Policy Achievements (Hansard, 25 May 1984)

§ Mr. Tebbit

Since June 1983, the Department of Trade and Industry has added to the achievements since 1979 of what were previously the Department of Trade, the Department of Industry, and the Radio Regulatory Department of the Home Office.

I have continued and sought further improvements to the Government-wide financial management initiative measures undertaken by my predecessors. The Department's activity and resource management initiative which enables Ministers to review and redeploy manpower 590W and financial resources against objectives has been further improved by the introduction of clearer priorities within the Department and an improved system of monitoring progress towards objectives. Since 1 April 1984, over half the Department's staff have been in "Responsibility Cost Centres", discrete units each responsible for a fixed and predetermined budget covering most administrative costs. Staff at all levels have worked loyally and with enthusiasm to continue to improve value for money in all the Department's work. Steps have been taken—including a substantial increase in staff—to enable the Companies Registration Office to improve its service without cost to the taxpayer.

In its support of industry and commerce, the Department has contributed to the formulation of the Government's economic policy which has brought about a substantial improvement in the operating environment for United Kingdom companies. The stimulus of the 1984 Budget in helping to improve the international competitiveness and profitability of British industry and commerce has been widely welcomed. In 1983, the gross trading profits of industrial and commercial companies—excluding north Sea oil companies—rose by 23 per cent. The volume of non-oil exports in the first quarter of this year was 6.5 per cent. higher than a year earlier. Manufacturing output in the three months to February was 4 per cent. higher than a year earlier. Output per head in manufacturing rose by 6.5 per cent. over the same period. Confidence in the prospects for United Kingdom industry as measured by CBI surveys has improved considerably and is currently at a very high level.

Further improvement has been sought of the performance of the state-owned industries for which the Department is responsible. BL has announced a return to profit before interest and tax; the Post Office has increased efficiency and profitability over the last two years; the British Steel Corporation has made good progress towards achieving viability with dramatic reductions in losses and external financial requirements since 1980–81 and a productivity improvement from 133 tonnes per man-year in 1979 to 223 tonnes per man-year in 1983; British Shipbuilders has made substantial progress in restructuring its business and has returned a number of its subsidiaries — including the heavy loss maker Scott-Lithgow — to private ownership.

Within the European Community, the Department has played a full part in securing agreement on the European strategic programme for research into information technology (ESPRIT); on the text of a regulation to strengthen the Community's external trade policy; on common standards for a wide range of industrial products; on an early warning system for new technical standards and regulations; a series of measures to simplify frontier formalities; and the continuing measures to end state subsidies to the European steel industry. It has also played its part within the European Community in urging international support for open trading policies, while also continuing appropriate safeguards for some sectors of United Kingdom industry against unfair competition and surges in imports.

The Department has primary responsibility for the United Kingdom contribution to the implementation by the Community and its member states of the work programme resulting from the ministerial meeting of the GATT in November 1982. It will shortly be submitting a United Kingdom national study on services to the GATT.

591W

The Department, by means of visits by Ministers to over 40 countries, often accompanied by industrialists, and by the wide range of services provided by the BOTB, has continued to support the export efforts of all sections of industry and commerce.

The Department has played its part in attracting a growing volume of inward investment to the United Kingdom — 1983 was the best year for inward investment since the IBB was founded seven years ago. Between 1982 and 1983 projects handled and projects successfully landed increased respectively by 46 per cent. and 58 per cent. These successes included decisions by IBM, Digital and Commodore to base personal computer manufacture for Europe in the United Kingdom; and the £135 million integrated pulp and newsprint mill of the Finnish company United Paper Mills Ltd. In 1984 agreement was reached on the Nissan proposal to start production of cars in Britain.

The Department has made further progress in preparing nationalised industries to be brought into the private sector and to bring greater competition to their activities. Work is on schedule for the flotation of British Telecom in late autumn this year: a draft of BT's licence was published in October 1983; the Telecommunications Act, which provides for the setting up of the Office of Telecommunications and the conversion of BT into a plc received Royal Assent last month. The broad outlines of the capital structure of the new company and regulatory measures for certain BT tariffs have been agreed as I announced on 2 May. At the same time I also set out initiatives to encourage wide share ownership in BT by employees and telephone subscribers. The first steps are being taken towards returning parts of BL to the private sector; I have announced BL's intention to proceed with a public offer for sale of Jaguar Cars.

Royal Assent was obtained to the Restrictive Trade Practices (Stock Exchange) Act 1984 which removed the stock exchange from the ambit of the restrictive trade practices legislation. This opened the way for radical changes in its dealing practices and admissions policies and to major innovations in the organisation of financial services in London.

Part 1 of Professor Gower's report on investor protection has been published and public comments sought.

The Department has published a White Paper on a revised framework for insolvency law with a view to the early introduction of legislation to reform the law in this field.

The Department has actively promoted and encouraged the development of key technologies and of new industrial products and processes. Financial assistance of about £250 million was given in 1983–84 and this will stimulate investments by industry approaching £1,000 million in new products and processes. Over 200 collaborative proposals have been received for the Alvey programme for advanced information technology and the first approved projects are now being announced. A new microelectronics industry support programme (MISP 2) has been announced.

A series of policy decisions affecting the future product strategy of the aerospace industry have been taken. Agreement has been reached to the advance of £250 million launch aid to BAe in support of the company's participation in the Airbus 320 project; launch aid to the advance of £70 million to Rolls-Royce to assist with the 592W development of the RB211–535E4 engine, and of £60 million to Westland towards its civil costs in developing the Anglo-Italian EH101 helicopter. Approval has been given for Rolls-Royce to participate in the V2500 international engine project (with £60 million launch aid) to power the A320 and other aircraft, and for the company to collaborate with General Electric of the United States on larger civil engines.

A White Paper on a more cost effective system of regional industrial development was published in December 1983, inviting comments on some issues which have yet to be decided; legislation to implement the basic structure of the new arrangements is currently before the House. In the meantime between 1 June 1983 and 31 March 1984 payments of regional development grants totalled £327 million; and between 1 June 1983 and 29 February 1984 offers totalling £121 million have been made under section 7 of the Industrial Development Act 1982 to manufacturing and service projects in the assisted areas.

A major review of tourism policy has been completed and its findings were announced in November 1983, which will be implemented by the Department and the tourist boards. A new chairman has been appointed to the British Tourist Authority who will also assume chairmanship of the English Tourist Board next year.

The Department has expanded its small firms service and encouraged the growth of local enterprise agencies. In the year to 31 March 1984 the small firms service handled 316,000 inquiries and provided counselling for around 21,000 firms. These included many businesses stalled under the enterprise allowance scheme which became available nationally in 1983. Under the pilot loan guarantee scheme 4,890 guarantees were issued in the year to 31 March 1984 for over £156 million of bank lending. A review of the costs and benefits of the scheme is now taking place.

The Department has continued to pursue matters of concern to consumers. New safety regulations and prohibition orders have helped to reduce the sale of dangerous goods to the public. A review of the existing law on false and misleading pricing has been published and views invited. Increased funding arrangements have been announced for the National Association of Citizens Advice Bureaux. Regulations have been introduced to bring into effect next year the outstanding provisions of the Consumer Credit Act.