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Trade And Industry

Volume 78: debated on Wednesday 1 May 1985

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Government Regulations

1.

asked the Secretary of State for Trade and Industry how many representations have been received by the Scrutiny Committee on the burden of Government regulations; and if he will make a statement.

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. David Trippier)

Field work for the "Burdens on Business" report involved more than 280 small firms and 14 business organisations. It has been published to stimulate further comment from all concerned.

Does my hon. Friend agree that European Community requirements are playing a significant role in increasing the burdens on business? What does he intend to do about that?

My hon. Friend is absolutely right. European Community requirements are a substantial and growing element in the regulatory burden. That is why my right hon. Friend the Prime Minister raised the matter at the last meeting of the Council of Ministers in late March. The Heads of State of all other member countries agreed with her, and I understand that the Commission has been asked to report back on necessary action.

What representations has the hon. Gentleman received about the burden of local government regulations on industry? Does he agree that over-zealous planning officers often place considerable burdens on businesses, especially small start-ups?

That certainly features in the report. Planning was a major concern in relation to small firms. That matter has been brought to the attention of my right hon. Friend the Secretary of State for the Environment, and we hope that action will ensue.

I congratulate my right hon. and hon. Friends on identifying these burdens and on the publication of the report. Does my hon. Friend agree that the quicker these obstacles to expansion are removed, the better? Will the Government consider whether the best way to achieve that is through the introduction of a deregulation Bill to scoop up and remove all those obstacles in one parliamentary measure?

As my hon. Friend will recall, in the debate on small firms on 18 January I said that some form of co-ordinated mechanism might be introduced to carry these initiatives forward. I chose my words carefully, because the decision as to the form of any such coordinating mechanism will have to be taken by people very much senior to me.

Does the hon. Gentleman agree that many local authorities have been extremely co-operative in relation to small businesses and that ratepayers have made considerable contributions, often carrying out duties which should be the responsibility of central Government?

I do not necessarily agree with that, although I agree that in many cases local authorities have tried very hard to assist small firms. We are concerned about the response of councils to the exhortations of the Department of the Environment—for example, in circular 22/80, which was supposed to give the benefit of the doubt to businesses seeking planning permission. A further circular 16/84 was issued by the Department of the Environment more recently and was widely welcomed at the Department of Trade and Industry. We await with great interest the response of the local authorities.

Passenger Cars

2.

asked the Secretary of State for Trade and Industry what proportion of the United Kingdom market for passenger cars is now taken by imports; and how this figure compares with that for 1978.

The Parliamentary Under-Secretary of State for Trade and industry
(Mr. John Butcher)

In the first quarter of 1985, 57·9 per cent. of the United Kingdom passenger car market was taken by imports. In 1978 the figure was 49·3 per cent.

Does the Minister agree that those figures prove that the Government are not defending the interests of the British motor components industry, given that in the 1970s it employed 1 million people but that figure has now dropped to 400,000? Will the Secretary of State now get on his cycle and defend the interests of people working in the motor industry by ensuring that multinational companies manufacturing in this country do not import complete vehicles from abroad? Will he also inform the Japanese that local content means United Kingdom, not European, content? Is he aware that the British motor industry will otherwise be decimated? What do the Government intend to do about that?

The hon. Gentleman has chosen the dates of his survey with conspicuous cunning. He is aware that between 1974 and 1979 imports of motor vehicles doubled from 28 per cent. to 56 per cent. It is this Government's duty to ensure that the more malignant trends of that period are put into reverse and that our motor industry becomes more competitive.

Of course we are anxious to see the maximum British content in British-built cars. That is why we stipulated certain measures in the Nissan deal and why we are anxious to support the flagship British motor industry builder, British Leyland, to the tune of £1·43 billion during the lifetime of this Administration.

To what factors does my hon. Friend ascribe the reluctance of the British public to buy British cars? Will those factors be taken into account when Austin Rover next wishes the taxpayer to subsidise it?

My hon. Friend should note that very good strides have been made by British vehicle builders. It is unfortunate that a large number of people in the United Kingdom have acquired the habit of buying foreign cars. They are not looking, as they should, at the better model range and increased quality now coming forward from British vehicle builders. I hope that they will reacquire the habit of at least looking again at British products.

In view of that answer, will the Minister take this opportunity to confirm that the Government, by refusing to allow British Leyland to put a new engine into production, are forcing it to buy Japanese engines, with a consequent loss of 5,000 jobs, mainly at the Longbridge factory in Birmingham?

As a Member for a distinguished constituency employing many car workers, the hon. Gentleman has a responsibility not to spread alarm and despondency by such questions. The matter that he has raised will be considered, among other matters, in the time-honoured tradition as part of the corporate plan. At the moment, I can say that the hon. Gentleman's question is pure conjecture.

