Exports

– in the House of Commons at 4:11 pm on 3rd May 1995.

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Motion made, and Question proposed, That this House do now adjourn.—[Dr. Liam Fox.]

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire 4:22 pm, 3rd May 1995

I have an almost infinite capacity to address a empty House when I come to it. I am, by the way, the Minister for Trade and in the past three years I have travelled some 355,000 miles and visited some 40 countries—many of them on three or four occasions. There are two great advantages to being the Minister for Trade: first, no one in the press or in the Press Gallery and very few people in the House of Commons know who on earth I am and, secondly, I do not have to read the demoralising tide of despair about Britain's failings and woes that are heaped from every daily paper on to the breakfast plates of the British people.

I have yet to visit a country where the perceptions of Britain match the image that we seem to be able to portray of ourselves. Certainly, 15 or so years ago, Britain was revered more for its past than its then present or its likely future. Now, wherever I go, everyone I see and talk to wants to know how we have halted the decline of our country and how we are in the process of restoring our fortunes.

The overwhelming majority of countries that I visit are eager to study our industrial relations reforms. Even the developing countries of India, Sri Lanka and China have work forces—well, not so much China, but many countries in the developing world—beset with the restrictive practices, closed shops and union-induced overmanning which work against their ability to attract inward investment from the developed world.

Many of those countries, particularly those in the Commonwealth, inherited those practices from a socialist Britain. That legacy is perhaps the Trades Union Congress's greatest success in export promotion.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

I find the historic analysis of the British industrial relations system interesting, but it does not accord with the facts in relation to many of my constituents who are unemployed shipbuilding workers. My constituency has benefited enormously from inward investment. However, I believe that those rundown shipbuilding yards on the Clyde would benefit enormously if they could join the international shipbuilding market. Will the Minister give a commitment to ensure that the European Union's seventh directive on the shipbuilding intervention fund will continue beyond 31 December this year? That subsidy is absolutely essential for the European Union's shipbuilding industry, let alone for the industry in Scotland.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I take the hon. Gentleman's point. He will know that, for several years, as the Minister responsible for industry in Northern Ireland, I was responsible for Harland and Wolff. I am no longer responsible for the shipbuilding industry and I cannot give the assurance that he seeks. However, I am sure that the British Government will do all they can in negotiations with their European colleagues to support the British shipbuilding industry to the utmost.

I take the hon. Gentleman's points about the trade unions' history, but I have recounted the facts as I find them on my visits around the world. The hon. Gentleman is welcome to come with me to learn those facts for himself.

Without exception, all the countries that I visit want to learn about the success of our privatisation initiatives. They look with envy at British Telecom which has cheaper telephone calls than Germany, France and Italy. They look also at British Gas where household bills have fallen 20 per cent. in real terms since privatisation, even including VAT. They also look at British Airways, the world's favourite and most profitable airline, and at British Steel, which is one of the world's most productive steel producers.

The rest of the world is flocking to Britain to learn how to emulate us and how to reduce state subsidies and inefficiencies. In 1979, the nationalised monopolies in Britain cost the taxpayer £50 million a week. They now pay tax of £50 million a week. Opposition Members may wish to sit on the Government Benches and promote British trade overseas. However, they have bitterly opposed every privatisation measure. Indeed, the leader of the Labour party claimed recently in Hansard that the British people are totally fed up with privatisation—I do not know who he means by the British people; he probably means himself.

Against the background that I have described, such comments sell short the achievements of Britain and the companies that I mentioned. Indeed, they do far more than that. They reduce the prospect of Britain's being able to sell its expertise and experience to those overseas who want it. In my judgment, that shows how woefully out of touch the Opposition are on an issue that is greeted with acclaim in almost every other country, whether it has a Conservative, Socialist or Liberal Government.

The world now sees us as a very different place from that when Labour last sat on the Government Benches. The results are there for everyone to see. The money is where the mouth is. As the hon. Member for Greenock and Port Glasgow (Dr. Godman) reminded us, one third of all inward investment in the European Union is made in the United Kingdom. The stock of inward investment stands at £131 billion. In 1979, it was around £14 billion. We attract 20 per cent. of French investment and 13 per cent. of German investment. We attract 40 per cent. of American investment, 40 per cent. of Japanese investment, 50 per cent. of Korean investment and 50 per cent. of Taiwanese investment in the European Union. Not even Mr. Will Hutton, whose words are avidly read by Opposition Members, and the assembled cohorts of economists and commentators from the BBC and The Guardian can stop that ever-rising tide of inward investment. The more they whine, the more it comes in.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

I seek some information about the right hon. Gentleman's remarkable inward investment figures. Will he disaggregate for the House fixed investment coming into this country and investment that, in the first instance at least, is simply acquiring shares through companies?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I cannot disaggregate it. I am sure that, in his speech, the hon. Gentleman will be delighted with his own disaggregation. However we take the figures, it is roughly 10 times more aggregated or disaggregated than when the Labour party was previously in office. The amount, compared with what other European countries have managed to achieve, shows that other countries have some confidence in what we are doing, which Opposition Members constantly seek to decry.

Photo of Patrick McLoughlin Patrick McLoughlin , West Derbyshire

Will my right hon. Friend give some figures relating to the number of jobs that inward investment has created? Also, as he has rightly reminded the House of his role in the Government, could he tell us about the trade that is taking place as a result of inward investment?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

Forty per cent. of our manufactured exports are as a result of inward investment in our country. The number of jobs created by inward investment over the past few years amounts to 700,000-350,000 since 1986. In Northern Ireland, for which I was responsible, about 45 per cent. of manufacturing and jobs come from overseas companies. That shows the trust and belief in what we are doing.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Of those 700,000 jobs, how many would be lost if the Government adopted the Labour party's policy of involving the social chapter?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I shall come to the social chapter, as my hon. Friend might have realised, rather later in my speech. My hon. Friend is right to say that joining the social chapter could do considerable damage to inward investment.

After a century of remorseless decline in our share of world trade, that decline stopped. Since 1985, our share of world trade has stabilised. We have 1 per cent. of the world's population and 5 per cent. of the world's trade. In a recent article in the Financial Times, Wynne Godley, an economist who has not shown great favour to the Government in the past, said that we have a better chance now than in the last 15 years of hitting the gong, is the consequence of the right policies at last having been followed". The open trading system and the quality and standards demanded by our inward investors are revolutionising British management's attitude to productivity, quality and service. More and more of our industrial base is striving for world quality in world markets.

Photo of Denis MacShane Denis MacShane , Rotherham

indicated dissent.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

The hon. Gentleman shakes his head, but he has only to look at the facts that I have given to realise the truth of what I am saying.

Photo of Denis MacShane Denis MacShane , Rotherham

I shake my head because I have read with great interest the speech of the right hon. Gentleman's boss, the President of the Board of Trade, to the Institute of Directors last week, when he averred the very opposite—that in many sectors British companies were not of world quality and that world-quality companies were overseas.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I am so glad that the hon. Gentleman takes such careful note of what my right hon. Friend the President of the Board of Trade and I say. Of course there is more to be done, and I shall refer to that matter. Of course we can never be complacent about our competitiveness. More and more British companies, because of the way in which inward investment has impacted through the supply chain, are improving their quality.

Let me give the hon. Gentleman an example. Some 350 companies in this country are now members of the Japanese Electronic Business Association. All those British companies supply Japanese companies—original equipment manufacturers—in this country, and are now starting to supply original equipment manufacturers in Japan. They are also supplying OEMs in France, Germany, Spain and even Malaysia. There is no doubt that the effects of the opening of the world trading system, and of competitiveness, are being felt increasingly as they improve the quality of Britain's industrial base.

Moreover, our share of world trade has ceased to decline. Our share of Organisation for Economic Co-operation and Development exports of capital goods is some 7.2 per cent., compared with 6.4 per cent. for France and 6 per cent. for Italy. There have been massive increases in Britain's sale of capital goods overseas. The DTI has set up capital sector working groups covering telecommunications, water, power, airports, railways, health and education. Baroness Perry, who chairs the education group, estimated the potential opportunities in Britain's education sector at some £4 billion about six months ago; having examined the position more closely, we now put the figure at £9 billion. The number of students coming to this country from Taiwan has risen from 500 five years ago to 10,000. British exporters from all sectors are achieving measurable success around the world.

The 1980s were a decade of radical change and dialectical debate. The 1990s must be a decade of partnership. We must now capitalise on those radical changes of the 1980s by building a strategic relationship with our businesses that—in a world that is "de-layering"—offers them what the mission statement of the Department's trade side describes as the best service to our exporters offered by any Government anywhere in the world. That, in fact, is exactly what we are doing.

All our major markets now have a country strategy and a market plan. Many of those markets now have campaigns: examples are Partnership Korea, Action Japan, Link into Latin America, North America Now and Spotlight Spain. We are increasing the professionalism of all who are employed in trade within the Department. We have established language training strategies. We are increasing the number of highly trained and committed staff in our embassies, from the ambassadors downwards.

Let me say a little about the overseas services offered by our embassies. Britain has a better Foreign Office and a better commercial service than any other country. I am constantly amazed at the knowledge and experience of our ambassadors and their staff overseas. We may not have used them as well as we might have in the past, for various reasons, but I pay tribute to the superb support and help that the Foreign Office gives our exporters.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I am sorry to interrupt my right hon. Friend again. Will he, however, undertake—with our right hon. Friend the Foreign Secretary—to lodge a campaign with, for instance, the Treasury to ensure that we have more representation overseas, and more embassies where at present we have none at all?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

Now that my hon. Friend remembers who I am, I can assure him that I shall campaign on his behalf. I do not really need that prod; I assure him that the DTI wants such a development anyway.

Photo of Mr John Gunnell Mr John Gunnell , Leeds South and Morley

The Foreign Office does a very good job in this regard, but does not the role of the embassy change from country to country? In Japan, companies naturally go to the embassy, seeing it as the representative of the United Kingdom; the United States takes a rather different view, and a great deal of work goes out without reference to the embassy.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I agree with the hon. Gentleman, and the roles of Trade Ministers vary from country to country as well. It is clear that Government meetings and missions led by Ministers are 100 times more valuable in some countries than in others. We must make sure that our overseas posts are adaptable and practical in what they do, and that is the case.

To make the service—which must be the best in the world—operate, the route between the Foreign Office posts and the Department of Trade and Industry must be seamless. We must have the right information technology link-ups and databases to enable companies to become involved. We must be capable of spreading the service out to small and middle-size enterprises all around the country.

We have taken on 100 export promoters from the private sector who have real experience and knowledge of the markets of the world. Those people will also get out around the country through business links—a vital one-stop shop initiative which has been welcomed by hon. Members on both sides of the House—to get the best possible information to companies that are capable of exporting, whatever their size and wherever they are.

Every business that now wants to export can be given immediate hands-on personal advice through the routes which I have just described about what to do, where to go and who to join, and anyone who has a complaint can come straight to me. But all this takes time to build, and it also takes time to build a knowledge of industry among senior officials of the Department of Trade and Industry and the Foreign Office. It takes time to change their culture, and to get them to concentrate on their business clients rather than on Ministers or personal secretaries. It takes time to establish the 80 market plans, recruit the salesmen and teach civil servants how to market, sell and promote.

It also requires leadership and imagination, and a dogged amount of devil in the detail. Changing a culture that has been geared only to provide policy alternatives and administrative correctness takes time. But we are changing that culture by changing the role of the Department and by changing the agenda. It is working, which is probably why no one is here today.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

It is the Whips' fault that no one is here.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

It is good of the hon. Gentleman to say that, and I shall come to him in a moment.

Almost everyone—certainly Will Hutton and his cohorts—thought that, by now, Britain would be faced with an ever-mounting trade deficit. The reverse is the truth. The volume of our non-oil exports has increased by 12.5 per cent. a year. Our engineering exports in the first quarter of this year are up by 21 per cent. on the same period last year. According to all recent surveys, our export growth record is at an 18-year high. UK manufacturers have recorded their strongest-ever improvement in export orders. Those details were given by the CBI on 25 April.

What is happening in this country is almost inconceivable. Our economy is growing because of the strength of our exports, and the strength of our exports is based not on the cheapness of our price but on the quality of what we do.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

Everyone welcomes the fact that we have a strong export performance at present. Does the Minister acknowledge that that performance is based on the devaluation since we left the exchange rate mechanism from DM2.95 to DM2.24? Is he sure that the kind of export performance about which he is talking can be sustained without further comparable devaluations? Will not that be the proof of our export strength?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I do not accept that for one moment. The successes in our pharmaceutical, capital goods and automotive industries, and the fact that we export more televisions than we import—an awful lot more than the Germans and the French—do not only result from the value of sterling, although the value of sterling helps. If the hon. Gentleman were in charge of our affairs, he would lock us into European monetary union and would have sterling tied to the deutschmark. I could then pose his question back to him. We have a competitive currency, but the real base of our strength in exporting is the quality of what we produce. The hon. Gentleman knows that the world will not buy rubbish—it will certainly not buy it from a high-cost country such as the United Kingdom.

If the Government know what they are doing on exports, what about the Opposition? I do not ask my first question of the hon. Member for Middlesbrough (Mr. Bell) personally, because I know him well and he knows what he is talking about. I am not absolutely convinced, however, that all those who have been placed over him—wrongfully, in my judgment—know as much as he does. I would not even contemplate bothering the House with the curriculum vitae of members of the shadow Cabinet [HON. MEMBERS: "Go on."] The Leader of the Opposition was a barrister at Lincoln's Inn and a columnist in The Times; the deputy leader, an author, a steward on Cunard passenger liners and trainee chef; the hon. Member for Dunfermline, East (Mr. Brown), a journalist with Scottish Television; the hon. Member for Livingston (Mr. Cook), a writer, former journalist on The Times and defence correspondent for New Statesman and Society; the right hon. Member for Copeland (Dr. Cunningham), an adviser on industrial policy to Albright and Wilson and regional officer of the General and Municipal Workers Union, as was the hon. Member for Blackburn (Mr. Straw); the hon. Member for Peckham (Ms Harman), a solicitor; the right hon. Member for Derby, South (Mrs. Beckett), the principal researcher for Granada Television; and, the hon. Member for Glasgow, Garscadden (Mr. Dewar), a solicitor. I looked in vain through that list of right hon. and hon. Members but could not find one who had done a day's work in any form of business.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

In a moment.

I am not sure whether I would entrust the investable savings of my constituents and those of my hon. Friends to people with such scant knowledge of industry and such non-existent personal experience of it.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

This sort of speech is amusing, but many people in Scotland, who are deeply concerned about the loss of oil fabrication orders to Spanish and Italian yards, for example, would like to know whether the Minister for Trade is satisfied that Spanish and Italian yards are not still being provided with hidden subsidies to enable them to compete for those orders. Is the right hon. Gentleman satisfied that the European Commission ensures that such competition is fair, square and above board?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

Clearly, with the hon. Gentleman's knowledge of industry, he would make a shining example if he moved from his present position to the Front Bench. It is always worth having someone with his experience on the Opposition Benches. If there is any evidence of subsidies that do not comply with European Commission rules, the Government will fight as hard as anyone. I hope that the hon. Gentleman's Euro-fanatic colleagues on the Opposition Front Bench would do the same, if they ever got the chance.

The lack of knowledge of Opposition spokesmen about trade and business is also shown in their inconsistencies. Opposition Members have obviously had some amusement at our expense this week, but we can now have some amusement at theirs. Most hon. Members would accept that defence is one of Britain's vital industries and that one of its most important elements is our ability to sell our aircraft overseas.

The Hawk aircraft is a very important element of the latter. I am glad to say that, about a year or so ago, New Statesman and Society said of the hon. Member for South Shields (Dr. Clark), on the subject of selling Hawks to Indonesia: As for British Aerospace's proposed sale of Hawk ground-attack planes … to Indonesia, where the military dictatorship is actively suppressing occupied East Timor, Clark is in favour. South-east Asia needs a stronger security system, he says, and Indonesia must be a part of it. I questioned the hon. Member for Livingston about a year ago in the House, asking: I wonder whether the hon. Member for Livingston (Mr. Cook) would also be prepared to put at risk the most successful training aircraft and the jobs that go with it in this country. He replied: The Minister will appreciate the fact that this is a major humanitarian issue"— he was talking about Indonesia— whether the number of casualties was 80,000 or 200,000. He will be aware that Hawk aircraft have been observed on bombing runs in East Timor in most years since 1984. What assurances did he seek, before giving export licences, that the 24 Hawks that he approved last year would not be used in the same way?"—[Official Report, 11 May 1994; Vol. 243, c. 307–308.] So, there you are. The problem for the hon. Member for Livingston is that bombing runs by Hawks in East Timor have not been observed in most years since 1984. Indeed, bombing runs by Hawks in Indonesia have never been observed. A Pilger film claimed to show a Hawk bombing Indonesia, but it turned out to be flying over Lincolnshire. The message is that such behaviour to please Opposition Back Benchers can do untold damage to our ability to sell overseas.

Perhaps the most depressing aspect of the Opposition's lack of coherence is their lack of interest. I accept that my roadshows are often dull and boring and may be of little interest to hon. Members generally. Nevertheless, when I brought my roadshow to the House of Commons, precisely six Opposition Members turned up, despite the efforts of the hon. Members for Middlesbrough and for Wolverhampton, North-East (Mr. Purchase) to galvanise their colleagues to come and see what opportunities they could gain in their constituencies. Opposition Members may have been too busy doing other things but, although my hon. Friends are basically used to a life of idleness and sloth, 60 of them managed to come along and listen to what we had to say. That gives some idea of Opposition Members' interest in trade.

The final evidence of that is that a Labour Government's major platform, as I understand it from travelling round the world at 35,000 ft, would be devolution. What on earth will that do for the confidence of investors in our country? What will it do to galvanise people to increase productivity, competitiveness and trade in our nation if the House spends five years considering its navel and trying to devolve its powers to an endless series of institutions around the country, which would then regulate and interfere with business?

Another aspect that I should mention is Opposition Members' naivety. The hon. Member for Wrexham (Dr. Marek) was kind enough to say in Korea the other day that, were there a change of Government, the Labour party would continue to follow our policy on attracting investment and supporting exporters, but with two provisos: the introduction of a minimum wage and signing up to the social chapter.

Much has been said about the dangers of a minimum wage and its effect on companies' competitiveness, but what concerns me most is the massive burden that it would put on companies' costs. It would wipe out family credit and the basis on which the state currently supports lower-paid people in jobs that companies can afford to give them. It would place the burden on employers and, because of its knock-on effect on wage levels, its effect on profits in many industries could devastate companies' competitiveness and profitability.

What is the point in Opposition Members claiming that greater capital allowances should be set against profits if they then destroy companies' profits by introducing a minimum wage? If the answer is that the minimum wage would be at such a level that it would not matter, why go ahead with it? The effect of frightening the children will certainly be of no benefit when, in this case, the children will be those who consider inward investment opportunities from overseas.

Photo of Denis MacShane Denis MacShane , Rotherham

indicated dissent.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

The hon. Gentleman shakes his head again. He would soon find that many of the investors from the countries that I mentioned would think twice before investing in his constituency.

Photo of Denis MacShane Denis MacShane , Rotherham

This is a wonderful knockabout political roadshow, but it does not have much to do with the motion.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. It is entirely to do with the motion. I am the judge of that.

Photo of Denis MacShane Denis MacShane , Rotherham

No wiser judge could there be. It is a pleasure to serve under you, Mr. Deputy Speaker.

What are the wage levels of inward investing companies from Japan, France and Germany? Are any likely to equal the appalling poverty wages that are now the cause of the minimum wage debate in Britain?

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

What does the hon. Gentleman mean by appalling poverty wages in this country? What evidence has he for that? Let me give him an example from an industry of which I have personal experience—the shirt industry in Northern Ireland. Many of the ladies working in that industry have for generations been the breadwinners. [Interruption.] It is not funny.

If a minimum wage of £4 an hour were introduced, as has been demanded by the general secretary of the Transport and General Workers Union, it would have a devastating effect on the Northern Ireland shirt industry. If the hon. Gentleman does not believe me, he can come with me and ask those in the garment industry, the multinationals and the local companies. They would have no option but to close their businesses and go elsewhere.

The whole basis of help in low-paid work should be through the family credit system, not putting burdens on the employers which they cannot afford. The hon. Gentleman would have to live with the consequences of a minimum wage. Unless he could find alternative work for those ladies—I do not know what he expects they would do—he would have to live with the unemployment consequences. That can stand up to investigation from any source.

Photo of Mr Tom King Mr Tom King Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament

Is my hon. Friend not rather wasting his breath on this matter? What is the point of berating Opposition Members, many of whom know in their hearts that the introduction of a minimum wage and the social chapter, which they have opposed in the past in discussions that I have had with them, would do great damage? But the problem that they face is that that is a union requirement. In the party that poses as the party of one member, one vote, as has now become clear, at their party conference, the policy-making body, 70 per cent. of the votes are with the trade unions. If the Labour party were to come into power, we would have a union-directed industry and trade policy.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

My right hon. Friend is right. That is the trade-off, of course. The trade-off may be fine between the union bosses and the Labour party, but it is not so fine if one happens to be a shirt maker in Derry.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

No, I have given way to the hon. Gentleman twice. The hon. Gentleman can make his own speech. It is not as if we are short of time.

