Competitiveness

– in the House of Commons at 3:30 pm on 22nd May 1995.

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Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade 3:30 pm, 22nd May 1995

A year ago, the Government published the White Paper "Competitiveness: Helping Business to Win"—the first comprehensive audit of the United Kingdom's industrial and commercial competitiveness. That White Paper was widely welcomed by business. Today, we publish our second report on competitiveness.

This year's White Paper is designed to report on changes in our performance over the past year, describe the action that the Government have taken to improve United Kingdom competitiveness over that period and set out our plans for further progress, making a number of significant announcements today. The White Paper contains new, more extensive analysis of our competitive position. It looks at the competitiveness of key sectors, regional developments and to the future, as well as reporting on changes in our performance over the past year in each of the main factors of competitiveness that we identified last year.

The White Paper reports in detail on the progress that the Government have made in fulfilling the commitments—more than 300 of them—in the 1994 White Paper. It shows promises kept and action taken. For the future, it contains 70 new initiatives and commits more than £240 million extra, of which £165 million is additional Government expenditure. In addition, my right hon. Friend the Chancellor of the Duchy of Lancaster is announcing today, in response to a question from my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), that he is publishing the report of the technology foresight steering group and the 1995 "Forward Look" of Government-funded science, engineering and technology. My right hon. Friend is also publishing the efficiency scrutiny report on resource management systems in Government. My right hon. and learned Friend the Chancellor of Exchequer is today publishing a White Paper on public procurement, and when the markets open tomorrow morning, my right hon. Friend the Secretary of State for National Heritage will be announcing the Government's conclusions on media ownership issues, followed by a statement to the House in the afternoon.

This White Paper reports good news. Last year, output rose by 4 per cent., manufacturing productivity by more than 4 per cent. and exports by 11 per cent.—increasing our share of world trade. Unemployment fell by 300,000. In the last quarter of the year, investment surged by 8 per cent. and is set to increase still further this year. The balance of payments deficit fell sharply and underlying inflation was at the lowest sustained level for 30 years.

That year-on-year performance is impressive and maintains the turnround in our economic performance started in 1979. But the competitiveness agenda is on-going and long term. Our task is to reverse more than a century of relative decline. Last year's White Paper showed how, during the 1980s, we stopped falling behind the rest of the world. We closed the productivity gap with our main competitors, put strikes into the history books and stabilised the decline in our share of world trade in manufacturing.

Today's White Paper takes the analysis forward. Overall manufacturing productivity is now close to that in Germany and France and continues to catch up the United States of America and Japan. At the same time, British companies have regained their reputation for first-class, world quality in manufacturing and services.

The United Kingdom economy's competitiveness is nowhere better illustrated than in our ability to attract inward investment. The UK accounts for one third of all inward investment in the European Union. That investment is worth more than £130 billion, and it has created and safeguarded nearly 700,000 jobs since 1979.

Our exports too are a huge success. They reached record levels last year, and the Confederation of British Industry reports that orders are growing at their fastest ever rate. Last year, Ministers led more than 80 trade promotion missions, accompanied by more than 1,000 business people, to more than 50 countries. I am delighted to tell the House that the business men and women who accompanied me to China last week were able to strike deals totalling more than £1 billion.

I said that competitiveness was on-going. The White Paper makes clear our determination to seek continued improvement. We shall seek it in management. We have as many world-class firms as Germany, but we have a higher proportion of poor performers. Among a raft of new measures to help companies—particularly small and medium-sized ones—learn from the experience of the best, the Government will make available nearly £100 million extra through business links for locally designed business development programmes.

On improvement in exports, despite the success that I have just described, only 100,000 of our 2.8 million UK firms export. We can do better. Today, therefore, we are setting a target of introducing 30,000 new exporting firms to foreign markets by the year 2000. To achieve that, my Department will spend nearly £40 million extra on support for exporters over the next four years. In addition, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has already announced a significant strengthening of Foreign and Commonwealth Office support for commercial work overseas, involving more than 100 new commercial officers, particularly in key, emerging markets.

