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Trade And Industry

Volume 84: debated on Wednesday 23 October 1985

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Steel Industry


asked the Secretary of State for Trade and Industry what representations he has received on the British Steel Corporation's corporate plan; and if he will make a statement.


Taylor asked the Secretary of State for Trade and Industry if he will make a statement on the position of the steel industry.

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Leon Brittan)

A statement on the British Steel Corporation's corporate plan was made by my right hon. Friend on 7 August, copies of which have been placed in the Library.

I am grateful to my right hon. and learned Friend for his reply. I welcome the fact that Ravenscraig will continue to operate during the current operating period of the British Steel Corporation. Is my right hon. and learned Friend aware of the widespread concern about BSC's proposal to close Gartcosh, which is in Strathkelvin, and the fears of the impact of that closure upon the steel mill at Ravenscraig? Will he assure me that if evidence is brought before the current Select Committee investigation which suggests that the closure of Gartcosh will prejudice the future of Ravenscraig, he and his ministerial colleagues will ask BSC to review its closure decision?

I am aware of the anxieties and have seen two delegations about the matter. I do not believe that the Gartcosh proposal will in any way prejudice the future of Ravenscraig. I shall consider any evidence to the contrary, but the material that has been put before me by the delegations does not support that view.

My hon. Friend the Under-Secretary of State has revealed to me in a written answer that whereas British jobs in steel have been cut by more than half since 1980, other members of the European Community have not reduced theirs by more than one quarter. Therefore, will my right hon. and learned Friend pay serious attention to the views of the Select Committee on Trade and Industry, which last year, said that there should be no further steel closures in Britain until other members of the Common Market carried a fair share of the cuts in jobs and capacity?

We shall fight for the British steel industry in the Community, as elsewhere. The United Kingdom's share of closures., which removed 30 million tonnes of hot-rolled capacity throughout the Community, was about 5 million tonnes. As for the future, I believe that the decision relating to Alpha steel makes a significant contribution towards what is required in the Community.

Will the Secretary of State take this opportunity to congratulate the workers of Gartcosh on their splendid record in co-operating with every one of British Steel's plans for productivity, pricing, delivery dates and exports? Will he also, using his new broom, withdraw the threat to this plant and to this community, which has given so much to the steel industry and to the British manufacturing base?

As the hon. Gentleman knows, I am happy to pay tribute to the work force at Gartcosh. Nevertheless, I cannot forestall or change BSC's decision. I am satisfied that Ravenscraig's future is not imperilled by that decision.

Does the Secretary of State realise that his reply, combined with the attitude and policies of the BSC, constitutes an insult to the intelligence of the Scottish people? They believe that if Gartcosh is closed there will be a proposal in three years' time, after the next election, to close Ravenscraig and that our national industry is being sabotaged.

The hon. Gentleman has no basis for making such an allegation. In many countries there are integrated hot-strip mills which have no cold mills associated with them. If the hon. Gentleman looks at Nippon Steel's Oita works, Nishin Steel's Kure works and, above all, US Steel's Geneva works in America, which is 400 miles away from the nearest cold reduction mill in Pittsburg, he will realise that his assumption is wholly unfounded.

Does my right hon. and learned Friend agree that in 1981 the British Steel Corporation was a joke among the steel producers in Europe, but today it is one of the most productive steel producers, if not the most productive, in Europe? Its costs of producing steel are lower than in Japan as well as West Germany. Will my right hon. and learned Friend remind the House that where the world is awash with steel and the European steel industry is operating at only 65 per cent. of manned capacity, decisions such as those in relation to Gartcosh must be taken if the BSC is to remain viable and to be set on course for a £300 million profit?

I agree that the decisions announced in August are designed further to strengthen the progress of BSC. which has been considerable, as my hon. Friend said. In doing so, the corporation will protect and enhance the prospects for all working in steel.

