HC Deb 01 November 2001 vol 373 cc1000-2
10. John Barrett (Edinburgh, West)

What steps the Government are taking to improve the competitiveness of British business. [9558]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)

Improving the competitiveness of British business must be a partnership between all those involved in business and the Government. For the Government's part, we have created a stable economic environment in which business can prosper. We have low inflation and the lowest long-term interest rates for 35 years.

John Barrett

I thank the Minister for that reply. Does he not agree that there have been a number of redundancies in our constituencies as a direct result of the economic impact of the terrorist attack on 11 September? For example, Grampian Foods in my constituency has laid off employees in the airline food industry. The Governments of other countries, such as the United States, have taken positive steps to support their airlines, so what action will this Government take to ensure that our industry can continue to compete on a level playing field?

Nigel Griffiths

No one should underestimate the events of 11 September, but no one should be in any doubt that, because of our economic policies, Britain is in a better position than other countries to weather any downturn. Steps have been taken to give us a business environment that has the lowest-ever corporation tax for small companies and the lowest starting rate in any major industrialised country. We have also reduced capital gains tax and introduced a host of other measures. Those steps have helped us to ensure that British businesses are in a better position than those in other countries to weather any downturn, to grow again and to compete in the world.

Mr. Jim Murphy (Eastwood)

I am sure that my hon. Friend shares my view that price fixing and cartels are bad for competition in British business. However, does he share my suspicion that there is still a degree of price fixing in the British airline industry? That fact was confirmed to me only this week when I inquired about the standard fare between Heathrow and Glasgow and was told by British Airways that it was £162. When I phoned British Midland, its answer was somewhere between £161 and £163. Both airlines charge the exact same fare, so I encourage my hon. Friend in future legislation to strengthen competitiveness and to ensure that there is a proper investigation into what I believe to be price fixing in our domestic airline industry.

Nigel Griffiths

Of course, any price fixing is to be deplored. I hope that my hon. Friend will refer any evidence that he has to the Director General of Fair Trading.

Michael Fabricant (Lichfield)

When my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) reminded the House that we had fallen from fourth place to 12th place in the competitiveness league, the Minister for Industry and Energy said that my hon. Friend was talking Britain down. The Minister added that he thought that we were doing pretty well. Can I tempt the Under-Secretary to agree with me that many in industry would say that that is a pretty complacent view?

Nigel Griffiths

My hon. Friend gave a robust and effective response. I am surprised that the hon. Gentleman has come back for more, but let me give it to him. Competitive rankings are by their nature very volatile. [Interruption.] I note that Opposition Members laugh at the fact that the United Kingdom is ahead of Germany, France, Italy and Denmark on the growth competitiveness index. If the hon. Gentleman examines The Economist intelligence unit report, he will see that we have made the UK the most attractive business location in the world. Those are the facts, and I am surprised that he should be so brave as to raise such an embarrassing subject for the Conservative party.