§ The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine)With permission, Madam Speaker, I should like to make a statement about the Government's White Paper, "Competitiveness: Helping Business to Win", which we are presenting to Parliament today. The Government are also presenting to the Trade and Industry Select Committee a memorandum replying to its report on the "Competitiveness of UK Manufacturing Industry". The report is a valuable contribution to the competitiveness debate. Its analysis and conclusions have much in common with the White Paper. I am very grateful to the Committee for its work in this area.
Our prosperity as a nation depends on the wealth that we generate. Our companies must be able to compete with the best in the world. There is no simple agenda; nor is there a totally accurate snapshot at any one time of how well we are doing. We face a continually moving target. Inexorably, our competitors move on, developing new products, finding better ways of doing business, and strengthening their capabilities. In a thousand different ways, they seek continually to improve their competitiveness.
Our analysis in the White Paper is sweeping. We have addressed the principal factors of competitiveness. We have considered long-term trends. We have looked at our performance over successive economic cycles. We have addressed our strengths and our weaknesses. The White Paper includes a number of major announcements. It also refers to many continuing reviews and indicates further announcements that will be made later this year.
The heart of any analysis of competitiveness must be the macro-economy. The United Kingdom is today in a powerful position: gross domestic product is rising; unemployment continues to fall; underlying inflation is at the lowest level for a generation; manufacturing productivity is at an all-time high; interest rates are among the lowest in the Economic Community; total plant and machinery investment has risen by more than 50 per cent. since 1979; and exports are at record levels. We are thus in an excellent position to take advantage of the recovery as it takes hold in the rest of Europe. In addition, the GATT agreement will open markets further and give a boost to world trade of more than 10 per cent. over the next decade.
The White Paper considers in detail the vital contribution of educational standards and training opportunities. With permission, my right hon. Friend the Secretary of State for Employment will make a separate statement later today setting out a range of new initiatives to improve standards in education and outlining new plans for training and apprenticeships. The White Paper also covers a wide range of other areas.
The adequate supply of finance for business is a matter of continuing concern. Under the Treasury's industrial finance initiative, my hon. Friends the Financial Secretary and the Economic Secretary are conducting a wide-ranging review of the workings of our capital markets, savings, the flow of funds to business and the implications for taxation and other policies. Their findings will inform the Budget decisions. In the meantime, my Department will be considering ways of extending the "business angels" concept to provide greater informal investment to small 184 companies. The White Paper also sets out our commitment to extending the private finance initiative as a means of funding major infrastructure investment.
Businesses are naturally concerned about the late payment of debt. There is no common view about what should be done, but it is widely recognised that there needs to be a change in business culture. I can tell the House that the Government will in future require all Departments and their agencies to comply with the Confederation of British Industry prompt payment code and to set out their performance against that in their annual reports. [Interruption.]
We shall work with the business community to develop further the proposal for a British standard for prompt payment. We shall take the necessary steps to implement proposals to require public companies to state their payment policies in their directors' reports. We shall simplify court procedures for debt recovery and we shall review court systems with a view to increasing the scope of the informal small claims procedures. If there has not been a significant improvement in the next two years, we shall reconsider the case for legislation. [Interruption.]
The quality of management has a vital influence on the performance of our businesses. Our best managers are as good as any in the world, but we need to raise the average. The White Paper sets out our proposals for extending best practice. The proposals build on my Department's benchmarking challenge to trade associations. Business Links, which will be open in all parts of England by the end of next year, will be the focal point for new services, ranging from consultancy and innovation to design.
I can announce two further initiatives by my Department to improve management performance. First, we shall set up a network of regional supply offices in England to work with private and public sector purchasers to promote supply chain partnerships. [Interruption.] Secondly, we shall work with the British Standards Institution and with industry to develop BS 5750 and product certification standards further to promote continuous improvement. [Interruption.]
§ Madam SpeakerOrder.
§ Mr. HeseltineInnovation is a key driver of competitiveness. Last year's White Paper on science, engineering and technology explained how the Government intended to direct their own substantial research and development expenditure towards competitiveness. There has been much progress since. The present White Paper builds on those changes.