The social chapter poses the simple question—can we or can we not afford it? The answer is that we cannot.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

Having heard what the hon. Gentleman has just said, I think that it would be best if he stayed in his present position. Not only can we not afford it; nor can anyone else in Europe.

UNICE, the European Union equivalent of the CBI, said that it was widely accepted today that one of the causes of European companies' loss of competitiveness and the persistence of a high level of unemployment arises from the unduly high level and/or extremely rigid character of social and labour regulations inherited from the past. In the Financial Times in December 1993, the former President of the Commission, Jacques Delors, said: a social opt out for Britain would set up one country as a paradise for foreign investment, particularly Japanese investment". For once, he was right.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

No, I am coming to the end of my speech and the hon. Gentleman can make his points in his own speech.

The problem with Labour trade policy is that it is the bland leading the blind. If it were ever to come about, it would soon undermine everything that has preceded it.

I close where I began. As I have said, I have travelled some 355,000 miles selling for Britain and there is no greater privilege than to be Her Majesty's Minister for Trade, and no greater enjoyment because we have the world's respect and friendship, the right strategy, the right team and the right policies, and because, once again, when we are selling Britain we are selling the best that the world has to offer.

Photo of Stuart Bell Stuart Bell , Middlesbrough 4:59 pm, 3rd May 1995

It is always a pleasure to rise at the Dispatch Box with you, Mr. Deputy Speaker, in the Chair and with the Minister for Trade opposite. It is typical of the incompetence of the Government that they bring their most successful Minister, with the best tale to tell on our exports, to the Dispatch Box on a Wednesday evening before the local elections, with a House that is not empty but less full than usual. That is the difference between the optimist and the pessimist.

The Minister has a good story to tell on exports and trade, and he touched on it in relation to his in-house workings. Those who have followed the in-house workings of the Department of Trade and Industry and who know of its endemic difficulties with Her Majesty's Treasury will understand the progress that he has made in the past two years. That is not just my opinion; it is shared by business men to whom we speak. I do not have the pleasure or honour of flying at 30,000 ft throughout the world as often as the Minister has, but he has a good tale to tell and, as he knows, I am the first to recognise it.

When the Minister talked of a demoralising tide of despair, I thought that he was talking about Conservative Members who are not here tonight, but it transpired that he was talking about the press. He talked about his visits to Anglo-Saxon countries and said that he sought from the Trades Union Congress a legacy of export promotion in relation to the structures that had been left in those countries by British and Anglo-Saxon influence. He will recall, however, that after the last war it was Ernest Bevin who gave the Germans a structure of trade unionism that has lasted for 50 years and served that nation especially well.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The Ernest Bevin model, however, was one of non-demarcation. In Germany, that model involved having one trade union for a whole industry. It was demarcation that destroyed, for example, this country's shipbuilding industry, about which we have heard so much this afternoon.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I am glad that I gave way to the hon. Gentleman. He knows that I follow his interventions in our debates, but I was looking forward to one three speeches from now. It has taken a while for us to get our trade union structures to their present position. I shall come to the point made by the right hon. Member for Bridgwater (Mr. King) on the influence of trade unions in the Labour movement. The Minister may wish to criticise the legacy of the TUC, but we must remember the legacy to Germany.

As my hon. Friend the Member for Rotherham (Mr. MacShane) has said, privatisation is a good subject for the Government to knock about in the House. When we had United Kingdom plc, revenue and taxes were coming in from British Telecom, British Gas, the water industry and other industries that were doing well. When we sold off those family heirlooms, we lost that revenue. The Minister talks about the enthusiasm for privatisation in other countries. I wonder whether the people to whom he talks look at the pots of gold that are available in share option schemes, the remuneration of directors and the great temptation of turning a public monopoly into a private monopoly, with all the gain that goes with it. We should be cautious when we consider privatisation in the round. Ten years after the event, we should consider the state of regulation of the privatised industries and their need now to be re-regulated and reconsidered in the interests of the consumer. We should be a little cautious before we say what a wonderful success story privatisation is.

The Minister was bullish on the export of capital goods. We are happy that such exports have increased in the past few years, but if there is a distortion in our balance of payments it has been triggered by a surge of capital equipment imports. The country does not have the base to provide the capital equipment to cover growth of 3 to 4 per cent. as we come out of recession. That is not my comment; it comes from the Financial Times, which says: The recent strengthening in UK company investment appears to have triggered a surge in imports of capital equipment, which were nearly 5 per cent. higher in the three months to January than in the previous three months. I am not entirely sure, therefore, that our record on capital goods is as good as the Minister says it is. Yes, we are exporting capital goods, but, equally, imports of capital equipment are off-setting that.

The Minister was again selective in his choice of export figures.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

The hon. Gentleman makes an important point. He is right to say we import certain capital goods, such as machine tools, printing machines and plastic moulding machines, but the point that I was making is that our share of capital goods exported to non-OECD countries is greater than that of France or Italy, which are well known as machine capital good producers. We have many other strengths.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I am grateful for that. I take the Minister's point but, if I may, I shall continue the quote from the Financial Times:Investment spending tends to suck in more imports than consumer spending, because Britain"— these are the key words— has a relatively small capital goods industry to satisfy demand. The Minister was buoyant about exports and bullish about the improvement in our exports. Statistics produced by the Central Statistical Office show that in 1994 exports from this country amounted to £135 billion, whereas imports amounted to £145 billion—a visible imbalance in trade of £10 billion or thereabouts. Fortunately for Britain—we recognise this fact—there was an invisible balance in such items as net investment income amounting to £10 billion, which meant that the overall deficit totalled £371 million.

The Treasury forecasts for 1995 and 1996 are that there will be a surplus of £0.8 billion in 1995 and £0.7 billion in 1996. After 17 years of Conservative government, that is hardly an appropriate balance of trade. The Minister may claim, and I give him, the credit for the important increase in exports, but we are importing more. The 1.5 per cent. increase in exports from December to January was matched by a 6 per cent. increase in imports. That is the balance that we seek to achieve in this debate.

When, in his intervention, the hon. Member for Gordon (Mr. Bruce) mentioned devaluation, a few Conservative Members dismissively shook their heads. I do not spend much time reading the 1992 Conservative manifesto at 4 am. I always prefer to read "Das Kapital", and possibly in French as that tends to send me to sleep quickly, but the Conservative manifesto can have the same effect. If my memory serves me right, it stated clearly that inflation could be contained only by staying within the exchange rate mechanism. The point made by the hon. Member for Gordon should not, therefore, be dismissed so lightly.

I shall, in modesty, not comment on the credentials of the members of the shadow Cabinet, which the Minister went through with such meticulousness. I often wondered why I was not in the shadow Cabinet, but now I realise that my curriculum vitae does not read as well as those of my colleagues. The hon. Gentleman talked about inconsistencies. May I enlighten him on the fact that one of the things that Labour Members—certainly Front-Bench Labour Members—seek is compatibility of objectives? We recognise the difficulties in opposition, as opposed to the difficulties in government, and we seek to consider our objectives and to make them all compatible. We believe in full employment. Clearly, therefore, we would not wish Lloyd's to be declared insolvent with the loss of 60,000 jobs. That is one example. The same compatibility of objectives would apply to the aircraft industry and other industries.

When we last discussed the subject we had an interesting debate about the national minimum wage and family credit and about the shirt manufacturers in Derry. The Government made some valid points, and the right hon. Member for Bridgwater mentioned the trade union connection. I assure the right hon. Gentleman and the House that there is no trade-off between our relationships with the unions and the development of our policies. We shall not develop the idea of a national minium wage as part of a trade-off with the unions concerning the internal reorganisation of our party. We support a national minimum wage because we believe in the social justice of that policy. That is the essential fact.

Why is there so much emphasis on the national minimum wage? I have here some recent statistics produced by the Library that show that the average gross earnings of employees in Great Britain increased by 3.1 per cent. in the year to February 1995. The underlying rate, taking account of staged agreements and bonuses, is estimated to be 3.5 per cent. That increase puts the actual level of the average earnings of full-time employees at about £335.60 a week, or £17,400 a year.

If those are average earnings in our country, who could complain about a national minimum wage for those far below that level, who deserve a better chance than they are getting?

Photo of Edward Garnier Edward Garnier , Harborough

Is that not precisely the point? Those wage increases have been made without the so-called assistance of a national minimum wage, because managers and employees have been able to work out proper rates among themselves. The hon. Gentleman's party seeks to introduce a Government, state-centred imposition. We have seen what happened in Spain and France. How can he possibly argue for a national minimum wage? Will he also bear in mind not only the experience of people in Northern Ireland, whom my right hon. Friend the Minister mentioned, but those who work in the manufacturing sector in Leicestershire, my county? Does the hon. Gentleman not understand that the trade-off involves not the trade unions, because they do not put themselves out of work, but the people upon whom the national minimum wage would be imposed, who would lose their jobs? That would be the trade-off.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I shall briefly repeat my point about the compatibility of objectives. If we believe in full employment, we are not in the business of making people with low wages unemployed.

One relevant factor in the economic debate is the enormous disparity in the United States between the very rich—and even most people who actually work—and those at the bottom. We should say that we shall not allow that to happen in this country, and that as a matter of social conscience and justice we shall have a national minimum wage that assists those at the bottom end, but that will not have the consequences that have been predicted for the shirt workers of Deny or for individual workers in Leicestershire.

There will be no trade-off with the unions, and there will be a proper valid national minimum wage. I shall return to the social chapter in a moment.

Photo of Mr Tom King Mr Tom King Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament, Chair, Intelligence and Security Committee of Parliament

I am grateful to the hon. Gentleman for addressing that question, but I do not think that his answer has quite satisfied the House. If employers pay the wage that the job will support and that they can afford, and keep somebody in employment, under family credit the state undertakes to pay the balance. The state takes on the burden of ensuring that people do not live in poverty. If we move to a national minimum wage the employer will be required by law to pay it. The industries that cannot sustain such wages will simply close down and there will be unemployment. I note that, despite all the other assurances in the new clause IV, there is no pledge of full employment.

Photo of Stuart Bell Stuart Bell , Middlesbrough

We have debated that before. The Minister will recall a debate about Derry that followed a Question Time performance by my hon. Friend the Member for Livingston (Mr. Cook). We looked into the question of the shirt workers in Derry and the relationship between the national minimum wage and family credit at the time. It was part of the process of debate and dialogue within the party, which will see a national minimum wage emerge properly and to the satisfaction of those who work with it—[Interruption.]—but obviously not to the satisfaction of Conservative Members; we recognise the limits of our powers of persuasion.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

The hon. Gentleman seems extraordinarily sanguine about the effects of the national minimum wage. Will he explain why 1,000 German companies have chosen to come to this country, making massive inward investment, to escape being so severely penalised by the minimum wage?

Photo of Stuart Bell Stuart Bell , Middlesbrough

My convictions about the national minimum wage arise out of my 17 years' experience of France, where there has been a minimum wage for many years. Unemployment in France is not caused by the minimum wage.

As for the hon. Lady's second point, I should be grateful if she would send me the evidence about those 1,000 companies that have left Germany to set up here because of the national minimum wage in Germany. I should be glad to read and analyse that evidence, and to publish it and send it to the Labour party's various policy bodies, so that they could take it into account.

The Minister vaunted the number of jobs created by inward investment, and his Back Benchers said, "Hear, hear." Let me remind him, again using the statistics issued by the Library on 1 May—not long ago—that although the work force in employment was 15,000 higher in June 1994 than it had been in June 1993, it was still 106,000 lower than in June 1979.

In our country today there are 106,000 fewer workers than there were when Labour left office. Is that not a remarkable statement? Those statistics put into context what the Minister said about the number of jobs created by inward investment in relation to the totality of the economy.

I am not one of the cynics who believe that such debates are arranged on a Wednesday night deliberately, as a kind of fag-end debate. This will he one of the best debates in a parliamentary week that will culminate in the local elections. When I prepared my speech I assumed that the debate had been chosen for tonight to coincide with the appointment of Renato Ruggiero as head of the World Trade Organisation, and his taking up of his post.

It also occurred to me that the debate might have been arranged for tonight because of the meetings taking place in Vancouver between the Japanese and United States Ministers for Trade, to deal with their multilateral arrangements. Or perhaps the real reason was so that the debate would coincide with the annual quadrilateral meeting between Japan, the United States and Canada to review global trade issues.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

As my hon. Friend is talking about inward investment, may I tell him that the more substantial inward investors in my constituency appear only too willing to offer employees reasonable terms and conditions of employment? I shall give two examples, the first of which is IBM, which was brought to Greenock by the late Hector McNeil, the Labour Member of Parliament. The second is National Semiconductor. Those companies are major local employers, and they are perfectly willing to pay reasonable wages and offer reasonable terms and conditions.

Photo of Stuart Bell Stuart Bell , Middlesbrough

May I please my hon. Friend by reminding him that in the 1970s, as a poor lawyer of modest repute, I went to National Semiconductor at Greenock and saw the plant and the investment, and what the company was prepared to do in our country. That was under a Labour Government, and nobody ever told me that National Semiconductor had come to Greenock because the men did not work well, or that it feared the social chapter or a national minimum wage. The company was there because it believed in this country. I shall develop that theme a little later.

As I was saying, I had thought that the debate might have been arranged to coincide with the "quad" meeting, or so that we could discuss the consolidation of the World Trade Organisation. I hoped that the Minister would discuss with us the unfinished business from the GATT Uruguay round. The meetings that will take place in Vancouver will discuss global rules for foreign investment. I am sure that Ministers will have one eye on that debate and conference while keeping their other eye on the House of Commons.

I shall dwell on the issue of trade in an appropriate and proper context that has more resonance with the public at large. The value of our currency has steadily declined from 1981 to what has now become its lowest point. Our exporters require to be buoyed up by a weak rather than strong currency. The French have become the world's fourth largest exporter. We are the fifth largest exporter, but the Minister does not like to dwell too much on the position of the French. The French position has been achieved on the back of a strong currency within the framework of the exchange rate mechanism.

The Government can advance our exports only by keeping the price of our money competitive. I do not entirely understand why they place so much emphasis on the national minimum wage or the social chapter when the policy that they follow is to keep our goods competitive by consistent devaluations of the pound. In order to have those steady devaluations, they need a higher interest rate than necessary.

The country has picked up the fact that a drifting currency reflects a drifting Government who sail along on a wing and a prayer. They balance the loss in value across the exchanges and they attract money back into the capital account with higher interest rates to stem the inevitable rise in inflation. That is a disjointed and unstable policy, which may increase exports by about 1.5 per cent., but increases imports by 6 per cent. so that invisible earnings must balance the equation and reduce the overall deficit. It is remarkable that that should pass for policy.

As we know, however, in the kingdom of the blind, it is the one-eyed man who is king and in the fool's paradise that seems to be Government Departments Ministers are complacent and have a feel-good factor that is not apparent in the rest of the country. The hon. Member for Gordon touched on the fact that people do not feel good. Since we withdrew from the exchange rate mechanism—the so-called black Wednesday scenario—the Conservative party has been unable to get beyond 26 per cent. in the polls. Never in the history of polling have a Government stayed within the same low parameter; never did so much confidence ebb away in a single day; never was there a more stark and blatant example of Government failure. That failure was of such a monumental scale that it could not be disguised, even by this Government.

Photo of Edward Garnier Edward Garnier , Harborough

What is the Labour party's policy on exchange rates?

Photo of Stuart Bell Stuart Bell , Middlesbrough

On exchange rates rather than exchange rate—in relation to the yen, the dollar and those currencies currently within the European exchange rate mechanism—we believe—[interruption.] I want to get on with my speech. [Laughter.] It is clearly the view—

Photo of Edward Garnier Edward Garnier , Harborough

Would the hon. Gentleman like time to think about it?

Photo of Stuart Bell Stuart Bell , Middlesbrough

We think about it all the time. We think about the relationship of our exchange rate with our exports and what we should do within the framework of the exchange rate mechanism. We think about what we should do when there is a movement within Europe to a single currency. We think about what is in the best interests of our country, not our party. It is not a matter that we take lightly, but something that we think about all the time.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

Conservative Members clearly do not understand that the strength of any currency is a simple reflection of the medium and longer term of the strength of its economy. We therefore see in our country the falling value of the pound against the mark. If the dollar were not so weak for political reasons—Japanese trade—our exports would not be so buoyant.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I shall make a final point to the hon. and learned Member for Harborough (Mr. Garnier) that follows on from the point made by my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase). It does not signify a strong economy when the Government cannot countenance or dare to re-enter an exchange rate mechanism with a 15 per cent. margin at either side and a 30 per cent. margin in terms of currency.

Photo of Edward Garnier Edward Garnier , Harborough

Will the hon. Gentleman give way?

Photo of Stuart Bell Stuart Bell , Middlesbrough

I should like to get on with my speech and perhaps the hon. and learned Gentleman can contribute later.

The fruits of devaluation and black Wednesday are dark fruits that turned the entire public opinion against the Government. Yes, there have been rising exports and a rising growth rate, and the Government have been given a happy-hour feeling that will last until inflation and interest rates rise and until other European nations catch up with us, as they are already doing within the framework of the exchange rate mechanism. The Government are desperately anxious to ensure that, as the pound drops in value, interest rates do not rise too much to give us yet another recession. That policy, dressed up in a different garb, has given us two booms and two busts in the past 16 years.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

I hate to bandy statistics across the Dispatch Box because it does not get us anywhere very much, but I must challenge the hon. Gentleman's assertion that exports are rising at 1.5 per cent. and imports at 6 per cent. The volume of non-oil exports is growing at an annual rate of 12.5 per cent. and imports are growing at a rate of 8.9 per cent. That turns what the hon. Gentleman was saying entirely on its head. Goodness alone knows where he got his figures.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I am always grateful for interventions from the right hon. Gentleman. My figures come from the first release of the Central Statistical Office—reference CSO 95.72–13 April 1995, prepared by the Government's statistical service. On the second page it states: In the three months to January, exports increased by 1.5 per cent. and imports by 6 per cent. Is the right hon. Gentleman objecting to the Central Statistical Office? The paper is not a secret document, but is issued by the Central Statistical Office at Great George street. I think that the Government will regret that they privatised that service. We know the Government's policy; we have seen the Government's policy—it operates on a wing and a prayer and does not achieve the sort of base that will endure.

I had a longer speech prepared, but I am aware that other hon. Members wish to contribute. With your leave, Mr. Deputy Speaker, and the leave of the House, I shall seek permission to wind up later.

I hope that we have quietly, investigatively and using figures from the Central Statistical Office, shown that the Government do not have a policy. They have a pious hope that the illusion that they have created—that, because we have increased our exports, we have strengthened our economy—will last to the next general election. The Government have been seen through since black Wednesday. Holding the debate tonight simply shows that they are not even competent enough to pinpoint their own exports achievements. I notice that the Prime Minister tried to gain some advantage yesterday in Question Time by basking in the glory of the Minister for Trade, but that will not be enough. Tomorrow there will be another millstone around the Government's neck, but the biggest millstone of all will come at the next general election.

Photo of Sir John Cope Sir John Cope , Northavon 5:28 pm, 3rd May 1995

In introducing the debate, my right hon. Friend said that he was fortunate to be the Minister for Trade. I agree, but I also think that the country is extremely fortunate to have him as Minister for Trade. I was very flattered to be mistaken for him the other day by my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant), who has more hair than both of us put together.

I want to draw attention to one particular British export success both because I think that it is worth drawing attention to in itself and because I believe that it illustrates much wider lessons on the subject of this debate. Apart from anything else, it illustrates the message of partnership in the 1990s, about which my right hon. Friend spoke.

The export success that I want to highlight is that of the British Aerospace airbus. British Aerospace is one of the companies that we denationalised, though most people have forgotten that and do not think of it as a privatised company any more. I hope that that means that it will never be in danger again. By any standards, the success of the airbus has been remarkable and the benefits to the British economy correspondingly impressive.

Airbus accounts for nearly 1.5 per cent. of Britain's total manufacturing exports. That is a contribution of over £1,000 million to the trade balance. It is estimated that in the United Kingdom, some 25,000 people work on the airbus in over 300 different British companies. It is estimated that about 125,000 people in Britain are supported by the airbus programme. It is particularly relevant to this debate on exports to point out that the vast majority—over 80 per cent.—of airbus orders are from customers outside the four countries of the partnership. Over 1,250 airbus aircraft have been delivered to over 120 operators worldwide and Airbus Industrie now holds second place in the world's large civil aircraft market and last year actually outsold Boeing.

As an example of the danger of using part-year statistics, as the hon. Member for Middlesbrough (Mr. 'Bell) did a few moments ago, I recall that at the Farnborough airshow in the autumn, a high official of Boeing dismissed the figures for the first eight months of the year, in which Airbus had outsold Boeing, and forecast that for 1994 as a whole, Airbus would go back down to 30 per cent. of market. Of course, the trend held up and Airbus outsold Boeing—the first time that any company in the world has outsold Boeing in the large civil aircraft market for 50 years.

Photo of Denis MacShane Denis MacShane , Rotherham

Would it not be a wonderful example of the strength of the airbus if, as he flies around the world, the Minister could occasionally land in one? Instead, because, I presume, he flies with British Airways, he mainly has to land in Boeing aircraft, because our airline company will not support our aircraft industry by buying the airbus.

Photo of Sir John Cope Sir John Cope , Northavon

Yes it would.