On improvement in education and training, the Government's reforms—the national curriculum, publication of schools' performance, devolution of management to local level—have already transformed our education system. One third of our young people now go on into higher education. There is, however, no room for complacency. Our aim is for Britain to have the best qualified work force in Europe. The White Paper sets out the steps that we are taking to achieve that aim. Today, the Government are endorsing new targets for achievement in education and training drawn up by the National Advisory Council for Education Training and Targets. Those set new, challenging standards. To ensure that we meet them, we will conduct a major review of our education and training effort, benchmarking it against our leading competitors and identifying where improvement is necessary.

On improvement in innovation, we match the best in inventiveness but not in bringing products to market. Some of the best ideas are born here. We must ensure that more are exploited here. To help, the Government will spend an extra £70 million over four years to support innovation and technology.

In addition, today's report on the technology foresight programme identifies sectors that we need to develop to stay in the top league of industrial nations. The Government's initial response is given in this year's "Forward Look". Foresight will influence spending priorities in Government and the universities. The Government will also encourage industry to respond through a foresight challenge, which will provide £80 million—half from industry, half from Government—for collaborative projects over the next three years,

British businesses have already benefited from the huge structural reforms undertaken by the Government since 1979. We shall build on our programme of radical reform: Nuclear Electric and Scottish Nuclear are to be privatised; the gas supply industry is to be liberalised; and today, I am announcing more than 100 deregulatory proposals on which we shall take early action and new measures to make enforcement procedures more business friendly. In terms of regulations alone, more than 1,000 have now been identified for amendment or repeal.

Today's White Paper adds up to a comprehensive agenda for action: action that will help business extend its growing success, action to improve the support that Government can give to the wealth-creating sector, action to equip our companies with the skills, resources and entrepreneurial drive to challenge the best in the world in the century ahead. I commend the White Paper to the House.

Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

We thank the President for making a statement in advance of a wider launch of the White Paper.

We recognise that Britain must survive and prosper in an increasingly competitive global market. There can be no protected Britain and no Fortress Europe. Is the right hon. Gentleman aware that the essentials for success in that market are much better and more sustained investment in skills, education and training, much better support for technological innovation and much longer-term investment in our manufacturing base? Although the modest announcement that he has made is welcome, in several respects it makes good only the planned reductions in spending which his Department announced in its annual statement for the year. There is little new Government money in what the right hon. Gentleman had to say.

Even allowing for two years of relatively successful growth, the right hon. Gentleman and his right hon. Friends will have to do much more to make up for 16 years of devastation of our industrial base. Contrary to what he said, our position has not improved relative to 1979. Manufacturing investment has become worse. Our position in respect of trade and manufactured goods is worse and training now is worse than in 1979. Perhaps we can give a modest welcome to the right hon. Gentleman's belated recognition, after 16 years in office, that some form of industrial strategy is necessary for us to compete in a global market.

The right hon. Gentleman said that his White Paper of a year ago was widely welcomed by industry. We were all reminded by the Director-General of the CBI today in the Financial Times that that was far from the truth. The director-general said that industry gave last year's White Paper two out of 10—hardly widely welcoming. The reality is that again many searching questions will be asked by those in industry and commerce about today's statement.

What happened to the much-vaunted industrial financial initiative that the right hon. Gentleman announced at about this stage last year? We all know that it was supposed to be directed to short-termism and the amount of money paid in dividends. That initiative was pole-axed by Lord Hanson. The right hon. Member for Loughborough (Mr. Dorrell), who was then a member of the Treasury team, was moved to the Department of National Heritage and the idea was quietly shelved.

When will the President recognise that unit labour costs matter, not wage rates, when it comes to increasing our productivity and competitiveness? When will he and his right hon. Friends recognise that cutting the training budget by one quarter is not the way to tackle the problem? Reducing training places for work by 55,000 this year over last year is not the way to tackle the problem. Having a training programme in which 50 per cent. of youth trainees achieve no qualifications is not the way to tackle the problem.

The right hon. Gentleman mentioned his recent trip to China. We welcome his endeavours. I remind him that those endeavours are certainly needed because in 1979 we had a balance of trade surplus with China whereas last year we had a deficit of £800 million. That is a measure of what his policies have done to our trade with the People's Republic of China.