The higher education funding councils will increasingly reward universities for the work that they do in partnership with industry. That will amount to a significant proportion of the relevant income from industry. The proportion of the councils' agreed total budgets used for that purpose will increase. The councils will take full account of the results of the technology foresight programme in allocating the funds between subjects. Individual academics will be rewarded for undertaking collaborative work with industry. [Interruption.] My Department will work with financial institutions and industry to help achieve a joint understanding of the importance of innovation.
We shall introduce a range of new services through Business Links to help technology transfer. New funds will be provided for innovation and technology counsellors in Business Links to provide advice and guidance to 185 companies on innovation. "Innovation credits" will be made available through Business Links to encourage smaller firms to discover the value of outside help by offsetting the cost for first-time users. [Interruption.]
§ Madam SpeakerOrder. Would the Secretary of State forgive me? I should be much obliged if the House would now settle down. It is a long statement. [Interruption.] Order. It is a long statement. There are often complaints that not enough Members are called to ask questions after statements. That can be done only if the statement is heard in the first place.
§ Mr. HeseltineNetworks of local contacts will be established across the United Kingdom to make local sources of innovation support more accessible. National centres of expertise will be linked through an actively managed network. We shall also help the process of innovation by increasing the exchange of people between industry and higher education through an extension of the successful teaching company scheme.
On support for exports, my Department is more than three quarters of the way to meeting the objective that I announced last year of bringing in 100 senior export promoters from the private sector. We shall extend this initiative by helping to fund about 70 export counsellors with private sector experience to work in each of the larger Business Links.
We shall be developing a partnership with the banks to reach more potential investors and continuing our drive to encourage firms to improve their language skills. Once the Business Link organisation approaches completion at the end of next year we shall have in place the most comprehensive export support network this country has ever seen.
The United Kingdom has an exceptional record in inward and outward investment. We have attracted the lion's share of inward investment in the European Community from United States and Japanese companies over many years. The White Paper contains a package of measures to help the United Kingdom to maintain its leading position. We shall also be looking to see how we can better help companies to exploit competitive advantage through outward investment.
The quality of our communications and transport infrastructure underpins the competitiveness of our companies. We already have one of the highest levels of investment in the world in telecommunications, including fibre-optics and mobile networks. We are giving further encouragement to the development of digital broadcasting technologies. The White Paper sets out our plans to open up more of the radio spectrum for commercial use.
The future of the BBC will be dealt with in a further White Paper to be published shortly. We shall be announcing later in the year the results of our review of the restrictions on ownership of broadcasting and newspaper companies. We shall be publishing a consultative document on the Post Office and responding to the recent report of the Select Committee on Trade and Industry.
The White Paper set out our policies across the full range of transportation. Public investment in roads, rail and public transport has nearly doubled in real terms since 1978–79. The private finance initiative is now being applied to the development of significant infrastructure projects, such as the Heathrow express, the modernisation of the west coast main line and the channel tunnel rail link. 186 Work is in hand on the exploitation of new technologies for the more sophisticated road traffic management systems needed to cope with tomorrow's demand.
During the 1980s, almost all the United Kingdom's principal airports and many of the smaller ones benefited from major investment to improve facilities and increase capacity. Within the European Community, only Germany has invested more per passenger. Most of this investment has come from the private sector, particularly following the privatisation of the British Airports Authority. Following work by the Civil Aviation Authority and Government Departments, we shall be consulting on the proposal that National Air Traffic Services should be established as a private sector contractor to the CAA. This will facilitate the substantial investment needed in this sector, while delivering greater management efficiency. The United Kingdom's high safety standards will be maintained through continuing regulation by the CAA's safety regulation group. In view of the increased pressure on aviation facilities in the south-east, we shall also be seeking views on the scope for developing business aviation at the Ministry of Defence airfield at Northolt.
London is one of the world's great cities and most important economic centres. We have recognised this by establishing a new Government office for London, in close partnership with public and private sector bodies, to provide concerted delivery of Government services. We welcome the steps being taken by the private sector, the Corporation of London and the Bank of England to enhance London's position as a financial centre.