At the same time, it is worth pointing out that when Airbus started 20 or 25 years ago, Lockheed and McDonnell Douglas were, with Boeing, the big three in the market. Lockheed no longer produces commercial aircraft and McDonnell Douglas has dropped below 20 per cent. of the market, whereas Airbus has risen and taken McDonnell Douglas' place. Those are impressive statistics and the congratulations and, indeed, the thanks of the nation and the House should go to British Aerospace and the other partners in Airbus.

These days, there is never any time for resting on laurels. Instead, it is important to reflect on how that success has been achieved and hence to understand how to build on it. Aerospace has long been one of those businesses in which Governments are inextricably involved and the sad fact is that, in 1969, the Labour Government withdrew from the fledgling Airbus partnership and for nearly the first 10 years we were involved only through the private sector because of the initiative of Hawker Siddeley Aviation.

That mistake by the Labour Government has cost this nation dear. It is the reason why we have a 20 per cent. share, whereas France and Germany have 37.9 per cent. each. At the time the Labour Government withdrew we, like France, were to have had a 37.5 per cent. share and Germany was intended to have the remaining 25 per cent. The fact that the French have retained their large share goes a little way to explain the success of French exports about which the hon. Member for Middlesbrough spoke.

We benefit from Airbus today because of the private sector involvement by Hawker Siddeley on the one hand and the technological skill of our companies on the other. I believe that it is extremely important, and I know that the Department of Trade and Industry realises this, that the British Government do not hesitate again in their commitment to Airbus.

The statement by my right hon. and learned Friend the Secretary of State for Defence on the future large aircraft last December was very important in that respect, particularly because it said that British participation was conditional on the FLA being under the management umbrella of Airbus. I believe that the Airbus management set-up has been an important contributory factor in its success.

Airbus Industrie itself, the group company, is in a French legal form known as a GIE, or groupement d'intérêt économique, which is required to make no profits and losses but pass them through to partner companies in the four countries. The group company has relatively few employees, most of whom deal with sales, customer services and so on. Partner companies do the manufacturing and most of the basic research and design so that British Aerospace retains for us its full capacity in research and design. Each partner bids for the various blocks of work and carries the costs of the blocks that it is awarded using funds that it provides.

The bidding process—indeed, the whole structure—has proved very effective both technologically and financially. However, the global marketplace, especially in aerospace, remains very tough. The world recession has hacked down airline business and hence orders for airliners. That has coincided with the ending of the cold war, with its effects on military budgets.

The prospects are for a recovery in civil markets because huge increases in world travel are forecast. The DTI forecasts, with a combination of accuracy and very broad margins, a demand for new aircraft of between 14,700 and 18,100 over the next 25 years. The two figures are remarkably precise, given how far apart they are. On any basis, it is a valuable market but competition is fierce, and not only from Boeing. The aerospace industries of Japan, Taiwan and other countries are growing and they are keen to get a share of the market if they possibly can. That is why Britain must make the maximum use of our involvement in Airbus.

We cannot compete in such global markets and keep up our standard of living unless we co-operate with our neighbours. Many countries on the Pacific rim can already compete with us through cheap labour and so on over wide areas of technology and with great skill and determination. The British people will not live better than the people of those countries and have better pensions and social services for the old and unfortunate, better education for our children and better health care for our sick, unless we develop and exploit to the full higher technology industries such as aerospace, where we have the expertise and proven ability to compete.

We have that ability to compete at present but competitiveness is a war that is never over. In the phrase that was used of the Labour conference so many years ago, it has to be fought, fought and fought again. That war must be fought on many fronts—the efficiency of management, the skill and flexibility of the work force, technological innovation through well-directed research and, above all, determination. Those battles have to be fought against overseas competition but also within Airbus because of the bidding system that I mentioned earlier—the partner companies all want larger work shares.

If we falter, as we did in 1969, others will take up the running at once. It is not just a question of thinking that it is a good idea to go for higher technology. If there proves to be a greater determination on the part of Germany and Deutsche Aerospace Airbus, for instance, than there is on the part of the United Kingdom to attain and keep technological leadership, we shall inevitably slip back. Given the frantic pace of technological advance today, any slowing down can quickly lead to a loss of technological leadership and hence an inability to participate in future partnerships.

I know that it is tempting to say, as some of my hon. Friends and Opposition Members do, that we might be better off on our own. Many companies thrive as sub-contractors to the big boys, and the argument is that 'we could do the same. That is all very well for some niches, but we must remember that only the partners in Airbus, for example, bid for the main contracts. If we were not in the partnership, we would not be the leaders in wing technology that we are and, if we fell out of the partnership, we should not be in the future.

When the pressures of unemployment are as great everywhere as they are today, the forces of protectionism will remain strong despite the new world trade organisation that is coming into being. It is true that the new world trade agreements, especially that between the United States and the European Union in July 1992, limiting Government support for the development for civil aircraft, make a difference to what Governments can do, but there is no doubt that Government support of every kind remains, and will remain, important.

I greatly welcome the DTI's involvement, with the Society of British Aerospace Companies, in the "competitiveness challenge" and applaud the Government's civil aircraft research and demonstration programme. Launch aid loans have been essential and, incidentally, a good investment by the Government. So far, about 80 per cent. of the launch aid loans for the A320 have been repaid and I am sure that they will be repaid in full with interest and continuing royalties. The Government are also committed to the national strategic acquisition plan for aeronautics.

That all proves the Government's willingness to back the aerospace industry. Doing so is not only desirable for constituencies such as mine in the mid-west of Britain where the aerospace industry is strongest in many respects, but essential for the future standard of living of all our people.

The airbus is a good example of success in international business which can continue. It is a practical example of successful partnership among European countries although outside the EU framework. There is no better example of the fact that Britain can compete in world markets and is now successfully doing so.

Photo of Mr John Gunnell Mr John Gunnell , Leeds South and Morley 5:43 pm, 3rd May 1995

The inward investment programme has been a success. My hon. Friend the Member for Middlesbrough (Mr. Bell) was quick to say so, and I agree that we have been successful in attracting inward investment in recent years.

I was surprised that the Minister began by suggesting that, although he would say how well we were doing in terms of inward investment, the Opposition would whine. He implied consistently that inward investment was not welcomed by everyone and that success in this sphere was something on which we take a narrow party political view. I myself worked for a number of years to get inward investment; I therefore recognise success, and I certainly recognise the difficulties sometimes involved in achieving it. The competition is tough. It is amazing that the Minister should say that we wish to decry the investment success that has been achieved.

Clearly, we are the most popular European location for overseas companies. A series of successes has brought other successes in its train, but the task at hand, which has yet to be mentioned in the debate, is how we retain our position. It is not a matter of dispute or party politics—we wish to continue this country's success in attracting investment from Europe, North America and Asia. The parties may see the future differently, but I should have thought that we all want companies to invest in this country. Therefore, to suggest that there is a difference of opinion about wanting to achieve inward investment is not helpful.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

The hon. Gentleman cannot get away with that. I did not for one moment suggest that the Opposition were not in favour of inward investment; I said that their policies would deter it. I know of the work that he has done. However, only four years ago, the Trades Union Congress passed a motion saying that Japanese culture was alien to us. I am pleased to find that that has now been dispensed with. The hon. Gentleman should not gild the lily of what I said.

Photo of Mr John Gunnell Mr John Gunnell , Leeds South and Morley

I shall accept what the Minister says and move on to a different theme.

It is understandable that the Government should laud their own role but they should not downplay that of others. Inward investment is achieved, not by Government policy alone but by a combination of factors and players. Unless the factors and players work together, investment is not forthcoming. Therefore, the way in which we conduct ourselves in the House must be such that it encourages people to work together.

It is also understandable that the Minister uses the success of inward investment as proof of the success of the Government's employment policies. He suggested that the Government's policies were somehow responsible for that success and that those which we have advocated—the social chapter and the minimum wage, specifically—would defeat inward investment and cause us great difficulty. The evidence to support that notion is very slight and, when challenged by my hon. Friend the Member for Rotherham (Mr. MacShane), the Minister could not produce the necessary evidence. I have met representatives of many Japanese companies, none of whom raised that issue with me.

It is absolutely certain that investment in this country is seen as investment in Europe. It is axiomatic that the reason companies come in this country is not only because of the British market but because of the European market. Therefore, Euroscepticism, when pronounced from Southend or Bolsover, is much more very damaging to inward investment. Some companies have become aware in the past year or two of the debate in which some Conservative Members have raised fundamental questions about Europe and shown that they do not wish to be part of the European Union. That is the issue raised by potential inward investors.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

I understand why the hon. Gentleman seeks to strike a balance by mentioning Southend and Bolsover, but is not the real cause of worry to potential investors in this country the members of the Cabinet who share the views to which he referred and who are undermining confidence in the Government's policy and shedding doubt on the continuation of the Government's commitment?

Photo of Mr John Gunnell Mr John Gunnell , Leeds South and Morley

That is very much the case. Overseas companies understand and enjoy the role of my hon. Friend the Member for Bolsover (Mr. Skinner) but they worry that Euroscepticism has taken hold in the Cabinet. They are anxious that we should maintain our position in Europe.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The hon. Gentleman is absolutely right when he says that countries from outside the European Union come to the United Kingdom to invest because we are in the Union. Does the hon. Gentleman accept, however, that we attract 40 per cent. of all investment in the European Union, which now consists of 15 nations? I suggest that a minimum wage would deter people from investing in the United Kingdom. The hon. Member for Middlesbrough (Mr. Bell) more or less accepted that by saying that if Labour were in office, it would set the level of the minimum wage so low that it would not deter investment. The question then rightly arises, as my right hon. Friend the Minister for Trade has asked, what is the point of having a minimum working wage if it is so low that it will have no effect?

Photo of Mr John Gunnell Mr John Gunnell , Leeds South and Morley

My experience from working with Japanese companies is that they generally pay a wage that is considerably above the minimum that we have spoken about, or the minimum wage that has been suggested to us as a possibility by Conservative Members. Many of the companies with which we deal are the stronger companies in their economies; that is almost automatically the case if they are thinking of investing overseas. I accept that labour costs are an important factor for them and that they weigh those costs carefully. However, for the companies with which I dealt, especially the major companies, labour costs here were no problem at all. If one takes on investment from a much smaller Japanese company, labour costs may become a factor. I do not believe, however, that the introduction of a minimum wage would have the startling effect on inward investment that Conservative Members suggest.

It is important that we look at the factors that have brought success because they need to be analysed, at the current state of inward investment because it is changing, and at the need for an inward investment service in the future. As my work was done through the Yorkshire and Humberside development association, which is now known as a development agency, most of the past and future examples on which I shall draw relate to Yorkshire and Humberside.

Having accepted that European membership is vital, I have to say that it is impressive that we have gained a 40 per cent. share of inward investment. Why has this happened? One major factor is completely beyond our control. Our language is an enormous help in attracting investment. English is the first overseas language taught in the Japanese education system because it is seen as so important in the world. In much of the far east, the American influence at the end of the war has led to English being a language that is widely spoken. In much of Europe, it is the second language. The Government cannot take credit for the language factor, which is a major influence in inward investment.

The language factor very much outweighs the other factor that we cannot control—our geographical position. In a sense, we are peripheral. The volume of investment that we have attracted is all the more significant when one recognises that we are geographically peripheral in the Union.

We must look at the factors that are within our control—the decisions made. We must ask whether we are organising our attraction of inward investment correctly, what factors are effective and what could be made more effective. We have been successful because we have managed to bring together the role of central Government through the Invest in Britain Bureau, the role of the regions, either through the Scottish and Welsh development agencies or through the regional development organisations, the role of the local authorities and the role of the private sector. For investment to work, all those four players need to be in place. Our successes have been due to the fact that each has played its part.

The IBB has been effective in terms of financing inward investment. The finance for the IBB is a relatively small part of the DTI budget, but it has been effectively spent. The bureau has operated well in terms of its co-ordination of regional development organisations. Over the past 10 years, there have been many discussions about regional development organisations and about whether they are the right way in which to work.

When I was first involved in attracting investment from Japan to Yorkshire and Humberside, the Minister who was responsible for inward investment was the right hon. Member for Kingston upon Thames (Mr. Lamont) who subsequently went on to other activities. He twice invited me to the DTI to suggest to me that as a regional organisation, Yorkshire and Humberside development association should spend as little as possible in Japan. He did not believe that one attracted the major Japanese companies by operating on a regional basis. We started off that way.

Subsequently, the policy changed; we were encouraged to spend more time in Japan and that was successful in terms of the investment we brought in. A proper balance has been found between the role of the regions and the role of the centre. That is a matter that must always be kept under review. One has to have co-ordination at the centre—the IBB could do with more opportunity to carry out research—but the marketing must be shared between the centre and the regions. I shall come back to that point.

It is important to involve local authorities actively in inward investment projects. In terms of planning factors, it is true to say that every inward investment which is not achieved by acquisition involves planning factors; that is certainly true of investment on green-field sites. The role of the local authorities is, therefore, important. The regional development organisations have played a big part in getting assistance from local authorities.

All the local authorities with which I have dealt, except one, have been Labour authorities, but there has been no political difference between them in terms of their attitude to inward investment and their willingness to put themselves out, both to meet visitors from overseas and to ensure that where there are planning difficulties, they are ironed out. The role of the local authorities must be recognised; it often proves vital in terms of giving a company the right perception of the area in which they may invest.

It is also extremely important to get the co-operation of the local private sector. In the Yorkshire region, we have managed to get a great deal of financial assistance directly into the regional organisations. We have also managed to get a lot of direct contact between companies coming in to look at the region and the private sector in the region, especially companies on which overseas investors might depend for parts. Most inward investing companies are manufacturing companies so the attitude of suppliers—who are rarely confined to one region—is important.

In many respects, the work in England goes well. We should, however, make a comparison between what happens in the English regional organisations and what happens in Scotland and Wales. The Welsh Development Agency and the Scottish Development Agency can put together a more comprehensive package when they meet companies from abroad than is possible in the English regions. We should look at the difference between the way in which those agencies work and the way in which the English regional organisations work. The fact that the agencies can usually put together a property package and a training package—and occasionally a venture capital package—gives them greater strength in attracting investment.

After the next general election, I expect the Labour Government to ensure that agencies with such a range of ability are also available in the English regions. They have proved effective. It is often important to be able to bring in property and training matters when one is talking with companies about investing in a region. The ability to put together a broader package is sometimes helpful in winning the investment of companies which are considering locating in the United Kingdom, the Netherlands or Germany.

The availability of regional selective assistance is also very important in determining investment. There is obviously a close parallel between investment in the regions and regional selective assistance and its availability. It is important that there is a level playing field in Europe. We achieve such a proportion of investment without a level playing field because of subsidies. Indeed, we do not always manage to create a level playing field in the UK itself, although there have been some improvements in that direction.

When I first entered the area of inward investment, packages available in Scotland and the English regions were certainly disparate. In terms of money, that disparity has been ironed out, but in the English regions there is still a slowness in arriving at a figure to put in front of a potential investor. One of the things that we want from regional selective assistance is a quicker decision, which would enable us to give companies a very clear idea of what they may expect. That can be very helpful in nailing the investment. The quicker the decision, the better it is.

We also have to face the fact that the scene is changing among players on a global scale. First, European enlargement makes some difference to us, especially enlargement to the east. While trying to attract to the UK a motor vehicle company, for example, or a company manufacturing vehicle components, much of the competition in the late 1980s came from Spain. Now much of the competition comes from the Czech Republic. We may say that our costs are lower than those in other countries, but they are not lower than those in the Czech Republic, which is managing to come up with packages which undercut us and that may influence a number of investment decisions.

When we are attracting companies from Germany—there has been increasing interest expressed by such companies recently—factors relating to unification are clearly quite important. A company in west Yorkshire is considering a major expansion which will create another 1,000 jobs. It is comparing the advantages of investing further in west Yorkshire with investing in eastern Germany. Understandably, the German Government will be encouraging their companies to invest at home.

The changing European scene affects inward investment even more in the case of Japan. The Minister was right when he said that we attract 40 per cent. of Japanese investment into Europe, but he will know that according to recent figures published in Japan, we are ninth in the list of receivers of Japanese investment. Of the eight countries ahead of us, the United States is in third place and all the others are from south-east Asia. China heads the list, Taiwan is second and Malaysia, Singapore and Indonesia are all ahead of us. Although we still lead European investment, we are well down the Japanese list worldwide.

Japan has shifted in recent years from primarily looking to how it can get into the European market to considering expansion, especially in south-east Asia. That has caused us in turn to look more widely at the Asian market. The particular strength of the yen at the moment has caused some further additional attention from Japanese investors. I am told also, that because a number of motor manufacturers suffered fairly severe losses in the Kobe earthquake, investors have begun to look here again.

We recognise that the United States is still our leading market. In the Yorkshire and Humberside region, there has been particular interest expressed in what may be termed call centres. Financial institutions have made inquiries into the setting up of telephone centres to enable contact with clients all over the country. That would create many jobs.

The scene is changing and we need to consider how to react in the future. It is important to maintain a balance between inquiries dealt with by the Invest in Britain Bureau and those dealt with by regional organisations. I note that in Yorkshire and Humberside, 60 per cent. of inquiries bringing visitors to the country are generated by ourselves and 40 per cent. are generated by the IBB. Although both play a significant role, it is important to nurture the local, regional organisation.

Although regional organisations have received a generous settlement, there is an attempt to freeze the amount of overseas representation of regional development organisations. That may or may not be sensible, but it seems to have been decided without necessary research. Although the IBB funds research into the performance of individual organisations, there does not seem to be any across- the-board research. Research into the value of overseas placements for regional development organisations would be helpful in deciding a suitable policy in future. Serious consideration must be given to the effectiveness of marketing the UK as a whole, comparing that with the effectiveness of the separate Welsh, Scottish and English approaches to inward investment.

I want to raise one specific matter with regard to Yorkshire and Humberside: how should inward investment into south Humberside be handled in future? With the change in local government boundaries, Humberside has effectively been split into two: north and south of the Humber. There is no doubt that on any map, Humberside attracts the main inward investment in the Yorkshire and Humberside region. I argue that it is important that Humberside and the Humberside estuary continue to be marketed as a whole.

There are several reasons why Humberside should continue to be marketed with the Yorkshire region. First, the present arrangements have been extremely successful for South Humberside. Of 15 major investments into the region in the past four years, six have been in South Humberside. Over the period, there have been 16 inward investment projects there, creating or saving 1,866 jobs and bringing in £312 million of investment. With regard to new investment in green-field sites, eight new investments have brought in 1,339 of those jobs.

Secondly, there is an accepted need, which the DTI recognises, for after-care for inward investors when they first come into the country. It makes sense for those who have brought the companies in to remain responsible for that after-care.

Humberside county council's economic policy was one of its successes. It has demonstrated that there is a great deal to be said for marketing the estuary as a whole. The estuary has a great deal of potential because there is space. In particular, there is space in South Humberside for the chemical industry which is now unwelcome in many parts of the country.

There is also far less synergy between what will now be called North Lincolnshire and the East Midlands than there is between that area and Yorkshire. As the main means of export to Europe, the Humber ports are a very important factor in our regional inward investment policies.

The new local authorities which have replaced Humberside have said that they want to continue to be marketed through the Yorkshire and Humberside region. Indeed, the Scunthorpe authority has a secondee with the development agency carrying out work in the United States.

The Government should make an early decision to leave the marketing area of the Yorkshire and Humberside development agency unchanged. The strength of the IBB should be maintained, but it should be given the ability to carry out the research and marketing necessary to support the work of the regional development organisations. There should be a review of the IBB's approach to Europe because there are suggestions that it is a little limited in its vision and that too much emphasis is placed on France and Germany while other possibilities for inward investment are not sufficiently explored. For example, inward investment from Turkey is proving very successful in Leeds at the moment and there are several investment projects from Switzerland. It has been suggested to me that, surprisingly, no one in that section can speak a European language other than English.

It is very important to stop putting inward investment at risk because of the electoral tactics being used by the Conservative party. It is quite wrong to suggest that inward investment would fade if there were a Labour Government. That suggests that there would be a lack of commitment towards overseas investment, but that commitment would be just as firm under Labour as it is at the moment.

No company to which I have spoken has described the minimum wage or the social chapter as spectres. In general the companies which are going to take the step of investing abroad are strong and they do very much more than meet the standards of the social chapter.

We went through a period when trade unions seemed to have great difficulty with inward investment, but in the region in which I operated, we soon found that the unions began to compete with one another to be the sole union to sign an agreement with a Japanese company. One of the unions that served a company that we have attracted to the region has said that if it could obtain the same conditions of service for their workers in English-owned companies, they would be very satisfied.

Photo of Mr Allan Stewart Mr Allan Stewart , East Renfrewshire 6:14 pm, 3rd May 1995

I want to respond to several of the points made by the hon. Member for Morley and Leeds, South (Mr. Gunnell) about inward investment. At the beginning, he made a fundamental and important point when he referred to the importance of after-care services. We should regard the decision of a company to invest in the United Kingdom as chapter one of a fairly long book. As the world changes, much of our new inward investment will involve second and third decisions by American and Japanese companies which are already here.

I welcome the title of the debate. It enabled my right hon. Friend the Minister for Trade to make an excellent and entertaining speech. I welcome it also because there is an increasing relationship between trade policy and trade developments and inward investment decisions.

