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Volume 984: debated on Monday 12 May 1980

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asked the Secretary of State for Trade if he will make a further statement on trade with the Union of Soviet Socialist Republics in response to the Russian invasion of Afghanistan, and with particular reference to the continuing massive imbalance between British exports to and imports from the Union of Soviet Socialist Republics.

The Government's view remains that trade with the Soviet Union should continue to be pursued on the basis of mutual advantage. As my hon. Friend will know, a very large proportion of our imports consists of raw materials valuable to our economy and of goods which are subsequently re-exported at a profit to the United Kingdom.

While thanking my hon. Friend for that reply, may I ask whether he is aware that so long as the trade imbalance stands at about the £480 million figure he has given, many people in this country will find it highly offensive that such an imbalance continues in the light of recent political events, not least the Russian invasion of Afghanistan? Will the Government take fresh initiatives to reduce substantially, if not eliminate, that imbalance?

I pointed out earlier to my hon. Friend that a very substantial part of our imports—more than 40 per cent.—are diamonds. Those diamonds are the basis of the London diamond market. A substantial number are re-exported at a good profit for Britain. By doing what my hon. Friend suggests, we would probably be damaging ourselves more than we would be damaging the Soviet Union. I suggest to my hon. Friend that this would not be sensible.

In the light of the Government's attempts to co-ordinate their trade policy in some areas of the world with the United States, have the Government sought an explanation of why the United States is proposing to lift the ban on the export of wheat to the Soviet Union?

It is not true to say that we co-ordinate entirely our actions with those of the Americans. The Americans deal substantially in some products to an extent that we do not. To say that we should try to co-ordinate our trade policy on all fronts, not only Iran, is not sensible. It would produce no gain for us.

While realising the need to export, is my hon. Friend aware of the impact of his statement on the Olympic and Afghanistan situations, when he praised the GKN contract for a factory in Russia producing heavy lorry bodies that can be used for war purposes?

I am sorry to have to tell my hon. Friend that his facts are not right. The contract was in East Germany for the production of lorries that will be re-exported to third markets other than this one.

Will not the Minister take credit for the truly magnificent way in which the Government took action immediately following the Afghanistan invasion? In answer to a question that I tabled, it was revealed that the Government had stopped importing £1,100 worth of vodka for the Government hospitality fund. Did that not take great courage?

Exchange Rate


asked the Secretary of State for Trade how many individuals, and how many bodies, have made representations to him about the effect of the exchange rate on trade.

About two dozen representations have concentrated on the effect the exchange rate has on trade.

Does my hon. Friend agree that the current unrealistically high level of the exchange rate is pricing some British manufacturers out of export markets? Does he not think that the Government should do something to bring about a decrease in the exchange rate? Does he agree that if that does not happen there is a danger that the demand for import controls will become irresistible?

I fully understand my hon. Friend's anxieties, but inflation remains the main threat to our economic success, and the strength of sterling has advantages in helping to contain inflation.

Have any of these representations referred to the sterling-rouble rate?

I appreciate the overriding need to contain inflation, but is my hon. Friend aware that the present exchange rate and interest rates are increasingly oppressing a great number of exporters? Will he and his Department, since they are responsible for exports, be urging the Treasury not to be dogmatic but to seek lower interest rates at the earliest possible moment?

The Government want interest rates to come down as soon as possible, but not if that means sabotaging our economic policy.

To what extent is the high exchange rate due to the high level of interest rates? Do not the two high rates impose a double penalty? Is it not implicit in the Minister's reply that the only reason why he is not to act upon the exchange rate is that he has made such a mess of inflation?

Interest rates have a bearing on the level of sterling, but to reduce interest rates before the money supply and the rate of inflation are properly under control would simply be a short-term palliative which would subsequently give a further boost to inflation?

Airports Policy


asked the Secretary of State for Trade if he will update those sanctions of the 1978 White Paper on airports policy dealing with general aviation requirements in the South-East in view of the subsequent changes in the pattern of road and airport developments in the area.

No, Sir. I do not think that there have been sufficient changes to justify another study of the situation being made at the present time.

Is my hon. Friend aware of the apprehension felt by the Bromley residents federation and by a number of my constituents at the proposed intensification of business flying at Biggin Hill? As the M25 has been constructed in the two years since the White Paper—one of several new factors—would it not make sense to think increasingly in terms of West Mailing as an alternative airport for at least some of these business jets?

