great difficulties following the Gulf war, but, at the very least, questions should be asked.
The sixth and final matter on which I wish to dwell involves Libya, again an awkward subject. The Minister and I have discussed the matter before. Libya, like Iraq, was a British Arab market and not an American market. The Americans had other markets, particularly in the Gulf and in Saudi Arabia. Britain's university and technical colleges have trained most of Libya's decision makers. I know that I was on unsafe ground when advancing my arguments on Iraq because difficulties were involved that were not germane to this debate. I feel very strongly,
412
however, that there is a case for lifting sanctions against Libya until we have a far clearer idea of who perpetrated the Lockerbie crime.
A libel case has been successfully conducted in the courts by the Maltese against a Canadian company that asserted that there was a Maltese connection between the bomb and Pan Am flight 103. Once the Malta connection is challenged, as it is more and more by serious people, the case against the Libyan state falls to the ground.
In an Adjournment debate and in other debates, I have argued that the Libyans were not involved and that other people have made them the scapegoats for an appalling crime. I went to Lockerbie on day three. The police from my area were there to clear up. The Lockerbie crime was the most terrible crime against civilians in the western world since 1945. Before we operate sanctions, however, we have to be clear that the people against whom we are operating them are the people who perpetrated the crime. There is mounting evidence that we have got the wrong people.
I asked the Prime Minister to identify the lead Department in the matter. I suspect that it is probably the Crown Office in Edinburgh. It is high time that the DTI went to the Foreign Office, the Crown Office and the relevant sections of the Home Office and asked, "For how long are we going to go on denying ourselves access to the plums of the Libyan markets?"
We still have 5,000 British nationals working in Libya. There are huge demands because of its high-quality oil, which can finance huge projects such as the great man-made river, which those of us who visited it thought was an ecologically sound and major project. There will be huge developments there and British industry is missing out. It is my strong impression that the Italians are not missing out. I not only have an impression, but am certain that the South Koreans are having a field day and making a bomb. [Laughter.] Sorry, that was an unfortunate phrase. If I could erase something from Hansard, that would be it. They are making a pile. No, that is also unsatisfactory. They are making a fortune and British industry is missing out.

If the Minister thinks that I am exaggerating, let him talk to senior management at Babcock and Wilcox, who said only yesterday that it had major orders waiting and that, if sanctions were lifted, it could start those orders tomorrow.
I promised to be brief. I leave those thoughts with the Minister and I hope that he will reflect on them over the next month.
6.56 pm
Mr. John Butcher: I do not want my right hon. Friend the Minister for Trade to reply to my comments. I wish merely to place them on the record and to ask for some discreet inquiries to be made of his officials. I want to discuss corruption in Russia and the extent to which it may pose dangers to British exporters.
The Russian market presents huge opportunities, but it may also present huge dangers. It appears that gangsters and mafiosi have almost totally penetrated Russian commerce and industry. There is, in effect, an alternative and more effective governmental system operating in Russia. It may be highly dangerous, therefore, when British and western European companies go into Russia to look for joint ventures. Russian gangsters may apply the

413
same methods to western European joint ventures that they do to Russian businesses. Those methods are well known. They involve blackmail, extortion, protection and the placing of henchmen in a company's management structures.
Perhaps most worrying of all, a new phenomenon seems to be appearing. Employees of joint ventures with foreign companies are being asked to accept middle managers and observers, who may go to the host country, usually western Germany, to go on a study mission and to learn what is happening in the exporting country. They may also be there, however, to spy out the land for the development of their particular form of exports—corruption, extortion, blackmail and other methods that I mentioned.
That fear has been expressed in some quarters. I ask only that Ministers in the Department of Trade and Industry, who have put in place the excellent structure about which we heard earlier, undertake internal studies of the extent to which their officials are picking up such signals and the extent to which British business men are being exposed to pressures that, initially and to a large extent, were placed on German business men, the most prevalent group of business men in Russia.
We take great pride in the fact that our business ethics and the way in which we do business are of the highest order compared with almost any other country. We do not want certain corrupt practices to wash back to the United Kingdom as a result of sincere, open and honest efforts to indulge in joint ventures in Russia or merely to export to Russia.
I leave those thoughts with my right hon. Friend the Minister for Trade, who commented in opening on the way in which he and the President of the Board of Trade have organised exports. That is music to the business community, which has wanted something like this for a long time. The system that my right hon. Friends have delivered makes Britain a first division player in export activity and I congratulate them on it.
7 pm
Mr. Nigel Jones: I seem to be making a habit of following the hon. Member for Coventry, South-West (Mr. Butcher). When I last spoke, I followed his generous speech; today, he made a thought-provoking speech, following his extremely amusing point of order earlier in our proceedings.
I am delighted that the House has found time to debate one of the most crucial issues that faces Britain. The hon. Member for Linlithgow (Mr. Dalyell) mentioned Iraq, which I visited in helping British exports before the recent troubles. Will the Minister tell us what happened to the money owed under the Export Credits Guarantee Department's scheme to companies exporting at the time of the troubles? Does he think that British exporters are getting a fair share of the construction work in Kuwait?
By inventing things before anyone else and by making high-quality products for sale to the rest of the world, the British have traditionally enjoyed one of the highest standards of living in the world The industrial revolution began in the west midlands—with the invention of railways, for example—and that peaceful revolution continues to bring change across our planet.
In recent years, Britain has fallen behind—or, rather, other nations have caught up and some have overtaken us. The centre of invention has moved away to Europe, North
414
America and, increasingly, Japan and the far east, and with that movement, the potential, through exports, for future wealth and prosperity in the United Kingdom has been threatened.
Our competitors will not easily give up their new-found wealth. They have succeeded by investing more than us in the future. Their Governments play a more active role than ours in co-ordinating, encouraging and, in many cases, providing financial pump priming for, exporters. Liberal Democrats and Conservatives understand that, in a free market, Governments should not attempt to run industry. But this Government fail to understand that even in a free market, Governments continue to have a vital role to play in helping industry to help itself.
The Minister gave examples of help that the Government are giving, but it is not enough. The President of the Board of Trade once promised to intervene before breakfast, lunch and dinner to help British industry, but we have seen precious little sign of his doing so. We have seen even less sign of the Government's investing in the future or of their having a vision or a strategy. Instead, they appear to be conducting a closing-down sale.
I should like the Minister to explain why a quarter of the people employed by the Foreign Office to help exporters have lost their jobs in the past 12 years. Has any research been conducted into the correlation between export success and Foreign Office assistance?
Our scientists and designers have a superb record of inventing things—there is nothing wrong with our innovation—but, too often in recent years, Britain has missed opportunities and has failed to generate wealth by exporting its inventions. As a result, we have a serious balance of payments deficit, including a deficit on manufactured goods. We must look again at making high-quality products for export on a large scale, so employing people who should be employed and paying taxes rather than sitting at home miserably twiddling their thumbs. Only with higher employment and higher-volume productivity will Britain afford a decent social programme, which probably all hon. Members want.
Our key industries, such as aerospace, must be nurtured. Companies such as British Aerospace, Rolls-Royce, Dowty TI, Westland and Smiths Industries bring in a net £2.5 billion to our balance of payments. Some people think that the black gold in the North sea—oil—has been wasted. Instead of giving unsustainable tax cuts to the rich, the Government should have used oil revenues to invest in the future and in Britain's infrastructure.
We have heard about the pharmaceutical industry and financial services today, but we run the danger of missing out on future opportunities in information technology, converging communications technology—made possible by fibre optics—environmental technology and biotechnology. These are key new areas in which high value-added jobs should be created in Britain. They offer huge opportunities for United Kingdom exporters. Other countries may have a lead, but it is not too late to do something to enable British companies to compete in world markets.
With margins squeezed in the European Union, many companies have looked further afield for business. The relaxation of the COCOM—the co-ordinating committee of western nations on technology transfer—restrictions has helped significantly to open up opportunities in central and eastern Europe.

415
What United Kingdom exporters need like a hole in the head is the reintroduction of national trade barriers; they need existing barriers to come down. They must be able, where possible, to buy components for their products from United Kingdom suppliers.
I shall give an example from an industry in which I spent more than 20 years—the computer industry. At this stage, I should declare an interest in ICL. Companies that manufacture information technology in the United Kingdom have global competitors. A company in the United Kingdom that assembles, for example, a box using a 486 processor will probably import its semi-conductors from the far east, but the European Union maintains high tariffs on semi-conductors, so a United Kingdom company that has made the box for export is at a price disadvantage in relation to its competitors in Japan or the Pacific rim countries, which need not pay that artificial tariff. A practical step that our Government could take would be to seek to persuade the EU to reduce or remove tariffs that harm our companies as they seek to compete in export markets around the world.
Another prime example of the United Kingdom's shooting itself in the foot is in relation to the new telecommunications technology and information super-highways. The commodity of the future is information. In the 1970s and 1980s, jobs that should have been kept in the United Kingdom and Europe migrated to low-cost Pacific rim countries; if, through inertia and misguided regulation, we allow North America and Japan to take an unassailable lead in the new communications technologies, the same fate will befall our knowledge-based industries in the 1990s. Those industries have the greatest potential for growth. Emerging information industries will simply locate where they find the best infrastructure and skills.
Potentially, the United Kingdom has an immense amount to offer in terms of technology, software skills—two out of five computer games are designed here—creativity and, crucial in a knowledge-based world, culture. We also have the English language, which is an enormous benefit to us. But it all needs to be joined together in an information super-highway. Current United Kingdom telecommunications policy, however, effectively excludes the two British flag carriers, BT and Mercury, from developing all but the most limited broad-band networks. It is a disaster. Perversely, it has resulted in cable television companies—largely United States-owned—being handed out a patchwork of technically different regional monopolies for an indefinite period to deliver broadcast television and telephony down the same pipe.
Mr. McLoughlin: The hon. Gentleman must get the facts straight. He cannot say that he supports investment while attacking it; and he cannot say that he wants to promote super-highways throughout the country while attacking all the ways in which they are being promoted in terms of cable television companies. He must accept that nothing stops even the two major players to which he referred operating cable television companies. Indeed, BT has the licence for Westminster.
Mr. Jones: I am grateful to the Minister for that intervention. BT has said that it wishes to invest £15 billion of its own money in constructing an information super-highway, but it cannot do so if it is prevented from
416
earning revenue from conveying television on such a network. Mercury backs BT on that. Sir Bryan Carlsberg, the Director General of Fair Trading, has warned of the dangers of new cable monopolies owned by overseas interests. BT and Mercury should be allowed to compete on level terms with those American companies to ensure the deployment of a broad-band, multi-media network throughout the United Kingdom.
Other countries are beginning to see the potential of the information revolution—for example, Vice-President Al Gore plans an information super-highway that reaches into every home and business in the United States. But the British Government are content to leave the infrastructure's installation—the cables under the pavements—to market forces. The result will be a second-rate system cobbled together by companies, most of which are not British, and the network will cover only the most densely populated areas of Britain. A map of the franchises that have already been granted shows that 80 per cent. of Britain is not covered.
Mr. Richard Page: As the hon. Gentleman is concerned about broad-band highways, will he be kind enough to comment on SuperJanet and the work that has been done in that area?
Mr. Jones: I do not know much about SuperJanet, so I cannot comment on it. But I know that much of the system currently being installed is not even consist fibre optics, which were invented here. So those people who are now being inconvenienced by having their pavements dug up will have to have the job done again if we are to have a proper super-highway throughout Britain. Remote areas, including most of Wales and Scotland and parts of England such as the south-west, East Anglia and the north, will be locked out of new services that will provide not just entertainment and video on demand but distance learning, shopping from home, information exchange—perhaps with doctors, local councils and Government Departments—and even, in the future, local referendums.
The United Kingdom supply industry is already being damaged by the lack of a United Kingdom platform from which to export its skills. It is extremely ironic, for example, that the Germans are installing the latest telecommunications technology in the former east Germany with a state-of-the-art fibre network. The network that it is installing is based on United Kingdom thinking, as trialled and demonstrated by BT and United Kingdom manufacturers in a specially localised dispensation from the regulatory rules at Bishops Stortford. United Kingdom technology was proven and copied, yet the suppliers in east Germany are all German and American because United Kingdom companies are prevented from benefiting from a domestic market in the United Kingdom.
Let me refer briefly to some other industries. We must support British scientists and companies in new technological industries such as biotechnology and environmental technology. British companies complain that they cannot find adequate finance for biotechnology, yet it is a hugely expanding field which opens up exciting possibilities for the future. Research and development are being carried out in connection with disease and drought-resistant crops. Properly developed and deployed throughout the world, biotechnology would eradicate hunger and starvation from planet Earth for ever. I can think of no more laudable aim for mankind than to end