When asked about the Labour party's policy on sterling, the hon. Member for Middlesbrough (Mr. Bell) said thoughtfully that Labour was thinking about it. He also said that, with the permission of the House, he would reply to the debate for the Opposition. I expressed the hope that his thinking process might have reached a conclusion by then, because that is a fundamental issue.

My right hon. Friend the Minister of State rightly said that the Labour party's only concrete policy is devolution. If there is ever a Labour Government, there would be a Scottish Parliament in the first year of that Labour Government. That would put the hon. Members for Greenock and Port Glasgow (Dr. Godman) and for Paisley, South (Mr. McMaster), who are both in the Chamber at the moment, in a very interesting position in relation to inward investment.

They would be able to speak and vote on inward investment and trade matters in this Chamber in relation to England, Wales and Northern Ireland, but not in relation to Greenock and Port Glasgow or Paisley. Those considerations would be the responsibility of the Scottish Assembly or Parliament.

If the hon. Member for Greenock and Port Glasgow seeks to catch your eye, Mr. Deputy Speaker, he may be able to enlighten us on how he would feel in that situation. He could tell us what Labour's policy would be, with devolution, in respect of two rather important aspects of inward investment—the rate of corporation tax and the level of business rates that would be charged in Scotland.

My right hon. Friend the Minister of State, and the hon. Members for Middlesbrough and for Morley and Leeds, South, underlined the importance of inward investment. I do not need to add to what they said, except to say that, very often, with an inward investment project, the headlines are about the number of jobs. That is the easy headline.

Very often, it is the quality of the inward investment and how it relates to the local economy that is important. I am not always convinced that we achieve the fullest possible advantage of inward investment projects once they are here. However, there is no doubt that our membership of the European Community is a major factor with regard to inward investment projects.

Opposition Members may say, "Well, what about the Government's position on monetary union?" In that regard, I believe that international companies are looking for a common currency, but not a single currency. There is a significant difference between the two. The common currency concept was put forward by my right hon. Friend the Prime Minister. It has resolved a large number of potential problems. It has not featured much in the public debate recently, but perhaps the Minister will refer to it.

When we look to the future, we all agree that our inward investment policies face an increasingly tough and competitive market. There are four reasons for that. First, as the hon. Member for Morley and Leeds, South mentioned, there is the huge and rapid development of low-cost economies in south-east Asia and mainland China. Secondly, within Europe we have two sets of new challenges. I refer to eastern Europe—the hon. Gentleman mentioned Czechoslovakia—and some European countries, notably France, that have come into the market. They were not in that market a few years ago. For a long time, France did not encourage inward investment, but it is now its policy to do so.

Thirdly, because of telecommunications, India is now a major source of inward investment. One can design software in India as easily as in Orkney, Leeds, the Isle of Wight or London. Fourthly, the Uruguay round is bound to make inward investment more competitive. In principle, it is absolutely desirable to lower tariff and non-tariff barriers, but we must face the fact that many inward investment decisions are made because companies want to get behind the tariff barrier. For all those reasons, we face an increasingly competitive market.

I do not want to follow the hon. Member for Morley and Leeds, South in relation to England. He made a number of general points with which I agree, but in relation to regional organisations, including those for Wales, Scotland and Northern Ireland, there is the danger of too many cooks spoiling the broth. It is important abroad that the United Kingdom puts its best foot forward. We do not want half a dozen organisations constantly badgering one company—that would put off that company. That is where the co-ordination of the Invest in Britain Bureau, the Department of Trade and Industry and the Foreign and Commonwealth Office is very important.

For obvious reasons, Northern Ireland is likely to do much better in terms of future inward investment, and that will be highly desirable for the United Kingdom.

My right hon. Friend the Minister for Export Trade referred to inward investment as a vote of confidence in the Government. It is true that inward investment can take place as a consequence of a range of reasons, but it is the best possible vote of confidence in the Government and in their policies when international, responsible capitalism from America and Japan—the Japanese take very long-term decisions—decides, as it did last year in relation to Scotland, in record terms to invest in this country.

Photo of Mr Donald Thompson Mr Donald Thompson , Calder Valley

Hon. Members may say, "He's just come in," but I have been watching the debate on channel 9. My hon. Friend, who has vast experience, has referred to the whole United Kingdom. Is he struck by the absence of smoked-salmon socialist Labour Members, for whom Jopling was invented, whereas many hon. Members who are present have to travel to all parts of the United Kingdom?

Photo of Mr Allan Stewart Mr Allan Stewart , East Renfrewshire

My hon. Friend is absolutely right. No doubt Scottish Members who are not here and do not have local elections of their own—

Photo of Mr Allan Stewart Mr Allan Stewart , East Renfrewshire

I am stunned by the sudden interruption by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I am sorry that more Scottish Members are not present. Whatever else they are doing, they cannot be canvassing in the English local elections.

There is consensus in the House on the objectives of investment. There is no dispute about that. The record levels of inward investment that we are achieving are a considerable and meaningful vote of confidence in the Government and their policies.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury) 6:25 pm, 3rd May 1995

We all welcome success within our economy. There is no point in disputing that. The inward investment that we have attracted in recent years has rightly been commented on by the Minister, not just in terms of the share that we are getting but in terms of the dynamic it creates in respect of the spin-off of ideas, the stimulus of competition and the raising of standards. I should not want anybody to doubt that Liberal Democrats welcome that.

However, as for the relative role of inward investment in the total economy, it was interesting to hear the exchange between the Minister and hon. Members about who was trying to run down whom. The Conservative party manifesto of 1979 states: At the moment we have the reverse of what it was aiming for— an economy in which the Government has to hold wages down in order to try to make us competitive with other countries where higher real wages are paid for by higher output. There is a genuine debate about what a minimum wage, national or regional, might do, what level it should be set at, and what its impact might be. The Minister will acknowledge that the debate about the minimum wage is not central to the attraction of inward investment, because, in reality, companies that are investing here have an agenda of their own in which the minimum wage at any level is not a problem.

I say that as somebody who is not convinced of the merits of a national minimum wage. If there is scope for it, it should be regionally varied. I suspect that the hon. Member for Middlesbrough (Mr. Bell) is heading in that direction, as well.

If our country's investment attractions are so great that we are getting that share of inward investment, why are companies that are already here not showing the same enthusiasm for investing and continuing to invest within the United Kingdom? We must consider the quality of management in the United Kingdom, the climate for long-term security, and the fact that, in recent years, the Government have almost institutionalised insecurity in the minds of business people, investors and employees.

Jobs are not secure. Many businesses have had to secure their investment against property that has fallen in value. They have a lack of confidence that the current low rates of inflation will continue to be low. That in itself is a discouragement to investment when interest rates have to go up.

That brings me to my intervention on the Minister about the exchange rate. When Britain was forced out of the exchange rate mechanism, many Opposition Members, together with the then Chancellor of the Exchequer, were singing in their baths that they had been freed from a terrible constraint, and that that would transform the economy. That might be true in the short term, but in the long term we must create a foundation of confidence, consistency and dependability upon which people can build their plans for long-term investment.

I repeat my challenge to the Minister: devaluation since we left the ERM, from a pound-deutschmark exchange rate of 2.95 to 2.24 now, is not the basis on which to build the confidence that we have a stable economic policy, or, indeed, a stable economic situation.

The Chancellor of the Exchequer postponed his meeting with the Governor—which was to have taken place today—until Friday, for reasons which I suspect we all understand. If you are going to put up interest rates, it may be best to hope that the news will be lost until the day after the local election debacle, rather than ensuring a debacle the day before. The Chancellor acted in the same way after his defeat on VAT, introducing an interest rate rise at precisely the same moment.

The problem is that these creeping interest rate rises are necessary because of the inherent weakness of the economy, and because—despite the benefit of inward investment—the rest of the domestic economy is not performing strongly enough to ensure that we can sustain current levels of growth without inflationary pressures being imported back into the economy. That is the problem, and it is a comment on the underlying failure of the Government's economic policy.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The hon. Gentleman said earlier that there was insecurity in jobs. Does he agree that one of the past weaknesses of our economy was caused by people's promotion into dead men's shoes, rather than through merit? The hon. Gentleman's proposals would return us to that old system, and make the economy weaker.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

One of the most interesting features of the debates to which I have listened during my 12 years in the House is the fulmination of Conservative Ministers about the incompetence of the management of nationalised utilities, which—according to them—must therefore be privatised. They have not climbed into dead men's shoes; they have stayed in their own shoes, and increased their pay by 1,000 per cent., with no justification and no return on effort.

I do not accept the hon. Gentleman's analysis. People feel insecure about the property values on which they must base their businesses and the security of their ability to retain employment. The inability of people in that state of insecurity to make the purchases that are necessary to sustain a strong purchasing power in the economy contributes, along with other factors, to the underlying weakness of the economy. We have a recovery from a low base, but there is a lack of deep confidence in the long-term future of this country among companies that are based here. If we are to secure long-term indigenous investment, we must deal with that problem.

Cultural changes are required, particularly in regard to property. I was recently asked to address members of the British-German Business Association—representatives of the management of German companies in Britain, some of them British and some German. We agreed across the table on the cultural difference between Britain and Germany—a difference that crucially affected attitudes to investment. In Britain, the first priority was to invest in property, whether domestic or commercial; in Germany, the first priority was to invest in economically productive output.

We agreed that that explained the sustained success of the German economy and the institutionalised paralysis of the British economy—especially in circumstances in which property prices collapsed after a period of artificial boom, which had created an illusion of growth and success that proved unsustainable. We need to deal with such cultural changes, which must go right through our banking system as well as our business system.

Photo of Ian Taylor Ian Taylor , Esher

I have just returned from a visit to Siemens in Congleton. The company stressed that the most notable factor in Britain during the past few years had been a massive increase in industrial capacity, accompanied by investment in that capacity by British companies. Having noted that development, the company had increased its dealings with partnership companies in this country.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

I am prepared to accept that intervention in the terms in which it was offered; indeed, the Minister for Trade made the same point. There has been a ripple effect from some inward-investing companies: an example is the impact of Nissan on car component suppliers. I recognise that such developments are beneficial, but the figures for the whole of the British economy do not follow through, as it were. The further we are from dealing with pools of inward investment, the less affected we are by them. These things do not happen spontaneously and indigenously.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

What factual evidence has the hon. Gentleman?

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

The Minister need only look at the levels of investment in the British economy across the board in recent years. They have been lower than in most other European Union member states. As commentators have pointed out for the past 12 or 18 months, investment in manufacturing in the United Kingdom has been relatively static for two or three years.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

It is beginning to rise, and no one would deny that that is welcome. However, Ministers cannot rely on short-term fluctuations while ignoring the long-term trends. Those trends show—as do the Government's own indicators—a lack of confidence in the long-term performance of the British economy. They show a lack of confidence in the Government's ability to manage and secure growth without inflation that can justify the level of investment that we shall need if we are to maintain the genuine competitiveness that can sustain our current export success without bringing about renewed inflation or a balance-of-trade crisis—both of which have been hinted at as a reason for the Chancellor's attempt to keep the lid on developments, and a concern that the President of the Board of Trade himself has acknowledged.

I submit that the debate is taking place on grounds with which the Government feel reasonably comfortable, but when the economic picture is put together, it looks rather different. It shows that, successful and worth while though the Minister's story may be, it is not enough to justify the Government's claims that a miraculous turnround has taken place. The Minister's opening remarks about the world beating a path to our door to discuss the successes of privatisation may well be justified in his terms, but the Government have not yet considered how, after privatisation, we are to ensure that we have a genuinely competitive market.

We certainly do not have such a market in gas and electricity—although I am happy to put on the record that, as the Minister will know, Liberal Democrats not only support the current Gas Bill but have been calling for it for years. The legislation is 10 years late. I am puzzled about how Labour could make the statements that they have made over the past two or three days, having voted against it. The Government, however, are now in the process of turning out two nuclear companies in one to ensure a privatised monopoly. There are serious question marks over privatisation: has it really delivered everything that was claimed for it?

The hon. Member for Eastwood (Mr. Stewart) made a passing reference to devolution. I do not wish to dwell on that, but let me point out an anomaly. If the Government are so insistent—as they may be, given the antecedents of the Minister for Trade—that Northern Ireland must have its own Assembly or Parliament to secure its place in the Union, and Scotland must be denied the same to secure its place, that logic will not be easy to sell.

The same question arises: who will be in charge of industrial investment promotion for Northern Ireland—the Northern Ireland Assembly or the Westminster Government? If the Northern Ireland Assembly will be in charge, why should Scotland be denied the same opportunity to promote its industrial development?

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

I will not give way. I hope that the hon. Gentleman does not mind; I know that he wishes to make a speech.

Let me make two points that are relevant to my constituency. The oil industry is a major employer and source of investment in my area, and accounts for a significant amount of capital investment. That is welcome; it is established; and, contrary to popular belief, it has a substantial future for many years to come. More challenging waters and developments lie in the future, demanding the application of ideas and technology.

All I ask is that the Government remain mindful of the need to ensure the maximum amount of British involvement in that technology. When there is a decline in oil-related activity around our shores in 30 or 40 years, we will need to be sure that we have established our expertise in that technology. That will enable us to go anywhere in the world and have the foundation of an export business in hi-tech, which will be the long-term yield of Britain's offshore industry.

My second point is that we need a recognition of the importance of the whisky industry, both nationally and locally. [HON. MEMBERS: "Hear, hear."] I realise that any mention of whisky reminds Members of the cup that cheers, but it is a serious industry, which—the Minister knows—is one of our major exporters. It is also an important source of employment in rural areas, including parts of my constituency.

There is real anxiety in the industry that changes in the tax system have widened the gap between the cost of spirits here and in Europe, and that that has weakened our export potential and threatened jobs on the ground in Scotland. I only ask the Minister for some feedback, as the Chancellor knows my view perfectly well. That view has been expressed by most Scottish Members. Failing to recognise that the home base is crucial if an industry is to be able to sustain its success is no way to treat a major export industry.

I recently visited the J and B malt whisky distillery in Keith. I was interested to hear that, following the downturn in the whisky market in the United States, Spain has now become its number one market, accounting for 24 million bottles a year. The tax changes of this year were causing real concern about whether the firm could sustain those sales in Spain against the onslaught of home-produced Spanish whisky and other spirits.

The marketing of J and B is astute, and it will probably succeed. The company has persuaded the Spanish that J and B is the only up-market spirit, although I find it odd and ironic that an enormous amount of effort goes into the subtle blend of the whisky, and a great deal of effort goes into its marketing for it to be diluted with Coca-Cola. However, if they are buying 24 million bottles, I do not care what they dilute it with.

These are serious issues, and I wholly accept that the Minister has every right to tell his story in the way he does. I agree with the hon. Member for Middlesbrough that the Minister is an energetic Minister for Trade, and that he has done a great deal to support the export drive. I am more than happy to give the right hon. Gentleman credit for that, and—whether it is this side of an election or the other side—he will be a hard act to follow.

I hope, however, that the Minister will accept that success in those areas—welcome though it is—does not constitute a total package for the long-term success of the British economy. The Government should eschew the dangers of selectively picking genuinely good news and turning to turn it into the production of an economic miracle. People will not buy that this time, because they want confidence and the removal of insecurity.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid 6:43 pm, 3rd May 1995

I begin on a rare moment of unanimity with the hon. Member for Gordon (Mr. Bruce), who praised the Minister for Trade. My right hon. Friend, with his usual flair and dynamism, created a tour de force as he opened the debate this evening. Not only does he travel 33,000 miles high—

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

My right hon. Friend is not a member of the 33,000 ft high club, I am sure. He has promoted trade in some 40 countries worldwide.

Photo of Ian Taylor Ian Taylor , Esher

It would be of great benefit to my hon. Friend to realise that, while my right hon. Friend is the Minister for Trade, I am the Minister with responsibility for space. There is a difference in the ways in which my right hon. Friend and I fly around the world.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I look forward to seeing my hon. Friend the Minister on the space shuttle shortly.

When I first came to the House three years ago, the hon. Member for Middlesbrough (Mr. Bell) told me that it was easy to get labelled in this place. I fear that I have become labelled as the media man—spelled "meejah". My right hon. Friend the Minister for Trade pointed out the credentials of some Opposition Members and I am pleased to put on record my background, which is not so much in the media as in selling the media, and particularly in broadcast engineering.

Before I came to the House, I helped to set up a company that designed, installed and manufactured equipment for radio stations in the European Union, the far east, east Africa, southern Africa south America, north America and the Soviet Union. My small contribution to the debate is at least based on some practical experience.

There was an interesting league table published in The Times on Friday 28 April of Secretaries of State for Trade and Industry or Presidents of the Board of Trade who have served in the DTI. It was interesting to note that the present Secretary of State has served there for the longest time. That continuity has given the Department of Trade and Industry its strength. The accompanying article in The Times was on the subject of exports, to which I shall confine my remarks today. It referred to the "years of complaining" about why the DTI could not be more like other countries' Industry Ministries, and especially Japan's MITI. I remember talking to Ministers long before I became a Member, and saying if only we could have a Department like Japan's MITI. I encountered firms such as NEC in Uganda, Kenya and Indonesia, and time and time again I found that the Japanese were far more interventionist than we were at the time. The article continued by saying that business now rates the DTI's export promotion activities. Mr. Heseltine's assigning of individual officials to specific countries and sectors and making them available to UK industry is judged to have worked well. I can certainly endorse that from my own experience.

It is important for us not to belittle intervention. Although I am a great believer in the free market, one can only operate in the free market when all other countries are operating in the same environment. Some people advocated unilateral nuclear disarmament in the 1980s—we heard some more of that today from Opposition Members—but that was nonsense. It was foolish to suggest it then, as it is now, when other countries still had nuclear weapons.

It is equally foolish to say that we will not intervene to help our industry when our competitors are helping their industries. The Department of Trade and Industry is actively helping our industry. One of the points which I used to make to Industry Ministers before I was a Member of Parliament arose from my experience in the United States. Some Members may know that I studied for my doctorate at the university of Southern California. When I lived there, the governor was one of the most right-wing governors of all time.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Ronnie Reagan, as the Whip points out. He later became President of the United States.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

As opposed to any other. He was an interventionist, and rightly so because the republic of California—as the state of California is properly known—has one of the largest economies in the world. It certainly has the largest economy of any of the states in the United States. No one could say that Ronnie Reagan was anything less than to the right of the Republican party.

One of the laws which existed in the United States at that time—and still exists today—was chapter 11. Too many businesses in this country have gone under in the past because they have not had a chance to trade their way out of difficulty. I was pleased that in his Budget speech on 28 October 1994, the Chancellor said: To give management more time to reorder their affairs, we will introduce a 28-day moratorium binding upon all parties. This will give companies a breathing space to assess rescue prospects and come to an arrangement with creditors.We are also consulting further on a mechanism to help substitute equity for debt of firms in administration or receivership. I hope that those measures will contribute further to the creation of a rescue culture, discouraging the needless and wasteful liquidation of businesses that could become sound."—[Official Report, 29 November 1994; Vol. 250, c. 1100.] On too many occasions, I have heard from businesses in my constituency and elsewhere that banks and, dare I say it, sometimes even the Inland Revenue and Customs and Excise, have acted too soon in winding up companies that could otherwise trade out of difficulty. I hope that the 28-day moratorium will be extended to 28 weeks in due course, but it is a good start.

Could the decision to impose a moratorium be based partly on the experiences of Leyland DAF? Going back a little further, on 2 February 1993, the President of the Board of Trade told the hon. Member for Livingston (Mr. Cook), in answer to a private notice question: The Government stand ready to work closely with Leyland DAF, the receivers,"— it had just gone into receivership— banks and other interested parties to mitigate, as far as possible, the impact on United Kingdom jobs. We hope that it will prove possible for all those involved to find a means of creating a business with a long-term, commercial future out of at least part of DAF's United Kingdom operations."—[Official Report, 2 February 1993; Vol. 218, c. 143.] We now know that he was successful and Leyland DAF continues to trade. That is a first-rate example of how a United Kingdom version of chapter 11 can operate successfully.

Benjamin Franklin, who is a particular hero of mine, said: No nation was ever ruined by trade. My hon. Friend the Member for Eastwood (Mr. Stewart) mentioned the difference between a common and a single currency. I feel uneasy about entering into a single currency, not only for the reasons that other hon. Members have mentioned but because our reserves would be required to form part of the general European monetary reserve. That would restrict our possibilities 10, 20, 30 or 40 years hence.

Although I do not believe for one moment that the United Kingdom can operate in isolation—we need partners—in 50, 60 or 70 years, after we are all dead and gone, Britain may wish to have some different partners from those in the European Union.

Interestingly, for the first time in its 220-year history, the United States has recognised that it cannot operate in isolation and that it must make trading arrangements with other countries. It is unhappy about its arrangements with Mexico and I believe that Australia feels equally unhappy about its arrangements with Japan, Vietnam and Korea. These are early days for the North American Free Trade Area, and one wonders whether in years to come there might be a realignment of trading arrangements.

If the Prime Minister's aim is successful—I hope that it is—and the general agreement on tariffs and trade reaches a complete conclusion, all those separate arrangements will become unnecessary. With total GATT, as I like to call it—well beyond the Uruguay round—we will not need any trading blocs as the bloc will be the world, and what could be better than that?