The competitiveness agenda extends to all areas of the country. We have already brought together the delivery of key Government services by establishing Government offices for the regions. I have also announced the concept of regional challenge, which will enable eligible areas of England and Wales to compete for part of the money available from the European regional development fund. I can now tell the House that the first competitions in 1994 will involve total prize money of between £150 million and £200 million.
We will consider later this year how to extend the "challenge approach" to further domestic programmes. The Government are determined to make further progress on deregulation. We have just completed the first stage of the review of the 3,500 regulations affecting business and more than 500 measures have been identified for action. The Health and Safety Commission has carried out the most extensive review of health and safety legislation for 20 years. The commission has made wide-ranging recommendations. The Government welcome and accept those, and my right hon. Friend the Secretary of State for Employment will set out the details in his statement.
A new deregulation task force has been set up to act as the focal point for further Government initiatives. Those will include proposals to set up equivalent private sector led task forces to scrutinise European legislation in conjunction with business men from other EC countries. In addition, the Government are looking at ways to simplify and improve company and insolvency law.
As part of their audit of competitiveness, the Government have looked in upon their own administration. The Efficiency Unit of the Cabinet Office will shortly be starting a review of management planning and control systems in Departments to ensure that they reflect best practice in the public and private sectors. We shall publish a White Paper on the civil service—
§ Madam SpeakerOrder. The House must come to order.
§ Mr. HeseltineWe shall publish a White Paper on the civil service setting out our conclusions on the Efficiency Unit's review of career management and succession planning for the senior civil service.
Finally, we shall evaluate the "competing for quality" initiative to see how best it can be developed in future years, including making greater use of innovative ideas and approaches from the private sector. The extensive range of Government initiatives that I have announced today will all be contained within the present public expenditure control ceilings, despite the significant extra resources that will be made available for education and training. But competitiveness goes far beyond the actions of Government. The White Paper sets out and reports on a formidable agenda for change and improvement across both the public and private sectors. It embraces the activities of all our companies and harnesses the energies of all our people. I commend the White Paper to the House.
§ Mr. Robin Cook (Livingston)I welcome the admission by the President of the Board of Trade that Britain faces a problem of competitiveness. May I help the President by putting that problem more bluntly than he dared? Will he confirm that since 1979 Britain has moved from a £7 billion surplus in manufactured trade to a deficit of £8 billion and that since 1979, alone among the G7 countries, Britain's industrial output has barely risen? Will he confirm that since 1979, as a percentage of gross domestic product, Britain's industrial investment has almost halved? [Interruption.] If Conservative Members think that that has nothing to do with competitiveness, they do not understand the nature of the modern world.
Will the President confirm that since 1979 Britain's income per head has fallen from the European average to below the European average and the European Commission now expects growth in Britain in 1995 to be lower than in Germany, France or Italy and will he remind the House which party has been in power since 1979?
May I assure the President that he will have the total agreement of the Opposition in giving priority to restoring the competitiveness of British industry? All that we would ask first is that he agrees that the need to restore that competitiveness exposes 15 wasted years that the Government have spent in power.
May I compliment the President on the glitzy presentation of his White Paper, which puts it in the coffee table class of White Papers, but may I also warn my colleagues that those of us who have had the chance to examine briefly its contents find that the gloss rubs off easily? I have been able to find only two specific proposals from the President's own Department: an uncosted proposal for regional supply offices and an unspecified proposal to improve British Standard 5750.
Does the President recognise that it exposes the bankruptcy of his White Paper that on the day Trade Indemnity reports the biggest reported late payment of debt within British industry, he proposes to look at the issue again in two years' time?
What was the point of felling all the trees to provide a 160-page White Paper if the President did not have one new idea to put in it? How much did it cost? Was there no better way of spending the money in his Department? Will 188 he confirm from the last passage in his statement that the document and the entire review has not provided one extra penny for spending in his Department—a Department with a budget that is now at the bottom of Whitehall—and is that not a far more eloquent statement than the White Paper of his Government's priority for industry?
