HC Deb 04 April 1985 vol 76 cc740-4W
Mr. Pawsey

asked the Secretary of State for Trade and Industry if he will list his Department's principal achievements since 1979.

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.

2. 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 reforms of business taxation in the 1984 Budget are progressively helping to strenghen the competitive base of British industry by encouraging investment in projects which offer the prospect of good pre-tax profitability. The 1985 Budget continues this strategy, while offering a number of detailed improvements and a major restructuring of national insurance contributions to reduce employment costs and encourage the creation of sustainable new jobs.

In 1984 the gross trading profits of industrial and commercial companies were 22 per cent. higher than in 1983. Manufacturing output in 1984 rose by 3½ per cent., the largest rise in any one year since 1973. Output per head in manufacturing rose by 4½ per cent. over the same period. Confidence in the prospects for United Kingdom industry as measured by CBI surveys has continued at a high level. The volume of manufactured exports rose last year by 10 per cent., the largest annual increase for some ten years. Investment in manufacturing and service industries has also risen sharply, by about 13 per cent. in 1984.

3. Progress has been made in transferring publicly-owned industries to the private sector. British Telecom was successfully privatised in the largest, and most international, primary share offering ever made, with more than two million members of the British public applying for shares. Other successful transfers to the private sector have been Scott Lithgow, Jaguar and INMOS.

4. Further improvement has also been made in the performance of the state-owned industries for which the Department remains responsible. Over the last two years, the Post Office has increased its efficiency and productivity and more than met its financial targets while reducing the price of basic letter post service in real terms. After excluding the serious effects of the miners' dispute, 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 doubling of productivity, from 1979, to 271 tonnes per man-year by 1984, and in returning certain of their activities to private ownership through outright disposals and joint ventures. British Shipbuilders has continued to make substantial progress in restructuring its business to enable it to concentrate its resources on a stable cost-effective merchant shipbuilding business. To this end it is disposing of its other business including its warshipbuilding interests.

5. A new framework for telecommunications in the United Kingdom has been created. The Telecommunications Act 1984, which was passed in April 1984, established a regime designed to encourage competition in telecommunications and set up a new body—the Office of Telecommunications—as the regulatory body. Public telecommunication operator licences have been granted to British Telecom, Mercury and the Hull Telephone Company.

6. The Department has continued to offer practical and realistic support for industrial research and development. Some £300 million will be spent in 1984–85 to help with the costs of innovative projects and the introduction and application of new technologies. Policy in this area has been the subject of a major review, the outcome of which I announced on 25 March. This will result in a shift of emphasis in the Department's support towards advisory services, the encouragement of best practice, improvement in the supply of key skills, and collaborative research.

7. Well over 400 applications have now been received for the Alvey programme for research into advanced information technology, and some 80 cooperative projects involving companies and universities have been approved. The Department has also acted as a national focus to spread industrial and technological awareness in schools and to devise new ways of meeting the information technology skills shortages. The micros in schools programme has been successfuly completed. The British schools technology unit has been established to provide a mobile means of in-service teacher training and the Department has been promoting the establishment of mini-enterprises in schools. The Butcher committee's recommendations of a partnership for change between industry and the higher education system are now being implemented.

8. 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 A 320 project; to the advance of £70 million launch aid to Rolls Royce to assist with the 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.

9. Following the publication of a White Paper on regional industrial development in December 1983, decisions on the revised structure of regional industrial incentives were announced on 28 November 1984. The major changes from the previous structure affect the Assisted Areas map and regional development grants, and are designed to concentrate the Department's regional assistance where it can be most effective in creating new jobs.

10. The findings of the major review of tourism policy, which were announced in November 1983, are being implemented by the Department and the tourist boards.

11. The Department's small firms service continues to meet strong demand for information and counselling. In 1984 it handled more than 279,000 enquiries and provided counselling for about 25,000 firms. The loan guarantee scheme has been extended until the end of 1985 to cover up to a further £50 million of lending. Under its provisions almost 6,000 guarantees have been issued since June 1983 for over £191 million of bank lending. In November 1984 Business Improvement Services was launched to help small firms in English areas affected by job losses in the steel, shipbuilding and textile industries. Some £63 million is available to provide grants for business consultancy advice.

12. The Department has published a While Paper announcing the outcome of the review of policy on the film industry, and the Films Bill has been introduced to make the necessary legislative changes.

13. Within the European Community, the Department has continued to press for the consolidation of the internal market and to seek greater European industrial cooperation. The Department has also played its part within the European Community in urging international support for open trading policies, and for a new round of multilateral trade negotiations in the GATT; while continuing to defend vigorously those sectors of United Kingdom industry facing foreign competition recognised as unfair by the GATT.

14. Export volume grew last year by 8½ per cent. and for manufactures by 10 per cent. The Department helped industry to achieve this largest increase for some 10 years through a wide range of Ministerial visits, trade policy work, and the export promotion programme, under the guidance of the British Overseas Trade Board, which included 6,000 new contacts with firms interested in exporting.

15. The Department has continued to support British companies pursuing major project business overseas. Since June 1983 contracts worth about £3 billion with a United Kingdom content of just under £2 billion have been won. The Aid and Trade Provision was used to help obtain contracts with a United Kingdom content worth more than £400 million.

16. The Department has played an increasing role in attracting a growing volume of inward investment in the United Kingdom. 1984 was the best year for inward investment since IBB was founded 8 years ago. In 1984 projects handled and projects successfully landed increased respectively by 17 per cent. and 36 per cent. The projects successfully landed involved capital expenditure of about £3 billion and will create over 28,000 jobs and safeguard nearly 18,000 existing jobs.

17. In 1984 agreement was reached on the Nissan proposal to start production of cars in Britain, and Yamazaki Machinery Works Ltd. announced its intention of building at Worcester what will probably be the world's most advanced factory for the production of machine tools. However, inward investment from the USA remained predominant, with major companies such as Hewlett Packard establishing in the United Kingdom.

18. Royal Assent was obtained to the Trade Marks (Amendment) Act 1984 which provides for extension of the registered trade mark system to include marks used in relation to services. The Department has published a Green Paper on the recording and rental of audio and video copyright material as part of the consultative process leading to reform of copyright law.

19. The Department has pursued a wide range of matters of concern to consumers. For example, new safety regulations and prohibition orders have helped reduce the sale of dangerous goods to the public. Reviews of safety laws and the law on false and misleading pricing have been concluded and new legislations planned.

20. In December 1984 the Department introduced into the House of Lords an insolvency Bill following a White Paper in February 1984.

21. In the last twelve months, the massive task of consolidating the Companies Acts has been completed. The new consolidated Acts set out in clearer and more convenient form provisions previously contained in six major Acts and will be of direct benefit to both the professions and the business community as a whole.

22. Royal Assent was obained 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.

23. Following Professor Gower's report on investor protection, the Department has published a White Paper on financial services in the United Kingdom, with a view to the introduction of legislation in the 1985–86 Parliamentary session to reform the law on investor protection.

24. Further progress has been made implementing the Financial Management Initiative in my Department. Details were set out in Cmnd. 9297.