417
starvation. If Britain fails to develop solutions to that most pressing of all global problems, other countries will—and they, not we, will reap the benefits both financially and through greater influence throughout the world.
We are also missing out on environmental technology. We currently have 1 per cent. of the world market in environmental technology. Germany enjoys the world lead with 36 per cent. and the USA has 15 per cent. The market is expected to treble by the year 2000. As understanding grows about the seriousness of the threats posed by pollution, global warming and ozone layer depletion, every country will need technological solutions to save the planet's environment.
An example is the Coal Research Establishment. At Stoke Orchard in Gloucestershire, British scientists have developed a world lead in clean coal technology, yet the Government have shown little recent interest. I tabled questions asking what plans the Government have for the future of the CRE and received the reply that it was a matter for British Coal, not the Government. The Government are handing over to Japan, Sweden and others the market for fitting clean-up technology to the world's coal-fired power stations when Britain had established a technological lead that could and should create jobs and wealth for the future.
The phenomenon of Britain inventing something and other countries making money out of it has arisen occurred too often. It must not happen in the future. Many people call it "the hovercraft syndrome". We must have a vision for the future. We invest too little in education; we plan short term rather than long term; and we undervalue our scientists and inventors. Other countries with which Britain competes invest more in education. They are making breakthroughs and their companies are benefiting.
Another problem is language. In many new markets, particularly eastern Europe, the ability to speak the customer's language helps to win business. That is where the Foreign Office can help. It is important that schools start to teach languages as early as possible, certainly before the age of 11. In Sweden, where I have worked, children are bilingual by the age of 11 and go on to learn a third and sometimes a fourth language during the remainder of their school career.
We must invest more in education; plan for the longer term; encourage innovation; and have a strategy. We may then be able to turn the opportunities for United Kingdom exporters into real jobs and wealth for our people.
7.17 pm
Mr. Richard Page: Whenever the House debates trade, industry and exporting, I feel that there is a tinge of regret and that we are looking over our shoulder at our history. Centuries ago, we had organisations such as the East India Company. Later, we were in the forefront of the industrial revolution. We took the fruits of our inventions, and made ourselves the leading trading and exporting nation of the world.
But then the pendulum started to swing away. Although trade and industry did not exactly become dirty words, it was certainly not the career for the socially mobile. We heard apocryphal stories such as that of the teacher who took her charges round a factory and, as she loaded them into the coach afterwards, said, "And there you are. If you don't pass your exams, that's where you'll end up." It became a career that was moving down market.
418
In the 1960s and 1970s, we began to realise that our share in world trade was slipping away, and we faced determined and efficient foreign competition. So the Governments of the day, particularly the Labour Government, started to think that it was up to the state to reverse that trend and save the day. Nationalisation and state intervention became the norm, and politicians had the conceit to believe that they could run industries better at third hand than the people who had spent a lifetime in those activities.
Perhaps the classic example is the setting up of the National Enterprise Board, which put hundreds of millions of pounds of taxpayers' money into various ventures. It collapsed, and I do not know of a single example of its activities that returned a profit at the end of the day.
To be fair, in the 1980s, the pendulum swung violently the other way, and Government reacted dramatically by removing themselves from the industrial scene wherever possible. I strongly support the privatisation process. That has been essential in introducing a new vigour and a new strength into British industry. However, at the same time, industrialists found themselves with a lead Department, in the shape of the Trade and Industry Department, which was starting to operate at arm's length.
The Department became a transitory post for Secretaries of State. I defy most Members of the House to name the Secretaries of State who headed that Department between 1979 and 1991. The average stay was slightly more than a year and a half. At those times of abandonment of trade and industry, I called for tax allowances to compensate for that lack of Government interest, because Government help does not have to be in the shape of money and handouts, but should more properly be in the shape of co-operation and smoothing the way.
Today I believe that, with the present departmental approach, due to the direction and influence of the Ministers who are currently in that Department, industry does not need those blanket taxes. It does not need those allowances. Governments should consider now only a selective approach for specific targets, such as the Japanese use for their machine tool industry.
That change is due to the Ministers. I pay tribute to my right hon. Friend the Minister for Trade. I congratulate him on his recent appointment, which is well deserved. He has done a magnificent job in promoting Britain throughout the world. For that, this country owes him a debt of gratitude.
I do not feel the same sense of regret in the debate today, because, for the first time in all the years that I have been in the House, I have the feeling, contrary to what the hon. Member for Cheltenham (Mr. Jones) said, that we are starting to achieve something that approaches a coherent plan—a plan that starts to tackle the subject of manufacturing and exports.
The recent White Paper on competitiveness is an important part of that overall strategy. My hon. Friend the Member for Coventry South-West (Mr. Butcher) said that that plan was music to his ears and I endorse that. After much work on its preparation, at long last we have a reasonably accurate appraisal of where we stand in the world vis-a-vis the competition. Anyone who operates in the real world might find it amazing that we have not carried out such an appraisal for decades. At long last, we have done it.
I am afraid that it is a characteristic of politicians that they think of the grand, sweeping design and forget all the

419
little nitty-gritty details. People who live in the real world know that the nitty-gritty details make the difference between profit and loss, success and failure.
As an illustration of the importance of the nitty-gritty details, I shall lift a story that was told by the President of the Board of Trade to a group of industrialists in Birmingham slightly more than a year ago. He told a story about a Japanese mission from a steel firm in Japan, which visited a similarly equipped British firm that was not making as much money.
When the Japanese left, they presented a list of 50 items that they suggested could be considered for introduction into that British plant. There were such items as, "When you test the metal quality, do you have to swing the glass door open wide? Why do you not simply open it enough to insert the sampling rod? When you take a sample, you take a nine-inch sample. Why cannot you simply take a couple of inches? That is all you need." The attention to the nitty-gritty will make the difference between success and failure.
It is tempting to quote whole sections of the competitiveness White Paper to illustrate what is being done to help exports. However, I sum it up by saying that there have been great, beneficial changes, which will help our exporters to export more, and that the DTI is to be congratulated.
I shall discuss one or two aspects and make a couple of observations. They will be predicated on the basis that if one does not show, one does not sell. The idea that we merely have to make a product and the world will beat a pathway to our door has long gone. I was, therefore, delighted to hear about the use of those private sector export promoters—last time I heard, it was 70; now I understand that it is 90—who will help to strengthen the promotion work in our 80 major markets.
I also feel that those private sector export promoters will achieve a couple of extra pluses. The first concerns additionality, which has been, in my view, inexplicably ignored by the Overseas Development Administration in the past in assessing overseas aid projects. I say, "inexplicably", because UK manufacturers have produced well-documented examples of how, having got an aid project, they have done further work and obtained further orders that have commercially stood on their own feet.
The second plus is that, although those private sector export promoters come from large companies and will be working with the Overseas Projects Board to target overseas ventures, the small business men—the small UK supplier and subcontractor—will be able to ride in on the back of that main contractor, and thus gain an opportunity to enter markets that they would not have been able to afford to enter if they had been left to themselves.
That leads me to my next argument, about the conspicuous failure by the majority of our trade associations effectively to serve their members in the manner of their overseas counterparts. Opposition Members have briefly mentioned that. I know that they are hard words, but in the tough international market of today, the time for niceties has long gone. Some trade associations provide effective liaison with Government and support for overseas activities, but they are in the minority. We must create a position in which those aims of
420
effective Government liaison, of dissemination of information to the members and support for export activities are the norm and not the exception.
Lord Devlin, as long ago as the 1970s, carried out an appraisal of trade associations, and reached an opinion on three counts. First, he decided that a trade association that did not have an income of about £500,000 in today's terms could not effectively carry out its task. Secondly, he said that there should be one trade association per industrial sector. Thirdly, he said that industry would probably have to take the lead in rationalising a sprawling and often incoherent structure.
The position has not seriously changed since. There have been a few mergers. I pay tribute to what has happened in the chemical and electrical industries. They are progressive and encouraging examples. In far too many sectors, I regret to say, the reverse has occurred—there has been a proliferation of trade associations, bringing with them an inverse proportion of effectiveness in achieving the three aims that I mentioned.
In addressing myself to the reform of trade associations, I make an argument of sheer practicality. If Government are to listen effectively to industry, it is impossible for each of the DTI's industrial units and the Ministers involved to communicate and liaise with every trade association that operates in any specific sector. It is simply physically not possible, partly because there are not enough hours in the day.
Moreover, how do the Government—the Ministers, the departmental officials—know the coherent message issuing from that sector? They may visit and speak to 20 industrial trade associations and receive 20 different messages. If the Government, in the shape of the DTI, are listening, as they are now listening, it is essential that an amalgamation takes place or that umbrella organisations for each sector are set up, so that one coherent voice may speak.
The present position is not only unfair: it is inefficient and is damaging our national interest. The advantages of a coherent voice are obvious. I shall not explain how better liaison can be promoted, and overseas campaigns, trade fairs and projects can be helped. A greater role must be taken in promoting that industrial competitiveness, which must go wider than the usual provision of legal services, economic data and lobbying. If trade associations do not put their own houses in order, I appeal to trade association members to say that they want one coherent voice per sector.
At the beginning of my speech, I commented on the shape and form of Government help, and I shall give a specific example involving the nuclear review. I shall not rehearse the advantages of nuclear energy, except to say that it is cleaner, does not produce acid rain or CO2 and is very safe—tempting as it would be to list all its advantages.
Government help can be given in a positive and effective way with a time-constrained report to reinforce the exports that already flow from nuclear-related companies. Two years ago, those exports were just £230 million; last year, they were £300 million. As my right hon. Friend the Minister said, there is a chance of our selling a nuclear power station to Taiwan.
Our safety features have great international attraction. The export potential for our nuclear industry is huge. There are about 427 plants throughout the world, and 50 plants under construction. As time goes by, each plant will want

421
to extend its life cycle. This country has the greatest experience in the world in extending the life cycles of nuclear plants, which will eventually be shut down and decommissioned. I shall not go into detail about the importance of encouraging British Nuclear Fuels. A long-drawn-out review will be damaging, especially to our nuclear exports.
At long last, we have a plan for manufacturing at a better quality and with better unit costs, so that we can export more. It suggests how we can draw together all the components of this country to compete. On that, the Department of Trade and Industry is to be congratulated.
7.32 pm
Mr. Michael Stephen: The subject of today's debate is one of the most important, if not the most important, that we ever discuss in the House. It is nothing more or less than the question of how Britain is to earn its living in the world, not only for the rest of this decade, but well into the 21st century. It deals with how we are to generate the wealth with which to pay pensions, educate our children, finance the health service and provide all the other essential public and private services that we have come to expect in a modern, civilised country.
Gone are the days when we could export simple manufactured goods with ease. The competition from the newly industrialised world is too strong. Many of those countries are now capable of making the goods at least as well as, and much cheaper than, we can. I nevertheless pay tribute to those British companies that continue to survive in that market by sheer skill and determination.
Our future lies in exporting the high-technology goods and services at which we excel. There is one sphere in which excel over most other countries, and that is nuclear power generation. I wish to concentrate my remarks on that subject. I am surprised and pleased that the matter has already been mentioned by my right hon. Friend the Member for Bridgwater (Mr. King), the hon. Member for Linlithgow (Mr. Dalyell) and my hon. Friend the Member for Hertfordshire, South-West (Mr. Page), for all of whom I have much respect.
I have no nuclear power stations in my constituency, and I have no financial interest in the nuclear industry, but I believe that it is in the national interest that we release the export potential of our nuclear industry. There are companies in the nuclear industry in Britain that are at the leading edge of world technology.
Last year, I visited the site in Suffolk where Nuclear Electric is building the Sizewell B power station, which is nearly completed, and which will be Britain's first pressurised water reactor. I was impressed by the immense technical skill and knowledge of all the people engaged in the project and the world-beating quality of the project management team.
Nuclear Electric has built at Sizewell the world's safest and most technically advanced nuclear power station and it has been built to British safety standards, which are the highest in the world. Perhaps just as remarkable, it has been built well ahead of time and well within the budget. That remarkable achievement has not gone unnoticed around the world.
As the House has already been told, Nuclear Electric has been invited to tender for a nuclear power station in Taiwan, in co-operation with the American Westinghouse company. If successful, that will be good, not only for the
422
growing trade relationship between this country and Taiwan—which I welcome in itself—but for manufacturing industry in Britain.
It will create 5,000 jobs for British engineers for at least five years and will be good news for Britain's hard-pressed engineering industry. It will generate export orders of about £700 million. It will also provide a shop window for the skill and expertise, not only of Nuclear Electric, but of the hundreds of British subcontractors and suppliers, and the professional consultants engaged.
Other possibilities exist; a technical agreement has already been signed with Korea—South Korea, I hasten to add. Many countries of the Pacific rim are interested. The annual growth in energy demand in that part of the world is, I understand, about 10 per cent. and many of those countries are looking to the nuclear industry to satisfy their future demand, not only because it is an effective way of generating electricity, but because they, like us, are conscious of the need to reduce the carbon dioxide and other noxious emissions that we are told are so damaging to the environment of our planet.
If we are to release the export potential of Britain's nuclear industry, we must do two things. First, we must grant companies the commercial freedom they need. Secondly, we must do our best to establish a solid home base and a viable home market to support the export efforts of that industry.
With regard to commercial freedom, Nuclear Electric, BNFL and Scottish Nuclear are nationalised industries and it was not easy for Nuclear Electric to reach the point where it could even bid for the Taiwan contract. Protracted negotiations had to take place with the politicians and civil servants who control the destiny of any nationalised industry, and that has added to Nuclear Electric's burdens and increased the disadvantages to which its commercial competitors from other countries have not been subject.
Such problems are inevitable with nationalised industries, because, in any commercial project, there will always be risk, and Governments have to underwrite the risks if the company involved is nationalised. As we all know, public resources are scarce and any Treasury, be it Conservative or Labour, would be reluctant to take those risks. To succeed in a highly competitive market such as nuclear technology, one must be able to offer speed and flexibility, not only in financing, but in the contractual terms that one is able to offer. That cannot be done by a nationalised industry. We must therefore set our nuclear industry companies free from the restrictions of nationalisation as soon as possible.
There will be difficulties, because, while in public ownership, the industry has accumulated large decommissioning obligations, but the difficulties are not insuperable and, if satisfactory arrangements can be made, a significant sum of money could be obtained from the sale of those companies—money which can then be used for hospitals, schools, roads and the like.
The family silver would still exist, working for us better than ever before; the industry would pay taxes on its earnings, employ British workers, efficiently generate electricity and earn foreign currency for Britain. We have seen how denationalisation has transformed British Airways, turning it, it is said, into the world's favourite airline—and it probably is. It is certainly much more efficient and profitable, and a better managed company,