I thank my hon. Friend for confirming that the Government are not yet prejudiced against the future of Austin Rover. Will he confirm that it would be in the best interests of the British motor industry if we had a British engine? Will he further confirm that if it was good enough for the mines to lose money, the modest extra sum of a comfort letter would help the British motor industry and save more than 5,000 jobs?

The whole question of future product development must be considered in the context of our discussions on the corporate plan. Of course, we appreciate BL's wish to see a design capability retained in the United Kingdom. Part of its submission is to be able to exercise that choice.

Will the Minister confirm what is known throughout the country—that the corporate plan includes a proposal to build a replacement for the A-series engine, costed at £250 million? Have not the Government refused to endorse BL's request? Is not the Department of Trade and Industry at war with Austin Rover over that project? Will the Minister end the uncertainty caused by the Government's reluctance to support the only remaining independent British vehicle manufacturer and stand by British industry, rather than force it into the hands of the Japanese?

Relations between BL and the Department of Trade and Industry are in their usual excellent shape. There is no confrontation or warfare. There is no formal bid for additional funding in the corporate plan. The question of BL's future product development strategy is one of the major matters to be considered as part of the discussions on the corporate plan. As previous Administrations have done, we shall place our conclusions before the House at the appropriate time.

Does my hon. Friend agree that one of the ways to improve British car market penetration, and so reduce import penetration, would be for hon. Members—when both inside and outside the House—to condemn practices such as industrial disputes, go-slows, demarcation disputes and excessive wage demands? Would not that improve the quality, productivity and delivery of British cars on to the British market?

My hon. Friend is right in identifying some of the past causes—[Interruption.]—of the British motor industry's difficulties. I am bound to say to him, if Labour Members will allow me to finish my sentence, that many of the malignant trends are being put into reverse and that British consumers should look yet again at the British product. In concentrating on BL, hon. Members may have missed an important target. There has been a significant increase in productivity and improvement in working practices within Vauxhall Motors and Ford. Vauxhall Motors is selling only 50 per cent. of its total production in the United Kingdom from the British-built source. It has only a 50 per cent., or less, British content in the cars which it manufactures. We are concerned that Vauxhall Motors and Ford should start cranking up their British content. British sales and British build.

General Agreement On Tariffs And Trade

4.

asked the Secretary of State for Trade and Industry what progress is being made towards a new general agreement on tariffs and trade round of international talks on trade.

11.

asked the Secretary of State for Trade and Industry what progress is being made in preparing for talks aimed at a new round of tariff reductions.

We are making good progress towards a new round of multilateral trade negotiations, although we do not yet have the agreement of all the GATT members. I hope that the Bonn economic summit will provide further impetus towards the launch of a new GATT round in 1986.

Does my right hon. Friend agree that freer trade will mean more trade and that more trade will mean more jobs in Britain? Will he give the House an assurance that the Government are doing what they can to ensure that all the GATT members enter into a new round of talks so that freer trade can be established as quickly as possible?

Yes, I can give my hon. Friend that assurance. I agree with what he has said. Since the second world war, world trade has increased eightfold, while world production has increased only fourfold. My hon. Friend has made an important point.

Does the Minister agree that free trade means free trade in both directions, and that that is an essential part of any agreement?

Yes, Sir. In any round of negotiations our aim will be to try to persuade other countries to remove any barriers that may exist against our exports.

Does my right hon. Friend accept that free trade will lead to more jobs only if the advice of the hon. Member for Oldham, Central and Royton (Mr. Lamond) is carried through? Britain has been a freewheeling area for most manufacturing countries, especially within the developing world, and even within the EC.

We have suffered because jobs have gone. Free trade in Britain has led to fewer rather than more jobs.

I cannot agree with my hon. Friend about that. We probably export more of our GDP than any other developed country—[Interruption.] It is interesting that such comments should be made today of all days when we know how confident British industry is about its export effort. My hon. Friend the Member for Macclesfield (Mr. Winterton) will know that we probably export more of our GDP than any other developed country. It is essential that we have overseas markets for our goods. That means that we must in general be in favour of free trade; that is, free but fair trade.

First, I appreciate the letter that I have received from my right hon. Friend. When he engages in international talks, will he be absolutely certain that they lead to a new multi-fibre arrangement that is acceptable to the British textile industry, whose future will depend on it entirely?

My hon. Friend will know that the Government have not yet come to a conclusion on the multi-fibre arrangement. I hope that we shall be able to discuss the matter in the near future.