My hon. Friend keeps me well aware of the anxiety of his constituents. I met members of the Bromley residents federation in mid-March. Although the M25 has progressed since 1978, its completion was envisaged then. There is nothing new about that. In my opinion, there are substantial environmental advantages for residents in the area around Biggin Hill in having a well-managed business airfield rather than leisure and club flying taking place at its present level.

Will my hon. Friend confirm that he is not casting covetous eyes on Biggin Hill airport and that he will not allow the British Airports Authority to do so either? Will he support the continued retention of the airport by Bromley council?

I will be the last man under your eyes, Mr. Speaker, to confess to the sin of covetousness. I certainly do not covet Biggin Hill; and neither does the British Airports Authority. I am very happy with the way in which the borough is going about the business of managing it.

Is my hon. Friend aware that there are insufficient facilities for business aviation in the London area? Is he further aware that of the London airports only Gatwick and Stansted have all-weather 24-hour facilities? Will he try to ensure that even more services are made available for business flying in London?

Yes, it would be my objective to ensure that there is a major all-weather business aviation terminal on the north and south sides of London to serve the city.

Saudi Arabia


asked the Secretary of State for Trade what is his latest view of the prospects for British trade in Saudi Arabia.

I hope that our close trading links with Saudi Arabia, which is one of our most important markets, will not be harmed as the result of the recent television film.

How many jobs does my hon. Friend think will have been lost in British industry as a result of the showing of the film "Death of a Princess"? Will my hon. Friend arrange an early meeting between the directors of ATV and those finding themselves unemployed so that those directors can explain their action to the people made redundant?

It is far too early to say what effects the showing of that film will have, but I hope that those in the media who make such films will in future, before they show them, reflect on the fact that they could damage British interests by showing them. I hope that they will reflect on the fact that there are 30,000 British people in Saudi Arabia whose jobs are less secure as a result of that film.

Is my hon. Friend aware of the anxiety in the British aerospace industry that over £1,000 million of exports will be lost as a result of the showing of that film in this country?

My hon. Friend very properly underlines the importance to us of Saudi Arabia as a market. It is our biggest market outside Europe and America and our exports to it last year totalled nearly £1,000 million.

Regional Water Authorities (Monopoly Situation)


asked the Secretary of State for Trade if he has any plans to refer any of the regional water authorities to the Monopolies and Mergers Commission under section 11 of the Competition Act.

Yes, Sir. Because there is widespread consumer concern about the charges levied by water authorities it would, I believe, be appropriate for the Monopolies and Mergers Commission to examine their costs and efficiency. I therefore made an announcement on 29 April that the Severn-Trent water authority will be among future references to the Commission.

I welcome my right hon. Friend's announcement. Is she aware that the commonest complaint about water authorities is that their charges are related to the rateable value of a property, not to the amount of water used in it? Is she further aware that that is grossly unfair to people living alone, to pensioners and to those with small families?

My hon. Friend has raised a point of great importance to consumers. I am extremely pleased to tell him that I learnt that after my announcement that a reference would be made of the Severn-Trent water authority, resolutions appeared calling for that authority to adopt a water metering option for its consumers. I know that a great many consumers believe that it is most unfair that their water rates should be assessed on the basis of the rateable values of their homes. I hope, therefore, that in reaching its decision, the Severn-Trent water authority will take full account of that.

What does the Minister hope to achieve by a reference to the Monopolies Commission? Does she not accept that she stands there naked of any powers of price control after the abolition of the Price Commission?

Any reference under section 11 of the Competition Act implies, as is correct in this case, that a monopoly exists and that therefore consumers need special protection. The purposes of these references, which vary from reference to reference, is to ensure that there are no elements of cost which are passed on in higher prices which may represent inefficiency or overmanning or are passed on in higher prices because of an abuse of a monopoly.

I am grateful to my right hon. Friend for announcing this reference, but did she not make a mistake in announcing that the reference was of the Severn water authority? Should it not have been the Southern water authority which has increased its rates by just under 30 per cent. in a year? Will my right hon. Friend think about that again?