The fact is that, far from making ground, Britain is falling behind our international competitors. Growth, since 1979, at 1.6 per cent. is the worst performance in the Group of Seven. Unemployment remains persistently high. Britain has lower productivity than any of our main competitors; lower skills, worse capital equipment and depressed investment. It is no wonder that our competitive position is so awful compared with Japan, China, the United States and others.

As the right hon. Gentleman talked about reducing burdens and getting rid of regulations, perhaps he will tell the House how many of the 1,000 regulations that he has identified for scrapping were introduced by his own right hon. and hon. Friends in the past 16 years.

On burdens, what has the right hon. Gentleman to say to industry and commerce about the record levels of taxation that the Government have introduced, despite all their election promises? Last year, he produced a White Paper of some 160 pages. This year his White Paper has an additional 100 pages—like the right hon. Gentleman, no doubt very long on rhetoric and very short on content.

The right hon. Gentleman had something to say about support for industrial innovation, and as he has announced some modern improvement, I welcome that, but the reality is that page 61 of his Department's annual report shows that his planned support for industrial innovation is to decline in real terms. He is just barely making that decline good. Fifteen sector panels on technology foresight have reported. How will his Department build on and back those strategic areas? The reality is, with very little Government effort or support.

All in all, this is yet another attempt at a relaunch by a failed and discredited Conservative Government, by a man who gives all the impression of taking the lead; but the lead that he really wants to take is the job of the right hon. Gentleman the Prime Minister sitting next to him.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Perhaps the next time that the right hon. Member for Copeland (Dr. Cunningham) responds to a statement, he might find it helpful to read it—a copy was given to him in advance—before he prepares his response. He will have recognised that all the issues on which he took issue with me were covered comprehensively in my statement.

I do not find it too easy to take lectures from the right hon. Gentleman on matters to do with wage rates and unit costs. I thought that the Labour party was committed to the social contract, to giving back power to trade unions and to introducing a minimum wage. Yet Opposition Members are telling us about unit costs. The Labour party is designing policies that would have one express consequence: to increase the unit costs of British industry. The right hon. Gentleman obviously has not understood, when he runs Britain down in so comprehensive a way—

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The right hon. Gentleman says that he did not do that. I heard him use the words "falling behind". That is of an economy that is attracting 40 per cent. of all the inward investment coming into the European Union, an economy with record levels of exports, with the best inflation record for 30 years and with an industrial relations record that we have not seen equalled for 100 years. I do not call that falling behind.

I must say to the cognoscenti of the House, of whom there are many even on the Opposition Benches, that the right hon. Gentleman trespassed a little on the speeches that are now being made by the Leader of the Opposition. The Leader of the Opposition apparently is telling us—I think he did so only today, and I am told that there is, God help us, another lecture coming tonight—that the old Labour days of tax and spend are over. Yet when I announce £165 million of money, the right hon. Gentleman says that it is very little new money. Just exactly how much would Labour's big money be? What will the leader of the Labour party say about the amount of extra money to which, by implication, the right hon. Member for Copeland refers?

I was fascinated by the right hon. Gentleman's references to the comments of the Director-General of the CBI on last year's White Paper. He clearly did not entirely understand what the Director-General had said. He said that the White Paper had been received with "deux points"—I appreciate that my accent may not be all that it should be; there is a limit to the ability even of a Euro-fanatic such as myself to speak French.

I have done some research, and I am told that "deux points" is something to do with a thing called the Eurovision song contest. I understand that the maximum score is 15, so "deux points" is not good news. The problem was, I think, that the Director-General of the CBI thought that the maximum score was "trois points".

The complexities of the translation, given the current exchange rates in France and Britain, may be beyond the right hon. Gentleman's comprehension; but I feel that he should establish whether we are trying to rate the country's performance against a record of serious economic advance or to trivialise it by referring to something to do with the Eurovision song contest. Let us get down to the hard core of the matter. If the Government's track record, economic policy and achievements are as awful as the right hon. Gentleman suggested, why is the leader of the Labour party hawking himself around the country's industrial and commercial communities trying to pretend that nothing much would change if there were a Labour Government?

The reason is that we have got it right, and the only policies that Labour Members can dream up are intended to bring them as close as possible to us without splitting their party in half.