In his early days in his new and important office, will the Secretary of State recognise that the British steel industry has been cut to the bone in terms of capacity? Will he urge his colleagues to make the strongest possible representations in the European Coal and Steel Community to increase the British quota? Will he also bear in mind that this country will not always be in a state of slump?

I can agree with a large part of what the hon. Gentleman said. We shall be asking for more quota. We have done so, and shall continue to do so.

I accept that the decision to close Gartcosh was taken by the BSC, and that it is right that a nationalised corporation should take its own decisions, but what does my right hon. and learned Friend propose to do about the 88 submissons made to him by the trade unions in favour of retaining Gartcosh? As far as Scottish Members are concerned, it is not yet a cut-and-dried decision.

I have met the trade unions concerned, which have elaborated their position to me. I have explained that the strategic decisions relating to the steel industry are taken by the Government, but the decision on Gartcosh is for the corporation.

Will the Secretary of State bear in mind that he need not accept every word that is uttered to him by BSC on this matter? The right hon. and learned Gentleman should recall that Ravenscraig was set up by a political decision of Harold Macmillan. Secondly, Gartcosh is seen by every Scottish Member, with the possible exception of one rather eccentric Member, as an essential feature of Scottish industrial life. Will the right hon. and learned Gentleman pay attention to the views of Scottish Members of Parliament, who know something about the matter?

Of course I want to consider carefully the views of Scottish Members of Parliament. It is precisely because I want to do so that I have seen two delegations on the matter. However, the fact is that Gartcosh takes 30 per cent. of Ravenscraig's hot mill output. Shotton already takes 25 per cent. and only 6 per cent. of Gartcosh's output goes direct to customers in Scotland. I sympathise with those working at Gartcosh, but I am determined not to undermine the future of Ravenscraig by giving currency or support to the view that the decision on Gartcosh has the implications for Ravenscraig that so many people have suggested.

I welcome the right hon. and learned Gentleman to the somewhat diminished Department of Trade and Industry. I thought that his right hon. Friend the Leader of the House was somewhat cruel on Monday when trying to justify the transfer of the Department of Employment and a considerable part of the right hon. and learned Gentleman's Department to a Minister in another place, who does not seem to bother to turn up. In trying to justify the transfer of the right hon. and learned Gentleman's duties, the Leader of the House said that it was important to have the right man in the job. May I say that it seems grotesque to the Opposition that, while the Germans are increasing subsidies to the steel industry, this Government are imposing further cuts? As a Welshman, I join my Scots colleagues in denouncing the Gartcosh closure. No one is taken in by the cynical decision to defer the Ravenscraig announcement until after the general election. We are all infuriated by the fact that the Gartcosh decision, plus the refusal to make appropriate investment in Ravenscraig, is a malevolent attempt by the Government to predetermine that Ravenscraig must close when the decision time comes.

I hope that if I ever have occasion to compliment and welcome the right hon. Gentleman, I shall do so in a less laboured way. The objectives of the United Kingdom Government in the European Community are for a highly restrictive regime for state aids to be applied by all countries. That is something that we shall pursue. The point that was made about investment in Ravenscraig is wrong. Since the announcement of which the right hon. Gentleman complained, the British Steel Corporation has announced investment of £15 million in Ravenscraig. That is an earnest of its intentions and sincerity about what was said in August about the future of Ravenscraig.

Order. I have allowed a long run on this important matter. We must now get on rather more rapidly.



asked the Secretary of State for Trade and Industry what plans he has to bring new industry to Merseyside.

The Merseyside travel to-work areas continue to benefit from the highest level of regional aid available in Great Britain.

When will the Minister recognise that the policies pursued by this Government have resulted in abysmal failure with regard to industry coming to Merseyside? Is he aware that about 70,000 jobs have been lost in Liverpool alone in the past seven or eight years and that unemployment among young people is as high as 80 and 90 per cent. in many areas? Is that not the reality, rather than the fantasy of the Government, who suggest that there is a better tomorrow? When will the Government act on the terrible problem of mass unemployment on Merseyside and in other places?