How dare the President congratulate the Government on setting up an office for London, when they will not let the people of London vote for a strategic government for London.
Will the President share with the House, as he did not in the statement, the contents of the health and safety review? Will he confirm that it states that 100 health and safety regulations—40 per cent. of the total legislation on health and safety—are to be scrapped? Why cannot the Government accept that better safety is not a burden on business but a saving to industry because it cuts the cost of injury, compensation and lost production? Competitiveness cannot be built on taking greater risks with the work force.
If the Government are really serious about addressing competitiveness, why does the White Paper not offer a single new measure to stimulate research and development? Why does it offer not one new policy to boost industrial investment? Why does it not do anything to achieve a better balance between the higher level of dividend payments and the poor level of profits ploughed back into business? Why does it not offer any plan to tackle the crisis in the defence industries or to help convert the skills and machinery in the industries to civilian production?
We are grateful to the President for producing the White Paper because it exposes how little the Government have to offer industry. It is a bankrupt statement from a Government on the verge of liquidation. It is an admission of 15 years of failure in the past and a confession that they have no policies for the future. It confirms that the only service that the Government can now provide the nation is to make way for a Government with fresh ideas, which the White Paper has so dismally failed to provide.
§ Mr. HeseltineIn anticipation of the intervention by the hon. Member for Livingston (Mr. Cook), I assumed that it would be as bad as it turned out to be. It occurred to me that it would be wholly beyond the hon. Gentleman's ability to rise to take part in any sort of serious intellectual analysis of the problems facing the country. I can say only how sharp a contrast there is between the political rubbish spoken from the Opposition Front Bench and the intellectual input of the Labour-led, all-party Select Committee that has reported to the House and tried to deal with the issue seriously.
If I had to defend the record of the 1980s, I would do so with pride, because I remember what we inherited in 1979. I know that lurking behind the hon. Gentleman's statement is a yearning to put the unions back in power, to take back into public ownership the industries that we have privatised, and to continue on Britain's relative industrial decline, which had haunted us for decades. Despite the trivialisation by the Labour party, which would not understand a debate about competitiveness even if it was published by Transport House, we now know that Britain is poised to seize an initiative in the world that has been denied us for decades.
The 1980s was the first decade since the war in which Britain's economy grew faster than that of France, 189 Germany and Italy. In the 1960s and 1970s, which the hon. Gentleman should remember, Britain had the slowest growth rate in the EC and the G7 countries. In the 1980s, the UK had the fastest growth in manufacturing productivity of the G7 countries. In contrast, in the 1960s and 1970s, we were at the bottom of the league. In the 1980s, for the first time in decades, we held our share of world manufactured exports after decade upon decade of decline. In the 1980s, Britain's industrial relations improved to become the best since records were first kept in this country. Britain has the highest proportion of people of working age in employment of any EC country. [HON. MEMBERS: "Reading!"] Yes, I have page after page of the record of the 1980s.
The reason why I can produce a track record of which we are proud is that the facts are on our side. When the hon. Member for Livingston produces his competitive White Paper, we shall find that in 15 years of opposition all that the Labour party has come up with is 15 reviews that it intends to conduct. It has no real ideas, no real proposals, and that is just as well, because it has no real prospect of power.
§ Madam SpeakerPerhaps we might have some order before we proceed.
§ Mr. Kenneth Baker (Mole Valley)I congratulate my right hon. Friend not only on his White Paper, but on sinking the shadow spokesman's campaign before it was even launched.
Does my right hon. Friend agree that the long-term competitiveness of British industry depends essentially on the education system of our country and on our schools? Will he, with our right hon. Friend the Secretary of State for Education, build on the initiatives—if necessary with additional resources—undertaken in the 1980s to improve the technological education in our schools, including computer-assisted learning, technology colleges, and technology for all children up to 16, so as to ensure that all our young people, whenever they leave school, have an expertise and knowledge of the new technologies on which the future prosperity of our country will depend?
§ Mr. HeseltineI am most grateful to my right hon. Friend, who personally played a significant role in advancing those causes in both the Department of Trade and Industry and the Department of Education and Science as Secretary of State. I hope that he will understand if I say that my right hon. Friend the Secretary of State for Employment will be dealing with those matters, and I believe that the House will be excited by what he has to say.