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

All the Australian political parties—both at federal and at state level—are anxious to strengthen trade ties with other south-east Asian nations.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The hon. Gentleman is absolutely right. The Australian Government are right to strengthen those ties, just as we are right to try to strengthen our trading ties within the European Union.

I welcome certain aspects of the Maastricht treaty, such as the creation of the single market compliance unit, which endeavours to ensure, for example, that, just as we do not subsidise our airlines, the French Government do not subsidise Air France.

We should never close the door on opportunities, however. In 30, 40, 50 or 100 years' time, who knows what alignments there may be? A single currency would prevent us from ever considering other alignments if it meant, as I think it would, that we had to give up our foreign exchange reserves. That is why I welcome the comments of my hon. Friend the Member for Eastwood on a common currency, which the Prime Minister suggested and which would be a much more flexible operation. I suspect that, in any event, the common currency would be the deutschmark.

In the past 12 to 14 years, things have moved on. The hon. Member for Middlesbrough rightly criticised the Government because, as an Opposition spokesman, his duty is to oppose. I am old enough to remember the 1970s, Madam Speaker, although I am sure that you will say that that is impossible, and expressions such as the "brain drain"—arising from high taxation when some of our most talented people went to the United States and did not return—are no longer in parlance. I went for two years to study in California, but I came back, despite the fact that taxation was extraordinarily high in Britain, with a top rate of 98p in the pound. The point is that the climate in the United Kingdom has been transformed and I would not like to see such high taxes again.

The hon. Member for Middlesbrough mentioned Aneurin Bevan

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I thank the hon. Gentleman for correcting me.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Absolutely, and a different spelling too. Ernest Bevin introduced the trade union system to Germany and, as I said in an earlier intervention, it was based on a different system to that existing in the United Kingdom. Many trade unions were competing for the same jobs within the same industry—competition that resulted in demarcation which cost us so many other jobs.

Last year, only 278,000 days were lost through strikes in the United Kingdom. Frankly, it does no harm to remind the House that, in 1979, 29 million days were lost through strikes. Clearly, our industrial relations system has transformed the environment. That is one reason why countries are choosing to invest here rather than in other EC countries; the social chapter is another.

To a large degree, trade unions pay the Labour party for its operations. He who pays the piper plays the tune and I wonder what will happen to trade union legislation in the unlikely event that a Labour Government were ever elected.

Photo of Mr Roy Beggs Mr Roy Beggs , East Antrim

Does the hon. Gentleman agree that one reason—in addition to the peace dividend—why Northern Ireland is so successful in attracting inward investment is that we have been able to show that we have the least number of days lost through strike action of any region of the United Kingdom?

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

It was my great pleasure to work for a short while in the early 1970s for the BBC in Northern Ireland and I am well aware that 98 per cent. of the population there want to work and, more importantly, want peace. I found it upsetting when I visited a factory in Newtownards that had been blown up by the IRA. People were deeply moved because the English company that had invested in Newtownards was doubtful whether it would rebuild the factory. I am pleased to say that, in the event, it did.

May I make the following recommendations to my hon. Friends on the Government Front Bench? First, the 28-day moratorium should be extended in due course and a chapter 11 version should exist within United Kingdom legislation so that more companies are allowed to trade out of difficulties.

Secondly, from my experience of operating in developing countries, I believe that the British Council should fund more grants for educational study in the United Kingdom. It is a false economy to deprive some foreign people of the opportunity of studying in the United Kingdom because people who have been educated in the UK often decide to invest here or specify British capital projects at a later date when they are in a position of responsibility.

Thirdly, my right hon. Friend the Minister for Trade will be aware that we need greater diplomatic representation in some areas, particularly the former member states of the Soviet Union. That would help our international trade, although I note that British Petroleum and other companies have been singularly successful in republics such as Azerbaijan, so we are already well away down that road.

Photo of Edward Garnier Edward Garnier , Harborough

I was simply interested in listening to the end of my hon. Friend's speech.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I thought that my hon. Friend wished to intervene. If he is anxious to speak, I shall give way to him as a politeness to the House.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. Hon. Members are anxious to speak, which is why they are sitting on the edge of the Benches, ready to take over as soon as the hon. Gentleman has finished.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

In that case, Madam Speaker, I take your advice and finish my speech.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East 7:01 pm, 3rd May 1995

My speech will seem terribly dull, following that of a world traveller, confidante of Benjamin Franklin, best friend of Ronnie Reagan and misquoter of Aneurin Bevan—or was it Ernest Bevin? I cannot possibly follow that kind of contribution.

When hon. Members read the title of the debate, "Exports, industry and inward investment", I ask them to take on board my subtitle of "Work, wealth creation and well-being". It is an alliteration, but an important one in the context of what we have to say.

Everyone has been spraying around statistics of one kind or another. We shall not agree on the majority of them and will have different versions from the same papers, or different figures that have no meaning or relationship. I wish to put into the debate one or two statistics that I have gleaned. I hope that they are not seen as untruths, for they are certainly not. They have all been taken from papers that are freely available to hon. Members. In 1993, there was £9 billion of inward investment into this country. That was excellent. Unfortunately, that sum is dwarfed by more than £18 billion of outward investment. The issue, therefore, is not necessarily how far the Government have encouraged inward investment but how we can tackle the investment gap and reverse the position that we have been in for so many years.

Photo of Edward Garnier Edward Garnier , Harborough

The hon. Gentleman said that there had been £18 billion of outward investment. Does he say that that is dead money that is lost to the economy? Money invested abroad produces profits that can be and are brought back to this country to be reinvested in British jobs and the British economy.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

The hon. Gentleman makes a good point and I shall deal with it in due course as I develop my theme.

I preface my remarks by saying that the current inward investment does not compensate for the financial structures that have led Britain to have a far lower level of investment than our competitors. Just to reach the levels of our German and Japanese economic rivals, we would have to increase our investment by £42 billion per annum.

Earlier, I asked the Minister to give the disaggregated figures for the total inward investment between fixed investment—purchasing goods for production, buildings and so on—and what is, in the first instance, the simple acquisition of shares in companies or parts of companies in this country. My figure is a little out of date: in 1992, 70 per cent. of the inward investment, which has formed the basis of the Government's vindication of their policies, was in the form of acquisitions of existing companies. We may argue about the details of what that means and how it might further develop activity within the British economy but, starkly put and understood for what it is worth—statistics do not always guide us correctly—that is an important point. For instance, BMW's acquisition of Rover was purely an acquisition and so far has led no further. As a west midlands member, I hope that it will lead to considerable development in the Rover company.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

Well, we shall see. It must come to fruition and time must be given for that. At first, it was thought that BMW simply wanted to acquire more outlets, and it was certainly envious of Rover's four-wheel drive vehicle. We shall have to see how all that develops.

On inward investment and the social chapter, the Japanese External Trade Organisation said about investment in Britain that membership of the European Union is a greater encouragement to inward investment than low wages, and hear, hear to that. It must be so. I take no comfort in seeing Japanese industry in this country overtaking ours, but the majority of Japanese companies pay considerably above what any of us would regard as an acceptable minimum wage and the conditions and quality of employment are often extremely high. It gives a lie to the idea that this country can prosper only with a low-wage economy.

Wynne Godley has written for The Guardian, which might disqualify him in the Minister's eyes. The Government chose him as one of the six wise men—[Interruption.] Yes, the Minister avoided him. Godley said that investment in the UK as a proportion of GDP had fallen to an all-time low.

I shall mention machine tools because we have discussed capacity. I give three cheers—or even four—to the news that exports are growing, and there are now signs that we cannot produce the volume of goods necessary to meet that export demand. That is almost entirely due to the wipeout of British manufacturing, especially the machine tool industry in the west midlands, during the Thatcher years when the need for a thriving, dynamic manufacturing sector was dismissed out of hand. The west midlands felt that like a gale. A third of manufacturing capacity there was lost, along with an even greater fraction of jobs in those industries. As a result, there was a severe loss of our ability to produce the tools to produce goods for export.

I mentioned my subtitle of "Work, wealth creation and well-being". With regard to work, I am talking essentially of employment. Whatever the statistics are, to the eyes of those who want to see, it is evident that unemployment is endemic in many of our inner cities. The figures that I have seen suggest that of the male population of working age, some 30 per cent. are either unemployed, in some way incapacitated, off sick or permanently disabled. In my constituency, at least two of the wards have young male unemployment well in excess of 30 per cent. The chance of young Afro-Caribbeans getting jobs on a basis comparable to that of young white males is slim.

The Government have created a culture in which the idea of personal welfare comes through a girocheque falling on the mat through the front door. Young people seem to have missed entirely the period in their lives when they begin to understand the link between work, wealth creation and well-being. They have now reached the point where they go down to the post office with a little piece of paper which pays a certain amount of money and which, sadly, in many cases, is then supplemented by means which are outside the law.

Photo of Mr Richard Needham Mr Richard Needham , North Wiltshire

Having been in Northern Ireland for seven years, where the figures are even more horrific, I understand the hon. Gentleman's point. That is exactly my point about the national minimum wage. It is exactly those sorts of people whom a national minimum wage would exclude and preclude from obtaining work. The hon. Gentleman wants to help them. Better to help them through the tax system than to do it that way.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

Yes, but the Minister misses the point. People in work can certainly be helped through the tax system, but these people are not in work. Many of them, aged 25, 26 and 27, have never had what we would call a proper job. They do not have that experience. They have not been allowed to grow and mature so that they can then make a contribution to the British economy. They do not understand the link that has to be forged between work, wealth creation and well-being. They simply have no concept of it. Because of the way in which the Government have dismissed value-added production, young people have been dispossessed of their dignity and virtually of their citizenship. That is the tragedy of the years of Thatcherism.

There is an anomaly in what Conservative Members say about social security and the minimum wage. It is perfectly coherent to argue that, because the quality of employment in some aspects in some places at some times is so poor, so hard pressed, in such a competitive market, for such low quality, low added-value goods that a proper wage cannot be paid, support is required through the social security system, but we cannot at the same time then say that the social security bill is too high. We can subsidise employers and look happy about it, but we cannot then grumble about the level of social security payments.

I mentioned the level of unemployment in my constituency, and in the nation as a whole male unemployment is exceptionally high, but we must also consider the quality of work available these days. Often, it is part time. There is nothing wrong with that, provided that one can get two or three part-time jobs and pay sufficient on the stamp to enable one to obtain the benefits to which one is entitled when genuinely unemployed. Often, that part-time employment carries with it no social value whatever in terms of a contribution from the employee or the employer.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

Does the hon. Gentleman accept that the great number of people who take part-time jobs then find that they lead to full-time work?

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

If the hon. Lady has the evidence for that, I shall be pleased to see it. I have not seen concrete evidence for that statement, although I have heard it made before. Often, part-time work simply leads to more part-time work. The part-time training courses on offer often lead nowhere at all, let alone to full-time work.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

The hon. Gentleman somewhat misunderstands the purpose of part-time work. For many women in particular it is a great relief to be able to find part-time work because it fits in with their family commitments.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

I do not misunderstand the nature of part-time work for women. The council estate on which I was born was surrounded by a number of factories, among which were Ever Ready, Guy Motors, Henry Meadows, ABC Coupler, Jaguar—all, especially Ever Ready, provided part-time work on the twilight shift. Such work often supplemented the wages of unskilled workers from my council estate in a working class area. I cannot possibly undervalue that work. It was vital to the household income. It paid for the holiday and ensured that there were clothes on the kids' backs and food on the table. Generally speaking, the children of such families developed into good citizens when they grew up.

The part-time work that women are now doing is often the only income for the family. That is the result of a massive loss of employment opportunities. Such jobs cannot possibly be fully replaced by part-time work. We need full-time work with proper wages and conditions so that families can grow and prosper in a way that all hon. Members would wish, particularly the hon. Lady. I know of the hon. Lady's concern for family values. I read of them, I understand them, I believe that the hon. Lady is right and I, too, want them to be developed; but that has to be done on the basis of economic security. Families must feel secure in their employment.

People have been encouraged by the Government—I do not deny it—to buy their own homes, putting them on the first rung of the ladder. I am pleased if people own their own homes, much more pleased than if a landlord owns them any day of the week. However, when such people then find that their jobs are insecure and they cannot see their way through the next few weeks before another part-time job comes up, tension and worry are created within the family, which again prevents them from developing in the way that we would like.

The country does not just need the social chapter, it is crying out for it and that is particularly justified by the economic well-being of the British people and the way in which we would all want people to have a properly developed family life. The social chapter is vital to the future of Britain because it underpins the value of work.

The Conservatives argue for low wages while paying the family income supplement. However, they do not want a big social security bill. We say that it is right and proper that people should have the dignity of a wage for which they work so that on a Friday night they come home with enough money to see them through the week. That is the proper way in which to run our affairs; it is not rewarding people through social security with a giro dropping on the doormat as the only contact with economic life.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Is the hon. Gentleman a member of the Labour party school of thought that says that Governments can create jobs? I think hon. Members on both sides of the Chamber would agree with his sentiments, but he has not said how that can be done.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

A difference exists between the Labour party and the Conservative party, or at least the Thatcher Conservative party—as an election draws near, I am not sure what the new Conservative party is doing. You are becoming interventionist—[Interruption.] I get this wrong every time. The Conservative party is becoming interventionist, Mr. Deputy Speaker. It understands the value of Government playing a part in the development of the economy.

The Government create jobs in two ways. First, where it is necessary, they create employment programmes involving useful work, which is paid for by the taxpayer, and from which the taxpayer receives a return, in so far as people are employed, start to buy goods in shops, pay VAT and other taxes and, generally, make a contribution that offsets the total cost to the state of employing them in that way. More important, by intervening in a measured and proper way in the marketplace, the state creates the environment in which companies can prosper and jobs can be delivered. That is my strongly held view. It seems to be part of the philosophy of the hon. Member for Mid-Staffordshire (Mr. Fabricant). I encourage him to continue on that line of thought, as it will inevitably produce jobs that the country needs, for all the people who want them.

To help create wealth, one must have a job, and I hope that I have set out a programme for that. Ultimately, however, wealth creation is a means of achieving the well-being and welfare that we all need in one form or another. Profitable manufacturing companies are returning to the west midlands region and north-west. Indeed, many manufacturing companies are doing much better than they were five or six years ago. At last, some value is being placed on the ability of manufacturers to contribute massively to the economy.

We find, however, that companies are unable to retain their profits for further investment. Frankly, the reason is that shareholders are greedy. They were determined to take more than they should from the company. Consequently, managers are under great pressure to ensure that a dividend is achieved that meets market requirements and demand, because otherwise they face the axe. Managers, whom we value highly, make profits, but instead of being able to use the biggest fraction of profits and retained earnings for further investment, development and job creation, companies are robbed of their inheritance as shareholders demand bigger and bigger pay-outs from their holdings. That must change.

In this country, investment is the epitome of short-termism. It simply means that retained earnings—the best means by which to invest—are progressively taken out of the hands of managers and put into the pockets of financiers. It is not good for Britain or British manufacturing industry. We must get to grips with that problem.

I mention almost in passing that pension funds are revalued on a far more regular basis than is necessary. Often, their fund managers give a monthly or quarterly figure on returns. A sensibly managed pension fund is one that provides long-term returns that equal the pay-outs required by pensioners. That is the way to run pension funds. They have become nothing more than a means of share-dealing, with chopping and changing. It would be reasonable to reconsider stamp duty or a tax on investment churning, which I talked about earlier.

We all know that it does not help British industry if it is in the grip of—in thrall to, as it were—people who have no more interest in manufacturing industry than they can fly in the air. Their interest is in making a fat profit as quickly as they can, whether or not it exists in reality, and turning it over to their shareholders. It must stop.

The country would improve its economic performance by adopting some of the methods that have been employed for many years in Germany, France and our other competitor countries. Their companies have long-term aims and capital holdings. In that way, they are able to plan their production.

It is often said that business people want a settled environment. I am sure that that is true. Planning is always better and of a higher quality when some sureness exists about what is likely to happen next month, next year and the year after. In this country, the way in which the capital markets are played with creates the greatest instability that they face. Measures must be taken to deal with that problem.

When wealth is created, not only do we suffer from a lack of retained profits to invest in the business, but we find that the company's wealth is distributed unequally. The work of scientific-technical people in particular is of great value, as is the intellectual capital that they bring to bear on these processes. We should consider how they are rewarded compared with, for example, lawyers, accountants and owners of capital. There is no comparison.

We have a culture that believes that, somehow or other, the intellectual capital and the skills employed by workers are of less value and importance than that of the wheelers and dealers on the exchanges and futures market, and the people who are into derivatives of all sorts. We seem to think that it is more important to reward them than the people who create the work that we all so badly need. That belief has been a feature of British industrial and commercial life for as long as anyone can remember. It grew to almost its worst during the 1980s.

I hope that we will start to get that matter under control. We must encourage the best people and brains to enter engineering, manufacturing and science-based industries. We must reward them. Some people say that Cedric Brown is worth £500,000, but I know of some scientists and engineers who dwarf his contribution and who struggle along with nothing like such a salary. Many do not earn £20,000. We do not want to create that sort of society. It must be recognised that the main contributors to that wealth should be the main beneficiaries. To get us back on the track to prosperity, we must create that culture.

The purpose of work and wealth creation is to improve our well-being, but what have the past 15 years brought us? It is sad to consider that question. If we have created the wealth, we should have a thriving, healthy, prosperous and well-educated population. What is the truth of the matter? Everywhere, poor people are more ill than those with greater incomes. That is wrong. I take a moral stance about it. In a civilised, well-developed country, everyone is entitled to the best available health care and to the best health. There is no reason why people in a country such as ours should die from curable diseases. We find massive inequality there.

After 16 years of Conservative rule, we hear of teachers being chucked out of the teaching force. We cannot afford not to educate our young people. The Conservatives want to have a great argument about where the money is in education. It is true that some education authorities have not properly played the game, but, by and large, the money under the formula has gone to schools. That is the truth. There is simply not enough money. We must spend more on education. We cannot afford to skimp in that sector. There has been a housing slump of the most serious proportions.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. With my usual tolerance, I was hoping that the hon. Gentleman would get back to the subject of the debate, but he is going very wide of it.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

I always accept your decisions, Mr. Deputy Speaker, but without good health it is difficult to hold down a good job, and without being properly educated one almost certainly will not get a job at all. Unless people have a roof over their heads, their health will deteriorate and they will not be able to go to work anyway.

We now have the worst housing crisis that people can remember. In my constituency, waiting lists for council houses are the longest for 25 years. I treat all those matters as relevant to what we ought to be able to see, feel and touch as a result of the wealth-creating activities of our companies. Nevertheless I shall move on, Mr. Deputy Speaker, because clearly you are not comfortable when I raise such subjects. Personally, I consider that they are of the utmost importance.

What is the prescription for exports? I shall join in the praise of the Minister for Trade. Everywhere I go, industrialists and factory owners say, "He is a good chap, that Needham. He is energetic and he knows what it is all about. He is having a go, and it is a good performance." I simply qualify that praise by saying that the Minister did not have much of an act to follow. By the way, we shall not keep him on after the general election; we shall have someone else. However, there is no doubt that we can see the difference between a Government who are committed to our industrial export effort and a Government who are not—and the Minister is a wonderful improvement on what we saw before.

However, let us examine the real position. We have had to run to stay still. World trade has expanded by more than 8 per cent., yet the expansion in British exports has also been just above 8 per cent.; we have merely managed to hold our own. More effort is required. The French, for instance, are bringing people from all over the world to their country to see what they have to offer. Perhaps we should think about copying that.

We must keep the role of the Export Credits Guarantee Department under review. In many cases it does a good job, but we must be prepared to take more risks in countries where trade is beginning to open up. The Minister may know that I have recently returned from Latin America, where we did a little arithmetic on the ECGD and found that it was less adventurous than may be called for at this stage.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Does the hon. Gentleman concede that the ECGD is now more competitive than, or at least as competitive as, the German system, HERMES?

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

The ECGD is very patchy; it is a curate's egg. There are indeed some areas of the world where the risk seems small and where there is a little hot spot where it does very well. However, I shall not praise the ECGD in that respect because the word coming back to me from people who use it is that it is patchy. I do not concede the point made by the hon. Member for Mid-Staffordshire.

I commend to the House the development of the small firms sector. Several steps need taking, and I join the hon. Member for Mid-Staffordshire in calling for a section 11-type moratorium law. I want the Government to be quicker about settling their debts and to give better encouragement for the recovery of debt. Indeed, I should like prompt payment to become part of our culture.

The story that the Minister for Trade has had to tell is a good one, but only by comparison with what happened before. Thatcherism has hurt Britain badly and it will take years to recover our industrial strength. The social furniture is in disrepair and, unfortunately, we have a giro culture. The prescription is: let us work harder and give more encouragement and incentives to our industries. Above all, we must get money into manufacturing industry.

Photo of Edward Garnier Edward Garnier , Harborough 7:33 pm, 3rd May 1995

The last time that I crossed swords, if that is the right expression, with the hon. Member for Wolverhampton, North-East (Mr. Purchase) we were debating fox hunting. I did not learn much from him then, but I have learnt a lot more from him today, because he has spoken with personal knowledge of his constituency and his west midlands region.

I was interested to hear that the hon. Gentleman had recently been to south America. I hope that he enjoyed himself, and that he learnt on that visit that Brazil is now our biggest export market in the region. We have record exports to that country; they exceeded £0.5 billion for the first time last year. In the first two months of this year, we have already exported £105.2 million worth of goods to Brazil, and increasing Brazilian exports to the United Kingdom created two-way trade worth £1.5 billion in 1994. There are huge opportunities in Latin America, and I trust that the hon. Gentleman played his part in boosting British exports to the region when he was there.