I can understand the concern of my hon. Friend. The Severn-Trent water authority was chosen for reference because it is the second largest water authority in the country. It therefore seemed appropriate for reference. Naturally I shall bear in mind the remarks of my hon. Friend about the Southern water authority when we consider future references.

If concern for the consumer is to be one of the criteria for references, when will the right hon. Lady make a reference from the private sector? Let us take, for example, the price of bread, bank profits and oil profits. When will she use that part of the Competition Act?

The question refers to references under section 11 of the Competition Act. The kind of references referred to by the hon. Gentleman are not apposite in relation to this question.

European Community (Competition Policy)


asked the Secretary of State for Trade what is the policy of Her Majesty's Government regarding the development of European Economic Community competition policy so as to reduce the number and extent of inter-Community non-tariff barriers to trade.

The Government actively support and encourage work within the Community to eliminate non-tariff barriers to trade. Our aim is the removal of all barriers which adversely affect our exporters. We seize every opportunity to press the Commission, which has primary responsibility for administering the competition rules of the Treaty, to this end.

Is my right hon. Friend aware that there are many ways in which the export of British products to the Community can be discriminated against? In my constituency alone I can name two products—Tapchangers and Lamp Standards—both of which our EEC partners successfully export to this country. Will my right hon. Friend list products which are successfully imported into this country to discover whether there are any non-tariff barriers to our trading similar to those of our EEC partners?

My hon. Friend will no doubt be pleased to learn that, far from being regarded as—dare I say it—"Wet" in our attitude to unfair competition from abroad, we are regarded by other countries—which sometimes complain of it—as being particularly tough in defence of British industry if it appears to be threatened by unfair competition. My Department is at present vigorously pursuing a number of cases—some of them successfully. If my hon. Friend has specific information which he would like to pass to my Department we will be pleased to receive it and act on it where appropriate.

How does EEC competition policy apply to the common agricultural policy where we are giving £1,000 million to Europe primarily because of the CAP? That means dearer foodstuffs for housewives because we must buy from Europe instead of from elsewhere.

If the Government have been tough, how does the right hon. Lady explain that the balance of trade in manufactured goods between this country and the EEC has changed from a £300 million balance in our favour in 1970 to a £2½ billion deficit—which is getting much worse—in 1978? Does not the right hon. Lady agree that that points to the disaster of our membership of the Common Market in relation not only to agriculture but to manufacturing industry?

What that points to is that British industry in the main—there will be exceptions—is not sufficiently competitive in relation to our EEC partners. Where there are non-tariff barriers and where there is unfair competition, it is right and proper for the Government to intervene. It is not in the interests of competition, of consumers or of our efforts to strengthen British industry for the Government to intervene where there is fair competition.

United Kingdom-Ussr (Air Services)


asked the Secretary of State for Trade whether he will take action to bring about a better balance in commercial air services between the United Kingdom and the Union of Soviet Socialist Republics.

Yes Sir. United Kingdom officials went to Moscow last month to negotiate new air service arrangements with the objective of securing a better balance. A second round is contemplated in the next few months.

I am grateful for that answer. Is it not true that Aeroflot has sales offices in Britain but that British Airways cannot have sales offices in Russia?

My hon. Friend is right, and that is one of the contributory factors to the imbalance. Aeroflot has offices here and is being allowed to open more offices in the United Kingdom. British Airways is not allowed to open offices for the sale of its tickets in Russia.



asked the Secretary of State for Trade when he intends to meet the Director General of Fair Trading to discuss refusal-to-supply activities.

It is for the Director General to decide whether refusal-to-supply constitutes a breach of the Resale Prices Act warranting action on behalf of the Crown in the courts. It would be improper for me to seek to influence his decision in individual cases.

When the Minister next meets the Director General of Fair Trading, will she raise with him the refusal to supply by major hi-fi and white goods manufacturers to Tesco and Argos and ask the Director General when he intends to take action to resolve that problem?

I am glad to tell the hon. Gentleman that I meet the Director General of Fair Trading frequently. Although we may discuss individual cases, I do not seek, as I pointed out in my earlier reply, to influence the Director General in individual cases. There are a number of ways in which action can be taken in such instances—on the part of the individuals concerned in civil proceedings, under the Resale Prices Act—which again would be a matter for the Director General of Fair Trading—or under the new, swifter and more flexible powers in the Competition Act which complement existing powers. No doubt the hon. Gentleman will welcome these new powers which will make it more difficult for the practices to which he has referred to prevail in future.