§ Mr. Don Foster (Bath)Does the President of the Board of Trade agree that his statement and the mode of its delivery have at least given short-term job security to his right hon. Friend the Prime Minister? Does he further agree that small businesses should be the engine room of recovery but that his statement today has given little support to small businesses? Indeed, many of them will be very disappointed that the only action that he is taking on late payment of debt is to establish what is little more than a charter mark. Will he not at least rethink that element of his statement and introduce urgent legislation in respect of late payment of debt to small businesses?
§ Mr. HeseltineThe hon. Gentleman will regret that intervention when he reads the White Paper. There are now 600,000 more small businesses than there were when the Government were elected. A recent publication of figures by Barclays shows that a net growth of small businesses has resumed after the recession. There is no doubt in the minds of small business men where their best political interests lie, and that is on the Government Benches.
§ Sir Michael Grylls (Surrey, North-West)Does my right hon. Friend accept that people will welcome this serious White Paper, which will build on the competitiveness of Great Britain which, as he said, is so essential? Will he try to build on the policies that our right hon. and learned Friend the Chancellor introduced in his Budget—the enterprise investment and Venture Capital Trust schemes—to provide equity and loan finance for small and medium-sized firms on acceptable terms? Is not a good deal more work needed there? Will he use his influence to carry on the good work started by the Chancellor in his recent Budget?
§ Mr. HeseltineI am grateful to my hon. Friend, who is very much associated with support for small companies. We place great importance on the enterprise investment scheme and we are consulting on the Venture Capital Trust scheme proposed by my right hon. and learned Friend the Chancellor. We shall also build on the opportunities which now exist, especially by encouraging awareness among the local Business Links of potential investors—business angels—who are increasing in number. It is important to draw their existence to the attention of small businesses.
§ Mr. Richard Caborn (Sheffield, Central)I want to raise a point about the procedure surrounding the release of the response to the Select Committee report, which unfortunately is not before the House today because it must first go to the Committee. However, it should be part of our discussion on the White Paper. Should not that response be delivered to hon. Members before they put questions on the White Paper? Otherwise, we have only half the information needed for debate. Perhaps there could be a one-hour embargo, or something of that nature, so that hon. Members can be—
§ Mr. Geoffrey Dickens (Littleborough and Saddleworth)Why is the hon. Member here?
§ Mr. CabornI am trying to ensure that hon. Members are well informed. Obviously, some of them are quite ignorant of the points that I am raising.
I hope that my suggestions will be given serious consideration. Many important points are not in the White Paper, but in the response to the Select Committee report. The Committee's analysis is not dissimilar to that contained both in the White Paper and in the response to the report. However, I am concerned about some of the language used, such as "re-examine", "under review", "reviewing" and "considering".
I want to raise three points with the President of the Board of Trade. Why did he not respond to the suggestion for a training levy, which was forcefully promoted in the report? There is also no response to our suggestion on the financing of small and medium-sized businesses or to our point about hostile takeovers. The Committee said that technology transfer should be viewed as a framework of operation. Unfortunately, there is only a part response to that point. We want a full response to the points raised.
§ Mr. HeseltineI am grateful to the hon. Gentleman because, as I said earlier, the report for which he is responsible as Chairman of the Select Committee is very important. It attempts to analyse many of the problems seriously and, in my view, very constructively—in sharp contrast to the attitude of the hon. Member for Livingston (Mr. Cook).
There were few points in the Select Committee report with which the Government disagreed. There were some, but not many. In the memoranda that we published we clearly set out our reasons for any disagreements. For example, we do not believe that a training levy is the right way to proceed. It would be bureaucratic. It has been tried, but it did not find general acceptance—although we very much welcome the interest in further and better training operations. My right hon. Friend the Secretary of State for Employment will talk about that shortly.
I sympathise with the hon. Gentleman as I was not able to help him in his request that I make the White Paper available to him in advance of the rest of the House. That is the convention and I felt that I had no alternative but to stick with it.