Is the Minister aware that the answer that he gave to his hon. Friend the Member for Dumfries (Sir H. Monro) will create despondency in the textile industry? Whenever we hear his responses to questions on the textile industry, it seems that he is planning to open up totally free trade for the British textile industry. If he does that, he will have a war on his hands in the House.

I do not think that my answers need cause any dismay to the textile industry. It has heard and read reports of our exchanges on many occasions. It has made many representations to me, and I have engaged in many consultations. I am aware of the industry's view. I hope that the Government will soon have an opportunity to make their views clear to the House, and I am sure that we shall be able to convince it that they are right.

Does my right hon. Friend accept that moves towards a new round of GATT talks are extremely welcome? Does he also accept that a most important restriction on the growth of international trade is exaggerated and speculative movements in foreign exchange rates? Therefore, does he accept that he has a major departmental interest in the Government in following any avenues that may lead to a reduction in such movements?

My hon. Friend raises an extremely important point, but he will appreciate that it is primarily the responsibility of my right hon. Friend the Chancellor of the Exchequer, who has held talks about this and related matters in the OECD and in Washington.

Is it not true that the MFA was set up as a temporary measure behind which we could restructure our industry? Does not the Silberston report show that the damage caused to the British textile industry by at least liberalising the MFA would not be as great as is often claimed? Therefore, is there not a case, in terms of moral obligation and practical wisdom, to consider some liberalisation of the MFA?

I note what the hon. Gentleman says, and all those points will be borne in mind before decisions are taken. That is the view of the Liberal party on this issue.

When my right hon. Friend begins the new round of GATT, will he bear in mind the problems of Third world countries, which need to export to the European Community, and will he consider cautiously further attempts by the Community to erect trade barriers against products on which Third world countries depend for their existence?

I agree with my hon. Friend. In the European Community, Britain is trying desperately to retain a free trading element to give access to developing countries. Since we export to them, they must be given an opportunity to export to other countries. Otherwise, they will not be able to pay for the goods that they buy from us. It will be in our interests to do so.

Since our deficit in manufactured goods this year is already breaking all records, is it as self-evident as the Minister seems to believe that his free trade theology is best suited to our trading needs? Before he rushes headlong into a further round of tariff cutting, which can only increase our vulnerability to imports, will he ensure that we at least have a proper debate in the House and the country as to where the balance of advantage lies?

There is no question of headlong rushing, because trade talks are bound to take years. Nor are tariffs the major point. It is extraordinary that the hon. Gentleman should persist with such allegations on a day when we see that business confidence has increased, exports are increasing, the figures for manufactured exports are better than ever, there is more optimism. and export orders are at record levels.

Japan

5.

asked the Secretary of State for Trade and Industry if he will make a statement on his recent visit to Japan.

During my recent visit to Japan I had useful exchanges with senior Japanese Ministers, including the Prime Minister, about a range of multilateral and bilateral trade issues. I also met several leading industrialists with whom I discussed the prospects for further industrial co-operation and two-way investment.

I thank my right hon. Friend for that reply. Penetrating the Japanese markets requires not only commercial competitiveness but cultural understanding. To which bodies can smaller businesses especially look for guidance and advice as to how they can best penetrate Japanese markets?

The first point of contact for a company considering exporting to Japan and which needs advice is the Export to Japan unit of the British Overseas Trade Board, which can itself help and can direct companies to other places where help can be obtained.

When will the Secretary of State do something about the huge deficit between our imports of Japanese goods and our exports to Japan? He claims to be tough—the hammer of the unions. Will he show his toughness by standing up for British interests, especially with the Japanese?

That is a nice piece of gunboat diplomacy from the hon. Gentleman, but he should understand that things are not quite the way they were in the middle of the 19th century. There is little doubt in my mind that some members of the Japanese Government, including the Prime Minister, are as aware as the hon. Gentleman of the threat that will arise to the world free trading system unless Japan's trading surplus is abated. There will be many problems in organising a sensible abatement of that surplus. I do not entirely share the hon. Gentleman's gunboat diplomacy view, especially as gunboats are in short supply.

Well known as my right hon. Friend is as one of our principal gunboats in our trade disputes and relations with Japan, could he tell me what representations he has made to the Japanese Government on their predatory and disgraceful dumping prices in relation to the building of the Bosporus bridge? What did his counterpart in Japan say that they would do about this focused assault on our legitimate trading interests?

When I was in Japan, I was not aware of the scale of the subsidy that was being offered by the Japanese contractors and their partners in seeking to gain that contract. With regard to the bridge contract, the British company's bid and the scale of aid that was offered by the British Government were highly competitive with the Japanese company's bid and aid in that sector. However, the same was not true of either the pricing or the scale of aid offered on the associated roadworks; in particular, our partners in foreign companies were not able to come forward with an aid package the size of that of the Japanese. Having said all that, it seems to me that the Japanese tactics of subsidy in this case were scarcely compatible with their avowed aim of reducing their trade surplus. No doubt that will be brought to their attention.