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

The White Paper will provide a welcome opportunity for us to build on the success of the 1994 White Paper in improving understanding of the vital importance of competitiveness to wealth creation in a competitive global economy. Does my right hon. Friend agree, however, that much work remains to be done? It would help, for example, if the media took more interest in the achievements of British industry and, indeed, showed more understanding. As my right hon. Friend has already demonstrated, there is also much work to be done with Her Majesty's Opposition.

Does my right hon. Friend agree that there will be a widespread welcome for the proposal to benchmark our educational achievements against those of our best competitors? Will he assure us that, when he carries out that exercise, he will have particular regard to what has been achieved in encouraging more of our best and brightest students to undertake courses in science and engineering, thus raising the skill base of our economy?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My right hon. Friend is absolutely right. He himself has played a distinguished part in helping to advance the competitiveness of our export activities in particular. My right hon. Friend the Chancellor of the Duchy of Lancaster will have heard what he said, and he can be assured that we take the matter extremely seriously.

As for the role of the media, none of us in the House expects the media to do other than criticise when it is appropriate, but a sense of balance is needed. Every time Britain's achievements are disparaged or ignored, it sends a message to the men and women on whose success we all depend. We need a greater recognition and a fairer representation of Britain's achievements by the British media.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

Will the President say a little more about investment? He spoke of an improvement in the last quarter, but investment is still not leading recovery here as strongly as it is in our competitor economies, or as strongly as it did after the recession of the 1980s. What proposals has the right hon. Gentleman to promote investment further?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The overall requirement is to preserve the stability of the macro-economy. However, the hon. Gentleman will be as pleased as I was to learn that the latest CBI surveys show encouraging indications for investment. We intend to preserve the economic background that will allow that to continue.

Photo of Mr Peter Hordern Mr Peter Hordern , Horsham

Does my right hon. Friend agree that the achievement of such a high level of inward investment is very creditable? Does he recall that 16 years ago corporation tax was at 52 per cent., and exchange controls meant that companies had to get permission before being allowed to invest overseas? Does my right hon. Friend recognise that there have been substantial improvements in the performance of British industry since those days and that there is still room for improvement in the conduct of business for small companies, particularly in terms of the late payment of debt?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My right hon. Friend is right. There has been a transformation, and the only people who do not appreciate that are the Opposition. There is no greater indication of that than the decisions by leading German industrialists to invest in this country rather than in their own, let alone the decisions of the Japanese, the Americans and the Koreans, who are increasingly choosing this country as the home base for their European expansion proposals. The record is important and we can be proud of it. In coincidence with the publication of the White Paper, there is a summary document designed to advise people who are in contact with small firms. I hope that all hon. Members will take the opportunity to disseminate the messages in that document. It is designed specifically for small firms.

Photo of Richard Caborn Richard Caborn , Sheffield Central

When the President dealt with last year's White Paper one of the weaknesses that many people criticised related to private financing. The industry finance initiative was set up at that time and it was said that there would be a report on that. First, why has that report not been produced? Secondly, Friday's report by the Select Committee on Trade and Industry on finance for industry again saw that as a structural weakness and mentioned short-termism. I think that that was accepted by the Financial Secretary to the Treasury when he attended the Select Committee. Paragraphs 52, 53 and 54 of the summary show that that structural weakness has not been addressed. The President has dealt with inward investment. What further financial initiatives indigenous to the UK will the President take, because on this issue the Government have a poor record?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman will know that we have not responded to the Select Committee report. However, we shall certainly do so with our customary care. A number of proposals are outlined in the White Paper and in the summary document for small firms. For example, one is to use business links to create a chain of advice to help small businesses to gain access to the financial markets. The House will be aware of the changes that we made to permit building societies to operate in that area. We should bear in mind the fact that there are now some 900,000 more small businesses in Britain than there were in 1979 and that they have been able to finance their survival and development within the existing regimes. We are all anxious to try to improve on that, but by and large the problem that affected the small business sector was the recession of the late 1980s.

