There is one sector of our vibrant economy in which employment is falling. Opposition Members may jeer about that decrease or, in their paradoxical way, even cheer about it. It is in the great service industries of the City of London. There are a number of reasons for the fall in the number of City jobs, not all of them bad. For example, in the Government bond markets, where there were far too many players, substantial numbers have been laid off, precisely because the supply of their lifeblood—Government debt—has itself been stopped. There is no more Government debt—only repayment—and I imagine that gilt dealers are the only people in the City of London who may be hoping for a revival in the Labour party's fortunes.
A number of people in the investment, banking and financial services industries have also been laid off, in part because of over-expansion prior to big bang, in part because the security markets are dull, and in part because of the welcome competition that has been introduced into the City by the Government, which has cut prices and therefore forced cuts in costs. At the same time, the City is faced with the ever-increasing costs associated with the implementation of the Financial Services Act 1986.
As announced in the Gracious Speech, we are now to have a Companies Bill. That Bill will have the chance to increase employment not just in the City, but, far more important, throughout the entrepreneurial business community, which has provided almost all the net new jobs in Britain.
The Companies Bill will need to do several things. First, it will need to simplify company accounts. Millions of people are now new shareholders who have been brought into the capitalist fold. The old, unreadable company accounts, behind which the accountant could hide in a camouflage that only he could understand, are incomprehensible to them and need to be simplified. Company accounts must be improved, within tighter parameters. They must be made more easily comprehensible, with certain factors, such as the value of the assets of a company being made more clear. That will be notably tame when it comes to valuing "goodwill", as we ever more develop the service industries. Goodwill is the difference in value between a company's assets and the price that another is prepared to pay for them.
Thousands of new companies have been created each year under this Conservative Administration, creating more jobs than ever. Yet they have to spend too much time and money wrestling with the red tape required in the public accounts that they need to produce every year, under a system that is at least 50 years out of date.
The second area with which the Companies Bill will have to deal, if it is to increase employment, as many of us hope it will, is mergers and acquisition policy, both national and international. I trust that nothing in the Companies Bill will make takeovers more difficult, more murky or more prone to Government interference, except solely on the ground of competition. Takeovers, national or international, increase prosperity and investment; most important of all, they increase jobs. The creation of jobs of the right kind stems directly from the market for takeovers.
If the Companies Bill does nothing else, it must allow more openness than we have had in the past. It must ensure that in the process of a takeover wrongdoers are spotted earlier and are stopped with a heavier hand than in the past. Like company accounts, takeovers, mergers and acquisitions should be made more straightforward and easier.
I hope that the Government will not introduce into the Bill anything that smacks of protectionism or xenophobia. This country thrives on having its markets open to the world—its financial markets as well as its industrial markets. As my right hon. Friend the Secretary of State for Employment knows, that freedom increases prosperity and the number of modern productive jobs. Britain thrives in overseas markets. After Japan, we are the largest creditor nation in the world, with a high and growing net overseas investment. The fact that in America and Europe tens of thousands of people wake up in the morning and go to work for a British company increases the wealth and employment in this country. It is no accident that countries with the highest investment overseas, such as Japan and Switzerland, have the lowest unemployment within their own boundaries.
The new self-confidence of British industry has encouraged it to fight for, and capture, some of the most famous commercial names in the world; nor have big companies alone led the massive investment of British wealth overseas for the benefit of the British people. Overseas takeovers by British industry represent millions of pounds and thousands of companies, and guarantee prosperity, jobs and income in the British home market.
All that is done through the City of London. It is imperative that the City should remain unencumbered with nationalist measures, and that it should be free to act on the instructions of British industry anywhere in the world. Of course, that means we must maintain a two-way street; and the more bustle there is on that street the better. It means that British companies must be free to purchase and invest abroad and that foreign companies must be able to do the same, and receive a welcome when they invest in Britain. Nothing is more economically illiterate or politically unsound than to bemoan each and every act of foreign investment or takeover. Such acts should be welcomed as acts of confidence in Britain. They should be welcomed by all who seek to further our prosperity and to increase the employment opportunities available to our people.
Ownership is becoming ever more fluid, and it is becoming a less important factor in international wealth creation. A few months ago I was on the north slope of Alaska, from which the United States gets most of its domestic oil. The major oil company there is BP. But no manager on those oilfields felt that he was working for a Limey company. Indeed, he would have been wrong to think so, as at least 30 per cent. of BP is owned by people outside the United Kingdom.
The ownership of new global corporations is becoming ever more diffuse and muddled, and it is rapidly changing. That is a good thing, and only the most old-fashioned would bemoan it. The Government would do a great disservice to our wealth creators and job creators, to the City of London and to industry, if they were tempted to tip into the Companies Bill any measure restricting this move to greater globalism, or any barrier to Britain's industrial investment in the world and the world's investment in Britain.