§ Madam SpeakerOrder. It seems that I have to remind hon. Members that we are not in debate on the White Paper. We are questioning the statement on the White Paper made by the President of the Board of Trade. May I now have brisk questions and answers please?
§ Mr. Tom King (Bridgwater)Our country's competitive position is excellent at present, and the supporting resources provided by the Department are much improved. Many excellent British companies are doing outstanding work in exports. Does my right hon. Friend agree, however, that many companies have not yet realised what opportunities exist overseas, and how vital those opportunities are to our balance of payments? Will he reinforce his efforts to ensure that every company in the country realises that there may be very good prospects in export markets as well?
§ Mr. HeseltineI am wholly in sympathy with my right hon. Friend. Trying to achieve that result, however, is an enormous management task. We must face the challenge of establishing a Business Links network in every major town and city, setting up databases to find out exactly which companies are capable of exporting and then securing the personnel to visit, encourage and guide those companies.
We have been helped immensely by the private sector, which has now seconded nearly 80 people to my Department, and I have announced today that an additional 70 will be recruited in the provinces to reinforce those arrangements. The fact that our exports are at an all-time high, while exports to the non-EC countries are 8.5 to 9 per cent. up on a year ago, augurs extremely well for the future.
§ Dr. Jeremy Bray (Motherwell, South)Given the right hon. Gentleman's enthusiasm for analysis, will he tell us what estimate he has made of the effects of the measures that he has announced on either growth or productivity?
§ Mr. HeseltineNo. As the hon. Gentleman will know, trying to make forecasts about the result of specific inputs is something that no Government of whom I am aware have ever tried systematically to do—except those who believe in command economies, and we know what 192 happened to them. My right hon. and learned Friend the Chancellor of the Exchequer has given the overall view of likely growth patterns in the country's economy over the years ahead, and I have no reason to dissent from that view.
In the White Paper, we are largely discussing two issues: maintaining the macro-economic framework—which is fundamental to competitiveness—and, persistently and in detail, working away at improving the supply side of the economy.
§ Dr. Michael Clark (Rochford)I congratulate my right hon. Friend on his initiative in producing the White Paper. Will he concede that, although we spend a great deal of our time criticising what is wrong with our industry and our companies, many of those companies are effective, efficient and world class in terms of competitiveness? Will he ensure that his Department looks at those companies as well, analyses what they are doing right and sets out their criteria for other companies to follow?
§ Mr. HeseltineI am grateful to my hon. Friend. That is one of the principal thrusts of the policy that we are pursuing in working closely with British companies—particularly the best companies, which are performing a remarkable role in many fields in benchmarking down the supply chains to pass best practice out into companies that are not immediately in touch with the agencies and Government organisations within my direct influence. We are seeing a huge expansion in the spread of best practice through the trade associations, the Confederation of British Industry and the supply chain; that is clearly one of the most effective ways of improving national performance.
§ Mr. Peter Shore (Bethnal Green and Stepney)What role does the exchange rate play in the right hon. Gentleman's analysis? Does he not rejoice in the fact that, since September 1992, we have no longer been locked into the exchange rate mechanism at DM2.95 to the pound?
§ Mr. HeseltineI know that the right hon. Gentleman never ceases to make his own particular point, but he will have a much wider, more historic perspective in mind. Time and again, Britain has had the advantage of a short-term competitiveness opportunity as a result of devaluation. The problem is that—largely as a result of the Labour party's policies—we blew it by not controlling inflation.
§ Mr. Nicholas Winterton (Macclesfield)May I congratulate my right hon. Friend on what I consider to be a very constructive package of initiatives? The Government have created the right climate for the expansion of industry: low interest rates and low inflation. Is my right hon. Friend aware, however, that perhaps the greatest impetus that he could give manufacturing industry would be the introduction of 100 per cent. capital allowances, as practised in many other countries of the European Community and throughout the world? Will he do that, and will he give me an assurance that he will accept an invitation to come to Macclesfield and open the new Business Link premises in the next few months?