Photo of Mr Nigel Forman Mr Nigel Forman , Carshalton and Wallington

Is my right hon. Friend aware that we regard his statement on competitiveness as good news? We should like to see even more done to help small businesses. One of our main competitors, Germany, has five times as many small and medium manufacturers as Britain. Will he assure the House that his efforts, especially on business links and related schemes, will assist that part of our economy because upon it depends much of our future employment and export prospects?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right. The White Paper contains a proposal to co-operate with the leading organisations representing small and medium companies so as to promote a national consultative process. We shall involve those organisations in that so as to draw the views of their members to the attention of Government. In that way we shall know exactly what are their high priority needs. That process will unfold in the course of the year.

Photo of Mr James Molyneaux Mr James Molyneaux , Lagan Valley

Is the President of the Board of Trade aware that some of the matters in his statement are in line with the discussions that the Prime Minister had last week with the two main Northern Ireland parties? Is he further aware that business and industry in Northern Ireland will welcome his intention to streamline the fair employment legislation? No one doubts its objectives, but the problem, as some of his right hon. Friends know, is that the legislation imposes a crushing financial burden, mainly on foreign investors in Northern Ireland who have to meet hideous legal costs to defend themselves against frivolous complaints.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I shall draw the attention of my right hon. and learned Friend the Secretary of State for Northern Ireland to the right hon. Gentleman's remarks. It is fair to say that the initiative of the Prime Minister and of my right hon. and learned Friend the Secretary of State in augmenting the peace process in Northern Ireland has been one of the best bits of news for industry and commerce in Northern Ireland in a generation.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

How Euro-fanatic is my right hon. Friend? He has been talking about deregulation and he will be aware that an increasing amount of regulation comes from European institutions, either through qualified majority voting or in areas where we did not think that we had given competence to European institutions. Will my right hon. Friend strive strenuously to return to this House powers which this House should never have lost?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My reference to Euro-fanaticism was a joke. For the benefit of those who take these matters seriously, I am advised that that means a "plaisanterie", but I could have got that wrong, so that might be another joke.

I understand the purpose behind my hon. Friend's question. The purpose of my right hon. and noble Friend Lady Thatcher in the mid-1980s was to create a single market which had rules and it is that which led her to send my right hon. and noble Friend Lord Cockfield as a Commissioner to Brussels to make sure that there were standard rules that everyone would keep to. That undoubtedly caused an enormous process of indigestion when the agenda of 300 items was introduced in the Parliaments of the European Union. That process is now behind us. There is no longer the enormous weight of change that has taken place, but we have to recognise that, as a result of that change, our trade with our partners in the European Union has significantly increased. The opportunities for British industry are very large and they are there partially because there is now a common standard of behaviour.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Have not this Minister and the Government got a cheek to talk about the successes in Britain's industrial trade and base when we consider that in the past 16 years they have shut down nearly every shipyard and closed most of the coal mines? Hardly any steel works can be found and one third of the manufacturing base has been destroyed. About the only people who have made anything out of that are those members of Lloyd's who, we have learned today, have had £2.75 billion written off their tax payments? That money has been lost to the Chancellor of the Exchequer. He has got a cheek to talk about wonderful Britain under the Tories. They have created more havoc than Hitler did in the second world war.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

If I may paraphrase the party political broadcast, that was new Labour speaking.

Photo of Mr Keith Hampson Mr Keith Hampson , Leeds North West

Is my right hon. Friend aware that his statement today is particularly welcome because it acknowledges that the prime responsibility for improving industrial competitiveness rests with company management, but that its efforts can be helped or hindered by Government? In that context, is my right hon. Friend aware that I counted seven reports in the 1970s in which the Labour Government acknowledged what we needed to do on education, training and continuing education, with a national curriculum and more further education, and that if they had done anything at all about it, we would now have more maths teachers in our schools and we would not have had the skill-based weaknesses that we have.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right to point out that virtually every one of the major changes that have been brought about to the benefit of the United Kingdom economy in the 1980s was forced through the House by the Government in the teeth of the union-dominated attitudes of the Labour party.