Like the hon. Member for Wolverhampton, North-East, the hon. Member for Gordon (Mr. Bruce) was most generous to my right hon. Friend the Minister for Trade, commending him for - all his hard work and for the worldwide travel in which he engages on behalf of our country. I was going to join in that praise, but the point of what I intended to say was somewhat punctured when my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) said that he had been there first, been there earlier and been there twice before. None the less, there is no question about the fact that my right hon. Friend is accepted in all corners of the House, and both abroad and in the United Kingdom, as a hard-working Minister. I am delighted to place on record the fact that he is doing such a excellent job.

The hon. Member for Middlesbrough (Mr. Bell) seemed for a moment to be suffering from what I might call analysis paralysis. He looked down the kaleidoscope and saw all sorts of interesting segments and colours, but he was not quite sure what the pattern was. He was asked one or two questions so that hon. Members could find out whether there was a thread to his argument, but if there was he did not seem to have hold of it. However, perhaps his hon. Friends will assist him during the debate so that if he catches your eye, Mr. Deputy Speaker, and replies for the Opposition we shall learn more about the Labour party's economic policy and the work that it wishes to be done on exports, industry and inward investment. I look forward to hearing the hon. Gentleman.

The message from the Opposition is deeply depressing, not only because it is wrong but because they think that it is in the interests of the British people that they should give out that message. The truth is that British businesses are winning in the global market. I use that expression advisedly, because—to add my name to those of the many other Thomas Cook beneficiaries who have spoken—I too have been around the world a bit over the past year or so, and in Korea last October I attended a conference arranged by the Institute of Global Economics. In Korea and in the far east generally, the expression "the global market" is on everybody's lips, and it is right that we should consider our performance as exporters and as attractors of inward investment in the global context.

As I said, the United Kingdom is winning. Output has been rising for three years and is now at record levels—up nearly 10 per cent. since the beginning of 1992. Last year it grew faster in the United Kingdom than in Japan and in the rest of the European Union. In the first quarter of this year output rose by nearly 1 per cent. and was 4 per cent. higher than the figure for a year ago.

I speak as the representative of a constituency that is, among other things, a manufacturing area, and manufacturers are leading the recovery. Not only is output up by more than 4 per cent., but productivity has increased and investment was up by 8 per cent. in the last quarter alone. Jobs are being created at the fastest rate for 17 years. The result has been success in world markets. Underlying exports have increased by more than 12 per cent.

Last year the current account was broadly balanced, showing a £2 billion surplus in the second half of the year. The latest figures show that non-EC exports for March stood at a record £3.5 billion, leading to a better than expected improvement in our visible deficit. According to the Confederation of British Industry that export boom is not a flash in the pan but is set to continue. Export orders are growing at their fastest rate ever, and optimism is at its most buoyant since 1973.

I can confirm those facts from my own constituency, where textile companies and light engineers report that their order books, and even their long-term order books, are filling up. They are taking on new people to work.

The figures produced by Leicestershire county council in its unemployment bulletin for March 1995 show that the unemployment in my constituency—which is not only a rural idyll but stretches up to the borders of the city of Leicester and is partly industrialised—has fallen by 633 since May 1992. It has fallen by 33 in the past month and, as I recall, by more than 25 per cent.—I think the figure is 28 per cent.—in the past decade. Those figures are from the east midlands, an industrial area which is fairly similar to the constituency of the hon. Member for Wolverhampton, North-East.

The area has been written off by the Labour party spin doctors and the Opposition doom merchants, but work is continuing. Business men are investing abroad thanks to the work of my right hon. Friend the Minister for Trade. They are not prepared to be waylaid by the appalling and desperately depressing stories that the Opposition would have us believe. Business men are working, investing and making the country a success. They are proud of doing so and want to take people out of the unemployment figures and back into the workplace, which is precisely what they are doing.

I shall not bore hon. Members with statistics from various accountants. I know that the hon. Member for Middlesbrough is already bored with the document that he is reading and desperately trying to understand. Every trend that one cares to look at is improving, week in, week out, in the east midlands—and in my county in particular. The people who work in that region are not prepared to be sidelined by the doom-laden stories that we hear from the Opposition.

There are two ways to approach the success that I have described. First, we can reflect on the achievement. The world of 1979 would be unimaginable in Britain today. Taxes were too high on individuals and companies. Large sections of the economy were run by inefficient, overmanned, state-owned monopolies. The trade unions had more say in running companies than management. Despite the kind words that were heard at whatever conference it was last week, the public can be in no doubt that, in the hideous event of a Labour party victory after the next general election, the unions would be back in Downing street, demanding beer and sandwiches, saying what was going on and saying that they were in charge.

It is all very well for the hon. Member for Rotherham (Mr. MacShane), who spent 15 years or so in the happy environment of Geneva, and who has returned, possibly out of touch with this country, perhaps he cannot even remember the last Labour Government, but I can. Although I may look a lot older than my hon. Friend the Member for Mid-Staffordshire, I remember only too well the appalling state of this country in 1979—all as a result of the Labour party and the trade union barons who fund it.

When the Government first took office, major structural reform was needed. We knew that then and everyone, even, apparently, new Labour—at least, for public consumption—has now come round to our view. For 15 years we have worked to free up the market so that entrepreneurs—business men and women in my constituency, in my region and that of the hon. Member for Wolverhampton, North-East, as well as those in Scotland and the north-cast—can succeed.

We have cut taxes and restored incentives for personal endeavour. We have slashed the cripplingly high top marginal rate from 98 per cent. to 40 per cent. and the main rate of corporation tax by one third. We have privatised the state-owned industries. In 1979, the nationalised industries cost the taxpayer £50 million a week—how many hospitals can be built for that? Privatised industries are now returning the same amount to the Exchequer every week in taxes on the profits that they make. We have reformed the labour market so that managers have the ability to manage. They are no longer defensive and no longer have to look over their shoulders to see what the bully boys in the trade unions are up to.

Manufacturing productivity has grown. faster in the United Kingdom over the past decade than in any other G7 country. That is good news, which the public need and want to know, and which the Government have produced. In the previous two decades, the United Kingdom had been the slowest in manufacturing terms.

The Government have liberalised our markets, brought choice, lower prices and massive injections of investment—£30 billion in the telecommunications industry alone, following privatisation in 1984. The result has been a transformation in our industrial performance—a transformation that we are seeing today in every forecast and every analysis of the figures.

Who would have dreamt in 1979, with car production in this country on its knees, that the Japanese would be building cars here to export back to Japan? Since 1979, the number of cars produced here for export has risen by nearly 60 per cent. Who would have dreamt in 1979, when we were net importers of televisions, that we would reverse the flow of that trade and would be exporting more television sets than France and Germany? Who would have dreamt in 1979, when our labour relations record made us the laughing stock of Europe, that it would now be the envy of most of our competitors? In 1979 we lost 29 million working days to strikes; last year we did not lose 1 per cent. of that figure.

Of course, there have been setbacks. Many people have suffered personal hardship, as I am sure the hon. Member for Wolverhampton, North-East will know. Many companies have faced difficulties and some sectors are still affected by the sometimes harsh consequences of the last recession. I know that from my own textilers, who are worried about the low wage economies in the far east, but all of them are prepared to fight for their country, to fight for their jobs and to fight for their companies. They are not prepared to give up heart. Why on earth should they? Everything is ready to improve further the economy not only of my east midlands region but that of the country as a whole.

In the next two years, the export-driven economic improvement will translate itself on to the domestic economy so that those who work in this country's industries but who do not export—those who are in the retail trade—will feel the benefits and realise that the recession is long over. I hope that when the hon. Member for Middlesbrough replies he will change his tune and start singing a happier song. There is so much good news out there—he only has to come out into the country to find it. It is there for the taking.

I know that my hon. Friend the Under-Secretary of State for Industry and Energy, who I welcome to his duties, will give a good account, not only of himself but of the Government, who have been working so hard to assist this country's economy.

Photo of Denis MacShane Denis MacShane , Rotherham 7:46 pm, 3rd May 1995

It is always a pleasure to follow the hon. and learned Member for Harborough (Mr. Garnier), but he represented, in essence, the two-nation country in which we live. For him, everything was coming up roses and everything was as good as it could be in the best of all possible worlds. He made passing reference to the moving description by my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase). Were the hon. and learned Gentleman to come with me to my constituency he would find a different Britain. It is the tragedy of this Government that they have divided the nation down the middle. It is the Labour party's task to reunite it. Inward investment, exports and investments will play a crucial part in that task.

I pay tribute to the sun-tanned, air-miled right hon. Member, the Minister for Trade. I am sorry to say that I understand that his air miles do not belong to him, but are to flow into the pocket of the Revenue. No doubt they will flow out again to the hon. Member for Davyhulme (Mr. Churchill) or whoever—perhaps as another interesting set of papers to sell to the nation.

The Minister called for partnership, supported planning and described the rigour and extent of Government intervention. For a moment I thought that I was listening to the only socialist Minister in the Government. The very success that he has achieved, like the proposals made by the hon. Member for Mid-Staffordshire (Mr. Fabricant), are based on suggestions that have been made by the Labour party in Opposition. We want Government intervention. We want the Government to fight for industry. We want embassies to help to export for Britain. We are interested in the chapter 11 ideas. I passionately support an increase in education so that more foreigners know about Britain and, equally importantly, more British people can speak foreign languages and know how to sell in other countries.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Does the hon. Gentleman accept that intervention is effective only when one intervenes in successful industries to make them world beaters? Does he accept that when the National Economic Development Council existed and there was a Labour Government, the Labour Government intervened on lame duck industries at the greater expense of those industries that could have been successful?

Photo of Denis MacShane Denis MacShane , Rotherham

In an earlier intervention, the former Paymaster General, the right hon. Member for Northavon (Sir J. Cope), said that one quarter of all our manufacturing exports was represented by Airbus—a consortium led by the state-owned French Aerospatiale company, which is backed very much by Government intervention. He reproached the last but one Labour Government for not having put Britain's state money into a full share of the successful airbus project.

Photo of Sir John Cope Sir John Cope , Northavon

The hon. Gentleman is misrepresenting what I said. He is exaggerating the extent, impressive as it is, of the exports attributable to British Aerospace Airbus. He is distorting what I said about the Labour Government. The investment which has been made by the British Government over the years, particularly in the A320, has proved to be a good investment. It is a good example of backing success in the way that my hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) mentioned just now. Crucially, the Labour Government also nationalised British Aerospace. That in itself was extremely damaging for a long period. I am glad that we denationalised British Aerospace. Nationalisation is the sort of intervention that we should not have now.

Photo of Denis MacShane Denis MacShane , Rotherham

The right hon. Member for Northavon cannot have it both ways. Either he wants Government intervention and praises the lead role taken by the French nationalised aircraft company, Aerospatiale, or he does not. If he reads his speech in Hansard, he will see that he criticised the 1966–70 Labour Government for not intervening as much as he wanted them to. I am simply stressing the point that Government intervention is fundamental in industry.

My hon. Friend the Member for Wolverhampton, North-East pointed out that for every pound coming into this country in inward investment, £2 leaves the country. Yes, that can sometimes represent rents coming back into the United Kingdom, but at the same time it represents a huge loss of potential jobs. If that money were invested in the United Kingdom, it would create jobs. I was privileged to attend a dinner of unit trust and investment trust representatives last night. The key speaker made exactly the points that my hon. Friend made. They are looking to find ways of repatriating capital so that capital stays in this country.

If we examine the Government's claims that inward investment is the result of recent Government policies, we find that the biggest surge of inward investment from Japan was between 1987, when it was £856 million, and 1990, when it surged to £2.1 billion. That was the period when Britain was in the exchange rate mechanism and was strongly committed to Europe. By 1992, as the clouds gathered over our commitment to Europe and we left the ERM, there was a disinvestment by Japanese investors. Those figures come from the report produced by the Library last October. Overall, Japanese investment in the United Kingdom is less than £5 billion, compared with £5.5 billion from Germany, £8.5 billion from France and £16.5 billion from the Netherlands.

I noticed a lot of cheap cracks about Europe in the Minister's speech. The growing hostility that one can feel seething from the Conservative Benches to engagement in Europe should give those who argue for inward investment pause for thought. The largest bulk of inward investment into Britain comes from Europe. Asianisation—to use the term that the right hon. Member for Guildford (Mr. Howell), the Chairman of the Foreign Affairs Select Committee, often uses in speeches today—may be a supplement, but our main future for both inward investment and exports lies in Europe.

To be part of that Europe, we have to look at our opt-out status. The President of the Board of Trade made a speech on the matter at the Institute of Directors last week. He said that the actual performance of so many British manufacturing companies in so many sectors was seriously lacking. He said: It is the averages that count and the UK has a long tail of under-achievers. You know it, I know it. Why cannot the Government admit it tonight? As the President of the Board of Trade said, Britain's share of many of its top 80 international markets has been taken over, not by low-cost, Asian exporters, but by high-cost, well-paid European, North American and Japanese companies, which compete even with their higher labour or currency costs on higher quality products.

So, as the President of the Board of Trade said, the challenge is producing top-quality products that people want to buy". That was not a speech from a Labour spokesman. It was a speech by the President of the Board of Trade. That message is reflected across the board by every serious examination of our competitive ability these days.

The Confederation of British Industry is concerned that we are reaching capacity constraints. According to the latest CBI survey, our capacity constraint in April this year was similar to that in October 1988, at the height of the Lawson boom. I saw that on a recent visit to Europe's best engineering steel plant, UES Steels in Rotherham. The company is having to take on extra shifts because it cannot produce enough to meet the demands of its customers. That is good news, except in that so little has been invested that steel is now being imported into the United Kingdom because we have insufficient capacity to produce.

The debate is partly about investment. The complaints about under-investment come from every sector. A report just produced by CCN Business Information says: There is still no sign that industry is prepared to invest in new plant and equipment. On the contrary, the evidence points to a greater priority on restoring dividends. That point was made by my hon. Friend the Member for Wolverhampton, North-East.

Richard Freeman, the chief economist at ICI, has said: I have no doubt that investment is lagging behind—people are hanging back because they feel uncertain. In 1960 the gear industry in Britain was twice the size of the German gear industry and there was no real industrial gear production in Italy. Now the United Kingdom industry trails both Italy and Germany in the export market. Mr. Michael Opperman, one of the leaders of the gear industry and a Birmingham gear producer has said that shareholders need to take a long-term view, particularly when it comes to investment.

The investment crisis is a constant problem that faces everyone concerned about manufacturing. Total investment—again, according to the House of Commons Library research papers—is down by 11 per cent. since 1990. That is the Prime Minister's legacy. He has presided over disinvestment in Britain. Money for Cedric Brown, no money for investment. I feel that strongly, as I represent the constituency of Rotherham. The success that Conservative Members have talked about is not visible in my constituency.

We have heard talk about the minimum wage. That is for a separate debate. I have here a wage slip handed to me recently. It shows pay of £1.80 an hour and take-home pay of £99 for a 50-year-old man with a family. That is not a living wage. The top-up from the Department of Social Security is a subsidy from the taxpayer to low-wage, exploitative employers. That is not acceptable. There is a fundamental dividing line between Conservative Members, who offer charity, and Opposition Members, who call for justice in the labour market.

Photo of Peter Luff Peter Luff , Worcester

And unemployment.

Photo of Denis MacShane Denis MacShane , Rotherham

The hon. Gentleman refers to unemployment. It is interesting that countries such as the United States, which have a clear minimum wage that has increased in recent years—indeed, Mr. Gingrich, the speaker of the Congress, voted for the last increase in the minimum wage in 1990—have a much better record of employment creation than the United Kingdom.

I deal now with exports, with particular reference to Rotherham. Despite the privatisation of British Steel, and despite the Government's claim that we have made a success of exports, the latest figures reveal that this country exports only 2.8 million tonnes of steel. Canada, Poland and even the former Czechoslovakia export more than us. One of the reasons is that we consume far less steel than other countries.

Per capita steel consumption in the United Kingdom is dramatically low. The figures that I am about to cite are kilograms per capita, the standard international measure for steel consumption. United Kingdom per capita consumption is 232 kg. That compares with 477 kg in Germany, 446 kg in Italy, 532 kg in Korea, 319 kg in Taiwan and 384 kg in America. I hope that the House will forgive me for detailing these tedious steel statistics but, converted into plain English, they show that other countries have public-private partnership programmes of investment, whether in new roads, hospitals, the car industry or shipbuilding, and we do not. Until we are ready to take the brakes off investment, our manufacturing capacity will suffer.

We need more than a Minister selling the United Kingdom overseas; we need a policy of demand based on continuing investment, especially outside the Conservative heartland of the M25 region. We need regional investment banks, and we need to encourage our schools to teach languages as opposed to cutting funding for schools.

The Labour party has learnt a great deal. From the disaster of the two-nation Britain it has learnt that new policies based on investment, increased exports and the revitalisation of all parts of our economy are needed. Only Labour can deliver the package to put such policies into effect.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam 8:01 pm, 3rd May 1995

I, too, congratulate my right hon. Friend the Minister for Trade on his excellent work in batting for Britain's interests overseas and attracting investment into this country. I am not a bit surprised at the success that he has achieved, because I saw how much he managed to do in changing the face of Belfast while he was a Minister at the Northern Ireland office. Any man who can turn Belfast around can certainly do a tremendous amount elsewhere.

Our track record on inward investment is a great success story. We should be proud that we have a magnetic appeal to overseas investors which is without parallel in Europe. Our trademark is a record of excellence. Many statistics have been mentioned this evening, but I shall state simply that the United Kingdom's stock of inward investment rose from £52 billion in 1986 to £131 billion in 1993.

That was no happy accident; we happened to have the right industrial and economic climate, which attracted thousands of companies from all over the world. The truth is that we worked hard and with great determination to build a nation on Conservative policies which are proven and which have created the right atmosphere for inward investment.

Overseas companies come here because the Government are committed to creating a commercial environment in which business can flourish and grow. We have the lowest strike record in Europe and the lowest main rates of corporation tax in the European Union, and, indeed, among the Group of Seven countries. Our personal tax rates are low, thereby allowing people to work hard and progress. We have low inflation and low rates, and no foreign exchange controls. Could the Opposition ever promise never to meddle and interfere with these valuable elements which guarantee our economic success?

Our labour costs are highly competitive, and we impose no punitive burdens, such as the social chapter. We are the envy of the Germans, who sent hundreds of companies here to escape such crippling sanctions. We need only look to Spain and France, where crippling social burdens have created very high unemployment, especially among the young. It is no wonder that Jacques Delors remarked that the social chapter opt-out makes Britain a "paradise" for foreign investment.

Last June, a Gallup survey revealed that eight out of 10 of Britain's top companies supported opting out of the social chapter. The same proportion believed that Labour's commitment to the social chapter would damage Britain's business.

In short, we work hard to welcome overseas investment. The core of our attitude is that we welcome overseas companies; we do not see them as foreign companies, but, once they happen to be here, as British companies with foreign owners. We are not suspicious of them, unlike the hon. Member for Wolverhampton, North-East (Mr. Purchase), who seems to have a deep mistrust of overseas companies, as if there was something wrong with their making a profit in this country.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

That is not true. I am simply proud of successful British companies and like to see them promoted more than foreign companies. I hope that the hon. Lady shares that sentiment.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

Does the hon. Gentleman agree that, when British companies benefit from foreign investment, we are all better off? His attitude to BMW's massive investment in Rover was a case in point. He fails to understand that such investment means jobs, which in turn mean livelihoods rather than the dole queue. He gives the impression of being a dog in the manger.

We must take great pride in our success with trade union relations. We are proud of the fact that we have a low strike record, thanks to our trade union reforms. None the less, below the surface those relations would be volatile and vulnerable if ever there were to be a Labour Government.

We should not forget the trade unions' hostility to foreign investment, which led the Trades Union Congress to describe Japanese firms as "alien" as recently as 1991. Nor should we forget that, in 1987, Ford's plans to build a new plant in Dundee fell through because the unions, including the Transport and General Workers Union, would not accept a single union deal.

Photo of Denis MacShane Denis MacShane , Rotherham

Mention has twice been made today to the TUC referring to foreign investment as "alien". It was, in fact, an expression used by Ken Gill, who did not speak for the TUC or for the mass of trade unions or trade unionists in this country. The expression was explicitly repudiated by leaders of the TUC at the time.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

I reject the hon. Gentleman's assertion.

Only the other day, Labour promised what I can only describe as a "strikers charter" of new union rights. The right hon. Member for Kingston upon Hull, East (Mr. Prescott) pledged to give striking workers a legal right to keep their jobs. He said that he wanted to bring Britain into line with Europe and stop bosses victimising staff.

The truth is that the Opposition are still in the pockets of their paymasters, and confidence in Labour's position on trade unions will come only when the party accepts that the Government's trade union reforms are working. It does not reassure companies looking to invest in this country when they hear the right hon. Member for Sedgefield (Mr. Blair) call compulsory ballots "scandalous".

There are some very positive benefits from inward investment, especially at the workplace. Inward investment has played an important part in the transformation of our manufacturing industry, and especially management. Workplace habits have also changed. It is sometimes alleged that foreign-owned plants are simply screwdriver operations; in other words, workers use assembly kits imported from Asia, which creates only a small number of low-paid jobs. That is not so.