423
than it ever was when nationalised. Much the same can be said of British Telecom, British Gas, British Steel and many others.
Let us be clear, however, that there will be no question of compromising safety standards. The Health and Safety Executive will still have the power to require compliance with the highest safety standards and the maintenance of a good safety record is also in the commercial interests of the company, because a plant that has to be closed on safety grounds generates no electricity and no revenue.
We must also create a firm home base, from which our nuclear industry can conduct its export activities. The economic benefits of nuclear generation will have to be debated some other day—they have often been debated in the House before. Suffice it to say that we lag behind France, Japan and the United States in our appreciation of the benefits of nuclear electricity.
I fear that there is a political, and sometimes an emotional, reluctance to accept the role that nuclear generation can play. That reluctance is much more evident among Opposition Members than among Conservatives, but it spills over into the thinking of Government and of our people and it puts our nuclear industry at a competitive disadvantage.
Nuclear Electric has already shown that it can build Sizewell B and there is no reason in principle why we should not decide without further delay that we wish it to build Sizewell C. That would enable us to put to work the engineers and project managers engaged on this massive project before their teams have to be dispersed. It would also create jobs for about 10,000 people.
The measures that I have outlined will enable the nuclear industry to plan with confidence for the future and to take its place as one of Britain's most important export earners.
7.43 pm
Mr. Jacques Arnold: I am delighted that we are holding this important debate on exports. There has already been considerable export growth, due in no small measure to Ministers at the Department of Trade and Industry, the Foreign Office and throughout the Government, and the missions that they have led abroad. Significantly, they take with them teams of leaders of British industry and of our great export sectors to foreign markets, prising open the doors and getting business for Britain. Export figures show what is being achieved, but much still needs to be done.
On his recent first visit to Brazil, my right hon. Friend the Foreign Secretary took with him some leaders of business. I have heard from Brazil that the visit had a great impact there. Earlier, the Minister for Trade spoke with great enthusiasm about the work that he and his teams have done in India and other countries in south-east Asia.
I should like to stress the fact that we should look to Latin America, too, and open our eyes to the fact that the continent has returned to democracy, with the one sad exception of Cuba. It has also returned to free trade. We should note, for instance, that Latin American countries have unilaterally cut their tariffs. In 1985, when the process began, they charged an average 56 per cent. import tariff. By 1992, the last year for which I have figures, those tariffs had been cut to 16 per cent. That provides terrific
424
opportunities which we must grab ahead of our competitors from France, Italy, Germany, Japan and the United States.
Hence, I welcome the Government's recent appointment of a director general of export promotion, Ray Mingay, and the establishment and bringing together of the export promotion divisions and the department known as XEA, which covers Latin America. Above all, I welcome the appointment of export promoters of high quality. They have come to us from the private sector, and they bring with them their expertise and dynamism. I know the ones appointed for Colombia and Brazil; I know of their experience and of what they have already achieved—it is most encouraging.
We should not forget that trade is a two-way process. That is why I particularly welcome the recent GATT agreement and the fact that, for the first time, it included agriculture. That is essential for the third world and invaluable for the countries of Latin America and Africa, because now, by their own efforts, they can earn foreign exchange and with it their self-respect.
If today we were discussing overseas aid—as we did yesterday—perhaps there would be a few more Labour Members on the Opposition Benches, whining about the fact that, as they see it, we do not give enough aid to the poor unfortunates over whom our hearts should bleed. I say that if we give them a chance to export their goods to us, they will not have to come here with their begging bowls; they will come here with their self-respect, having earned an income for themselves. That is why it is so desperately important that we ensure that the GATT agreement is properly implemented.
GATT has tended to concentrate on tariffs and the blocking of non-tariff barriers. What we need is transparency that will enable us to see the obstacles to international trade and then squeeze them out of existence.
I am uneasy about the fashionable new talk, especially in left-wing circles, about so-called social dumping, about which I questioned the hon. Member for Middlesbrough (Mr. Bell). It is supposed to describe the ruining of their environment by third world countries in their effort to manufacture products, and those countries' exploitation of their workers. That, at any rate, is the claim. I would certainly welcome an examination of the despoliation of the environment and the exploitation of workers in the context of goods imported from China, produced in massive slave labour camps in that communist republic. That indeed represents a humanitarian scandal, so let us deal with Chinese products first. Likewise, let us deal with the widespread instances of child slave labour in certain countries and sectors. We need to come down hard on them. It worries me that the idea of social dumping may be used to create new tariff barriers that will destroy the third world's competitive advantages.
A few months ago, we all saw on the television what was represented as the Colombian coal industry—children wheeling barrows along rickety wooden planks. We were told that the coal produced in this way in Colombia competes with coal from our own mines. Not true. Colombian coal is produced from vast seams, stretching out in straight lines for 4 km. Massive machinery is brought in to strip out the coal seams, and the coal is carried on conveyor belts to bulk carriers. That is why the Colombian coal industry, for instance, is competitive against our own coal. It is not because they have children running around with little, rickety, wooden wheelbarrows

425
or because of the exploitation of children. That industry is providing for Colombia a source of massive foreign exchange, which gives it a chance to turn away from the ghastly drug trade which has plagued it and brought to it death and misery.
Another example is the cellulose or softwood industry of Brazil. We hear allegations of massive destruction of the tropical rain forests. Let us understand that the overwhelming bulk of the softwood produced in Brazil comes from the south of Brazil in the states of Paraná and Santa Catarina. In those states, they have been producing softwoods for years and years. Indeed, they clear entire forests, but they had planted those forests in the first place and they replant them because they are good at the husbandry of the forests. They produce the softwood and the pulp, cellulose, which we in Britain need to import.
Of course, such states have a worrying competitive advantage because if one plants vast plantations of softwood in Scandinavia, for instance, it takes 25 years for a tree to reach maturity. However, if one plants that tree in the fertile and appropriate areas of the third world, such as those areas of Brazil to which I referred, for instance, they will be fully grown for cropping in five years. It is obvious that such areas will have a competitive price advantage, but let us not allow the people who support barriers to trade to come up with a load of twaddle that, somehow, those countries are despoiling the environment or using child slave labour and, therefore, we should have non-tariff barriers against them. Brazil and other countries that are alleged to be in the third world and which are involved in such production have addressed those important points so that they can achieve continuity of production. There are many other cases of claims of child slave labour, such as in the textiles industry.
Third world countries have difficulty when they go to the Geneva offices. Along comes the European Commission, which in so many instances is an organisation in support of barriers to trade, with vast legal teams of experts. They charge into Geneva and easily out-manoeuvre the negotiators and the defenders of trade from the third world countries, who cannot compete with the legal and technical expertise which is brought to bear in such forums. Those teams scour their export competitors in the third world for evidence of social malpractices, they artfully argue them from the specific to the general and then they create massive tariff barriers.
Yesterday, my right hon. Friend the Member for Eddisbury (Mr. Goodlad), the Minister of State, Foreign and Commonwealth Office, made an outstanding speech in which he stressed the importance of trade for the third world and how valuable it is to create conditions in which the third world can earn its living, rather than relying, demeaningly, on the begging bowl to be filled by the countries of Europe and north America.
It is a valuable debate and it is significant that, at 7.53 pm, Conservative Member after Conservative Member of Parliament is wishing to put the case, not only for Britain's trade, but for the world's trade. I only feel sorry for, I would say, our hon. Friend the Member for Middlesbrough—I say that with good heart—who, for much of the debate, has been the sole Labour Member present. I note that he has been joined, somewhat belatedly, by a colleague.
Mrs. Gillan: An odd colleague.
Mr. Arnold: His hon. Friend is the Whip on duty. Perhaps he is an odd colleague, but I must be careful since our own Whip is also present.
Export success leads to jobs and to improving standards of living. That is why I back so strongly the work of my right hon. and hon. Friends the Ministers in their work in developing British exports.
7.53 pm
Mr. Michael Fabricant: It is a great privilege to take part in the debate. It is quite a hard act to follow some of the hon. Members who have spoken. My hon. Friend the Member for Gloucestershire, West (Mr. Marland) spoke about the recycling of material, especially iron, which is not to be referred to as waste. My hon. Friend the Member for Shoreham (Mr. Stephen) talked about nuclear energy and boasts—perhaps he does not know this—in Shoreham the prototype power station for the power station subsequently built in Battersea. Also, of course, my hon. Friend the Member for Gravesham (Mr. Arnold) spoke so eloquently about south America. Of course, he was born and brought up in Brazil.
Mr. Jacques Arnold: Not born in Brazil.
Mr. Fabricant: Not born there, but brought up there, nevertheless. I believe that he speaks fluent Brazilian Spanish.
Mr. Arnold: Portuguese.
Mr. Fabricant: Brazilian Portuguese. Such ignorance! Having heard from my right hon. Friend the Minister that the Labour party has few credentials on which to speak about the subject, I was going to set out—and I shall set out—my own credentials.
Some years ago, when I started off in business, I founded a company which subsequently set up radio stations in some 50 countries worldwide; one of those countries that purchased equipment from me was Brazil, so I hasten to add that it was a slip of the tongue when I said Spanish instead of Portuguese.
I was involved with manufacturing in Cornwall and the pre-installation of equipment in Sussex. In my last few years with the company, I was deputy chairman with special responsibility for overseas sales. As I said, we established radio station equipment in more than 50 countries worldwide, from Radio 4 and Capital Radio in London to radio stations as far afield as Rikisutvarpid in Iceland, Radio Botswana in Gabarone and Radio Moscow. They all have radio stations which I helped to set up.
It frustrates me when I visit exciting British companies that have not considered exporting their products and services. I must confess that I visited a firm in Lichfield last Friday that manufactures—I will not name the company—and designs computer control equipment for use in brewing and in the pharmaceutical industry.
Mrs. Gillan: Name it.
Mr. Fabricant: I will not name the company, as my hon. Friend urges me to do, because it would embarrass the management of that company. I was impressed with their technology, but I was equally disappointed that they had made no attempt to export any of it.