Photo of Malcolm Chisholm Malcolm Chisholm , Edinburgh Leith

Does the President agree with last week's Select Committee report that the level of dividends in this country is too high and that far more of the money should go into R and D and other investment? Why did the Government give up their finance into industry initiative last year—was it just because Lord Hanson called the previous Financial Secretary a socialist or was it because the Government have no intention of doing anything about the problem?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman is fully aware that the Government have introduced a range of changes—principally the reduction in corporation tax—to ensure that companies enjoy the use of more of their own money. Those changes enable alternative sources of finance to be made available to small companies and, above all, we have presided over a climate in which there has been a very large increase in the number of small and medium-sized companies. That proves beyond peradventure that our policy of supporting that wealth-creating sector has been working. It is all very well for the Labour party to talk about these matters, but its policy proposals are all designed either to put more costs on or remove more money from the wealth-creating sector.

Photo of John Butterfill John Butterfill , Bournemouth West

Does my right hon. Friend accept that Conservative members of the Select Committee on Trade and Industry greatly welcome the energy and enthusiasm with which he has addressed many of its recommendations and especially his commitment to assist many more small businesses to become exporters? Does he, however, agree that the single most damaging thing that we could do and which would reduce our competitiveness would be to adopt a national minimum wage? Does he therefore share my hope that the recent reported statements of the Leader of the Opposition that he does not now intend to proceed with a national minimum wage will not be diverted by his trade union bosses?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I have been abroad and might have missed something, but what I thought the Leader of the Opposition was saying was that he was not going to tell us what the national minimum wage would be until after he became leader of a Government, were that unfortunate event ever to occur. It means that he will do a deal with the trade unions and no one will know what the national minimum wage will be until after he is elected. If he were to be elected, everyone would pay the price in lost jobs, but we shall help the public to understand the risks involved in that deception.

Photo of Ann Coffey Ann Coffey Opposition Whip (Commons)

As the President will be aware, the enterprise allowance scheme has helped thousands of start-up businesses through financial and counselling support. That scheme was abolished by the Secretary of State for Employment in April this year and the business link scheme, which is based on recharging businesses for businesses, is not going to offer the same financial support. Does he not feel that there will be a gap and that start-up businesses will in future be offered less support than previously?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Lady raises an important point. In fact, the single regeneration budget led to a bidding process in which this form of support did not attract locally the degree of priority that it had previously enjoyed. However, when the hon. Lady and other hon. Members read the texts, they will find that we have introduced a new support system to fill part of the gap that has occurred.

Photo of Mr Den Dover Mr Den Dover , Chorley

Does my right hon. Friend agree that, if inward investment and investment in the United Kingdom is to continue to increase, there needs to be more competitiveness in the construction industry? Can he report whether his officials in the deregulation unit have dropped any opposition that they had to the implementation of Sir Michael Latham's proposals?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

We greatly admire the work that Sir Michael has done and welcome the sponsorship role that the Department of the Environment is pursuing in partnership with the construction industry. I shall have a further look at what may or may not be happening in my Department in relation to my hon. Friend's question.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The President referred to the Government's so-called successes since 1992. Does he attribute any of those so-called successes to the panic devaluation of September that year?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

As the whole House knows, the history of the past 50 years has been one of a constantly depreciating currency. In the short term, that always gives a relative advantage to the country whose currency depreciates. The problem is that, time and time again, we have thrown away that advantage by pursuing domestic inflationary policies that undid what temporary gain there was. The strength of the Government's position is that we are not prepared to see that happen again.

Photo of Dr Harold Elletson Dr Harold Elletson , Blackpool North

I congratulate my right hon. Friend on his achievements in boosting United Kingdom competitiveness and creating a sustained export-led growth. Is he aware that one of his Department's initiatives, which has been most successful in that regard, is the export promoters scheme? It has been widely applauded by industry and has significantly boosted UK competitiveness. Will he take this opportunity to thank those companies that have taken part in the scheme and will he ensure that it is extended?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am most grateful to my hon. Friend for providing me with such an opportunity. About 100 export promoters are now seconded to the Department and they are helping to create a change of culture in relationships between the public and private sectors, as well as adding to the significant export achievements of this country.

Photo of Mr Kenneth Eastham Mr Kenneth Eastham , Manchester, Blackley

When the President was trotting out the catalogue of improvements in training, output and production, was he aware that only two weeks ago the Select Committee on Employment was told that the budget for training by training and enterprise councils has been reduced from £3 billion to just over £1.5 billion since 1990? Was he further aware that only a few weeks ago the Engineering Employers Federation issued a document showing that engineering production in the north-west is only 24 per cent. of capacity? What sort of successes are those?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman will recognise that unemployment is falling by 1,000 people a day. Therefore, it is not surprising that public-supported training may not be at the same level as it has been. I shall certainly draw the attention of my right hon. Friend the Secretary of State for Employment to the specific points raised by the hon. Gentleman.