I do not believe that the hon. Gentleman listened to my reply. The highest levels of aid in Great Britain are available to Merseyside. Has it not occurred to the hon. Gentleman that Councillor Hatton drives away investment in Liverpool faster than any other thing?

Does my hon. Friend agree that the best way for Merseyside to encourage industry into that area is for the Liverpool city fathers to admit that the great Socialist experiment has failed, and that a belief in free enterprise, flexible working practices and lower overheads, especially rates, is needed? Until then, will the Government stop throwing good money after bad?

I entirely agree with my hon. Friend that the decisions which have been made by the Socialist council in Liverpool drive away investment and jobs from Merseyside.

Is the hon. Gentleman aware that over the past seven years Liverpool has lost 65,000 jobs, and that Mr. Hatton has been deputy leader for the past two years only? Is he also aware that Liverpool, according to EEC charts, is fifth from the top in the league of areas with regional problems? Is he further aware that one in four of the workers on Merseyside is unemployed and that Liverpool is only part of Merseyside? Will he stop talking a lot of nonsense, like his colleagues, about Mr. Hatton and begin to deal with the real problem of Merseyside —unemployment—[Interruptioni.]

The hon. Gentleman will be aware that my constituency is just 15 miles away from Merseyside and Liverpool. I am well aware of the problem with which that part of the country has to deal. However, it would help if the likes of Councillor Hatton and his colleagues did not drive away potential investors.

Does my hon. Friend accept that one of the most sensible recent suggestions about the problems of industry was made by my right hon. Friend the Secretary of State for Defence, who is determined to ensure that the overfat south-east industry goes to help the lean and hungry midlands, north and Merseyside? Does he agree that it is a sensible use of Government patronage to ensure that those who are hungry in the north need not always feed those in the south?

As my hon. Friend will accept, I always agree with my right hon. Friend the Secretary of State for Defence, who will have regard to value for money and other aspects when he places contracts.

Notwithstanding the fact that the contrived confrontation in Liverpool is undoubtedly driving away industry and investment from Merseyside and that the sooner the confrontation and aggression end the better it will be for Merseyside, does the Minister accept that one in five of the population there is out of work, and that the city planning officer predicts that a further 31,000 will become unemployed by 1991? What will he seriously try to do to attract new and better enterprise to that deprived part of the country?

I am glad that the hon. Gentleman accepts that there is a problem of turning away inward investment. I accept that Merseyside and Liverpool have great problems. As I said in answer to the main question, Liverpool receives the highest regional aid in the country through the various schemes. I do not believe that the Government can do more than that.

European Regional Development Fund


asked the Secretary of State for Trade and Industry what is the value of the grants allocated to England from the European regional development fund since its inception.

Does my hon. Friend agree that those grants bring considerable advantage to Britain? Is he satisfied that the general public are aware of the extent of such assistance from the EC?

I certainly accept tht the grants bring investment into Britain. Between 1979 and 1983, about 109,000 jobs have been associated with the regional development fund. I am always keen to broadcast the schemes available, and my right hon. and learned Friend and I will do precisely that throughout the country.

I welcome the Minister of State to his new responsibility for regional aid, but I point out to him that he inherits a policy that was hacked to pieces by his predecessor. Will he take an early look at the prospects for regional aid in the light of the fact that, whatever we get from the ERDF, we shall still be a massive contributor to the EC budget, and that any help that the Government can give under section 7 of the Industry Act will be far less than was lost to the regions through the reduction in the previous regional policy? Will he review the position and the policy that he has inherited in the light of its results?

I thank the hon. Gentleman for his welcome. We certainly wish to maximise what we gel from the EDRF. However, I am sure he will agree that the most sensible and correct way to proceed is to direct the money available towards the creation of more jobs.

Steel Industry


asked the Secretary of State for Trade and Industry what is the present position in regard to the privatisation of the special steels capacity of the British Steel Corporation; and if he will make a statement.