427
When I was in the United States, both as a doctoral student and later as a salesman for Britain, I was impressed by a comment of Woodrow Wilson, although he made it in 1912, some years before I was there:
"Business underlies everything in our national life, including our spiritual life."
Wilson's comments are as true today as they were when he said them. As a small island, we clearly cannot afford not to focus on sales abroad. For the past four elections, the British people have chosen a Government who recognise and value wealth creation through the success of British business.
My purpose today is twofold. First, it is important that we acknowledge our success over the past 15 years in boosting our exports, and pull apart the myths and fallacies expounded by those who oppose simply for the sake of opposition. Secondly, I wish to focus on ways in which we can increase our exports still further, especially by opening up a new frontier in Russia and eastern Europe. We must not allow the Germans to make all the running.
I well recall taking part in a trade and industry debate at a Conservative party conference in Brighton some five or six years ago, and saying to a highly sceptical audience that cracks were appearing in the Soviet empire and that I could foresee a time when a Russia, unbridled by socialism, might even join the European Economic Community, as it was then known. Oh, happy days.
It is so important to remember all the tremendous export achievements of British industry over the past few years. Who would have thought that we would become a net exporter of television sets? Who would have thought 15 years ago that we would rise to the top of the G7 league table for manufacturing productivity? Who would have foreseen that, since the early 1980s, our manufacturing exports would increase by more than two thirds and that output would rise by 30 per cent. over the past 10 years? Who would have believed, given the years of ruin by Labour in the seventies—the years of Red Robbo, of lame duck, bankrupt and strike-ridden motor manufacturers—that we are on course to become a net exporter of cars by the mid-1990s? That is all despite the fact that the Labour party still tacitly supports the rail strike, which damages not only commuters, but our exports. We must not forget that it affects freight transportation, too.
Who on earth would have considered, even in his wildest dreams, that we would be so successful in exporting our political policies? From Angola to New Zealand, Governments are following the example of sound Conservative policies such as privatisation, deregulation, lower taxes and value for money. Despite its jealousy of the purity of its own language, I have even seen the headline in Le Figaro: "Le Privatisation." Even that favourite social democratic golden calf, Sweden, has seen the light at last and is adopting the British approach, the Conservative approach. What a remarkable contrast with the Opposition's policies.
The Liberal Democrats' only big policy export is proportional misrepresentation, which overseas Governments are trying to cast off even quicker than the president of the Liberal Democrats can run to a betting shop. As for Labour, what can we say? Just when we thought it was safe to go back in the sea, Beckett's "Jaws" returns. In the scramble for the top of the greasy Labour pole, we know that the leadership contenders want to
428
export only that old British disease—industrial strife, union rule, subsidies and taxpayers' money down the plughole.
I want to return to a more important matter—the success of British industry. Over the past few years, the efforts of the Board of Trade have been instrumental in securing British success overseas. I well recall, only a few years ago, being in Kampala and witnessing the machinations of French, German and Japanese exporters. Hand in glove with their own Governments, they were able to bend GATT rules and offer loans on capital projects on far more preferable terms than those available from the United Kingdom.
The hon. Member for Middlesbrough (Mr. Bell) alluded to that earlier today. Even if a contract could be secured, German firms enjoyed advantageous terms from HERMES, while our own ECGD provided inadequate cover for British exporters. That has changed. Since the last Budget, the President of the Board of Trade has ensured that British firms can compete on an equal footing with France, Germany and Japan.
The DTI campaign to help businesses make more of the single market provides vital information and practical advice—I received some before I was elected to the House—to British companies striving to take up the opportunities that the single market offers. Given that so many member countries of the EU flout single market rules—the French subsidies for Air France and Italy's aid for its steel industry being prime examples—the establishment of the single market compliance unit is an excellent and necessary step.
Too often, EC countries, in their zeal for federalism and the social chapter, seem to forget that single market rules are to be obeyed. We can no longer tolerate a Community in which many members shriek, "Do as I say, don't do as I do."
The Government deserve credit for preventing further EC steel restructuring grants for a number of European companies. I have the privilege of serving on European Standing Committee B, which has been considering that very problem. Other measures have also been beneficial, such as the overseas visits of Ministers. We heard earlier of the activities of my right hon. Friend the Minister for Trade. His visits with key business men are an excellent step forward and will do much to promote good will.
No longer must British business men be subjected, as I have been, to namby-pamby diplomats in our high commissions and embassies overseas, unwilling to get their hands dirty by discussing trade. There is a new ethos. More than 80—perhaps 90, as we heard today—business men have been seconded to the DTI to provide expert advice, and there is a growing cross-fertilisation between the DTI and the Foreign Office. As with the first Elizabethan era, our diplomatic stations overseas are now more aware than ever that their role is to promote trade first and practise diplomacy second—and about time, too.
I want to discuss how we can boost our exports still further. So far, I have concentrated on the success of our British exports. We should be proud that Marks and Spencer shirts are worn all over the world and that Cadbury-Schweppes is a global household name. Are hon. Members aware that Marks and Spencer is building a second store in Paris because demand has outstripped its first? Are hon. Members aware that it is not just good value clothing that Parisiennes seek? The quality and freshness of the food available at Marks and Spencer outstrip that

429
available from comparable French stores. So let them not mock the English cuisine. There are also things we should not do.
We should not fall into the trap of comparing ourselves with Japan and Germany and demand subsidies, as the Opposition always do. The Japanese Ministry of International Trade and Industry had a smaller budget in 1990 than the pro rata budget of the DTI. Most of German industry is no longer subsidised, either. Our research and development programmes are first-class, and it is no wonder that the pharmaceutical industry had a trade surplus of £1.3 billion in 1993—a great success story Nor must we forget the trade surplus of £4.2 billion that the chemical industry earned, or the fact that 70 per cent. of the turnover from the aerospace industry is exported.
We should not allow industrial taxation to climb. We now have a favourable climate for industry that must not be allowed to slip. Taxes and other costs on businesses must be reduced at every opportunity. Of course, wage costs must be kept to a minimum.
We should not allow the pound to be chained to any artificial mechanism. Every time the pound has been allowed to float freely, most notably between 1933 and 1938, and between 1981 and 1989, industry prospered. In all other periods, industry suffered. As the late Lord Ridley stated in his memoirs:
"During all these periods, the pound was managed in some way or another—the Gold Standard, the Bretton Woods agreement, and later shadowing the deutschmark and finally the exchange rate mechanism. All these devices were designed to keep the pound higher than the market would otherwise have it. As a result, our companies' ability to sell profitably was markedly reduced."
As a great Baroness once said, "You can't buck the market." We should all be aware of that.
An over-valued pound gives the opportunity for high-cost economies such as Japan and Germany to import a huge quantity of goods into Britain and to weaken our industry by eating into our markets. Benjamin Franklin said:
"No nation was ever ruined by trade."
We should take that into account when we consider how to boost our exports.
Quite rightly, the Government focus on the European Community and the Pacific, but I believe that the next great frontier for British trade must be Russia and its neighbouring states. Russia alone has a market of 150 million people, many of whom are highly educated. In our quest to open up markets in Japan, we must not neglect the markets in eastern Europe, in central Asia, in the Caucasus and in the Russian Federation. Why should we allow Germany to use her proximity to the Czech Republic and Hungary to make all the running and turn those countries into its own economic fiefdoms?
British Petroleum has made significant inroads into Azerbaijan. We need to encourage our motor manufacturers, our pharmaceutical companies and our service industries to look at trade in eastern Europe and Asia. Encouragement of joint ventures with Russian or eastern European firms is one way of getting a foothold, but we can also support other, less obvious activities to encourage overseas trade. We must make sure that the single market works for not only us but the countries of eastern Europe that are struggling to free their economies from years of socialist central planning.
430
Franco Racca, executive director of LICA Development Capital Ltd, and a former strategic adviser to Fiat, made a good point when he said:
"It is in the West's interests to help Russia …the preferred approach must involve barter, and most projects must find western joint ventures and managers. Rather than western Government and agencies lending money, they should underwrite private sector joint ventures and set the industrial priorities, by sector and region. The West must realise that the Common Market goes all the way to the Urals as an essential fact; it is that barter replaces currency in Russia as the principal medium of exchange".
We could supply Russia with food, manufacturing machinery, management and distribution systems in return for minerals—which Russia has in abundance—oil, diamonds, gold and titanium.
We have a model for that barter approach. The largest ever export order was the Al-Yamamah project in Saudi Arabia, headed by British Aerospace. In return for the Saudis supplying 500,000 barrels of oil a day, with some money as well, BAe supplies Tornados, Hawks, ground facilities and training, as well as minefield clearers from Vosper Thorneycroft. Britain could gain from increased trade and increased military security.
Back in Azerbaijan, British Petroleum is involved in a joint venture with the British Council for Management and with English-language training of personnel. The British Council is targeting the East Asia and Pacific region and Latin America for special attention, and the council is active in 108 countries worldwide.
Germany spends three and a half times as much as Britain, and France spends seven times as much on their cultural equivalents. That is not altruism. In my experience, buyers who have been culturally exposed to Britain like what they see and their purchasing decisions nearly always reflect that.
It would be a false economy to cut back on the British Council, just as it would be a false economy to cut back on the BBC World Service or on the number of our embassies.
The prospects for British exports have never been brighter. We are moving back towards the realities of the first Elizabethan era, when we made use of every trading opportunity. GATT—as noted in a recent debate—will increase our trading opportunities still further.
I have no doubt that eventually, and with a glorious inevitability, GATT will establish a global free market, so that we do not have to be dependent on Europe alone and will have the chance to embrace other trading blocs. Provided that the Government continue on their present path, provided that the European Community looks outward not inward, provided that we maintain our hard-won opt-outs from a single currency and the crippling social chapter, and provided that British industry continues to offer value for money, the scope for British business and economic success of the nation is unlimited.
The high wage-cost, interventionist and regressive trade union policies of the Labour party would spell disaster, resulting in just one export—the brain drain of talent that we experienced in the 1970s—and economic ruin. We cannot allow that to happen.
8.13 pm
Mrs. Cheryl Gillan: It is always a great pleasure to follow my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant). I am sure that we all agree that he is a salesman not just for his

431
constituency but, as he said, for Britain. I congratulate my right hon. Friend the Minister for Trade on securing this debate.
On examining Hansard, I discovered that we last debated this subject on 21 May 1993. The hon. Member for Middlesbrough (Mr. Bell) complained that he did not have the support of the four civil servants in the Box, now down to three. I felt sad for the hon. Gentleman during this debate because he has not even been supported by four of his party colleagues. The debate on 21 May 1993 proved a similar occasion. Then, only one Front Bencher spoke for the main Opposition party, and no Back Benchers spoke.
It is difficult to take Labour seriously when it cannot muster support on a debate on a subject that is so important for British industry and the wealth and health of our nation. In fact, I could not find on the parliamentary on-line information service a single supply day on which exports were chosen by Labour as the subject for debate. That is a bad record, and I hope that people outside the House will take note of it.

Earlier, I referred to the hon. Member for Middlesbrough as a friend, and I would not withdraw that remark. He spent most of his speech defending the hon. Member for Sedgefield (Mr. Blair). It was phrased in such a way as to suggest that there will be no contest and that the hon. Member for Sedgefield is already the leader of the Labour party. Again, many people in the House and outside it will note that assumption.
I tried to intervene on the speech of my right hon. Friend the Minister to pick up on his remarks about exporting education. I should like to draw attention to the only independent and excellent university of Buckingham in my county, which recently won the Queen's award for exports. That first-class establishment offers special, different and excellent education, and I thought that I should mark its contribution in this debate on exports.
Over the past two years, I have visited several companies in my constituency that make a great contribution to British exports. Blease Medical exports anaesthetic delivery equipment. That excellent company produces reliable equipment that is used throughout the world, and particularly in third world countries because of its reliability. Securon Ltd. in Winchmore Hill produces seat belts. In this country, direct demand for seat belts is low because they are installed as part of the car's manufacturing process. The seat belts that Securon manufacture are installed in many cars in foreign countries that were manufactured before seat belts as original equipment were a matter of course.
Boughton Engineering produces a wide range of engineering equipment and has a successful record of trading abroad. The last time that I visited Boughton, it was preparing certain vehicles for use in Bosnia by the United Nations and our armed forces. Finally, to link with remarks made by my hon. Friends the Members for Hertfordshire, South-West (Mr. Page) and for Shoreham (Mr. Stephen) about the nuclear industry, it would be remiss of me to contribute to a debate on exports without mentioning Amersham International, which is a success in terms of both our privatisation policies and exporting.
The other nuclear company that I visited recently was AEA Technology. I am pleased that my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) is in his
432
place on the Front Bench. Yesterday, he was good enough to answer my question on when a statement would be made about the privatisation of AEA Technology, to set it free. He replied that
"we hope to be able to make an announcement…shortly."—[Official Report, 22 June 1994; Vol. 245, c. 222.]
It is worth repeating that the strides being made by that company in terms of environmental science, neural networks and environmental safety mean that it is ready to be set free. I hope that he hears my remark that the sooner it is set free, the better.
We are the fifth largest exporter in the world, and I believe that, at last, the Government seem to be getting their act together with a policy on trade and industry which is benefiting our industry. Coupled with the excellent work now being done by the Office of Science and Technology, particularly on research and development, our businesses are beginning to find that the Government can create the environment in which they can be allowed to build their share of the world market.
With what I can only describe as renewed commercial aggression, set against a background of low interest rates and lean production, British business is in a position to compete against the Americas and the Pacific rim countries.
No debate on exports could take place without reference to the White Paper on competitiveness, which was issued recently by the President of the Board of Trade. Competitiveness is at the heart of ensuring our industrial success. I particularly welcome the emphasis that my right hon. Friend has placed on the dialogue with industry. That affects not only our present position but future policies, which will now be properly influenced by the wealth creators who run our industrial concerns.
I do not believe that anyone would disagree that the Tory Government had a great deal to do in the early 1980s. They had to move from subsidising inefficient nationalised industries to creating efficient, contributing organisations. They also had to reduce the unreasonable influence of the unions. We had a reminder of such influence—it has been spoken about at length in the Chamber today—by the RMT strike. Yesterday's strike shows that eternal vigilance is still necessary from Conservative Members. I must mention that, during that strike, the Chiltern line, which serves my constituency of Chesham and Amersham, kept on running. It took three signalmen and the millions of pounds that we invested in that signalling system. My constituents were extremely pleased that they could get to work.
It is difficult to understand how my colleagues on the Opposition Benches can talk about the success of our businesses at home and abroad while supporting industrial action that sends appalling messages to foreign investors and buyers alike that the unions still have a grip and a force, which is ultimately damaging to trade and business. Success in world markets and strikes do not go together.
London is undoubtedly the leading financial city in Europe and, together with centres in different time zones such as New York and Tokyo, it stands out as one of the commercial centres of the world. It is vital that its infrastructure and facilities reflect its position. Therefore, it was with great sorrow that I attended the meeting to announce the failure of the Crossrail Bill at Committee stage. That project is of great significance not only to my constituency but to the business and financial community,