Photo of Anthony Steen Anthony Steen , South Hams

My right hon. Friend's statement is good news, as every right-thinking person should realise. Will he consider the problem of small businesses that are trading with Europe, which is that although the rules and regulations are rigorously enforced in this country by our officials, they are not rigorously enforced in other European Union countries. The result is that our small firms have on-costs and therefore face more problems in competing. Small firms in other countries do not have those on-costs or the enforcement of rules and regulations.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I can only ask my hon. Friend to let me have the evidence. I have a range of officials whose task is to examine specific cases, but I have to tell the House that evidence is a great deal harder to obtain than anecdotal suggestions indicate. We will examine every piece of evidence put before us.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

The President will be aware that a number of his hon. Friends are concerned about their future employment and their potential retirement. Will he explain what is meant by the section on page 71, which makes it clear that the Government no longer believe that the state will help people in their old age?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman must realise that that is fiction.

Photo of Mr David Shaw Mr David Shaw , Dover

Is my right hon. Friend aware that the global market in information technology and multi-media services is forecast to grow to $1 trillion by the year 2000? Has he considered, in relation to his White Paper, whether British industry will be able to take a leading role in that market? Will he do everything to ensure that as many British jobs as possible are created in that important market?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

One of the success stories of the past few years has been deregulation in that very important area, as a result of which we now have huge investment programmes by both multinationals and a growing number of small and medium-sized British companies. My hon. Friend is absolutely right in what he says.

Photo of George Mudie George Mudie Opposition Whip (Commons)

The President has rightly drawn our attention to the importance of education and training. As a member of a Cabinet that was told by the Secretary of State for Education that there was insufficient money in this year's budget to fund all teachers, can he specifically tell us how much of the £165 million package will go to education?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The public expenditure figures for education have already been announced. The specific package that I have announced today relates to programmes in the Department of my right hon. Friend the Chancellor of the Duchy of Lancaster and the Department of Trade and Industry.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Does my right hon. Friend realise how much his statement will be welcomed by exporters throughout the land, with more than 100 initiatives demonstrating that he and his Department are going full steam ahead with fresh ideas? My right hon. Friend mentioned the £40 million extra that he will provide to exporters. Does he realise how important it is for exporters, especially small firms, to attend trade exhibitions abroad? Can he outline whether any of that £40 million is to be used for that purpose?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am pleased to tell my hon. Friend that, as part of the package of measures that I announced, we intend to increase the number of missions and trade exhibitions to a record level.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

In his opening statement, the President of the Board of Trade referred to Scottish Nuclear and Nuclear Electric. In the debate last Wednesday, two rather different things were said. First, we were told that the headquarters would be coming to Scotland, with all the supposed advantages to Scottish Nuclear. At the end of the debate, however, in answer to the hon. Member for Gloucester (Mr. French), who was reflecting legitimate constituency interests, we were told that Barnwood need not worry, no one was going to move and that there might be 50 extra positions. Which is it?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

This matter was fully debated in the House last week. I was extremely grateful to the Opposition for providing the opportunity for such an early debate and I was immensely impressed by the scale of the Government's majority in both Divisions.

Photo of Mr John Fraser Mr John Fraser , Norwood

It is more than three years since the right hon. Gentleman's Department proposed changes in competition law. When will he do something to resolve the discrepancies between European and United Kingdom competition law and to make it easier for the victims of anti-competitive behaviour to get an effective remedy?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman raises an important issue and it is a matter of finding parliamentary time.