Accepting that capitalism is a system of international competition and that the Government are dedicated to the capitalist concept, is it not true that for the British people the interests of British capitalism also have some interest? When will this capitalist Government, dedicated to the continuation of the capitalist system, do something about defending British capitalism against Japanese capitalism?

I think that the hon. Gentleman, uncharacteristically, may be in a state of some political confusion. I think that he is mixing up 20th century capitalism with 17th century mercantilism. I do not think that subsidies should form a large part of capitalism either in the United Kingdom or elsewhere.

Reverting to predatory pricing by the Japanese, may I ask whether my right hon. Friend is aware that there are 900 bridge builders in my constituency who would very much welcome some firmer international rules on the extent to which Governments can subsidise companies in important overseas contracts of this sort?

I would welcome not only firmer rules, but perhaps a greater willingness to abide by the rules; although again I have to say that in this case it does not appear that the Japanese Government broke such rules as there are.

If the Japanese people take no notice of the urgings of their Prime Minister to buy more goods from outside Japan, what steps will the Secretary of State contemplate?

Several steps could be taken, some of which I urged upon the Japanese Government. The Japanese Government could give a good example to the Japanese people by making major capital purchases from overseas. That is one thing that could be done. They could also help by introducing measures to internationalise the yen so that it more accurately reflected the strength of the Japanese manufacturing economy. Taking steps along those lines could ease that problem.

Does my right hon. Friend accept that the predatory pricing policies of Japan and the dumping of credit are an absolute disgrace, and that the consequence is that the Japanese are simply hijacking our industry? The bridge builders in the constituency of my hon. Friend the Member for Darlington (Mr. Fallon) will be eliminated as a result. Furthermore, many other British industries have had their bases destroyed by such policies. What is my right hon. Friend going to do about it?

I can well understand the anger felt by my hon. Friends, because clearly the British company's bid was competitive and better than that made by the Japanese company. British Government aid to that company was on the same level as Japanese aid, but unfortunately the countries associated with us were not as smart as the Japanese company's associates.

I agree that the Japanese Government, in offering cheap credit and subsidy to that extent, were foolish. It was probably unnecessary under the circumstances for the Japanese Government to go that far to get the order. The Japanese Government's action was incompatible with the programme they have announced to reduce their trade surplus. That will be brought clearly to their attention again. As I said in Japan, unless that surplus is abated, unless their markets are opened and unless the Japanese desist from some of their trading practices, protectionist forces will be impossible to resist.

Is the Secretary of State aware that, although I have no doubt that he raised these issues with the Japanese in Tokyo, there is a great difference between Japanese professions and Japanese actions? Precisely what undertakings, if any, did the right hon. Gentleman receive from the Japanese about a change in their policies? If no undertaking was given, what action will the right hon. Gentleman take to ensure that such undertakings are given?

When my hon. Friend the Member for Macclesfield (Mr. Winterton) is invited to speak from this Box I hope that he will put his case, but perhaps he will allow me to answer the question.

The undertaking that I received was that the Japanese Government would pursue with vigour the policies which Mr. Nakasone announced on 9 April—that is, opening and liberalising the Japanese market. An undertaking was given to seek further to reduce the non-tariff barriers where we could show that effective non-tariff barriers were being imposed by the Japanese Government.

Although no guarantees were given, a great deal of discussion took place about the liberalisation of the Japanese financial markets. I believe that that liberalisation will occur, although much too slowly for my liking. I have no doubt that the Japanese are keeping some of their powder dry, like most other countries, for future rounds of trade negotiations.

Manufacturing Industry

6.

asked the Secretary of State for Trade and Industry what is the most recent figure for output in manufacturing industry; and how this compares with the figure for the same month five years ago.

For February 1985 the index of production for manufacturing is 102, based on 1980 being the equivalent of 100. This is 4 per cent. lower than its value in February 1980, though 10 per cent. higher than its value during the trough in the first quarter of 1981.

Does my hon. Friend not find it alarming that output has fallen by that amount in the past five years? To what extent does he think that Government economic policies have been responsible for the fall?

My hon. Friend will know that manufacturing in the previous peak in 1979 was below that of the earlier peak in 1973. The trend is long term. I should have thought that my hon. Friend might have felt it worth while to refer to the significant CBI industrial trends survey published today. It is one of the most optimistic ever published. Manufacturing export orders are shown to be the best since 1977. The outlook for employment in manufacturing is also the best since 1977 and every sector is displaying much greater confidence. That shows that Government policies are benefiting manufacturing.