It was announced on 7 August that the Government have agreed in principle to BSC's and GKN's proposals for a joint venture in engineering steels. The Government welcome the proposed venture as a further step towards the privatisation of BSC's activities.

Does the Minister agree that after all the furtive wheeling and dealing in pursuit of this privatisation, which has continued for several years, it is time that some consideration was given to the interests of the workers in the special steels industry, who hay e devoted great energy to assist the development of the industry, taken part in an enormous effort dramatically to improve productivity and broken world production records, but whose wages, valuation and conditions of employment are now regarded as a matter of the utmost secrecy? Does the Minister accept that the Government have a responsibility to the nation as a whole, not merely to the accommodation of the fixers in our declining economy?

I certainly agree with the hon. Gentleman that the work force is an important aspect of any company. However, he will be aware that the Government made their decision, which was announced on 7 August, with the thought in mind that it is in the best interests of the companies and, therefore, of their labour forces, that the proposals should be proceeded with. However, negotiations have yet to take place.

Is my hon. Friend aware that steel stockholders in my constituency tell me that they have considerable difficulty in getting supplies of appropriate steels from BSC and that, although they would like to buy British, they find that on the whole BSC does not seem to be interested and that, as a result, they have to import many kinds of special steel? Does my hon. Friend agree that privatisation can only improve that position?

I agree that privatisation is likely to improve the situation. That is why we are proceeding with quotas in the way that we are.

Is the hon. Gentleman aware that rumours are rife again in south Yorkshire about further closures in the special steels sector? In the past such rumours have all too often proved to be true. As the BSC chairman, Sir Robert Haslam, made it clear at his last meeting with the Select Committee that he expected a further closure in that sector after Tinsley Park, and as agreement has now been reached on the privatisation scheme, will the hon. Gentleman take steps to make public this agreement, which so far has been secret, so that the people concerned will know where they stand, how many more closures will take place and how many more jobs will be lost?

Those rumours are pure and complete conjecture. Further negotiations are taking place to get the deal together and, until they are concluded, no decisions could possibly be taken. I understand the hon. Gentleman's point about uncertainty. That is always very unsettling for those who may or may not be involved.

Competition And Retailing


asked the Secretary of State for Trade and Industry if he will make a statement on Government policy following the Director General of Fair Trading's report on competition and retailing.

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. Michael Howard)

A full statement was made by my predecessor on 28 June, stating the Government's policy in the light of the Director General's report.

Does the hon. Gentleman accept that there is widespread concern that the Binder Hamlyn report seriously underestimated the power of the monopoly purchaser in the market place through the operation of the discriminatory discount system? If the hon. Gentleman will not legislate to protect the small retailer, will he at least consider setting up a voluntary code of practice, or is he merely prepared to stand idly by and let our network of small retailers, especially those in rural areas, simply wither away?

The question of a code of practice is one for the trade itself to consider, although it would be essential for such a code not to conflict with the requirements of our competition legislation.

Will my hon. Friend confirm that his Department has not received any complaints from consumers or consumer organisations about the level of competition in retailing? Is it not a fact that consumers throughout the country are enjoying great benefits from the Government's competition policy?

I welcome the Minister to his new responsibilities. I put it to him that there is a simple question at the base of this apparently complicated matter. The market share of the four major supermarket groups has risen, the number of small independent grocers has fallen and the discriminatory discounts which are the cause of the problem have grown in size. Are the Government prepared to sit back and allow this to continue?

The extent to which the market share has increased is diminishing. The hon. Gentleman is asking the Government to take action that would increase the prices that consumers pay. I think that such action would be difficult to justify.

Cars (Imports)


asked the Secretary of State for Trade and Industry what representations he has received from BL about the report by Dan Jones on import penetration of cars.