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

Is my right hon. Friend aware that small and medium-sized businesses in my constituency have thrived and become very competitive as a result of Government policies? Is he also aware of their nervousness of pressures from the Opposition to make the Government sign up to the social chapter, as such a move would cripple them and destroy all their hard work?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right and that will become more apparent as the political debate unfolds, especially when it is added to the dangers of the minimum wage.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

Will the President of the Board of Trade confirm that the White Paper states on page 71 that, in old age, people will see no improvement in their living standards from public funds. What does he think that old-age pensioners will think about that provision?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

What the paragraph says, as the hon. Gentleman knows full well, is that, if one destroys the wealth-creating process and over-taxes society, it will affect the ability of a society to fund its welfare provisions. That is the context and sense of the observation. It is the most classic extreme of the behaviour of the Opposition to suggest that there is any implication whatsoever that the normal welfare provisions that the Government provide are at risk.

Photo of Margaret Ewing Margaret Ewing , Moray

May I ask for clarification from the President of the Board of Trade in connection with paragraph 6.5 of the companion booklet entitled, "Helping Smaller Firms", which refers to the preparation of an export development strategy for Scotland. Does he mean the facility to have a distinctive and autonomous Scottish export unit, with its own budget and facilities to make direct contacts overseas?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

Of course, that is the position and it will remain the position.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

Does the President of the Board of Trade agree that it is regrettable that many of the new educational and training standards are still lower than those of our competitor countries? Is not that because the overriding factor that determined the standards was what was attainable rather than what was desirable?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

One of the reasons why we have such education problems is that all the reforms which the Government have introduced have been fought tooth and nail by the Opposition. Every attempt that we have made to extend power to parents, publish a national curriculum and introduce testing of children has been resisted. Once we have introduced those reforms, the Opposition once again admit that they would not change them because they know that we are right and simply lacked the guts to do it themselves.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

Does my right hon. Friend agree that, if we are considering our productivity record over the past 16 years and lamenting the fact that we may still be behind some of our competitors on productivity, it is worth remembering where we started in 1979: flat on our backs at the end of a period of Labour Government? Will he confirm that, over the past 16 years, we have had the highest growth in productivity of all the G7 nations?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I am most grateful to my hon. Friend. That is precisely why White Papers on competitiveness are so valuable: they show the regular annual improvement. We started from a low base. We were behind, but we are catching up. If we go on in that way, the prospect for the country's economy is exciting. The easy way to bring it to an end is not to re-elect a Conservative Government.

Photo of Mr Barry Jones Mr Barry Jones , Alyn and Deeside

Does the right hon. Gentleman propose grants to British Aerospace specifically for research and development of wing technology? How does he see the future of the European Airbus Industrie project? Are the jobs of my constituents who work on that project safe?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The Airbus project is at the heart of the country's industrial aerospace strategy. The hon. Gentleman will know that my right hon. Friend the Prime Minister made clear our interest in the future large aircraft project, which will take forward the wing technology in which British Aerospace is the European leader.

Photo of Denis MacShane Denis MacShane , Rotherham

Does the President agree that, in the case of British Steel, it would be helpful if the £13 million in share option profits announced today were invested in the company? Page 169 shows that Britain in general would then have a higher level of investment and a dividend level that was not twice that of France, three times that of Germany and nearly six times that of Japan.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

One of the last announcements that I remember from British Steel was of a major expansion at Llanwern. As I travel the world, I am also aware of the contracts which British Steel is winning. The reason why it is winning is that it is now a world-class private sector company.

Photo of Mike O'Brien Mike O'Brien , North Warwickshire

Will the President of the Board of Trade now read the document that he has put before the House? Does he accept that page 71 does say that individuals will not be able to look to the state to fund improvements in their living standards in old age? What does the President mean by that statement, which will cause considerable worry to many pensioners throughout the country.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

It will cause no worry unless the Labour party indulge in their scare techniques to frighten people when it is not justified. [Interruption.] I shall tell hon. Members what it says. It says that if the economy is not run properly, as a Labour Government would not run the economy properly, improvements in living standards cannot be offered to people. Even the Labour party should understand that.

Photo of Peter Hain Peter Hain , Neath

How is our industry supposed to remain competitive when it is required to produce punitively higher rates of return—much higher than our competitor countries? What will the President of the Board of Trade do about that?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I shall go on helping British exporters to secure the highest export level that they have ever had, even with the problems to which the hon. Gentleman referred. How is it that we are doing so well if things are so wrong? There is no answer except that things are not as wrong as the Opposition constantly try to suggest.