Is the Minister aware that a particular example of the decline can be seen in south Leeds, which was the manufacturing core of that great city? The industry has been in decline there in recent years. Is it now the perceived wisdom that manufacturing industry will never come back again and that it is all over and done with?

Of course that is not the perception. It is very much the Government's intention that the country should have a strong manufacturing base. That is borne out by the results shown in the CBI survey, which shows that manufacturing is participating fully in the recovery and that in 1984 manufacturing grew more quickly than the economy as a whole.

Exports are encouraging, but if we are to build on that tentative improvement we shall have to remain competitive. Is my hon. Friend not worried about the growing signs of protectionism around the world? Does that trend not reinforce the need for a round of GATT talks very soon in order to stop the growth of protectionism, which will damage our jobs and exports?

I am sure that my right hon. Friend the Minister for Trade will note what my hon. Friend says.

Does any member of the Government know anything about major manufacturing industry? If not, will the Government listen to those who do, such as Mr. Harvey-Jones of ICI and Lord Weinstock?

I will certainly listen to what the chairman of ICI says, especially about pay restraint. I noted what Mr. Harvey-Jones said the other day, and I agreed with some of his comments. I agree that one of the concerns of the manufacturing sector is the level of electricity prices. That is why we need a competitive coal industry—one one of the aims for which the Government have worked very hard.

Is it not true that there are bags of opportunities in our home market as well as opportunities for exporters? If only our motor manufacturers, for instance, took the same proportion of our home market as the French, the Germans and the Italians take of theirs, we would have the answer to the question, "Where are the jobs to come from?"

My hon. Friend is absolutely right. I am sure that he is well aware that every 1 per cent. of penetration of the domestic market is equivalent to a quarter of a million jobs. If only we could hold back the tide of imports, employment would rise.

The Minister's complacency will be taken very badly by British manufacturing industry. Is he not aware that manufacturing output is still 10 per cent. below what it was when the Government came to power in June 1979? That is a bigger drop than has been suffered in any other industrial country, and the biggest drop since the war. Is he not thoroughly ashamed of that disgraceful record?

I would take the hon. Gentleman's comments more seriously if he acknowledged that manufacturing output fell sharply between 1974 and 1979. I was referring not to what the Government thought about the future of business but to what business men themselves see as the future for employment, investment, output and exports.

Small Firms Counselling Service

7.

asked the Secretary of State for Trade and Industry if he will make a statement on the continuing role of his Department's small firms counselling service in the light of the growth of the local enterprise agency movement.

The work of the small firms counselling service is being reorganised to operate increasingly through and in partnership with local enterprise agencies.

Is it my hon. Friend's intention therefore to change the objectives set for the counselling service?

I see a continuing role for the small firms service in giving its excellent advice to existing small businesses and start-ups. I hope that, over time, the local enterprise agencies will concentrate more on startups, leaving the resources of the small firms service to be concentrated in the area of special skills and also on the up-market counselling that it does so well.

Will the Minister give further consideration to the work in this field of the Co-operative Development Agency, which the Government supported last year? The small workers' and service co-operatives are now growing rapidly, and they need counselling in both marketing and accounting if they are to survive.

I know of the hon. Gentleman's interest in co-operatives. As I have said before, we are very anxious to support them. We have put the taxpayer's money where our mouth is by supporting the Co-operative Development Agency. We are funding it for the next six years to the tune of £200,000. More than 1,000 co-operatives have now been established in the country, but that figure must be compared with a total of 1·4 million small firms and 2·5 million self-employed. The £200,000 that we give the Co-operative Development Agency every year should also be contrasted with the £75,000 that we give to Business in the Community, which relates to the local enterprise agency movement. Business in the Community helps the local enterprise agency movement in many ways. We are incredibly generous to the Co-operative Development Agency.

Is my hon. Friend aware of the excellent work of the small firms service in west Norfolk. and in particular the work of Dr. John Knights? If my hon. Friend is to integrate the work of the small firms service into the local enterprise agencies, is there a continuing role for it as a separate entity?

My hon. Friend used the word integrate, but I prefer to use the word complementary in describing the way that the two services will operate. I envisage a continuing role for the small firms service and I do not envisage a time when we can do without it. It has doubled over the past two years. The expertise in the counselling teams, which are composed, as my hon. Friend knows, of industrialists and not civil servants, would be difficult to find in local enterprise agencies. Therefore, the roles are complementary.

Some of these agencies are undoubtedly doing an excellent job, but does the Minister recognise that many of them are virtually talking shops? Is the Department carrying out a cost-benefit analysis of their work, and is any consideration being given to the establishment of some objective standard of performance?