§ Mr. HeseltineMy hon. Friend will realise that of course any tax judgment is a matter for my right hon. and learned Friend the Chancellor, but I remember very well that we decided that it was advantageous to the wealth-creating processes to have reductions in the level of corporation tax and to remove the artificial incentives of 193 tax allowances as part of that package. If I remember correctly, under Lord Lawson that was the right economic decision to take. Having given industry the major advantage of lower tax rates, some now want to go back to total capital allowances, which would be to have one's cake and eat it as well. That must be a matter for my right hon. and learned Friend the Chancellor, but it is important to realise how much we have already done.
As for my hon. Friend's most generous invitation to visit Macclesfield, that would give me huge pleasure, but I am not yet able to offer a date.
§ Mr. Barry Jones (Alyn and Deeside)What is the consequence of the right hon. Gentleman's White Paper for Britain's aerospace industry, which is still the source of many skills, many jobs and a great many exports? With the Germans now coveting British Aerospace's Airbus wing technology, will the right hon. Gentleman take a strategic decision in favour of the future large aircraft, which would help British Aerospace, Rolls-Royce and Shorts? Does the right hon. Gentleman realise that tens of thousands of jobs depend on that decision and that, today, he could give confidence to British Aerospace and the whole industry?
§ Mr. HeseltineThe hon. Gentleman raises the interests of a most important industry. I share that view, and it has been my privilege as a member of a Conservative Government to help to create the European Space Agency, to sell Tornados to the Saudis, to get the European fighter aircraft programme off the ground, to launch the EH101, and to give general and continuing support to that industry to the tune of £1.5 billion since 1979. Although I appreciate the hon. Gentleman's support, I can assure him that the Government need no advice on this matter.
§ Mr. Nirj Joseph Deva (Brentford and Isleworth)I congratulate my right hon. Friend on the timely White Paper. Will he join me in congratulating my hon. Friend the Minister for Trade, who this very day has succeeded in normalising our trading relationship with Malaysia despite the Labour party's efforts to damage British prospects? My right hon. Friend mentioned that he would like to improve the competitive advantage of our outward investment. Will he expand on that?
§ Mr. HeseltineMy hon. Friend is generous in referring to my hon. Friend the Minister for Trade, who is never satisfied with normalising relationships but is hellbent on improving them, which he is doing with remarkable success across the world. As for outward investment, we shall be looking to the export promoters who have been seconded to my Department for the purposes of encouraging exports to look for outward investment opportunities as we realise that that gives an additional competitive advantage to British companies and will lead to massive repatriation of profits in the future.
§ Mr. Dennis Skinner (Bolsover)How on earth does the President of the Board of Trade expect businesses large and small voluntarily to settle their debts when the Government are giving the nod and a wink to Tory Members not to settle their debts at Lloyd's?
§ Mr. HeseltineThe one way that British industry would find it encouraging to settle its debts is to listen to the hon. Member for Bolsover (Mr. Skinner) and realise that, if anything went wrong, he could be part of a governing party.
§ Sir Anthony Grant (Cambridgeshire, South-West)Is my right hon. Friend aware that he is absolutely right to reject any silly socialist subsidies for industry, which seem to be the only policy of the Labour party? My right hon. Friend is also absolutely right to identify the late payment of debt as the biggest problem from which the small firms sector suffers. Will he bear in mind that statutory interest is not so simple as it seems, that it can sometimes work against the interests of small firms and that the idea of publicising and exposing to shame the activities of larger firms is therefore the better solution? Does my right hon. Friend—we were in government together—also recall that when the Labour party was in office, the small firms sector almost disappeared entirely?
§ Mr. HeseltineMy hon. Friend is absolutely right. The punitive tax regimes of the Labour party made it impossible for the small industrial sector to generate itself, and the punitive capital and wealth taxes meant that family businesses were bound to be sold into the hands of publicly quoted companies which had massive tax incentives to take them over. My hon. Friend is absolutely right also that the various legislative answers to the better payment of debts may have particularly onerous effects on small businesses which often use their creditors as part of their companies' financial package. If we look at the balance sheets of small businesses, we often find that the people who might suffer most from a rigid regime would be those very companies starting up.