Is my right hon. Friend aware that refusal to supply is being used by newspaper wholesalers in London who are attempting to make themselves into monopolies in particular areas? Will my right hon. Friend ensure that this particular technique, which is totally against the interests of the consumer and the retailer, is brought to the attention of the Director General of Fair Trading who has said nothing about this matter up to now?

My hon. Friend has raised a matter about which I know there is considerable concern on both sides of the House. There is a registered agreement under the Restrictive Trade Practices Act in relation to the supply of newspapers which makes it impossible for certain people to obtain a supply of these newspapers if it is refused by the wholesaler. I, along with my hon. Friend, am not satisfied with this situation; and I shall discuss it with the Director General of Fair Trading.

Consumer Education


asked the Secretary of State for Trade what plans he has for consumer education.

Consumer education is important if consumers are to be properly equipped to wield their own considerable influence in the market place. Indeed, I recently announced my plan to compile a consumer education teaching pack for distribution to local education authorities.

I thank my right hon. Friend for that reply, but does she recognise that it is most important that consumers are fully informed of their rights? Will my right hon. Friend say when the education pack to which she has referred will be distributed?

I hope that it will be ready for distribution some time next year. The purpose of this pack is to enable a new generation of consumers to emerge from school with some idea of their rights and obligations. As a result of this they can become as effective and powerful in the market place as they should be. They will need less recourse to advice from other sources.

Is it not a fact that the Government have cut consumer services in the high street in collaboration with Tory-controlled county councils? Is it not the reality that consumers need speedy, if not immediate, access where false information is provided by traders or if they need to obtain further information? Should not the Government come clean and state clearly that they are not interested in the consumer and admit that they have been attacking consumer protection services nationwide?

I can come completely clean by telling the hon. Gentleman that my main concern is for consumers. I am satisfied that the kind of advice to which he referred is available to consumers through the CABs and through local trading standards offices. The greater the number of consumers who emerge from school with some idea of their rights and obligations, the fewer consumers will need to go to centres to ask for help upon matters which they have never pursued with the companies themselves in the first place.

Is my right hon. Friend aware of the considerable increase in the number of inquiries received by CABs since that function was dropped by the county councils? Is my right hon. Friend further aware of the effective way in which CABs have met their new responsibilities? Will she give sufficient support to the CABs to enable them to continue that function?

I am very grateful for the way in which the CABs have responded. I am not surprised that they have done so because the quality of the service they have provided in the past is renowned. I have given a great deal of support by doubling the grant to their national unit.

Is not the right hon. Lady talking nonsense if she says she believes that an education pack for schools is any substitute for detailed advice about problems faced by consumers every day? Is it not a fact that the CAB movement opposed her wholesale slaughter of consumer advice centres?

I am surprised that the hon. Gentleman is opposed to the education pack and that he says that it is not a substitute. He introduced a safety pack for schools which did not replace anything whatsoever. The consumer education pack is not meant to be a replacement. It is a more constructive and consistent way of ensuring that consumers are armed with the necessary information in the market place.

Is my right hon. Friend aware that her activities in this direction are far more valuable than setting up a whole new plethora of consumer quangos which only confuse people and provide jobs for the boys?

Stansted Airport


asked the Secretary of State for Trade what progress has been made in planning the enlargement of Stansted airport; and if he will make a statement.

Planning the development of Stansted airport is a matter for the British Airports Authority, not my Department. On 22 April, the authority announced the boundaries of the proposed development and the measures which it is to take to relieve blight. The Department of the Environment has now initiated discussions with the BAA and the local planning authorities on the procedures to be adopted.

Does my hon. Friend think that it is fair and reasonable that the British Airports Authority, with the power of the public purse behind it, should distribute to every home in my constituency a publication called "Development of Stansted Airport" which presents a one-sided version of events? Will he provide assistance to the organisations which have a different view so that they can circulate households in a similar fashion?

The Secretary of State has come to a conclusion which he announced to the House on the recommendations which we should make. It would seem distinctly odd if we were to give our help and support to undermining those proposals. What is more, I invite my hon. Friend to consider what our colleagues who represent constituencies near other potential sites would say if the Government reversed their position.