I am surprised that the right hon. Gentleman should frame his question in that way. I am sure he will realise on reflection that the local enterprise agencies would be offended at being called talking shops. The only shops that one could connect with the local enterprise agencies movement stems from the fact that we are anxious that, within the communities, they should be one-stop shops. A survey has been conducted by Business in the Community, which shows that the movement is extremely successful. Another recent survey conducted in Scotland shows that where there are local enterprise agencies there can be a reduction in the level of unemployment by about 2 per cent.

Steel Scrap

8.

asked the Secretary of State for Trade and Industry how many representations he has received about the export of steel scrap.

Since 1 January Department of Trade and Industry Ministers have received 54 letters and telexes about the export of steel scrap. I have also met delegations that have referred to this subject.

Is the Minister aware that in the first two months of this year scrap prices rose by over 40 per cent., largely because subsidised industrialists in other countries such as Spain are buying imported scrap at inflated prices and thereby pushing up the international market price? In view of the resulting threat to the British foundry industry, will the Government intervene now to deal with this, instead of tolerating a threat to foundry workers' jobs brought about by the Government's doctrinaire worship of free market forces?

I agree with the hon. Member that the Spanish subsidy is an important aspect of the problem. This is being raised through the EEC and is being studied, and we are seeing what can be done about it. However, I do not agree with the hon. Gentleman that the answer to the problem is to impose controls on the export of scrap. That would not be effective if it were carried out in one country alone. Other countries in the EEC are strongly opposed to scrap control. Secondly, we have to take account of the needs and interests of the steel scrap industry as well. It is an important industry here, employing 100,000 people and making exports of £300 million a year. We cannot just shift the burden of the problem from one sector to another.

Does my hon. Friend accept that part of the problem for the steel scrap industry is continuity, that many of the contracts entered into are long-term contracts, and that any suggestion of controls and turning the tap on and off would destroy confidence in the industry, the importance of which to the economy my hon. Friend has just outlined?

I agree with my hon. Friend. A point that I should perhaps have added to what the hon. Member for Falkirk, West (Mr. Canavan) said when he quoted the figures on prices, comparing the latest month's with January, is that the recent trend has been for quite a reduction in prices. In April, prices of the main grades were £65 a tonne compared with £85 a tonne in the previous month. We have to see what happens in the market, but those price increases are from a very low level and in real terms are not all that different from those obtaining in 1979.

As I am one of the 54 who have made representations to the Minister on behalf of a private enterprise firm in my constituency, will he appreciate that it is not sufficient to turn a blind eye to this situation, otherwise more firms will go the the wall, with consequent redundancies?

Of course we must not turn a blind eye to the situation, and the 54 representations ensure that we cannot do that. The hon. Gentleman must also look at the interests of the scrap industry. Just because one industry is facing a problem, we cannot shift the burden of that on to another industry. There may be a problem of price. There is not a problem of an overall shortage of scrap, and it is to a shortage that the provisions for controls within the ECSC treaty relate. There is not a shortage of scrap at present.

Does the Minister accept that as far as the special steels industry is concerned nationally, and certainly the special steels industry in my constituency, the problem continues to be grave? Would it not be wise for the British Government to recognise that the Spanish Government are serving the interests of Spain, and that it is about time that this Government began to serve the interests of Britain?

I have acknowledged that the Spanish problem is serious. That has to be examined in the context of Spain's accession to the EEC, and it is being examined. This matter was raised at the last Council of Steel Industry Ministers. We cannot impose controls unilaterally. The hon. Gentleman must recognise that there are other countries in Europe which are firmly opposed to the imposition of scrap controls. What would be the point of scrap controls imposed on one country if it exports to another country, which then exports out of the EEC? Such a gesture would make the hon. Gentleman feel better, but it would achieve nothing.

"Support For Business"

9.

asked the Secretary of State for Trade and Industry what responses he has received following the publication of his advisory booklet, "Support for Business".

Over 200 telephone calls a week about DTI assistance are being received at the new London central inquiry point. Regional inquiry points are also receiving many calls.

In congratulating my hon. Friend on his initiative, may I ask whether he expects the supplementary leaflets to be available when he makes his welcome visit to Bolton during Local Enterprise Week?

We have already produced the leaflet on support for innovation. We hope that shortly we will produce the leaflet on support for investment. I shall certainly try to get it out in time for my visit to Bolton during Local Enterprise Week.

When will the Minister get the Prime Minister to understand that no amount of small, detailed schemes for the alleged support of industry can possibly compensate for the appalling burden of interest rates that are persistently higher than those of all our competitors, except Italy, the overbearing domination in the market of cash-rich, huge companies, which support the Government financially or otherwise, and, above all, the lack of purchasing power among the unemployed and the other millions of poor families in the country?