None, but I recognise the concern about the sourcing policies of the multinational car companies, and there have been discussions with those companies. Ford has now said that it plans to manufacture 70 per cent. of its United Kingdom car requirements in its United Kingdom plants in the second half of 1985, and to maintain or increase the 80 per cent. United Kingdom content in these cars. Vauxhall aims to increase the number of cars and car-derived vans that it manufactures in the United Kingdom from 45 per cent. of its requirements in 1984 to 56 per cent. this year. Vauxhall will also raise the United Kingdom content of its vehicles from an average of about 46 per cent. in 1984 to about 49 per cent. by the end of this year. I regret that, after lengthy discussions, Vauxhall is not yet ready to go further in proving that it really is a British car producer.

Has not the report, with its revelation that exactly two-thirds of car sales in Britain come from imports, prompted the Government to push General Motors, Ford and Peugeot into making public their plans for investment and future manufacture in this country? Does the report not show that the catastrophic fall in employment in the car industry from 500,000 to 250,000 over the past 10 years is because multinational companies such as General Motors and Ford have no loyalty to Britain or to their workers, and that their loyalty is purely to the global strategy of profit and money?

I do not believe that the hon. Gentleman's analysis will assist the British motor industry. The causes that have led to the fall in British car manufacture are much more complicated than the hon. Gentleman suggests. He has to look at such things as labour practices, productivity and wage claims. The progress made by some British car manufacturers, in particular British Leyland in the past few years, resulting in their getting to grips with the difficulties, has been remarkable and should be commended.

Instead of listening to hard luck stories about British Leyland and import penetration, will my right hon. and learned Friend listen to the success stories of General Motors, and in particular Vauxhall Motors? Does he appreciate that output by Vauxhall Motors has doubled in recent years, that the United Kingdom content of Vauxhall cars is going up quite dramatically and that, unlike British Leyland, Vauxhall, certainly at Luton, has received no Government money, whereas BL has received £1·8 billion over the past two years? Will my right hon. and learned Friend talk about the success stories rather than listening to the carping of British Leyland?

I am happy to compliment my hon. Friend's constituents on the sterling work that they have done and I hope that that will lead to General Motors to ensure that more Vauxhall cars are made in Britain.

In the general endeavour to get some balance into our motor industry, can we expect that the new Secretary of State will initiate strenuous attempts to achieve balance in the trade between Spain, and this country, to enable Austin-Rover to trade on equal terms in that country and not have to climb over a tariff barrier four times as high as that faced by the Spanish manufacturers?

The hon. Gentleman is making a perfectly fair point about Spain, and this is one of the matters where Spanish entry into the EC will assist, because it will lead to a reduction in the tariff and an increase in the reduced duty quota.

Will my right hon. and learned Friend bear in mind that the manufacturers in my constituency, and in particular Land Rover, would benefit greatly in terms of competition if they could enjoy lower interest rates and more favourable exchange rates, and if there were a review of the special VAT on cars?

These were among the points made by the Society of Motor Manufacturers and Traders at its conference this morning and I am conscious of the interests and desires of the society in that respect.

Has the Secretary of State seen this absurd advertisement, which says "GM loves UK', ending with the words

"We seem to be a perfect match"?
Does the right hon. and learned Gentleman agree that for us this is a case of unrequited love, as GM told the House of Lords Select Committee that imports to the United Kingdom of foreign-made kits, for cars to be merely assembled here by Meccano technology, have increased more than threefold, from 51,000 in 1981 to 163.000 last year and in the meantime GM's net adverse trade balance has reached the appalling figure of £656 million? Far from being a perfect match, is not the reality that GM has leeched on to the British market under the disguise of British labels to sell foreign cars while exporting British jobs to the EC?

I have given the figures and my comments. I do not think that it helps to put the matter in the terms that the right hon. Gentleman does. Having said what I have said about our disappointment that it has not been possible for General Motors to go further, one has a duty to point out that if the British components' share in the product is not so high as one would like one must ask whether British component manufacturers cannot produce products which General Motors must recognise ought to be included in its cars, on price considerations alone.