433
which is, after all, responsible for one of the largest contributors to our wealth through the invisibles sector of our economy.
The Opposition always pay lip service to the need to get people out of cars and on the railways, but the two Opposition Members who served on that Committee voted down the crossrail project. I believe that that decision will greatly hinder the City's development. I urge my hon. Friends on the Front Benches to continue to seek a way in which that project can be revived, as it would provide the necessary infrastructure for the success of our City in the next century.
I am a consultant to the Chartered Institute of Marketing and I am proud to speak for it in the House. While I declare my interest, I must also declare my disappointment with the White Paper, because it made so little direct reference to marketing per se. The fortunes of some of our most successful exporters are based on marketing. Yes, their products were high-quality ones, but those products were refined chiefly from the sales and marketing forces, which identified customers' needs and the way in which to satisfy them profitably. Two great weaknesses of the past are still apparent today—lack of middle management training and lack of education in marketing.
I make no apology for emphasising the importance of marketing training in a debate on exports and highlighting the wide choice of course and education available through the Chartered Institute of Marketing. This is a commercial, because the institute's facilities at Moor Hall are excellent. It tailors its courses to suit busy managers who may only be able to take a limited time off from their employment to further their knowledge. Yes, this is a commercial because I am a marketing person, but so are our competitors.
Last year, while I was in Taiwan, it did not surprise me to learn of the emphasis that businesses and business leaders placed on marketing. The head of the trade centre in Taipei took a great deal of trouble to explain to me the efforts and expenditure that were being put into marketing training.
I hope that the Department of Trade and Industry will register this small protest at the apparent exclusion of specific reference to marketing in the White Paper. Now that measurements of marketing effectiveness are becoming more widespread, I hope that the DTI will join me and those business men who already have a greater appreciation of the role and value of this discipline to our industries. Understanding a product or a service is not enough; one must also understand marketing and marketing techniques to exploit that product or service.
One of the things that the DTI seems to have lacked for many years is continuity. In common with many of my hon. Friends, I congratulate the President of the Board of Trade and his colleagues at the DTI on the progress that they have made with an impressive team. If it is not too late, I should like to put in a plea for relatively minor, if any, changes at the DTI. Whatever the motives that may be attached to the media reports about my right hon. Friend's own career preferences, I believe that the exporting community fully endorses the view that there have been too many ministerial changes at the Department since 1979. I believe that the trade team should stay where it is.
There has been a transformation in the Government's input to the trade scene and they have been extremely receptive to the views of exporters. The Government have been keen to find solutions and imaginative in the way that they have collected information and set about resolving
434
key issues. We now have a situation in which for the most important markets for British exporters, the Export Credits Guarantee Department's premiums are at a realistic and competitive level. I realise that the ECGD premiums may be out of line with the competition in some markets, but they cannot all be tackled at once.
Perhaps the most challenging issue that presents itself to the ECGD is how to address cover for privatised projects. The central features of such a project, as opposed to a conventional one, is that the project is looked at by the underwriter in the ECGD on its own merits and viability and the returns that it will generate, and not on the basis of a guarantee from an overseas Government. Such projects are off a Government's balance sheet and the ECGD and Ministers should consider those projects with substantive private sector input.
The American export credit agency, Exim, has hired three outside specialists to cover such underwriting, which is different from current underwriting. Coface, the French agency, has also hired a specialist for between the next six to 12 months. Even if it is a costly exercise, I believe that it would be a worthwhile investment. We would be able to look in depth at the ways in which the ECGD should respond to the underwriting needs of such privatised projects.
I am grateful for advice and information from Banque Paribas in London, which is supporting the activities of many British companies in their exporting endeavours. More importantly, it has given me up-to-date information on the success of travelling with a British Minister in a trade delegation which, it said brings the market into sharp focus. Journalists writing about the Minister in Export Today said:
"when accompanying with him one should not expect a holiday. It is hard work all the way even when it is social. However, one can expect to bring back the orders and that is what the Minister's travels have been about."
We should congratulate my right hon. Friend on his initiative in visiting the far east no fewer than 10 times in the past 18 months. As Latin America is his next target, I fully expect further good results from his travels there. I believe that he is visiting Venezuela, Brazil and Argentina, and we wish him and our businesses good fortune.
I do not wish to refer just to the Minister leading the trade delegations. I want to say a word of praise about DTI officials who staff some of our embassies and consulates. Businesses in my constituency have noticed a marked improvement in the services being provided from our embassies, not by Foreign Office officials but by officials from the Department of Trade and Industry.
One of our most successful exports—indeed, our leading export—in recent years has been privatisation, which has been touched upon in a different context. British companies such as Ernst and Young are selling their experience abroad following successfully advising on the privatisation of British Telecom, Jaguar, Royal Ordnance, British Gas and many others. That expertise is opening up the economies of central and eastern Europe to home and overseas investors. As has been said, extensive knowledge and experience of the former Soviet Union are needed, but when coupled with privatisation expertise, the combination is bringing home contracts from virtually all the countries of the former Soviet Union.
Ernst and Young is just one of a series of companies involved in the exporting of Conservative privatisation principles. It has successfully advised on the first offers for

435
sale in Poland and Romania and has pioneered mass privatisation in the Czech and Slovak republics and in St Petersburg in Russia. More and more Governments and more and more countries are adopting privatisation programmes. For example, such programmes are beginning in Argentina, Hungary, Latvia, New Zealand, Nicaragua, South Africa, Sri Lanka, Venezuela, Ukraine, Kazakhstan and, nearer to home, Denmark.
There has been a sea change in the Department of Trade and Industry and in the services that the Department is providing to British business to help it export successfully. It is up to Government to create the framework and it is up to our businesses to go out there and sell the goods.
We have an excellent Minister leading the team. I should like to end by quoting from Export Today, an excellent magazine, which said, in article written by Carol Debell:
"There's nothing random about where he goes or when he goes. It is part, he says, of a carefully planned strategy to use his Ministerial clout where it can make most impact."
I am proud to be on the Benches of a Government who use their ministerial clout to make our exporting businesses more successful.
8.33 pm
Mr. Bell: With the leave of the House, I should like to reply to the debate.
I congratulate the hon. Member for Chesham and Amersham (Mrs. Gillan). It is my first opportunity to follow her in a debate. I appreciated her remarks and her knowledge and lucidity in the various subjects she covered. We have heard a number of quotations. Oscar Wilde was mentioned by the hon. Member for Gloucestershire, West (Mr. Marland). I managed to mention Benjamin Disraeli and Winston Churchill and the hon. Member for Mid-Staffordshire (Mr. Fabricant) got Benjamin Franklin in on the act. Years ago, Lloyd George used to say that one can make a good name for oneself in Friday speeches; the tradition has now moved to Thursday evening.
We have heard some quite good speeches. I missed the speech of the hon. Member for Shoreham (Mr. Stephen) on nuclear energy. I shall read it with interest tomorrow. After the effervescence and turbulence of the opening speeches, it has been a good and constructive debate. The hon. Member for Mid-Staffordshire pleased me enormously, not that he got "privatisation" right, but he got the gender right. It is masculine, not feminine.
The hon. Member for Chesham and Amersham referred to various privatisations throughout the world. Her mention of Hungary reminded me of a little joke I heard in Hungary recently. They are saying, "What has capitalism done that 40 years of communism could not do?" The answer is to make socialism popular. There may be lessons in all this for us.
The hon. Member for Chesham and Amersham referred to competitiveness; indeed, she made more references to it than the Minister, but no doubt the Under-Secretary's homologue in closing will rectify that. She referred also to the rail strike. It is a little desperate of the Government to blame a future Labour Government for the rail strike and to come back to it time and again.
The Minister showed his disregard—or should I say "contempt"—for European networks, whether they be rail or road. He dismissed them out of hand and said that all
436
that would happen would be that taxpayers' money would be used to build such networks. In fact, the money comes from the European investment bank and, if Mr. Delors has his way, from a new European bond. So the British taxpayer will not have to pay for the European networks when they get going.
The hon. Member for Gloucestershire, West referred to recycling. I shall not go down that road. I found his remarks interesting, but not in my particular bailiwick. He took me up on the lack of formulation of Labour party policy. He will be happy to know that at 8.36 pm, with a good hour before me, I am able to deal with more Labour party policy than I could earlier.
The Minister made great play of comments made by my hon. Friend the Member for Livingston (Mr. Cook), touching upon output and productivity. The Minister referred to our document, "Winning for Britain". He made great play of the fact that we had not covered Northern Ireland. Of course, it is part of the United Kingdom and we have a separate document to cover that. It is a fact—and it is in the document—that, until 1980, investment in manufacturing never fell below 3 per cent. of GDP. Since 1980, it has always been below 3 per cent. and is now barely over 2 per cent. Even in the best year of the 1980s, manufacturing investment was still below the percentage of GDP invested in the worst year of the 1970s or 1960s.
Mr. Stephen: Is not there a problem of definition in seeking to draw a distinction between manufacturing and services? For example, in the computer industry, we might say that manufacturing is making the hardware. But is making the software manufacturing as well? Sometimes the software is of higher value than the hardware.
Mr. Bell: I am grateful to the hon. Gentleman for that intervention. We make that point in our document. The Minister touched on the fact that software can be involved in both services and manufacturing. The point that we were trying to make in our document, which was dismissed by the Minister, is that the distinction between services and manufacturing should no longer exist. We have a way of creating wealth in our country. If it comes from services, so be it and if it comes from manufacturing, so be it. The two are not, as we lawyers say, mutually exclusive.
Our document says that manufacturing output in Britain is barely above its 1979 level. I referred to the Minister's speech and his two so-called revolutions, which we call recessions. In the recent recession, more than 80,000 companies went into liquidation. The fact to remember is that that is a permanent loss to our economy. One of the most valuable contributions that the Government can make to sustained industrial recovery is to maintain policies of macro-economic management which promote sustainable demand growth with low inflation. I tried to point out earlier that the Government's policies would not lead us to sustained growth or low inflation.
Britain now invests less of its GDP in manufacturing than all bar two of the 24 nations of the Organisation for Economic Co-operation and Development. The hon. Member for Mid-Staffordshire made several references to the OECD, but did not cite that fact. Under the Conservatives, the proportion of profits taken out of business in dividends has increased from about half of net profit to almost three quarters, a fact which concerns the Financial Secretary to the Treasury as well as my colleagues. British companies now invest in their business