I think that the hon. Gentleman may have framed his question yesterday before having read this morning's newspapers. The Financial Times of today states:

"Small companies' confidence about general trading prospects improved markedly in the first quarter of this year, says a survey due out today. There is a strong upturn in the number of groups expecting to employ more staff, and a revival in investment plans, the study says."

Would my hon. Friend care to comment on whether there is another thing that businesses need, not least small businesses, which is to be left alone, especially by local government?

Wherever I go on my regional visits, I seem to be given conflicting advice from any audience that I address. On the one hand, there are people who say to me, "Let's have some more money"—or that is what they really mean when one takes off the fancy wrapping. That is the bottom line. That is, of course, taxpayers' money. In seemingly direct contrast to that, I get messages saying, "For goodness' sake, get out of our way, get off our backs and allow us to run our businesses in the way that only we can do." That is why we conducted the burden scrutiny exercise and that is why we published "Burdens on Business", and we hope to carry forward those initiatives to cut out the red tape and to free small business men from being prisoners of their in-trays.

Departmental Employee (Background)

10.

asked the Secretary of State for Trade and Industry if he will make a statement on the latest position regarding the civil servant in his Department whose Nazi background has been looked into.

The inquiries undertaken by the Department have revealed no grounds for disciplinary action against this officer.

Is it not strange that someone with such a known notorious background should have been taken on by the Department in the first place? Is the right hon. Gentleman aware that while someone who, for example, is a supporter of CND might be described by those who do the vetting or interviewing as a subversive, the person who is the subject of my question is a civil servant and, as the right hon. Gentleman has just said, will continue in that job?

The hon. Gentleman is making a serious mistake in the line of his questioning. He should understand that two problems may arise in relation to the political views and activities of a civil servant or a potential civil servant. One is whether he or she may or may not be a subversive—that is, a potential traitor to this country.

Exactly, that is one consideration that may apply. A second and broader consideration is that, whatever political views an official may hold, he is, within the limits of certain ranks of the Civil Service, debarred from active participation in national politics or from intervening publicly in matters of national, partisan controversy. This gentleman fell into neither of those categories.

Is the Secretary of State aware that the Minister for Trade told me in a letter that the Government confirmed

"that the Civil Servant in question attended meetings at a London hotel earlier this year regarding the formation of a new Right-wing organisation."
However, the view is taken by the Government that since the meetings to form this new Right-wing organisation were held in private, no rules were broken. Is it seriously the Government's position that, provided political activity does not take place in public, it is permitted under the rules?

There is nothing to prevent an official holding views or going to a meeting to listen to those who hold similar views or discussing his views in private. If we went to the extent of saying that the mere expression of an unpopular political view in private should be cause for dismissal from the Civil Service, we should be going a long way down a road which I think the right hon. and learned Gentleman and most of us would regret. I find the views of extremist Socialists, whether they are National Socialists or any other kind, extremely displeasing——

—but that should not give one the right to dismiss a person for holding such views.

Japan

12.

asked the Secretary of State for Trade and Industry what are the prospects for trade with Japan.

United Kingdom exports to Japan in 1984 rose by 16 per cent. on the previous year, to almost £1 billion. I hope to see this favourable trend continue, but much will depend on the effectiveness of the Japanese Government's 9 April import promotion package and on the continued efforts of exporters.

I thank my right hon. Friend for that reply. Despite the restrictive practices of the Japanese, how do we compare with other would-be exporters, such as Germany, to Japan? Are all countries being treated equally unfairly?

All countries are finding it equally difficult to export to Japan. We do not have figures on a strictly comparable basis from our own sources, but according to Japanese figures, which differ slightly from ours in some respects, we have been doing rather better than the Germans in increasing our exports—our exports and imports are of the same order as those of the Germans—and we have been doing better than the French, whose exports to Japan fell last year.

Does my right hon. Friend agree that one can lead a horse to water, but one cannot make it drink? In other words, unless our goods are what the Japanese people, as opposed to the Japanese Government, want, they are not likely to buy them. Does he further agree that we should equally ensure that our goods are better than Japanese goods?

Yes, indeed. The essence of a successful economic system must be competitiveness. In some areas our goods are selling extremely well in Japan. For example, Wedgwood china is selling so well there that Japanese manufacturers come as near as they dare to counterfeiting it in their imitations of the styling and the manner of marketing. So that is a clear case where competitiveness can pay.