The City (Regulatory Framework)


asked the Secretary of State for Trade and Industry what progress has so far been made in establishing the regulatory framework for the City.

Good progress is being made. The preparation of legislation based on the financial services White Paper is well advanced. In the City, arrangements for setting up the new regulatory structure are in hand under the direction of the Securities and Investments Board and the Marketing of Investments Board Organising Committee.

Does my right hon. and learned Friend agree that, on reflection, and following the debates in the House before the recess, it might be better to have one overall body to regulate the City, rather than two bodies as originally proposed, but subject to reconsideration?

I know that a strong body of opinion feels that way. We are awaiting the views of the SIB and MIBOC as to whether there should be one board or two. If a single board is recommended, I shall have absolutely no objection to that.

Will the Home Secretary—or rather the ex-Home Secretary, complete with his new job and new hairpiece—[Interruption.] I think that it is very fancy. Will the right hon. and learned Gentleman lake appropriate steps to ensure that there is a proper inquiry into the Lloyd's fiasco? Will he also acknowledge that a major body blow to the City and to the taxpayer has been the loss by the Export Credits Guarantee Department of £400 million in the last financial year, resulting in a £350 million bail-out from the Consolidated Fund? Will he also make inquiries in Nigeria to see where the fraudulent practices took place that resulted in a substantial loss to the taxpayer and take appropriate steps, with the Attorney-General, to see that those involved are brought to book?

The only part of the hon. Gentleman's supplementary that has anything to do with the main question is that related to Lloyd's. Disciplinary proceedings by Lloyd's have been taking place. In addition, the Director of Public Prosecutions is considering a number of matters relating to some of the affairs concerning Lloyd's that have achieved wide publicity. I believe that that process should be allowed to continue.

Is my right hon. and learned Friend aware that if the new proposals for large conglomerates in the City and the merger between jobbers and brokers go ahead there will have to be careful consideration of the whole law of agency to avoid the conflict of interest that may be expected? Will he examine that very carefully in the forthcoming Session?

I shall certainly look very carefully at the point made by my hon. Friend. We shall wish to consider the impact on the law of agency of any changes in the City. In saying that, however, I do not wish to give the impression that we have reached any conclusions whatever on the subject.

Does the right hon. and learned Gentleman accept that his plans for regulating the City would carry more credibility if he were prepared to take seriously the abuses and irregularities that have come to light in respect of the British Telecom flotation? While some of the cases have rightly been referred to the Director of Public Prosecutions, does he agree that with further privatisations pending it is essential that a full departmental inquiry should take place into what went wrong with the BT flotation so that we can all know the extent to which killings were made at the expense of the taxpayer and in defiance of the Government's own rules?

I do not believe that such investigation is called for. I believe that the inquiries now being made, to which the hon. Gentleman rightly referred, are the appropriate ones and that that is the right way to proceed in this matter.

To pursue the answer given by my right hon. and learned Friend to the supplementary question of my hon. Friend the Member for Surrey, North-West (Mr. Grylls), would it not be most remarkable if either the SIB or the MIBOC were to recommend its own abolition? I support my hon. Friend and urge my right hon. and learned Friend to give serious consideration to the representations that have been made from both sides of the House during the many debates that have taken place on this issue. We must have legislation that provides for one stratified authoritative body to have control of the regulation of the City.

I assure my hon. Friend that I shall give most serious consideration to the issue that he has raised. He is right to say that he is by no means the only person raising it.

In view of the revelations of pending prosecution of representatives of the Bank of England and the attention that is being directed to its own regulatory role, when matters have been cleared up will the Secretary of State make a statement to the House on the future of the Bank's regulatory role in respect of the commodity markets?

The hon. Gentleman must have said inadvertently what he did not intend to say. Certain matters are being investigated, and until the investigations are completed it would be quite wrong to jump to the conclusion to which the hon. Gentleman has jumped.

Company Donations


asked the Secretary of State for Trade and Industry if he will now encourage companies to ballot their shareholders and employees before making donations for political purposes.