§ Mr. Alex Salmond (Banff and Buchan)Does the President of the Board of Trade accept that the only industry to get a substantial boost from today's announcement is the paper, printing and publishing industry? How could he take so long to say so little of substance? Looking at the full nine pages of his statement, can he tell us where the beef is?
§ Mr. HeseltineI know that it is customary in the House to indulge in that sort of fatuous intervention—[interruption.] As the hon. Gentleman sits there, pregnant with a big idea, I often wonder what goes on in his mind. The only conclusion that anyone watching the performance in the House this afternoon and the antics of the Opposition could draw is that the House has lost the capability to hold any rational debate about anything that is of genuine concern to the country at large.
§ Dr. Keith Hampson (Leeds, North-West)My right hon. Friend is to be congratulated on producing the first comprehensive analysis of our industrial problems and the first coherent approach to them since the Labour Government's 1975 White Paper, which was wholly unmemorable and hopelessly ineffective. There is now at least a focus which, so far as I can see, follows exactly the trend of the thinking of the Select Committee on Trade and Industry, which is chaired by the hon. Member for Sheffield, Central (Mr. Caborn). In particular, it focuses on the role of Government in helping businesses to help themselves. Above all, small companies—
§ Madam SpeakerOrder. The hon. Gentleman will resume his seat. I have cautioned the House a number of times this afternoon that I am not prepared to listen to statements. This is not the time for statements; it is the time for questions, and I am looking for a question from the hon. Member for Leeds, North-West (Dr. Hampson).
§ Dr. HampsonWill my right hon. Friend confirm that the central thrust of the White Paper is to ensure that small businesses which have the potential for growth are to be helped to become the powerful medium-sized companies of which we are particularly short when compared with our major rivals?
§ Mr. HeseltineI very much sympathise with my hon. Friend, but one of the reasons why we are short of medium-sized businesses, which are so characteristic of, for example, the German economy, is that when the Labour Government were in power they wiped them out.
§ Mr. Michael Clapham (Barnsley, West and Penistone)From his reading of the report of the Select Committee on Trade and Industry, the President of the Board of Trade will be aware that the United Kingdom spends less on civil research and development than any of our competitors, both in absolute terms and per capita. What precisely will his statement do to obtain more Government investment in British industry?
§ Mr. HeseltineThe hon. Gentleman is right, but he does not draw the right conclusion. In terms of public expenditure, the Government spend broadly the equivalent of what equivalent countries spend—it is the private sector that spends less. A careful analysis of the private sector shows that there is nothing in the structure of the British capitalist system which makes it inevitable that that should be the case. In some industries—for example, the pharmaceutical industry—Britain spends a great deal on research and development and is in a world-class position. This is one of the subjects that my hon. Friends the Financial Secretary and Economic Secretary to the Treasury will be considering in their analysis.
§ Mr. Tim Devlin (Stockton, South)Is my right hon. Friend aware that successful manufacturing businesses in the north of England will greatly welcome the White Paper, but that they will feel that the problems with which it deals are of such fundamental importance that they should not be the subject of petty party politics? Will he therefore take every possible step to bring at least a large proportion of the Opposition on board to support his proposals?
§ Mr. HeseltineMy hon. Friend sets me a task beyond the wildest dreams of human politicians. Anyone studying the White Paper will realise that we have deliberately tried to consider economic cycles as opposed to the tenures of any one Government. We have deliberately tried to examine the problems in the context of decades. When I came to the House today, I had not the slightest intention of turning this matter into a party political issue, but I was not so naive as to think that that would be the attitude of the Opposition, so I had a devastating response to any wholly irresponsible intervention.
§ Mr. D. N. Campbell-Savours (Workington)Why did the Government not introduce the more interesting parts of the document four years ago, when they might really have had some impact? What has changed?
§ Mr. HeseltineThe performance of the British economy has changed. The more the hon. Gentleman and the House examine the document, the more it will be realised that we are building on the strengths that now exist in the British economy but which simply did not exist in the early 1980s.
§ Madam SpeakerOrder. We now move to the second statement.