Is the Secretary of State aware that these talks with the Japanese have been going on for many years, when a previous Tory Government were in office and when a Labour Government were in office and that the Japanese managed to string those Governments along by saying that they were going to change things a little bit later, but not just now, in favour of Britain? Will the right hon. Gentleman also bear in mind that one of the factors that enables British people to buy Japanese goods is that we are surrounded by hypocrisy? Is he aware, for instance, that at the time when the leader of the Liberal party was saying "Buy British" he was driving a Japanese car and that he stopped driving it only when he found that the British School of Motoring was to give £188,000 to the Liberal party, when he started driving a British car?

The hon. Gentleman is, as ever, amusing and, as ever, of course, he is deeply conscious of being surrounded by hypocrisy.

Small Firms (Marketing Advice)

13.

asked the Secretary of State for Trade and Industry whether he is satisfied with the level of advice on marketing available from his Department to small firms.

I thank my hon. Friend for his reply. Will he say what he intends to do to assist more firms with their marketing problems?

I am very conscious of the importance of marketing as one of the key elements in running a successful business of any kind. We have a golden opportunity to run a pilot marketing scheme in certain areas as a result of the non-quota ERDF money that is being made available in the steel, shipbuilding and textile areas. We are obviously very anxious to monitor how that marketing scheme is working within the business improvement service package to establish what degree of success has been achieved.

Is the Minister aware that many voluntary bodies have established small businesses, which are helping to create employment, and that they could do a lot more if they were assisted with marketing within the voluntary sector? Is he aware that one of the biggest frustrations is the lack of liaison between the MSC, which often provides initial funding, and his Department, which seems not to be aware of the developments within the voluntary sector and the general problem that responsibility for assistance to the voluntary sector is split among so many Departments? Will he take responsibility for co-ordinating the activities of voluntary bodies to create employment and marketing?

I should certainly like to look in greater depth at the problem which the hon. Gentleman has outlined. An initial suggestion, which might prove helpful, is that those voluntary organisations should get in touch with the small firms service, because what I omitted to say earlier is that there is a degree of marketing skills within these small firms counselling teams.

Is my hon. Friend aware that many small firms within my constituency and elsewhere would be much more successful in their marketing if they could get better help and support from the banks? Will he look at that question?

There is no doubt in my mind that over recent years the main clearing banks have proved to be more helpful and flexible than they had been in the past. Certainly my mail bag is full of complaints about the banking system and, perhaps, a degree of inflexibility on the part of the banks. Although I am not standing at this Dispatch Box to defend the clearing bank system in any way, I must point out that it would have been impossible, for example, for us to get the loan guarantee scheme off the ground without the support of the banks, and I very much welcome that support.

Overseas Projects Board

14.

asked the Secretary of State for Trade and Industry what response he is making to the representations made by Mr. Roy Withers, chairman of the Overseas Projects Board, about the nature of Government support for the board; and if he will make a statement on the level of Government support for the board.

What consistent support is this country going to give, in terms, for the capital goods industries to make sure that they are no worse than terms offered by our industrial competitors?

As the hon. Member will know, we give a great deal of help. There is the projects and export policy division of this Department, which is engaged in trying to help project business; we have the fixed rate export finance scheme by ECGD and we also have the aid and trade provision, which has gone up from £36 million to £66 million a year. So quite a lot of support is given and, in fact, we have won a great many projects.

Steel Industry

15.

asked the Secretary of State for Trade and Industry when he will be meeting the chairman of the British Steel Corporation to discuss the corporate plan for the steel industry.

BSC has only recently been in a position to resume its normal corporate planning process, and at present my right hon. Friend has no specific plans for an early meeting with the chairman to discuss the corporate plan.

Does the Minister appreciate that there is concern at the Llanwern steelworks about the failure to give the go-ahead for the concast project? Therefore, will he press the chairman over this issue, bearing in mind that the works has beaten all efficiency and production records in recent years—a trend, presumably, which the Government are trying to encourage?

The hon. Gentleman has raised this matter several times at Question Time and at Welsh Questions. As he knows, it is a matter for the corporation to put to the Government, and the corporation has not done that as yet.

Will my hon. Friend confirm that the Government's policies in relation to the BSC have been highly successful and have led to increased profitability, increased productivity, and a position in Europe which enables it to compete effectively with almost every other European steel producer?

I hope that the Government's policies have contributed to the success of the BSC. The progress on productivity has been dramatic. We have equalled and surpassed the levels in France and Germany and done our restructuring. The BSC project is now poised to reach viability. It is a tribute not only to the Government but to the management and all those who work in the corporation.

Order. I said that I would take the hon. Gentleman's point of order after Question Time.

The hon. Gentleman is entitled to raise it, but I am entitled to say when I will take it, which is after Question Time.

Order. I ask the hon. Gentleman to bear with me. I have said that I will take his point of order after Question Time, and I certainly will. We have one more question in Question Time to the Secretary of State for Trade and Industry, and that is No. 46.