437
about half the proportion of profits retained by their German and Japanese competitors. We believe that the loss in price competitiveness against nations with newer machine tools, better-designed factories and more advanced transport and communications systems will inevitably mean that, in the long run, there will be a failure to invest in innovation.
In reply to the Minister's earlier statement, I have to say that the first objective of any serious industrial strategy must be to raise the proportion of the economy invested in industry. Why has not the success of Britain's financial sector been expressed in better performance in industrial Investment? I am trying to put on the record some of our refutations of the Minister's arguments.
Britain has accumulated the world's second largest portfolio of overseas equity while running the second poorest level of investment in manufacturing among OECD countries. With reference to the European network, which I mentioned earlier, an important part of competitiveness is the provision of an efficient transport system that eliminates delay in the movement of goods and provides reliable travel for the work force, a point touched on by the hon. Member for Chesham and Amersham.
It is remarkable that, during the 1980s, the Government said that manufacturing and the balance of payments did not really matter. In an earlier debate on this topic, the hon. Member for Colchester, North (Mr. Jenkin) took me to task, but I was able to refer him to a number of statements made by Ministers in the 1980s. The Select Committee on Overseas Trade in another place produced a famous report in 1985. It made it clear that, unless
"the climate is changed so that steps could be taken to enlarge the manufacturing base, combat import penetration and stimulate exports of manufactured goods, as oil revenues diminish the country will experience adverse effects which include…an adverse balance of payments of such proportions that severely deflationary measures would be needed".
That was exactly what happened.
The hon. Member for Gravesham (Mr. Arnold) referred to social dumping both in an intervention and in his speech, giving me the opportunity to put on record the Opposition's views on what he describes as social dumping. It is right and proper that the wealthier trading nations of the world should accept competition from those that are less wealthy, but not on the backs of impoverished people who will stay impoverished in order to maintain their competitiveness. There should be economic growth in the world as well as human development so that, as internal markets expand and wealth increases, there can be more trade with industrialised nations both in imports and exports. The hon. Gentleman also referred to a speech made yesterday by a Foreign Office Minister.
We believe that there should be a balance between those who are working and the sale of goods for export. There could be mechanisms to assist development so that, as a country ceases to be one of the very poorest and acquires higher living standards, it would be expected to meet a new set of obligations on workers' rights under a new social chapter for the WTO. I want it clearly on the record that we are talking not about social dumping but about raising the living standards of exporting countries.
I referred earlier to a document from the Institute of Export and NCM Credit Insurance Ltd. It mentioned the fact that the banks were not as helpful as they might be in our export drive. It might help to put on record two or three other points made in that document. It stated that 53 per
438
cent. of exporters use credit insurance and only one in four respondents realised that it can be used for purposes other than credit protection. Its summary states:
"Unfortunately, too many British exporters still feel that they can invoice in sterling, insist on letters of credit and ignore the crucial need to train staff to respond to international cultures.
Although there has been a marginal improvement since the 1993 Survey, many areas of support for exporters still fall below what is needed."
I appreciated the speech of the hon. Member for Hertfordshire, South-West (Mr. Page). He and I tramped the wrong side of the streets together in Workington back in 1976, but he had a remarkable by-election victory. When he looks back on that and compares it with the Conservatives' present by-election defeats, he will realise that every coin has two sides. He mentioned a variety of measures that were taken in the 1960s. He referred to the National Enterprise Board which, of course, saved Leyland and Rover and made it possible for Rover ultimately to be taken over by BMW.
The hon. Member for Coventry, South-West (Mr. Butcher) said that the competitiveness document was music to his ears. However, the hon. Member for Chesham and Amersham admitted that it did not place enough emphasis on marketing. We would also claim that it does not place enough emphasis on quality and high technology rather than low technology. It seems that the Government believe that price is the only element in competitiveness—keeping wages down and being competitive in that way. That will not work in low-technology goods because there will always be other countries that can produce the same goods more cheaply than we can.
The hon. Member for Gravesham made an interesting and erudite speech. His knowledge of Portuguese is equal to my knowledge of French. We could have a debate in two different languages if the House would allow—we would probably have more of a meeting of minds than we do in English. He referred to GATT and the poorer countries and used phrases such as " the begging bowl". One thing that is clear is that GATT is incomplete at present. It needs a social chapter, an enhanced platform for the environment and a better relationship with the third world. They could be arranged over time. I agree with the hon. Gentleman that if there were proper trade with third-world countries, they could improve their standard of living and not be a burden on the industrialised world as we know it.
The hon. Member for Mid-Staffordshire knows that I have a great affection for him. He mentioned Red Robbo and Lame Duck. I can remember Red Robbo but not Lame Duck—perhaps I missed that particular cartoon. In the 1970s, the trade unions were supposedly rampant—at least that was the impression that the Conservatives like to give—but the Minister and the hon. Gentleman failed to ask, "Where was the management? What were they doing?" It was a Labour Government who brought in Michael Edwardes to manage the British Motor Corporation or British Leyland as it became, because we saw the difficulties. We saw that management was not managing.
Mr. McLoughlin: Will the hon. Gentleman remind me whom the Labour Government brought in as vice-chairman of British Leyland?
Mr. Bell: I should likes to be reminded by the hon. Gentleman.
Mr. McLoughlin: It was Sir Ian MacGregor.
Mr. Bell: I am glad to have brought Mr. MacGregor into the debate. I listened to the diaries of my right hon. Friend the Member for Chesterfield (Mr. Benn) on the radio and he was talking about the day when Mr. MacGregor asked Mr. McGahey to play golf. One can imagine the conversation between Mr. McGahey the Scotsman and Mr. MacGregor the Canadian, with Mr. McGahey saying, "I have never played golf in my life," and the other gentlemen saying, "It is a wonderful game and we can do business on the golf course.".
It is nice to hear mention of Mr. MacGregor and to know that he is not entirely forgotten. The Conservatives brought him into the mining industry for a specific task, which was unworthy of them and did our coal industry no good. We will reach the ultimate conclusion on that on Tuesday night. I shall not go too far down that road, but on Tuesday night we shall see the culmination of 50 years of vendetta by Conservative Administrations against a specific industry which they consider to be the vanguard of socialism. But that is another debate.
The hon. Member for Mid-Staffordshire mentioned Radio Moscow. I remember how, when I was the candidate at Hexham, travelling over the hills and dales at night, I was able to listen to Radio Moscow and be appraised of the latest production of pig iron in the various Soviet states.
I shall end on the point raised by the hon. Member for Chesham and Amersham about the number of debates on subjects such as exports. They are our better debates, because knowledge can be brought forward and put on the record.
We all agree that Britain as a nation state must export. We are an island economy, part of the European Union and full-time, fully paid-up members of GATT and we consider the expansion of world trade and our part in that as important to us, but we have to get away from the ideology and develop a strategy. We have to get away from believing that, simply by producing a document on competitiveness, we have changed the world; we have not and we have a difficult role to play.
I said earlier that the French are increasing their share of the world market. Ours has stabilised following years of decline. That may be good enough in the short term; it is not good enough in the long term. The Opposition will be vigilant—though the serried ranks behind me may not demonstrate that at the moment—in holding the Government to account and seeing where the export drive actually goes.
8.51 pm
The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin): Perhaps I should start by congratulating the hon. Member for Middlesbrough (Mr. Bell). It is fair to say that today, the Labour party has spoken with one voice. I can honestly say that we have not had the divergence of opinion that we sometimes hear from the Labour party. I suppose it might have something to do with the fact that we have heard only one voice from the Labour Benches, apart from the hon. Member for Linlithgow (Mr. Dalyell). However, the hon. Member for Middlesbrough has made up for it by the length of his speeches, and I do not intend to follow his example.
After speaking for some 20 minutes, the hon. Gentleman said, "I am just about coming to my speech." Perhaps he was so surprised by the speech made by my
440
right hon. Friend the Minister for Trade that he had to rewrite his own. That is why, after speaking for 20 minutes, he told us that he was coming to his speech.
I am not quite sure what happened in those first 20 minutes, but the hon. Gentleman made some interesting justifications, because he talked about the hon. Member for Sedgefield (Mr. Blair) and the education policy that he may wish to follow for his own children. I say to the hon. Gentleman here and now that nobody objects, or has any intention of objecting, to whatever school the hon. Member for Sedgefield wishes to send his children to, but we welcome the fact that he has chosen a grant-maintained school. The Government pursued that policy because we believed it to be right, and that point was made earlier.
Mr. John Spellar: Why do Ministers not send their children to grant-maintained schools?
Mr. McLoughlin: The Labour Whip asks why Ministers do not send our children to grant-maintained schools. I can tell the hon. Gentleman that I do, and I am proud of it. William Gilbert is an excellent school, yet Derbyshire county council tried to stop it becoming grant-maintained. I will not take lectures from the hon. Member. Perhaps he should be more careful about choosing his targets before he lets off.
The hon. Member for Middlesbrough also said a number of other interesting things. When I tried to intervene on him, and he would not give way, he was saying that the Labour party would look at the effects of the minimum wage and carefully consider how to implement it so as not to put people out of work. The hon. Gentleman is nodding his head in agreement.
It is fascinating to remind him that the Labour party fought the last general election on the introduction of a minimum wage. One would have thought that they might have worked out the policies they were pursuing then. I am grateful to the hon. Gentleman. He accused my right hon. Friend the Minister for Trade of not turning sufficient attention to the competitiveness White Paper, which has been broadly welcomed by John Monk, the TEC leaders and a number of other bodies.
Yesterday, we had questions to the Department of Trade and Industry, and we heard Opposition Member after Opposition Member attacking the Government on their trade and industry policy, yet today, when the House is given the opportunity of a full-scale debate on the whole subject, only the hon. Member for Linlithgow has taken part. The score sheet shows that there were nine speakers from the Conservative party, two from the Labour party and one from the Liberal party.
My hon. Friends covered a number of interesting points. My hon. Friend the Member for Gloucestershire, West (Mr. Marland) referred to the problems that he feels have been faced by the scrap metal industry. He told us that it is not waste, and he is absolutely right; it is an important component. He is also right about the importance of recycling those materials. They are not waste; they are materials.
The Government recognise the valuable contribution that recycling industries make to the economy and the environment. The Department of the Environment is working with my Department, and we will continue to monitor the new legislation to ensure that it imposes minimum burdens on the industry.

441
My hon. Friend referred to the meeting with my hon. Friend the Minister for the Environment and Countryside. He was pleased there had been a postponement in part of the implementation of the regulations—a longer delay in registering. I certainly take on board what he said and, in the light of his speech, I will carefully consider the calls that he made on the Government. I will examine the matter closely and see whether we can help him in some way. I cannot give him a commitment at this stage, but I will certainly look into the matter.
The hon. Member for Linlithgow raised six items; the fact that this is an Adjournment debate allowed him to range fairly widely. Local government reform in Scotland, which he raised, is an issue which has been fully dealt with. There is a valid point to make, but it has been fully dealt with in debates at various times.
The hon. Member for Linlithgow also mentioned Motorola, which based in his constituency, or on the edge of it. Not long ago, I was there, and I agree with him about the investment there, and the confidence of the workers both in the jobs that they were doing and in the expansion taking place there.
The hon. Gentleman went on to say that more should be done for the quarrying industry, and suggested that import substitution could take place. When he talks about the quarrying industry, he hits on a raw nerve in some areas of the country, because quarrying is not usually welcomed by local people—but his points were valid.
The hon. Gentleman raised the question of markets ouverts with me in Committee on the Sale of Goods (Amendment) Bill. Earl Ferrers, the Minister of State, Home Office, responded to the hon. Gentleman on 17 June and dealt with some of the points that he made then. The hon. Gentleman also asked about Iran, Iraq and Libya, and the Minister for Trade will respond to his questions in more detail in due course.
My hon. Friend the Member for Coventry, South-West (Mr. Butcher) made an interesting contribution which will make interesting reading in the record of our proceedings. I will certainly consider the points that he made.
The hon. Member for Cheltenham (Mr. Jones) spoke about telecommunications, but I disagreed with quite a lot of what he said. We must acknowledge that the cable television companies are making huge investments in this country, and I do not believe that that would have happened if they had believed that BT or Mercury could enter the entertainment market. There is nothing to stop either BT or Mercury providing cable television companies, but that has to be done in the same way as the cable television companies act. That is important.
BT still has 97 or 98 per cent. of the domestic market for telephones. It is important to bring about competition, and the White Paper that set out our policies in 1991 has led to huge investment in this country by cable television companies. I should have thought that the hon. Gentleman would welcome that.
The hon. Gentleman said that the cable television companies would serve only about 10 per cent. of the population, but he is wrong. The current cable licences will serve about 60 per cent. of the population—a substantial percentage. Of course, there are greater problems with rural areas and some of the more remote areas, but that is true even now of some terrestrial transmissions in certain parts of the country. The situation is not exactly as the hon.
442
Gentleman painted it, and I am convinced that the investment would not have come about without the policies set out in the White Paper.
My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) made a speech which mirrored several of the objectives for which the President of the Board of Trade called. I wholly agree with what he said about trade associations, and the need for them to combine in certain areas so as to speak for their trade with one concerted voice. My hon. Friend gave examples of trade associations that do an effective job.
That follows a speech that my right hon. Friend gave last year—to a CBI dinner, I believe—in which he urged trade associations to get their act together. He said that some of them should combine so as to speak with a more united voice. What my hon. Friend has said on that subject tonight is absolutely correct.
My hon. Friend also talked about changes taking place at the Department of Trade and Industry. I do not want to comment on that subject at this stage in the parliamentary year, but my hon. Friend will have heard from various other people more important than I that they may share his view about continuity being a good thing for the Department.
My hon. Friend also described how we have pushed the export promoters and brought them in. My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) talked about that, too. That is a welcome change, and has brought a dramatic new input on exports into the Department, which has produced the important line on that subject taken under the leadership of the President of the Board of Trade and the Minister for Trade.
My hon. Friend also referred to the nuclear review, and when I deal with the nuclear issue I shall deal with what he said and also with what my hon. Friend the Member for Shoreham (Mr. Stephen) said. That subject took up a major part of my hon. Friend's speech, and I listened with great interest to what both my hon. Friends said about it. I will certainly draw the attention of the Minister for Energy to their remarks and to the matters that they raised. They were both thoughtful and interesting speeches, and I will ask the Minister for Energy to respond to them.
My hon. Friend the Member for Gravesham (Mr. Arnold)—it seems odd to refer only to Conservative Members, but, as no other Opposition Member has spoken, all I can do is to respond to my hon. Friends—made some important points about the importance of south American markets. I was in Brazil last year. I am glad that we have managed to restore some Export Credits Guarantee Department cover in relation to Brazil, which is important. He referred to the visit by my right hon. Friend the Foreign Secretary to Brazil, and my right hon. Friend the Minister for Trade intends to go there.
Comments were made about the Foreign and Commonwealth Office. In recent years, the Foreign Office has been working increasingly closely in partnership with the DTI to help exporters. That is a key priority of the Foreign Office, which devotes more resources to supporting exporters than to any other activity. Industry often compliments it on the valuable help that it provides—a point made by my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant).
Our embassies are helping our industries, which is essential. Time and again, we receive the message from industry that it is grateful to our embassies around the world for the help they give in getting them to understand

