Oral Answers to Questions — Trade and Industry – in the House of Commons at 2:22 pm on 12th July 1995.

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Photo of Bernard Jenkin Bernard Jenkin , Colchester North 2:22 pm, 12th July 1995

To ask the President of the Board of Trade what responses he has received to his Department's second White Paper on competitiveness; and if he will make a statement. [32124]

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The White Paper "Competitiveness: Forging Ahead" has been widely welcomed by industry, including major representative bodies, such as the CBI, the Engineering Employers Federation and the Chemical Industries Association, as well as many of our major companies.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

Returning to a theme raised earlier, does my right hon. Friend agree that a suitable tax regime is vital to competitiveness and that Britain currently has the most punitive capital gains tax regime among the Organisation for Economic Co-operation and Development southern countries? Is it not welcome therefore that noises emerging from parts of the Government suggest that that regime is under review? Will he use his good offices as President of the Board of Trade to push for a sensible reform to reduce the burden of capital gains tax?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I shall certainly ensure that my right hon. and learned Friend the Chancellor of the Exchequer is aware of my hon. Friend's concerns on that. My hon. Friend will, of course, agree that the reduction in corporation tax for both large and small companies has been one of the driving forces behind the successful growth and expansion of the economy in recent years.

Photo of Ken Purchase Ken Purchase , Wolverhampton North East

Given that the driving force for competitiveness is investment and the fact that investment in this country is at the same level as it was in 1989, does the President of the Board of Trade not recognise that to match the investment performance of Germany this country needs to invest another £42 billion per annum in order that we might become internationally competitive? What plans does he have to tackle that problem?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

Perhaps the hon. Gentleman did not hear my answer to an earlier question, when I pointed out that investment in manufacturing industry was up by 8.3 per cent. on a year ago. As for his comparison with earlier years, I can tell him that, since 1981, total manufacturing investment has risen by 18 per cent. What guides investment is confidence in the management of the economy. Confidence is there now that was lamentably absent when the Labour party was in power.

Photo of Eric Pickles Eric Pickles Vice-Chair, Conservative Party

Does my right hon. Friend agree that the White Paper builds on many of the changes in the competitive nature of the British economy, one of which has been the creation of a flexible work force? Does he also agree that that can be seen writ large in the Ford Motor Company, which, this month, sees the production of the new Fiesta and which two months ago announced the new diesel plant at Dagenham? Does he further agree that Dagenham, which was once the symbol of all that was wrong with the British economy, is now the symbol of all that is right with the British economy?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

Yes, I do. My hon. Friend makes the point very well. The Ford Motor Company is going from success to success. It is good to see the United Kingdom sharing so fully in that.

Photo of Stuart Bell Stuart Bell , Middlesbrough

May I on behalf of Opposition Front-Bench Members congratulate the right hon. Gentleman on his elevation to President of the Board of Trade? We shall miss the lion's roar from the Conservative Benches, but no doubt the steady purring will continue into the ear of the Prime Minister.

Is it not remarkable that we are dealing with a competitiveness White Paper and the consultation documents on the day when it has been announced, by official figures, that we have the lowest growth rate since late 1993; that our construction orders are at the lowest level since late 1992; that our housing figures, the orders in housing, are down 13 per cent. from what they were a year ago; and that private industrial development is also down? Is not it a fact that the only thing over which the previous President of the Board of Trade presided was insecurity in our industry, the length and breadth of the land? Is not that what the right hon. Gentleman should be addressing?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I am grateful to the hon. Gentleman for his welcome, which I much appreciate. Sadly, I thereafter have to disagree with everything that he said. He has been extremely selective with his figures. He might like to know that, overall, GDP, which has been rising for the past three years, rose by 4 per cent. in 1994. I recall that, when the previous Labour Government were in power, they could not achieve growth on average of more than 1 per cent. per annum.