This is something for company directors to decide in the light of circumstances and their priorities.

Now that union members have demonstrated clearly their wish to continue with the political fund, why is it that the Government refuse to legislate for, or even to encourage companies to have, such balloting before contributions are made for political causes? What does the Minister, especially the Secretary of State, say to all those fair-minded individuals who say, "If unions are forced to have political fund ballots every 10 years, why are companies not subject to the same provision?" Is the answer that companies donate to the Tory party?

Companies are not subject to the same provisions, for a simple reason which I would have thought would be apparent to the hon. Gentleman. Shareholders are free to buy or sell their shares, and very often trade union members do not have the freedom to choose the union to which they will belong.

Why has the Labour party such a fixation about these donations? Have representatives of the Labour party never been able to attend annual general meetings? Have they never had the privilege of reading an annual report in which political donations are declared? If they take such a view about political donations, should they not attend annual general meetings to try to vote down the proposition that such donations be made? Surely each company shareholder is entitled to support or dismiss a political donation as it comes before him.

My hon. Friend is absolutely right. He and the House may be interested to know that within the workings of the Labour party there are some proposals afoot which suggest that the Labour party might approach companies to see whether donations might be forthcoming.

Should not companies such as Silentnight be forced to hold ballots for their shareholders before they break agreements that have been reached with trade unions and before they dismiss workers who balloted under trade union legislation?

Aid And Trade Contingency Provision


asked the Secretary of State for Trade and Industry if he is satisfied with the operation of the aid and trade contingency provision; and if he will make a statement.

Since 1978, exports totalling £1·7 billion have been secured with £350 million from the aid and trade provision. With this support, 96 projects have been won in 37 countries. I am confident that ATP will continue to be a very effective instrument.

I am grateful to my right hon. and learned Friend for that answer, which demonstrates how well he has done. Does he realise how seriously concerned major British exporters are that their Japanese counterparts have an ATP fund that is 40 times as great? They will feel at a distinct competitive disadvantage for as long as this continues. despite the excellence of their products. Does he agree that, first, we must deal toughly with the Japanese on what amounts to a grotesquely unfair trading practice? We must speed up our procedures for the approval of the ATP budget so that industry can take quick decisions. If possible, we should increase the budget. We should certainly set aside a special budget for China, without reducing the existing budget.

I agree with my hon. Friend about the need to take action against unfair practices. My hon. Friend will be aware that we have announced that in principle the aid and trade provision could be used to enable long-term low interest loans, similar to those that are offered by our competitors, to be made available in appropriate cases. It is in that context that officials have been visiting Beijing to consider a possible facility there. The total size of the ATP provision is being considered in the context of current public expenditure discussions, and I cannot anticipate their outcome.

Is not the point that the Japanese offer massively better facilities than are offered by the British Government, in that to date the British Government have been halfhearted about that kind of assistance for industry here? Has the time not come when we ought to have a genuinely rolling ATP programme so that the timing of a project is not the factor that means that the project fails to receive the go-ahead?

Certainly, I agree that we need one that is flexible and can accommodate the commercial realities of the situation. It is true that the use of mixed credits has grown. Notifications to OECD rose by 50 per cent. in 1984. I do not think that a general competitive increase in provisions of this kind is necessarily in the best interests of this country, because if it goes on we may be outbid. It is, therefore, in our interests to use our international influence to discourage practices of this kind. For the moment there is no doubt at all that we must adopt a flexible approach. It is for just that reason that we shall be introducing the soft loan facility of the kind called for by industry, which will help us make the best possible provision.

I was very happy to hear my right hon. and learned Friend's last statement. Is he aware that, in the experience of most exporters, including the largest in Lincoln, the flexible use of soft loans is one of the best weapons in securing large overseas contracts, rather than our previous excessive reliance on direct grants?