Japanese companies such as car makers find it worth while to use a high British content in their products, especially as our domestic suppliers have turned out to be more reliable than expected. In any case, it is not viable for the companies to import parts from their own base countries.

Sony is a case in point. It is a Japanese electronics firm which is now Britain's largest maker of television sets. Its two plants in south Wales employ more than 3,000 people, and support about 9,000 suppliers' jobs nearby. The European content of the television sets made there is already 90 per cent., and may rise further.

A study of Japanese-owned plants by the Judge institute of management studies in Cambridge found that the European content of their products increased steadily as they became longer established, typically reaching about 80 per cent. after 20 years.

The Japanese links with local firms have helped those firms to improve the quality of their goods to match the Japanese high standards. Toyota may be tough with their car parts suppliers, but, as a result, the suppliers have re-engineered their production processes to improve quality and cut costs. As an incentive, Toyota gives its suppliers a regular feedback, awarding them marks for QCDD—quality, cost, delivery and development. That is a culture shock indeed.

One firm in Leicestershire, Rearsby Automotive, which makes handbrakes, gear sticks and so on—it may be in the constituency of my hon. and learned Friend the Member for Harborough (Mr. Garnier)—has said that, as a result of its liaison with the Japanese, we were dragged kicking and screaming into becoming a worldclass firm. I make no apology for telling the good news—the positive news. The benefits to our economy are incalculable. That point needs to be repeated many times, so that we can slay the myth that Britain is a sick and ailing country, a slur eagerly put round by the Opposition. They have the gall to run down this country, suggesting uncertainty, vulnerability and insecurity. They begrudge our success stories, and they begrudge the fact that we have brought scores of jobs to this country, through companies such as Black and Decker, which closed its Limburg plant in Germany and expanded in Spennymoor, in the constituency of the right hon. Member for Sedgefield (Mr. Blair), with 300 jobs on the way.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

We all appreciate the successes. Can the hon. Lady tell us, however, when manufacturing production and manufacturing exports will return to the levels that we enjoyed in 1984, when manufactured exports exceeded manufactured imports? With all the news that the hon. Lady brings to us this evening, can she tell the House when that favourable position will return?

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

Bearing in mind the fact that our economy is booming and bringing benefits all round, the hon. Gentleman's remarks are simply irrelevant today.

I want to return to the remarks made by the managing director of Black and Decker: The production cost savings in switching to Britain are far bigger than our total wages bill for a whole year. The company found that the compulsory social charges in mainland Europe of paying half of every worker's health insurance, unemployment insurance and state pension, and all the company pension, were crippling it. That is why the company came to this country. A Black and Decker machine shop supervisor said: Industry is flexible, it has to be—and the Social Chapter isn't. I now turn to the social chapter, because there are many myths and misinterpretations of it. I did not find it helpful—it will not be helpful for the country as whole—to hear the hon. Member for Middlesbrough (Mr. Bell) say that Labour believed in the minimum wage, because it was social justice. That sounds splendid in itself, until one begins to examine what the hon. Gentleman means.

The call for a minimum wage will drive away all the jobs that we have created. The Opposition fail to understand that, if they introduce a minimum wage, they will increase wages for some, but the net result will be that the prices of products will increase, profits will go down and there will be an increase in the jobless. I hardly call that new Labour fairness. If we fail to heed the lessons of the social chapter, we shall find that Britain will rapidly lose its attractions, and major companies will relocate. They may go to eastern Europe or to the far east. One thing that is for certain is that they will not stay in this country.

Our strength is that we have a flexible work force who can adapt to the demands made of them and are prepared to retrain where necessary. They welcome the opportunity to work overtime to bring benefits to themselves and their families. People respond to the chance to work, and to bring rewards for themselves.

If we had been stuck with the social chapter, people would have been limited to a maximum of 48 hours a week. Many of our workers are doing between 55 and 65 hours a week, week in and week out. That is their choice. The Government do not have a right to try to limit the hours that people choose to work. The reward is that people have a marked increase in disposable income, which has never been the case under any Labour Government. If we hobbled a company by preventing it from working hard, we would deprive factories of the ability to compete worldwide.

We must consolidate our work in sustaining the right climate for inward investment. We need to support companies that can genuinely show that they will introduce long-term, quality employment. We need to show inward investors that they enjoy the support of a Government who are committed to their success and their business.

However, we should not delude ourselves. International companies would not be willing to locate in the United Kingdom or to create thousands of skilled jobs if this country allowed itself to be held back by the anti-business attitudes so beloved of the Labour party—or, to put it in Labour party newspeak, interventionism, which means denying companies the right to manage.

We should remind ourselves of the statement by the hon. Member for Livingston (Mr. Cook) when he was trade and industry spokesman. He told a Tribune group rally: more socialist planning would be the best way to solve Britain's economic problems. He left the audience in no doubt about where he stood. He added: How many people have they heard making the case for socialist planning of the economy? If we can get almost a majority without even trying, just think what we can do if we are confident and really give it a push. "It", of course, was socialist planning.

I conclude with a word of warning—

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

I am giving you extra warning—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. I hope that the hon. Lady is not warning the Chair.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

I would not dream of trying to take your elevated position here, Mr. Deputy Speaker. What you say is highly respected.

I issue a word of warning. The Labour threats to interfere, which come from here, there and everywhere, could be extremely damaging. Foreign investors will not invest in an unsuccessful Britain. Labour's business plans for Britain demonstrate that Labour is still wedded to the policies that lay behind our industrial failure of the past.

Mr. Stanley Kalms, the chairman of the Dixons group, was clear about Labour's plan. In a letter he wrote to The Times on 11 February 1994, he said: I had an awful sense of having been there before. We went through all this in the 1960s and 1970s, and it didn't work. British business doesn't want a national plan. It wants low inflation, it wants low interest rates, it wants good industrial relations. But some great blueprint drawn up by civil servants, politicians and economists—no thank you. The Financial Times commented on Labour's policies as follows: Labour's corporatist, interventionist instincts are alive and putting the boot into the free market. Those who thought Labour had forsaken the 'profits are dirty, bash big business' mentality of the post-war decade are in for a rude awakening. The overseas companies are taking a careful look at what might happen if we had a Labour Government. They are well aware of the increasing burdens that could be thrust upon them. Indeed, they will take rapid flight should there ever be a Labour Government.

Overseas companies are aware that they would be threatened with heavy tax increases. They have already taken note of the comments by the hon. Member for Dunfermline, East (Mr. Brown) about trying to close tax loopholes. Everybody knows that that phrase means increasing taxation, which is crippling and which will drive out all the magnificent inward investment we have brought to this country. I congratulate the Government on their enormous drive to attract inward investment. I have no doubt that this country will continue to support a Government who will keep jobs.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow 8:19 pm, 3rd May 1995

The hon. Member for Sutton and Cheam (Lady Olga Maitland) has just offered us a remarkable picture of a United Kingdom basking under the benign, compassionate stewardship of a Conservative Government, yet her Government and her party are astonishingly unpopular throughout the country. We shall win the next election. I bet the hon. Lady that her party will—undoubtedly—lose the Perth and Kinross by-election in three weeks.

I shall focus my speech on Scottish maritime industries. If I get the Minister's attention for a moment, I would like to ask him a couple of questions concerning those industries. Before I turn to them, I shall make a comment or two on inward investment. I remind the House that the hon. Members for Eastwood (Mr. Stewart) and for Gordon (Mr. Bruce) referred to devolution in relation to this motion. The hon. Member for Eastwood, who was until recently a Minister with responsibility for industry at the Scottish office, was understandably modest about his party's current standing in Scotland. His party was humiliated at the recent elections to the new unitary authorities.

As I said, given its industrial and other policies, the Conservative party will undoubtedly lose the by-election in Perth and Kinross. I hope sincerely that the Scottish National party does not win. It will be a close race between the SNP and the Labour party. The SNP has already engaged in a very unsavoury campaign and it does not deserve to win.

My interest in the maritime industries has been lifelong. My father was a fisherman, my mother a fishergirl. At the age of 15 it only needed the experience of one north Atlantic gale to put me ashore for ever, where I served an apprenticeship in a shipyard as a shipwright. Therefore I know something about the shipbuilding industry and the industrial relations in it.

The record of inward investment in Inverclyde, especially in Greenock is good. The hon. Member for Sutton and Cheam will be disappointed to hear that the then Labour Member of Parliament Hector McNeil, later Sir Hector McNeil, persuaded the president of IBM to come to Greenock and establish premises in Spango valley. That was a remarkable piece of marketing for the valley because it was a bog-like area at that time. IBM remains one of the biggest private employers in my constituency and is turning out remarkable profits based on the assembly of personal computers and related software. It offers good terms and conditions of employment to its employees, many of whom are constituents of mine. The same largely holds for National Semiconductor. The setting up of that plant predates what we now know as the Thatcher Government, to which the hon. Member for Mid-Staffordshire (Mr. Fabricant) referred. National Semiconductor is also a large employer, pays good wages and offers reasonable terms and conditions of employment.

I mildly criticised the hon. Member for Eastwood a moment ago concerning his blind spot, but I compliment him on playing an important part in bringing the enterprise zone to Inverclyde, for which he deserves some credit. Unfortunately, he and his officials at the Scottish Office designated two problem sites in that enterprise zone, one of which will never be developed. It impinges on a site of special scientific interest and the European flora and fauna directives will ensure that no development ever takes place there. There is no question of transferring or swapping sites in a zone, so that site has been written off.

There is also a problem with the Gourock ropeworks, a derelict, listed industrial building, which I would like to see demolished. The Scottish Office must act much more decisively to bring that demolition about so that, in what is left of the lifetime of the economic industrial enterprise zone, at least the existence of that site may persuade another inward investor to come to Port Glasgow. No inward investor will take over a derelict, listed building which requires many millions of pounds to renovate and conserve. It would be better if it were demolished and the site cleared for another industrial incomer.

I would like to ask the Minister a question or two concerning the shipbuilding industry. I was deeply disappointed when P and 0 ordered two huge cruise liners from German and Italian yards. I was very angry at the time. In fairness to P and O, it has to be readily acknowledged that no shipyard in the United Kingdom expressed the slightest interest in those two remarkable contracts, which I found deeply disquieting. Indeed, there are only two shipyards in the United Kingdom that could build ships of that size: Kvaerner Industries of Govan and Harland and Wolff of Belfast. That is a savage indictment of the way in which the industry has been allowed to run down over the past 30 or 40 years—not the past 15 years. The industry has been allowed to run down to the extent that such lucrative orders go to shipyards where the wages are even higher than those paid in the few remaining shipyards in the UK.

Almost 1,000 constituents of mine are still engaged in shipbuilding at Fergusons in Port Glasgow—two weeks ago, Princess Alexandra launched the Caledonian MacBrayne ferry for services to the Isle of Lewis—at Kvaerner of Govan and at Yarrows of Scotstown. I know that the Minister and his colleagues are opposed to subsidies of any kind, but access to the shipbuilding intervention fund under the European Union seventh directive is still hugely important to Kvaerner, Fergusons and, indeed, to Harland and Wolff.

I understand that the Government want the intervention fund to cease on 31 December. I appeal to the Minister not to allow that to happen as it would have a deleterious effect not only on the few remaining shipyards in Scotland and south of the border but on shipyards throughout the European Union. Throughout the EU, we still find it extremely difficult to compete effectively and successfully with yards in south-east Asia.

I would be grateful if the Minister would take that plea on board and if he and his ministerial colleagues would consider continuing with the directive, because it provides work in areas of massively high unemployment. One has to think only of Belfast and the people employed at Harland and Wolff and of the people employed with Kvaerner and Fergusons on the Clyde to see the directive's importance.

The United Kingdom shipbuilding industry has suffered a severe decline over the past 40 years, brought about by a combination of poor management, poor industrial relations and some very short-sighted trade union policies. I speak as a shipyard worker who, many years ago, argued with union colleagues about the need for our working practices to become as flexible as those in the many European yards. I am glad to say that Fergusons in Port Glasgow, Kvaerner in Govan and Yarrows of Scotstown have superb systems of industrial relations. I can pop in any time to the Fergusons yard to talk to managers and shop stewards. The atmosphere in the yard is very good and quite unlike the atmosphere and ambience in the yards in which I worked as a young man until I came in from the cold. I never did like clocking on at 7.30 am. I decided that there were better jobs than that.

I do not want to take up as much time as some of my colleagues. Having made my plea to the Minister, I want to raise several points about developments in the offshore oil and gas fields, for which the Minister has responsibility following the closure of the Department of Energy.

With the developments in the oil and gas fields west of Shetland, and the very important developments in the Morecambe bay field, there is a future for firms on the lower Clyde. Two rigs are being converted in my constituency at the moment. That work employs the remarkable talents and skills of welders and others in my constituency. Those people will continue to have a role in respect of conversion work to change production rigs to accommodation platforms.

Is the Minister satisfied with the operation of the Petroleum Act 1987? The responsibility for its implementation originally lay with the Department of Energy. That very fine man, the late Alick Buchanan-Smith, piloted the 1987 Act through its Committee stages. He was a remarkably popular Minister. He was also a very fair-minded adversary and remarkably popular with other Scottish Members.

From the moment Alick Buchanan-Smith piloted the Petroleum Bill through its Committee stage, I gave him notice that I would monitor its implementation. Each year since its implementation, I have tabled a batch of questions about its operation. I believe that six questions are tabled for answer on 15 May. However, I would appreciate it if the Minister, with his usual courtesy, would respond to some questions in advance of those written parliamentary answers.

When those platforms and submarine pipeline networks become redundant, they should not be abandoned and lead to the kind of escapades that we saw last weekend in respect of certain members of Greenpeace. They should be dismantled and removed from the sea bed and the sea bed should be swept clean, as is the case in Norwegian waters. That would allow our fishermen, who have readily forsaken those grounds to allow for the development of the off-shore industry, to return to fish those areas. In the main, I am obviously talking about demersal fishermen.

It is wrong to abandon those structures. They should be dismantled and removed. The Minister will confirm that that has always been the objective of Governments in Norway, whatever their persuasion. Wherever possible, they try to clean the sea bed. I know that it is enormously difficult to do that with concrete structures and that it is easier with steel structures. However, I believe that the oil and gas companies are avoiding their moral responsibility to other users of the local maritime environment, particularly the fishermen. Is it now this Government's policy to abandon those platforms and structures rather than to dismantle and remove them?

With regard to the sparse wording of the subject for debate, I believe that the experience and knowledge gained from dismantling those structures could aid us in acquiring such contracts elsewhere in the world. Because of the influence and pressure exerted by environmental lobbyists, the argument for the removal of such structures will become stronger. Abandonment presents safety problems, but that is not this Minister's responsibility. It is a matter for his colleagues in the Department of Transport. The fundamental objective should be the honouring of the obligation to commercial fishermen and other users of the maritime environment that those structures will be removed.

Long may inward investment continue. The hon. Member for Eastwood knows how much my constituency has benefited from it. Incidentally, as he has returned to the Chamber, may I tell him that I recently offered him a rare compliment in respect of his active role in establishing the Inverclyde enterprise zone and initiative? If I remember correctly, he launched that initiative in Gourock. That investment must continue.

The people of the lower Clyde are only too keen to be given work in the range of industries that is coming our way. As the hon. Member for Eastwood is aware, the Royal Bank of Scotland recently set up in Greenock. I sincerely hope that the shipbuilding industry, even in its current shrunken state, will be allowed to compete internationally. It can do that only with the help of the seventh directive on the shipbuilding intervention fund.

As the offshore industries develop to the west, that should have a beneficial effect on our fabrication yards, which are among the best in Europe. It is my fervent hope that the lower Clyde will enjoy the economic benefits of the work that I believe will come our way as a result of the developments in the west with regard to that important industry.

In terms of inward investment, our maritime industries in Scotland must be managed effectively and in the interests of everyone in them. That should embrace the interests of the traditional industries, such as fishing, as well as those of the much newer industries involved in the extraction of oil and gas from the continental shelf.

Photo of Stuart Bell Stuart Bell , Middlesbrough 8:37 pm, 3rd May 1995

With your permission, Mr. Deputy Speaker, and with the leave of the House, I want to reply on behalf of the Opposition.

I begin by responding to the hon. Member for Eastwood (Mr. Stewart) and the hon. and learned Member for Harborough (Mr. Garnier), who took such a strong interest in the development of our economic policy. I was with my hon. Friend the Member for Dunfermline, East (Mr. Brown) yesterday or the day before when we elaborated on that policy and, in response to the questions asked today I want to share some of the thoughts that were expressed.

We fully recognise that industrial and business communities must prosper within the framework of growth and expansion with low interest rates and low inflation. The hon. Member for Sutton and Cheam (Lady Olga Maitland) said that she believed only a Conservative Government could deliver low interest rates and low inflation, but at present both interest rates and inflation are rising. The hon. Member for Gordon (Mr. Bruce) referred to the meeting between the Governor of the Bank of England and the Chancellor of the Exchequer on Friday, which is not too far away. We await with interest to see what happens to interest rates after that meeting.

At his press conference on Monday, my hon. Friend the Member for Dunfermline, East referred to his "iron commitment" to establishing a stable framework of monetary and fiscal discipline for sustainable long-term growth and an "iron commitment" to macro-economic stability and financial prudence.

I enjoyed the intervention of the hon. Member for Eastwood. He referred to the general agreement on tariffs and trade. I came along to the debate armed and well prepared with a mighty thesis on GATT, the World Trade Organisation and where we go now. Unfortunately, the debate went in a different direction, and we discussed other matters such as the value of currency, which are close to the heart of the hon. and learned Member for Harborough.

I was remiss in not congratulating the hon. and learned Member for Harborough on taking silk. From one barrister to another, it was well merited. I have read in "Dod's" and "Who's Who" about his interesting career at the Bar. I am sure that he, his family and those around him will be very pleased at his elevation.

Photo of Edward Garnier Edward Garnier , Harborough

I thank the hon. Gentleman for his kind remarks. From an ex-client of mine, they come all the better.

Photo of Stuart Bell Stuart Bell , Middlesbrough

I am very grateful. [Interruption.] As Conservative Members say from a sedentary position, us lawyers stay together.

Sometimes when I cannot sleep at night, I read "Das Kapital" in French, sometimes I read the 1992 Conservative manifesto, and sometimes I read old copies of Hansard. According to Hansard, the right hon. or hon. Member who replies to a debate always says, "We have had an interesting debate." We have had an interesting debate. It has ranged far and wide beyond industry, beyond trade, and even beyond inward investment. The hon. Member for Sutton and Cheam, in an interesting intervention on my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), actually mentioned family values, among other subjects. One interesting exchange between the two touched on part-time employment. It reflected how the economy has changed over many years.

As I said to the Minister for Trade, there are fewer people in work today than there were in June 1979. The composition of the number of people in work is different. In June 1994, 46 per cent. of the work force in employment were female. In June 1994, the self-employed represented 13 per cent. of the work force in employment, compared with 10 per cent. in June 1983. Again, in June 1994, 11 per cent. of male employees and 47 per cent. of female employees were part-time, and they totalled 6 million employees. We can see how society has changed in relation to employment.

The national minimum wage has weaved its way through the debate. The hon. Member for Sutton and Cheam referred to the social justice aspect of it. My hon. Friend the Member for Rotherham (Mr. MacShane) was eloquent and persuasive. He made the point—it is often overlooked by the Government—that there is a national minimum wage in the United States of America. We are consistently told how good the United States of America is in respect of job creation. I believe that Newt Gingrich supported the previous rise in the national minimum wage.

Therefore, although there is a tendency to compare the national minimum wage, which will become part of our society under the next Labour Government, with the position in France and Germany, we tend to overlook a comparison with the United States. It is because of the significance of the national minimum wage in terms of employment, the low-paid, social justice and the impact on family credit that we are taking our time. We will come up with a proper, valid minimum wage that is in the interests of the work force of this country. I reject entirely the argument that, because we believe in a national minimum wage—I have believed in it for the past 20 years—we are in hock to the unions.

The hon. Member for Sutton and Cheam, in an eloquent intervention of which Lady Thatcher would be very proud, gave the impression of Rip van Winkle. He had been asleep for 100 years, but how many years have Conservative Members been asleep? The world in which we live now is not the world of 1979 or 1978. My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) was very frank about industrial relations at that time. None of us wants to go back to the 1970s—we cannot. We must see how dark the backward stream, a little moment passed so smiling. It is always nice to throw a little poetry into our debates.

The past is the past. The great failure, if I may say so respectfully to Conservative Members, is that, by banging the drum of the past, they are not in touch with public opinion. They would be better advised to consider carefully how we develop our policies and to be critical of them as they develop, than to try to take us back to the 1970s, an age that is long gone.