443
and capture markets. Some of the slight criticisms of my hon. Friend the Member for Mid-Staffordshire were perhaps out of date and not relevant, because there has been a substantial change.
My hon. Friend the Member for Mid-Staffordshire reviewed some of the changes that have taken place and have allowed British industry to become successful and profitable and to look for export markets. Exporting is difficult, but its rewards are important. It involves finding new and challenging markets.
I know my hon. Friend's constituency well. I served on a district council in that constituency for quite some time before I entered the House. His constituency is spread across a large distance, and the middle part of it is an industrial heartland. It is essential that companies always have their eye on exporting and the way in which exports can be won.
My hon. Friend the Member Chesham and Amersham (Mrs. Gillan) rightly paid tribute to the achievements of the university of Buckingham's export drive. She made a point about AEA Technology, which she raised yesterday during oral questions. That is a matter for my hon. Friend the Minister for Energy, and I will draw his attention to her strong feelings on the subject.
I think that it was my hon. Friend the Member for Chesham and Amersham who said that privatisation was one of our most successful exports, which is partly true. Without doubt, privatised companies are winning world markets. Time and again, they were constrained from doing so because of Treasury rules and the fact that they were in the public sector and taxpayers had to underwrite commitments.
The BT/MCI deal is important in relation to winning world markets. The hon. Member for Cheltenham talked about world markets, British Telecom and the technology and software industry. I agree with him on most of those matters, although I disagree about domestic BT policy. It is essential that our companies win world markets and privatisation of companies has achieved that. They have started to export some of their technologies and knowledge to other countries.
More than ever, the Government are committed to helping United Kingdom companies win overseas markets. To achieve that, we are developing a long-term export strategy involving increased partnership between Government and industry. The United Kingdom has always been a great trading nation. We export 25 per cent. of what we produce and, per head of population, we export more than the United States of America and even Japan.
In the three months to April 1994, the volume of non-EC exports rose by 11 per cent. Since 1981, the volume of UK exports has grown faster than that of France, Germany, Italy and Japan, yet all the Opposition do is carp, complain and bemoan our achievements. On a subject such as this, I should have thought that they could give British industry a little credit for what it has achieved, instead of talking it down.
We have recently seen dramatic increases in exports to markets as diverse as Hong Kong, South Korea and the United States. In 1993, the value of our visible exports exceeded £121 billion and our visible earnings passed
444
£114 billion—an increase of more than 10 per cent. on 1992, despite the recession hitting hard in many overseas markets.
Our competitive advantage lies in the quality of our products, delivered at the right price and with quality service, but in this ever more competitive world we must fight even harder merely to keep our share of the market. Foreign markets provide a stern test of our products and services. World trade is set to grow between 5 and 10 per cent., helped by the successful completion of the GATT round.
Everyone is keen to get a piece of the action. There are many great opportunities, but threats are posed by industries abroad. To meet those challenges, it is crucial that more firms treat exporting as an integral part of their business strategy, meeting and beating the world's best in overseas markets.
Competitiveness is a continuing challenge. The Government have a key role to play in increasing our competitive edge by providing good-quality information, advice and support for exporters. My right hon. Friend the President of the Board of Trade, along with the Prime Minister, is leading the most important export drive that this country has seen for decades.
The Government are harnessing and driving this export initiative across the private and public sectors, involving all Government Departments. As many of my hon. Friends have said, exporting is not merely a matter for the Department of Trade and Industry and the Foreign Office; all Departments with a sponsor role have a part to play.
Mr. Stephen: Does my hon. Friend recognise the tremendous effort that the royal family make in promoting British exports?
Mr. McLoughlin: That is absolutely true. The royal family play an important part in our export drive.
The DTI and the Foreign Office jointly provide a first-class information and advice service for the United Kingdom's exporters under the banner of overseas trade services. Overall, the Government spend about £170 million on overseas trade services, and that amount becomes larger when all the help offered by Government Departments is taken into account.
Business plays a vital part in our strategy. The Government's principal adviser on trade promotion and activity is British business, in the form of the British Overseas Trade Board. Under the chairmanship of Sir Derek Hornby, the BOTB is made up of a dozen senior business people, who freely give their time and experience to help and determine the best use of our export promotion funds. DTI and Foreign Office Ministers attach much weight to the board's advice.
In addition to the board, there is a network of more than 200 business people with experience of markets around the world who help through 14 geographical area advisory groups. They ensure that the needs of business are reflected in the overseas trade services operation and help to formulate specific initiatives to increase trade, such as the "North America Now Campaign" and the "Indo-British Partnership".
Our business faces great challenges in a fiercely competitive world, but there are also great opportunities, not least in the fast-growing markets of the far east and elsewhere. We have made significant improvements to our export services to enhance the export drive. We will

445
continue to work in partnership with business to ensure that the United Kingdom's firms continue to win in world markets.
A number of my hon. Friends paid tribute to my right hon. Friend the Minister for Industry. There is no doubt about the gusto that he has brought to his role and, as my hon. Friend the Member for Chesham and Amersham said, his leadership is helping to drive British trade higher and higher, and we should all be grateful to him.
Mr. Timothy Kirkhope (Lords Commissioner to the Treasury): I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

PETITION

  Student Grants
  Mr. John Denham: I beg leave to present a petition to the House signed by 2,000 students at Southampton university who have expressed their opposition to the cuts in student grants that will be introduced next year and in successive years. Students already live on incomes lower than those on income support and housing benefit. The proposals will leave students in great debt when they finish their courses.
  The petition reads:
  To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The humble petitioners of Southampton students declare that we the undersigned register our opposition to the cut in student grants by 10 per cent. this year, next year and the year after.
  The petitioners therefore request that the House of Commons should ensure that proper levels of funding are available for student grants.
  And your petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

Water Boreholes, Fron
Motion made, and Question proposed, That this House do now adjourn—[Mr. Kirkhope.]
9.15 pm
Mr. Alex Carlile: I am grateful for the opportunity to raise an issue of great concern to myself and a number of my constituents—damage caused to private properties in the Fron area of Montgomeryshire as a result of water borehole operations.
We often hear from the English that an Englishman's home is his castle. But most of the finest castles are not in England but in Wales. Whether it be those castles in Wales or the lesser dwellings occupied by most of us, people in Wales feel strongly that our homes should be sacrosanct against invaders of any kind. They should be sacrosanct against burglars—the level of burglary in rural Wales is still mercifully low—and Government Departments invading our privacy and the safety of our homes in the name of mere statutory and utilitarian powers.
We look to the House as being the only place where that principle can find protection. Some people have expressed the view—the noble Lord Hailsham is perhaps the most notable—that the House can no longer adequately protect the interests of private citizens. I do not believe that to be the case yet and I hope that the Minister's response will show that my confidence in the House remains justified.
The invasion of my constituents' properties is serious, although it affects but a small group of people. Those mainly affected live in a settlement known locally as the Fron near Montgomery. I know the place well as my home lies less than two miles away by road—perhaps one mile as the crow flies. In the settlement of Fron are three houses with gardens whose owners have approached me about the matter. I have been involved with the matter in some detail. The homes have the arcadian names of Abernant, Silvermere and Cherrylea. All are—or, at least, were—comfortable homes with well-tended gardens. I hope that I will be forgiven for calling their occupants active, mature citizens who are valued in our local community of Montgomeryshire. They are the last people whom one would expect to be moved to lobby and protest through this House.
The three properties are a few hundred metres from the River Severn—less than a quarter of a mile from the river as it flows through that area of Montgomeryshire. Between the river and their properties there lie a substantial field, the A483 trunk road, which is sometimes dignified with the style, "the Manchester to Swansea trunk road", although only a lunatic would use it for that purpose, and the Montgomery canal. A major gas line also passes through the field, transporting the mains supply of natural gas under high pressure.
The road carries a large volume of traffic. Its safety and security are of paramount importance. The canal, although no longer used for the purpose for which it was designed—the carriage of goods—nevertheless is increasingly used as a leisure facility because it is an especially beautiful canal, with leafy towpaths. The bank of the canal has already started to slip, which is significant in relation to the subject that I shall mention.

Severn Trent Water Ltd. is the villain of the piece, or at least the principal villain. Severn Trent is, as I am sure that you know, Mr. Deputy Speaker, a privatised water utility, which continues to act as the water undertaking for

447
Shropshire and other places, including one part of Wales only. The rest of Wales is covered by Dwr Cymru—Welsh Water—but Montgomeryshire still has its water supplied by Severn Trent. Generally, we have benefited from that historical anomaly because, on the whole, Severn Trent is helpful and responsive to customer complaints and although its charges are high, they could be higher.
In 1991, Severn Trent sought, and was granted by the National Rivers Authority, a licence for test pumping by the River Severn in the field to which I have referred. The licence required the monitoring of water levels in a number of specified wells.
The area consists of one side of a typical glacial river valley. The bedrocks, I am reliably informed, consist of Silurian—that is to say, slightly more than 450 million years old—mudstones and siltstones, which dip to the north-west. Overlying the bedrock are fluvial and glacial deposits, which are highly variable in their composition, density, porousness and other relevant properties.
In granting the licence, the NRA appears to have made, to put it mildly, scanty demands of Severn Trent. The NRA relied on Severn Trent to perform an appropriate survey for the selection of monitoring wells. Oddly, existing wells—for example, one at the property Silvermere—were not chosen for that purpose. It seems that the local survey did not identify the well at Silvermere. That omission is highly suggestive of a negligent survey, for it appears that, in spite of the well's proximity, at 300 m from the pumping site, Severn Trent simply did not know of it. Had it asked in the local post office, or asked any local resident, it would no doubt have been told of it. The well would have been observable from certain maps and, of course, from an aerial view. Two other wells, only 100 or 200 yd further from the pumping site, were not identified either. It was a very scanty survey.
The first test pumping at the site took place in November 1991. The first signs of cracking in the walls of the property, Abernant, appeared shortly after that, but it was not realised then that there was likely to be a connection between the pumping and what at first appeared to be relatively minor damage. However, further pumping of a much more dramatic sort took place in 1992, particularly in the period from 7 September to 5 October 1992.
During the 28-day pumping period, collapse and subsidence were observed at three locations. The company, Severn Trent, was informed by my constituents part way through its drilling that damage had occurred, but it did not stop drilling. It continued drilling and the damage was thus exacerbated.
The main collapse occurred in the field opposite Silvermere in the following sequence. On the night of 24 to 25 September 1992, collapse in the field was observed and it was reported on the morning of 25 September. On 26 September, the hole was photographed. The hole shown in the field at that time was irregular and large, but not very large—approximately 3 m by 5 m and 2 m deep. But by 27 September, the next day, the hole had increased in size to approximately 16 m by 22 m and 10 m deep. It would have held two or three double decker buses.
The test pumping finished on 5 October; by then, the sides of the hole were vertical for about 2 to 3 m, then curved to the bottom. The description given locally was
448
that the hole was deep enough for a double decker bus although, in reality, it would have held a garage of double decker buses by then. The collapsed hole was refilled within a week by Severn Trent.
Another effect noted at the time was that three local wells ran dry or so close to dry that no abstraction could take place from them, which had never happened before. The wells were not drying up due to dry weather. I must admit that, wonderful holiday area though Montgomeryshire is, by 5 October we do not expect the wells to dry up in ordinary weather.
Another feature that was noticed at that time was extensive cracking in four locations. The three houses, Abernant, Silvermere and Cherry Lea, and also, worryingly, in bridge No. 140 over the Montgomeryshire canal. I have been to see the cracking, which continues to expand in a worrying way. Ground subsidence of up to 9 inches also occurred at that time in the gardens and fields at the Fron. One of the gardens, which was particularly well looked after, has changed dramatically in its topography since the bore hole operations. Ground subsidence of up to about 3 ft also occurred in the fields next to the river, bringing out something that had not been seen for a long time: the line of an old river channel.
Another matter that was noticed was the effect on the well at the property, Silvermere. My understanding is that, to this day, that well has not recovered and the water depth remains at only 1 ft against the normal expected level of 4 to 6 ft.
All those effects were noted and caused great alarm. As a result, my constituents set about obtaining some technical evidence. Fortunately, the son of one couple—the people who live in Abernant, Mr. and Mrs. Gleave—is a hydrogeologist; otherwise, they would not have known where to turn. He and a colleague prepared a careful report on what had occurred, and I believe that the report's findings are entirely objective. It is good scientific work.
In a sentence, what has been found is that the drilling of the boreholes has caused a significant change in the local hydrogeology. No other cause for the change can be found; nor has any other cause been suggested with any sense of conviction or any evidential support. It is clear to the people who know the area that a cause-and-effect relationship exists. Before the boreholes, there was no subsidence. As soon as they were started, the subsidence started. As the borehole operations were increased, the subsidence dramatically increased. And at the height of the borehole operations, a hole the size of a double-decker bus garage appeared, and no one has been able to give any realistic explanation besides a cause-and-effect relationship.
Recently, nearly two years after these events, Severn Trent appointed a Professor Hutchinson of Imperial college, London, to write a report on what has occurred. It is impossible to understand why Severn Trent has taken so long about this. It is to be hoped that the report will be available very soon. I am pleased to say that I was informed this morning on the telephone by a legal adviser to Severn Trent that efforts will be made to expedite the report. But the residents have now waited two years for Severn Trent to recognise the cause-and-effect relationship, despite their own clear evidence of one.
I suspect that the company has delayed so long because it finds it hard to admit to its negligence, for there is certainly clear evidence of negligence by Severn Trent. It failed to exercise proper professional care, in that it did not

449
adopt the normal professionally recommended procedures in this case; it did not, for instance, report the situation to the appropriate local authorities to ensure that no damage to the surrounding properties, roads, bridges and canal would occur in the event of collapse or subsidence. The company failed to carry out proper tests of the local geology.
It is extraordinary that when the collapse occurred on the land, Severn Trent did not inform the NRA of what had happened. The NRA found out only because a local resident rang it up and told it. As a result, an NRA officer had to visit the scene to find out for herself whether it was true.
Not only has there been professional negligence by Severn Trent but local residents have enjoyed less care than they were entitled to expect from the National Rivers Authority. In correspondence, the NRA has stated that it has no jurisdiction to protect property from the structural effects of water abstraction and no power to refuse or qualify a licence on the ground of structural defects. The test pumping certainly did not set out any requirements concerning either the procedures that should be undertaken in the case of adverse structural effects on the local geology or adverse effects on the local water table. Perhaps, the National Rivers Authority—foolishly—took it for granted that Severn Trent would approach the matter with proper professionalism.
It is also regrettable that the NRA, in granting the licence, appeared to have paid no attention to any possibility of an effect on the area surrounding the boreholes. As I have already said, the canal bridge and the canal bank have been damaged. I understand that British Waterways, which is ultimately responsible for the canal, is concerned about the situation. I understand that the Ministers's Department, the Welsh Office, has been monitoring the trunk road to see whether any damage has been caused to that and that it is concerned. The bridge to which I referred earlier is all too evidently patched and cracked.
The damage to the three properties has been very severe indeed. It will cost many thousands of pounds to repair it. However, another aspect of the damage to the properties is that they have suffered a significant diminution in their value. If the owners wanted to sell their properties, it is almost inevitable that purchasers would be put off and would require a huge reduction in price because there was and has been serious subsidence. It is likely that the value of those properties may well have been reduced by a half to two thirds. The residents concerned are respected and respectable people, but they are not rich. None can afford the consequences of such an attack on their largest asset.
One may ask, what is the problem? Surely, if Severn Trent has caused that damage by its water boreholes and if it has been negligent—perhaps, even if it has not been negligent—it will pay up. Not a bit of it. We have received from Severn Trent something that one may expect to receive from me at my more legalistic moments—po-faced legal pedantry. It is the sort of legal pedantry that is extremely hostile to people such as my constituents. I shall quote from two letters. One is from the district manager of Severn Trent, Mr. Ashcroft, who, I must say, is usually extremely helpful and I do not believe for one moment that Mr. Ashcroft is responsible for the words in the letter. He says:
"the company solicitor has advised me that even if the damage to your constituents' properties has occurred as a result of our
450
activities, we have no legal liability. I understand that this opinion was derived from case law involving ground-water levels being affected by the carrying out of legal acts.
I have also been advised that it would not be appropriate for the Company to make an 'ex gratia' or other payment to Mr. Gleave or any other party."
A little later, on 11 April, 1994, Mr. J. T. Rhead, the area solicitor-west for Severn-Trent Water said in a letter to another local resident:
"As you may be aware, much of the law relating to England and Wales arises not from Acts of Parliament ("statute law"), but from the decisions of the Courts going back in some cases centuries ("case law"). As a result of case law, the legal position is that where surface damage arises as a result of lawful interference with water in undefined channels in underground strata, that damage carries with it no legal liability. There are perhaps half a dozen cases directly bearing on this question, and all confirm that legal principle. The most recent, something under ten years ago, was Stephens v Anglian Water Authority. On the basis of these cases, we will of necessity have to strenuously deny any suggestion of liability, even assuming that there were a definitely proven connection between our pumping activities down by the river and damage either at your property or elsewhere."
That denial of liability contradicts something that had previously been said by a representative of Severn Trent. On 21 September 1993, a Mr. Bramley of Severn Trent met Mr. Gleave—who, with Mrs. Cleave, owns the house Abernant—in the presence of his solicitor Mrs. Snow, a local solicitor in Bishop's Castle. Mr. Bramley said categorically that it was the practice of Severn Trent to provide compensation for loss and damage arising from water abstraction and that funds were available for such contingencies. That was a welcome commitment, but it appears to have been withdrawn in an attempt to rely upon a set of ancient legalities which, if they were right, would have no relevance to this modern age.
On the face of it, Severn Trent is saying that there is a wrong without a remedy. Surely that cannot be acceptable to the Government. The water utilities claim in their correspondence the right to interfere with the underground strata with total impunity. I hope that we will hear from the Minister that they are wrong and that it was never the Government's intention on privatisation to give the water utilities total security from legal action.
I hope that the Minister will be able to confirm that privatised utilities were not given powers that are available even to the state only in extreme emergencies. What is claimed would be the equivalent of requisition without either compensation or reward.
Putting it simply, what is claimed by Severn Trent is a licence to be negligent. Surely the Government cannot accept—and I am sure that the Minister's advice would weigh with Severn Trent—that if what would otherwise be lawful borehole operations are carried out with negligence, there is an immunity from civil liability. It would be ludicrous to say that that is correct.
The House is the repository of the rights and duties of citizens. The citizens for whom I speak tonight could not be more dutiful people. I ask the Minister to confirm in his reply that their legitimate expectation of redress is one which the Government will confirm.
9.43 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): I appreciate the importance of the concerns raised by the hon. and learned Member for

451
Montgomery (Mr. Carlile). I fully sympathise with them, and I shall deal with them as well with the broader background of the matter.
Severn Trent Water is currently seeking to develop a new source of water supply at Abermule to enable it to give a better service to a large area of Montgomeryshire between Welshpool and Llanidloes. I understand that the existing supply at Llandinam, which serves a population of about 20,000, is near the limits of its capacity. In 1993–94, the average demand on Llandinam treatment works was 13.4 megalitres per day, compared with the permitted daily abstraction licence figure of 13.7.
That leaves little or no spare capacity for growth in demand or to accommodate the sort of peak demands that could be expected during a prolonged dry period. Apart from Llandinam, there is no other existing source of any substance available to meet the demands of the area. The new source being investigated at Abermule is intended to have a similar output to the source at Llandinam and would be linked into the distribution system, to reduce demand on Llandinam and to provide for future growth. It would also provide increased security in the event of equipment or power failure at Llandinam.
Although a number of alternative sources to Abermule are theoretically possible, I am advised that they all have major disadvantages in terms of delay, cost, water quality or practicality.
As to Severn Trent Water's actions in undertaking the test pumping operations at Abermule, the land on which the boreholes were constructed was purchased at auction by the company in April 1989. Before that, general geophysical cross-sections of the valley had been undertaken in the Abermule area, to identify the parts of the valley that might provide fruitful exploration for a public water supply source. Ordnance Survey geological maps were also studied by the company to obtain hydro-geological inferences before the land was bought.
The boreholes were constructed under consents to drill and to test-pump, issued by the National Rivers Authority. Planning permission was not required. Initially, a small exploratory borehole of 10 inches diameter was constructed to test the geology and water quality characteristics and to allow an estimate of the potential for obtaining an exploitable yield from production-sized boreholes.
That pilot hole gave good results, and production holes of 508 mm diameter were then constructed by the company. There are three production-sized boreholes on the site—all around 54 m deep. I am advised that all boreholes on the site have solid lining to a depth of approximately 54 m to stabilise the holes, with slotted screen below the level to the bottom of the holes. The boreholes were constructed to be stable, to prevent local collapse, and were screened to prevent the ingress of any large volumes of the surrounding gravels and other uncemented strata during pumping.
The boreholes were test-pumped singly and in groups. The water was discharged to the River Severn via an open-top weir tank for measurement.
The test pumping was undertaken under a consent issued by the National Rivers Authority, and a number of local water sources. in the area that the authority specified
452
in the consent were measured. The company maintains that it complied with good practice, in that the development was staged with pilot exploration work prior to proceeding.
Full-scale test pumping was started at a low rate from individual holes, and only later increased to pairs of boreholes being pumped. All observations required by the NRA were undertaken. When it became apparent that other wells existed outside the specified area and were affected, they were measured. I am advised that is the usual staged approach to good groundwater developments.
The hon. and learned Gentleman expressed concern about the possible wider effects of the pumping operations on a nearby trunk road and on the Montgomery canal. As to the latter, I am advised that the problem is confined to the ground below an accommodation bridge at Abernant. The situation is being carefully monitored by British Waterways, which has advised that it will take any steps necessary to protect its own property and the safety of those on and alongside the canal, including users of the adjacent highway.
As to the A483 trunk road, Powys county council—as the agent of my right hon. Friend the Secretary of State—has been asked to pay particular attention to the section of the road at Garthmyl during its normal monthly safety inspections. I assure the hon. and learned Gentleman that the situation will be carefully monitored, but at present there does not appear to be any need for immediate concern.
Following the test pumping operations, there were reports by local residents of possible subsidence—exactly as the hon. and learned Gentleman said. In response, the company commissioned and paid for a professional examination of the three houses involved. Indications from the examination are, I am informed, that the damage does not put the structures at risk of collapse, being mainly superficial.
In addition, the NRA required that a number of identified wells and boreholes in the local area be monitored and measured during the test pumping. During the later stages of, and also after, test pumping, a number of other wells were reported to have been affected and monitoring was immediately initiated. Only two wells were in regular use, other than for garden watering, and an alternative source of water was provided.
Although at present there is no known direct geological linkage between the damage and Severn Trent Water's activities, the company has taken the step of appointing an independent geological consultant, Professor J. N. Hutchinson, of Imperial College, London. He is an expert in geotechnics, engineering geology and engineering geomorphology.
The brief of the consultant is to provide an independent assessment of the events to date, to examine the data gathered, both incidental to works carried out and that resulting from specifically initiated research, to advise on proposed further investigations and submit a report addressing the implications of developing the source from the point of view of ground stability. The consultant will also investigate the reason for the appearance of three holes in fields near the boreholes during the second period of pumping in September and October 1992.
The company will consider the findings of that independent assessment and will consider its course of action on that basis. I understand that it is the company's intention to make the report available to the hon. and learned Gentleman.

453
The company has stated that it will not undertake any further pumping from the site until Professor Hutchinson's report is available. Other than for test pumping, the company will require a licence from the NRA to abstract water from underground strata. The company advertised its proposed licence application in July and August 1992. Its application was received by the NRA on 24 August 1992. No objections were received during the statutory period. A licence has not yet been granted by the NRA, pending further legal agreement with Severn Trent Water.
I am advised that there was a disruption to private supplies to two properties during the initial pumping stage. No further properties are expected to be affected, since the operational pumping regime will be less rigorous than that during the test pumping. Temporary alternative supplies were provided to those affected during testing, but the legal agreements required by the NRA as a condition for granting a possible licence have been reached by the company and both parties concerned whereby their properties will be connected to the mains at no cost to themselves. A capital sum would be paid to each to compensate for the higher cost of mains water by comparison with the private source, should the new source be developed.
On the legal and compensation issues raised in the debate, Severn Trent Water was, as I have already said, duly entitled to undertake the test pumping operations at Abermule under the terms of a consent granted by the NRA. The authority is entitled to give consent—without the full advertisement procedure required for licences—for boreholes for the purposes of looking for water in underground strata, or for testing the effect of borehole abstraction.
Otherwise, a full licence is needed, which carries with it the requirement to advertise the proposal locally and nationally and to give all those affected the opportunity to comment. An abstraction licence application was advertised in this case, and no objections were received.
Given the purposes of the Water Resources Act 1991, the NRA is not expected to consider the effects of a consent or licence other than those on water resources, the aquatic environment and the protected rights of others to abstract water. The control system is not there to reinforce the law generally on the question of the support owed by one landowner to another.
A right of abstraction can be available to any person, subject to the consent powers of the NRA. Severn Trent Water is not relying upon any specific powers in its role as a water undertaker in order to carry out the operation. Nevertheless, Severn Trent has a general duty to maintain a water supply system by virtue of section 37 of the Water Industry Act 1991, and its activities must be judged against that duty.
Water undertakers have powers to carry out works on land that they do not own, and for that purpose they may compulsorily acquire land and rights over land. They may also enter premises for the purposes of survey and to search
454
for water. In such circumstances, schedules 6 and 11 to the Water Industry Act govern the payment of compensation. However, such provisions are not applicable where the water undertaker is seeking solely to exercise rights that are available to any landowner, such as rights of abstraction conferred by the Water Resources Act.
As I have said, the action of Severn Trent Water is one that any landowner is entitled to take. In these circumstances, the usual legal remedies are open to any complainant, who may seek legal redress through the courts in the form of a private action in negligence or nuisance.
I understand the concerns that have been raised by the hon. and learned Member for Montgomery. Nevertheless, a balance has to be drawn between protecting people's property rights, protecting the aquatic environment and countryside and ensuring that the necessary water is available for public and private supplies, industry and agriculture.
I have already said that planning permission was not required for the test pumping operations at Abermule. However, it is possible that, if the borehole is to become a permanent structure, planning permission may be necessary. In that event, it may be open to the council to request the preparation of an environmental impact assessment, although such a request would be subject to the usual appeals procedures.
I stress that I fully sympathise with those who have suffered damage to their houses and properties, but it is still premature to say with certainty that that damage has been caused by the test-pumping operations. It is also premature to suggest anything other than that the company's operations were properly and professionally carried out, and were within the requirements of the responsible authorities. New water resources need to be found if demands are to be met in this area, and that is the background to Severn Trent's operations.
The company, as the statutory undertaker for the area, has a general duty to develop and maintain water supply systems, to ensure adequate and sustainable supplies. Those parties whose private water supplies may be affected by the operation have been offered a mains water supply at no additional cost to themselves.
The company has taken the responsible step of commissioning an independent report from an acknowledged expert in this area. I suggest to the House that we have to await his findings. Ultimately, it is for the individuals who feel that they may have been affected to seek legal redress if they consider that they have suffered damage as a result of the company's operations.
As the hon. and learned Gentleman is aware, I have written to the company seeking its further views on the matter. If, as a result of the correspondence, there is anything I can add to what I have said, I shall write to the hon. and learned Gentleman.
Question put and agreed to.
Adjourned accordingly at three minutes to Ten o'clock.