The Minister for Trade was somewhat taken aback by my reference to our exports having increased by 1.5 per cent. and imports by 6 per cent. He seemed somewhat flummoxed by that. I was able to read to him from the Central Statistical Office's "First Release". The news is even worse than I thought at the time. It states: The value of total exports in January was £11.8 billion (1.5 per cent. more than in December).Total imports were £13.0 billion in January (2.5 per cent. less than in December).The latest estimates of trends in the value of trade show little change for exports and an increase for imports.In the three months to January, exports increased by 1.5 per cent. and imports by 6 per cent. As for the volume of trade, it states: In January, excluding oil and erratics, the volume of exports fell by 2 per cent. compared with December and the volume of imports fell by 3 per cent.Trends in trade volume (excluding oil and erratics) show a decrease for exports and increasing imports.In the three months to January, excluding oil and erratics, the volume of exports fell by 0.5 per cent. and the volume of imports rose by 5.5 per cent. On exports and imports of unit values, it states: In the three months to January, the unit value indices increased by 2 per cent. for exports and by 3.5 per cent. for imports leading to a 1.5 per cent. decrease in the terms of trade. The hon. Member for Gordon said that there is a danger for the Government. They consistently fall into the trap that they set for themselves when they have good news on the increase in exports. The Minister referred to the period a year ago in respect of the 9 per cent. increase in our trade. Opposition Members who have been in the House for 12 years know all about selective statistics. It takes us a little while to get to the bottom of them. The Government use selective statistics and seek to build an economic policy around them, so it is hardly surprising that they do not hear the desired echo from the public.

The right hon. Member for Northavon (Sir J. Cope), whose contribution seems to have been made a long time ago, talked about the success of Airbus and the Groupement d'intèrêt economique, which had been its framework. The hon. and learned Member for Harborough will be tickled to know that I lived and practised in France when that framework was brought into effect. I remember, for my sins, being with Valéry Giscard d'Estaing at the Airbus factory in Toulouse when he made a speech. I followed the development of the Airbus.

My hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell)—I am glad that, bearing in mind our time constraints, he is still with us—followed the theme of inward investment and rightly linked it with regional selective assistance. He made the point that inward investment is not simply a matter of money coming into the country; there must be the co-operation and development within the country that make it possible and worth while. In other debates, hon. Members have congratulated many Labour-controlled councils that have worked with the Government to make inward investment feasible, viable and attractive.

In 1993–94, the Department of Trade and Industry spent £90 million on regional selective assistance to support investment that created or safeguarded jobs in assisted areas. During the same period, the Department expected to offer £135 million to support projects involving 30,000 jobs and a total investment of £1,000 million. Notwithstanding some of the statements made by the former Chief Secretary to the Treasury, we have always encouraged the Government to recognise the importance of the principle of regional selective assistance to inward investment.

The hon. Member for Mid-Staffordshire (Mr. Fabricant)—who has followed the debate patiently and who, as he knows, has the affection of the House—took us on a little jaunt to the University of Southern California. He mentioned both Ronald Reagan and Benjamin Franklin; I am not sure which of the two was at university with him, although I am sure that one of them was. In any event, he enlivened our proceedings.

The hon. Gentleman also talked about GATT. I am glad to note the presence of hon. Members on both sides of the House who are aware of developments in the world trade community—and the World Trade Organisation—following the appointment of a new director general of GATT, and understand the need for a multilateral trade negotiation that will unite the world. The hon. Gentleman touched on that. He knows, I know and no doubt Ministers know that—because the Uruguay round continued for so many years—there is now a tendency towards unilateral agreements: the United States is looking for such agreements with Japan and South America in relation to financial services.

The hon. Member for Mid-Staffordshire—this was first-class Labour party policy, in regard to the 28-day moratorium for companies going under—urged on the House and the Government the adoption of chapter 11 procedures. We support such policies, and I found that part of the debate interesting and constructive.

My hon. Friend the Member for Wolverhampton, North-East showed great experience of the House. He demonstrated that if an hon. Member is asked about, for instance, women working part time, that hon. Member can talk about Ever Ready, his council estate and the twilight hours, speaking from first-hand experience.

The hon. and learned Member for Harborough made an interesting speech, but seemed to be caught in a time warp. It is not helpful to return to the past, which may mean talking about what happened a long time ago. He spoke of the global market place; I should have liked to hear someone talk about exports into that global market by Barings, which exported £800 million into Singapore, but no one has done so. No one has pointed out that that is the unacceptable face of capitalism.

I recently made a speech in the north-east of England about how Barings had taken £800 million to Singapore—in suitcases, cheques and used notes; through bank loans; through whatever means they could. I pointed out that Barings had not invested in industry in the north-east, saying that it wanted a return on its investment. That reflects the difference between the Opposition and the Government: £800 million can be swept away, the banking system shudders but does not crumble, and nothing is invested in industry.

Photo of Edward Garnier Edward Garnier , Harborough

If the hon. Gentleman thought that Barings was so important, why did he not mention it in his opening remarks?

Photo of Stuart Bell Stuart Bell , Middlesbrough

I shall let the hon. and learned Gentleman into a secret. I prepared a speech that would have taken an hour and a half to deliver, because when we last debated these issues the House was less full than usual. I am glad to say, however, that tonight we have heard first-class contributions from both sides, and have been able to keep the debate going. I am sure that the part of my speech that I did not make will be delivered on another occasion, and will enliven a later debate.

The hon. and learned Gentleman referred to some of the statistics that I was examining, and expressed a hope that I would understand them. The Government's difficulty is that we understand the statistics all too well, as do the public. It does not matter whether the Prime Minister stands at the Dispatch Box and says how well we are doing in exports, or whether the Minister for Trade says how wonderfully we are doing; the figures are there, prepared by the Library of the House of Commons—and they are based on statistics for the United Kingdom balance of payments current account.

The hon. and learned Gentleman said that that account was in surplus. The invisible balance, however, tells a different story. There was a deficit of £3.1 billion in the final three months of 1994, compared to one of £1.9 billion in the previous three months and one of £3.3 billion in the final three months of 1993. The deficit for 1994 as a whole was £10.7 billion, compared to £13.4 billion in 1993.

The invisible balance helps the nation out. I am now coming to the point made by the hon. and learned Gentleman. Outward investment produces net investment income, which is fortunate—although in times of recession that money has a tendency to flow back into the country. The invisible surplus improved significantly in 1994, reaching £10.4 billion. A slightly lower surplus on services and a slightly higher deficit on transfers were more than offset by a large rise in net investment income—a point made by the hon. and learned Gentleman. The figure was £11.2 billion in 1994, compared to £1.6 billion in 1993.

The current balance was in surplus by £0.5 billion in the fourth quarter of 1994, compared to a revised estimate of £1.3 billion in the third quarter. The current account for 1994—to which the hon. and learned Gentleman referred—was in deficit by £0.4 billion. Those are the statistics; those are the facts. If the Government—on the eve of tomorrow's elections—want a better echo from the public, it is important for them to understand those statistics and then communicate them to the public with a different message from the one that they are sending now.

The hon. Member for Sutton and Cheam mentioned Toyota, but even she missed an important point that she might have made. Indeed, the hon. Member for Derbyshire, South (Mrs. Currie), who often graces debates such as these, might have made it for her. Toyota is to invest a further £200 million to double production at its Burnaston plant in Derbyshire. By the time the plant is in full production in 1999, it is expected to create 1,000 jobs directly and a further 3,000 with suppliers. [Interruption.] If the Minister for Transport in London continues to make that kind of noise from a sedentary position, I assure him that he will be here until 10 pm. Sufferance comes in gentle doses, as he knows.

Let me return to what should be, and has been, at the heart of the debate. No doubt the Minister will refer to this, as my hon. Friend the Member for Morley and Leeds, South did. He said that we supported inward investment—the inward investment of Samsung in Cleveland, that of NEC in Livingston, that of Honda in Swindon, that of Motorola in East Kilbride, that of Samsung Heavy Industries in Harrogate and that of Ford in Dagenham, with its £400 million investment.

The truth is that the Government are not anxious to tell us that our own inward investment is part of a trend—the trend of taking in each other's washing in terms of trade, and investing in each other's countries in terms of finance.

My final point—that will please the Minister for Transport in London—is that we must deal with one of the most important points to come out of these debates, and it is one which shows the misconceptions of the Conservatives towards the social chapter. My hon. Friend the Member for Greenock and Port Glasgow referred to IBM and to National Semiconductor, and described how they located in this country in the 1970s. Following those investments, 36 per cent. of world direct investment in European Community member states was in the United Kingdom, compared with 5 per cent. in Germany, 15 per cent. in France, 11 per cent. in the Netherlands and 13 per cent. in Spain.

The Invest in Britain Bureau commissioned a survey of 200 manufacturing, assembly and research and development companies that had invested in the United Kingdom. When asked their main reason for investing in the United Kingdom, 45 per cent. mentioned the need for a United Kingdom presence; 29 per cent. mentioned the need for a European base; 25 per cent. stated that their market in the United Kingdom warranted local manufacture; 16 per cent. said the English language; 14 per cent. said financial assistance; 10 per cent said labour skills; 10 per cent. said the European single market; 6 per cent. said labour costs.

Nissan said that it was interested in a good technological base in terms of people and the fact that it had a market here was important. Let us lay to rest the idea that companies will not invest in our country because of the social chapter. The hon. Member for Sutton and Cheam said that the Opposition were knocking Britain. but no one knocked Britain more than the Conservatives in the late 1970s. The hon. Member for Mid-Staffordshire referred to the brain drain, which was a phrase invented at that time by the Conservatives to damage a Labour Government. Allegations and threats that the social chapter will cost jobs here because it will prevent inward investment are knocking Britain, and not knocking the Labour party.

Conservative Members who participated in the debate are now so out of touch with the people of this country that they will wake up on Friday with a shock that will be more important than they have realised. They will see how the country votes in local elections, in which they will lose thousands upon thousands of seats. If I were them and I had ears, I would hear.

Photo of Mr Richard Page Mr Richard Page , South West Hertfordshire 9:02 pm, 3rd May 1995

The debate tonight has been based on quality, if not quantity. I can tell any hon. Member who has not been here tonight to relax, as there will be very little media comment about this debate because it has been about good news. There is good news about the United Kingdom's manufacturing, exports and inward investment, which guarantees that the debate will get no coverage in our gloom and doom-laden media.

May I first pass on an apology to the House from my right hon. Friend the Minister for Trade? He regrets that he cannot be here for the wind up, but he is the Minister responsible for promoting exports and he is attending an engagement tonight at which he will be doing just that.

I now have the slightly unpleasant task of chiding the hon. Member for Middlesbrough (Mr. Bell), who is a big man and can take this type of remark. I must criticise him for taking a highly selective snapshot on import and export figures to bolster a rather dodgy argument. Quoting a three-month variant against a previous three-month variant is rather like quoting turkey sales just before Christmas against turkey sales just after Christmas. I am afraid that the facts presented by my right hon. Friend are more reliable and accurate.

If the hon. Member for Middlesbrough wants to do three-month comparisons, I suggest that he compares the three months he quoted with the same three months of the previous year. That is the fair thing to do. If he did that, he would see that visible exports have gone up by 12.5 per cent, while visible imports are up by only 8.9 per cent. Non-EC exports have gone up by 6.9 per cent., while imports have fallen by 7.2 per cent. That is what the hon. Gentleman should have done, rather than producing his selective figures.

My right hon. Friend the Member for Northavon (Sir J. Cope) rightly referred to the success of the airbus. He uncharitably drew the House's attention to the failure of the previous Labour Government to keep us in the scheme, and added that the Conservatives enabled us to take part in a highly profitable and successful venture. My right hon. Friend underlined the need for international partnerships in major products to achieve similar successes in the future.

My hon. Friend the Member for Eastwood (Mr. Stewart) made an important point about second and third investment decisions, but he knows that those can come only if the first decision is made, and it is important to get that first decision. I shall not follow him down the devolution route, as that could occupy us for a considerable time. I agree that it is important that we send coherent and stable messages to those people who wish to invest in the United Kingdom.

My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) always brings a degree of colour and excitement to our debates, and he correctly referred to the length of service in the Department of Trade and Industry of the President of the Board of Trade. My hon. Friend compared that with the shorter terms of his predecessors, and there is no doubt at all that the President of the Board of Trade's tenure in that position has brought stability, positive programmes and significant improvements to this country's export and manufacturing progress. He is to be congratulated on that.

I am glad that my hon. Friend the Member for Mid-Staffordshire referred to the consultation paper which is being produced to help companies which are on the brink of collapse, by introducing a moratorium period, and the whole House welcomed that. The only thing which worried me was that I heard that the measure is Labour party policy. We will have to look closely at the measure to make sure that we are on the right lines.

My hon. and learned Friend the Member for Harborough (Mr. Garnier)—I add my congratulations to those which have been given to him—was right to criticise the Labour party for its scaremongering. It does not help if overseas companies who wish to invest in this country hear it being run down by the Labour party. He was right to give examples of succesful companies to show how we are winning. As the House and the country know, the proof of the pudding is very much in the eating.

The hon. Member for Greenock and Port Glasgow (Dr. Godman) mentioned the opportunities in the offshore construction industries. He knows of the successes that are being achieved in supplying the fields in the North sea, and the west of Shetland will open up a completely new vista. I know just how hard the oil and gas division of the Department of Trade and Industry is working to ensure that British firms supply the equipment. He mentioned abandonment policies and, in the fullness of time, I look forward to receiving his letters so that I can reply. In the meantime, I can tell him that policy is under active consideration. I look forward to consultation with the industry on the best way to achieve the environmental balances to which he referred.

Photo of Stuart Bell Stuart Bell , Middlesbrough

The Minister is referring to my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) and during my speech I said that IBM had gone to Greenock in the 1970s. In fact, IBM went to Greenock in 1950.

Photo of Mr Richard Page Mr Richard Page , South West Hertfordshire

Well done and thank you.

When considering the tone of this debate, hon. Members will come to the conclusion that the Opposition are struggling to come to terms with today's increasingly integrated world economy. They are off stage, desperately congratulating themselves on dropping clause IV. What an achievement—managing to ditch the ideas of the 19th century, just as we are about to enter the 21st.

Conservative Members have clearly won the argument in this debate. We have won because our policies are coherent and the only ones that will produce a thriving business base.

Back in 1979, Britain was in continuing decline. Strikes were crippling industry, we were losing world market share and we had cash-devouring and inefficient state monopolies. I am grateful to the Labour Government because, at that time of 26 per cent. inflation, with the IMF calling us a banana republic, I managed to come to this House as the Member for Workington. It was a time when the Conservative party won by-elections.

Photo of Mr Richard Page Mr Richard Page , South West Hertfordshire

There was—I remember that winter of discontent.

I welcome the courage that the hon. Member for Rotherham (Mr. MacShane) demonstrated by talking about the steel industry. I well remember that industry. It was costing us £450 million a year in running costs. We had already put in £4 billion, but it was still losing money. Today, strikes in the industry are the lowest since records began in 1891. My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) rightly drew our attention to that significant and dramatic improvement.

We are gaining world share in manufacturing for the first time. Exports are at record levels, despite the tinkerings of the hon. Member for Middlesbrough, who was trying to make out that we are not doing as well. Manufacturing investment is up—by 8 per cent. in the last year—output has been rising for three years and unemployment has been falling during the same period. Inflation is under control at historically low rates and there is every sign that those trends will continue. Those are the hammer blows of success that the Opposition can try to spirit away if they wish, but they are genuine and they are being achieved.

The United Kingdom is more internationally competitive than at any time in recent history. We have world-class manufacturing companies and a world-class service sector. How else could we do so well in services in the United States of America, where we are the number one overseas supplier, with 13 per cent. of the market? That is even more than the Canadians, who have a natural local advantage.

The Government have already done much for industry, but there is more to be done. First, I will tell the House what we will not do. We will not turn the clock back; let inflation loose; have punitive tax rates; let the state make decisions that are best left to managers operating under market conditions; or interfere in the pay arrangements of business.

While Opposition Members are holding sterile debates about what happened yesterday, we are taking practical steps to improve further our competitive position and drawing on the strengths of Government and business to create a partnership to develop more world-class firms.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

How will the war against inflation be sustained against the background of a falling pound and rising commodity prices? It is all very well saying that the trends are good and that that will continue, but how can the Minister be sure of that? Can he explain why industry is not confident that will happen? That lack of confidence is holding back the investment that we need.

Photo of Mr Richard Page Mr Richard Page , South West Hertfordshire

The hon. Gentleman answered his own question, if he only realised it. Manufacturing investment is increasing. That sort of investment in robotics and automatic machines will produce lower unit costs, which will enable us to take more of our market share. That in turn will mean more orders and we will be at the creation of a virtuous circle. That is why our share in world markets is increasing. That is the trouble with the Opposition. They are shaking their heads. They want the country to do badly and yet the figures show how much more—and how well—we are doing.

What else have we got to do? We have to help small and medium-sized companies and boost and support their growth. I would like to spend considerable time talking about what we are doing to help, especially with the business link network, but that should wait for another day and another debate.

By the end of the year, there will be more than 200 business links, giving a single coherent signpost to businesses, to which they can go to get the type of support that they need to expand and develop.

On the international scene, hon. Members should look at how our partnership works on exports. More than 200 business people advise UK companies and more than 100 experienced executives have been seconded by major companies to help the effort. Indeed, major companies are now using secondment to the DTI as a useful part of the career development of their senior staff. I pay tribute to companies that have released well-paid, experienced and knowledgeable members of their staff to come and help UK Ltd. win on the world scene. There is continual dialogue with businesses and their representatives to focus our efforts in each of the United Kingdom's top 80 markets. We have more ministerial visits abroad than ever before. My right hon. Friend the Minister for Trade is not here, but he has been a shining example of what the Government have been doing to help Britain's industry to go forward.

Let us return to privatisation. The Opposition simply have not learnt and we hear criticism of privatisation wherever we go. On the privatisation of British Gas, the hon. Member for Gordon (Mr. Bruce) said that 16 million gas consumers could expect only one result—to pay increased gas prices, higher than the rate of inflation, for years to come. He was wrong. Domestic gas prices have fallen by 23 per cent. in real terms since privatisation and investment has tripled.

On the Electricity Bill, the right hon. Member for Sedgefield (Mr. Blair) said that, in exchange for having no choice, we would have the reality of higher prices. He managed to make two errors in 14 words. Although the privatisation was relatively recent, prices have already fallen and will do so again. Every person who lives in the London Electricity area has received a note with their electricity bill, which says: Prices are down again. For the third year in a row, London Electricity is reducing its prices. The main reduction will be in standing charges, which will be cut on average by 7 per cent. Unit charges are also going down by 2 per cent. It is all good news. Since 1990, the number of electricity disconnections has dropped from over 55,000 to just 1,180 last year.

I could go on and on about the knocking of privatisation. The hon. Member for Glasgow, Garsgadden (Mr. Dewar) said that British Airways would be the pantomime horse of capitalism. It is the world's most successful airline. The right hon. Member for Salford, East (Mr. Orme) said that he had heard that public call boxes could be threatened with extinction, but BT has increased the network by over 50 per cent. to 127,000 call boxes and, instead of only 75 per cent. of them working at any one time, the figure has now risen to 96 per cent. Labour Members may have taken clause IV out of the party's constitution, but it will not erase what it represents from the constitutions of party members.

Even last night on the Atomic Energy Authority Bill, the Opposition had a shining opportunity to say that they would not oppose the privatisation of AEA Technology. Clause IV may not be up in front, but it is still in their hearts and they voted against giving staff members of AEA Technology a chance to run an operation for themselves.

Instead of facing the facts, Opposition Members do not admit that nationalised industries were a terrible drain on the economy. As my right hon. Friend the Minister for Trade said in his opening remarks, they were costing the taxpayer £50 million a week in 1979. Now they cost nothing but contribute to the Exchequer to the tune of £50 million a week.

Those utilities were not just ornaments. One has only to look at one or two of them to see how well they are doing. BT's productivity is up by 135 per cent. since privatisation. Prices have fallen by 35 per cent.; a 250,000 waiting list has been abolished; and BT has invested some £22 billion at home. The same applies to Mercury, which has invested 2.7 billion. The list goes on and on.

No wonder the world is queuing up to copy us.

The world continues to try to invest in the United Kingdom. Inward investment is one of our success stories because, flowing from the economic policies that we pursue, we offer a competitive advantage. As my hon. Friend the Member for Sutton and Cheam has already said, that means low inflation. low taxes and good industrial relations. It is an achievement and a success, as the hon. Member for Morley and Leeds, South (Mr. Gunnell) admitted through gritted teeth. Investors are looking for a location which will give them the best mix of quality and cost, a stable economic system, a skilled and creative work force and lower cost production.

The Opposition have heard it all before and will hear it again and again. As a result of that inward investment, the United Kingdom has 40 per cent. of United States and Japanese investment in the European Union. Samsung's plant in the north-east will bring 50 per cent. of South Korea's investment to the United Kingdom. We welcome all that unreservedly.

Inward investment will give us even greater growth, but already it is giving us one fifth of manufacturing employment, one fifth of manufacturing output and one third of capital expenditure, while 40 per cent. of United Kingdom exports originate from foreign-owned companies and 35 overseas companies won the Queen's award for export achievements in 1995. But that is not all. We get the new technology and the new ideas, so it is a two-way process. The new companies coming in bring their new technologies and help to enrich the base of knowledge and expertise in Britain.

The Government welcome the debate. We have shown during the course of it that, far from having no policies on industry, exports and inward investment, the Government have a consistent approach based on all the factors that have been mentioned. I commend the Government's policies to the House. Only by the continuation of those policies shall we reap the benefits of the great investment that we, as a nation, have put into reclaiming our business heritage.

Photo of Mr Michael Bates Mr Michael Bates , Langbaurgh

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.