Both will be needed. Different mechanisms will be appropriate for different projects. We are, however, persuaded of the need for soft loans and it is for exactly that reason that I hope, in the not too distant future, to announce the details of the scheme on which we have been working.

Regional Policy


asked the Secretary of State for Trade and Industry if he will make a statement on the results to date of his regional policy.

It is too early to measure the effectiveness of the revised regional policy. The transitional period is not over and we expect to continue making payments under the old schemes for some time. We shall make an assessment as soon as possible after the new incentive package has had time to work through into additional job opportunities.

Further to that very disappointing reply, is the Secretary of State aware of the vast and ever widening gulf between some regions of this country and others in terms of economic activity and recovery, in relation to which his present budget for regional policy is quite inadequate? Will he, therefore, announce that he is now aiming at greater financial support for his regional policy?

I do not need to be told by the hon. Gentleman about the gulf between different parts of the country. It is a subject on which I touched very extensively in my speech to the Conservative party conference only a couple of weeks ago. However, the hon. Gentleman is making a great error if he thinks that the efficacy of regional policy can be judged simply by the amount of money spent on it. To provide huge sums of money for capital investment which would have taken place in any event, or which would lead to no substantial number of new jobs, is simply a waste of money and has nothing to do with regional policy.

Does my right hon. and learned Friend recognise that regional policy is not simply a matter for his Department, but affects decisions of all Departments of State, as the Secretary of State for Defence has now acknowledged? Is it part of his responsibility within the Government to ensure that regional policy is considered in all aspects of other Department's decisions?

I am not sure whether it is my responsibility, but I certainly indicated in that same speech that I thought it ought to happen.

In the light of that Blackpool speech, when the Secretary of State indicated strong support for regional policies, and in the light of what he has already said, is he hinting that there will be a reduction in public expenditure in inducements for investment?

I was not hinting at anything. I said what I had to say. The evidence of the new policy and what it is doing is apparent in some respects, because since parts of the west midlands became intermediate areas last November, 538 firm applications for regional selective assistance have been received, 156 offers of grant have been made so far, which represent over £17 million of grant and over £150 million of total investment, and nearly 12,000 jobs are to be created or safeguarded. That is our new regional policy.

Is my right hon. and learned Friend aware that, irrespective of the answer that he has just given, the designation of the Ross and Cinderford travel-to-work area as an intermediate area is regarded as a sick joke? Since the designation a year ago, only 18 of the 285 applications made have gone to the first stage of appraisal, and, as far as I am aware, not a single one has come to fruition. Given the intervening increase in unemployment in the area, which has now reached about 17 per cent., will my right hon. and learned Friend reaffirm yet again his determination to make the intermediate area status successful? Will he also let us know how that travel-to-work area compares with others that were designated at the same time?

I assure my hon. Friend that the existence of intermediate areas and the regional selective assistance available to them are important parts of regional policy. If my hon. Friend has any reason to believe that a project put forward from his constituency has not received the consideration that it should be given under the criteria, I hope that he will let us know.

Is the Secretary of State aware that the House is not terribly interested in what he tells the Conservative party at Blackpool, but is much more interested in what he does as the Minister in charge of regional policy? Will he confirm that it is the stated aim of his policy massively to reduce regional aid for the regions, and confirm that that is already being acheived? When the impact of that policy becomes clear in the regions, will the Secretary of State make a statement to the House and, in the light of reductions in regional aid and the ever-increasing unemployment in the regions, will he revise his policy and reinstate the policy which his predecessor hacked to pieces?

I do not undertake to do any of the things for which the hon. Gentleman asks. He sounded like an old gramophone record that needs replacing. As I said in answer to a previous question, I do not believe that the success or value for money of regional policy can be judged simply by the amount of money being poured into it. The evidence given repeatedly over the years of money spent in the name of regional policy not leading to more jobs in the regions is legion. There is evidence to support the better targeting of regional policy, which we are pursuing. I have given an example from the west midlands, and I am happy to give an example from Bishop Auckland, a different part of the country, where, in a comparatively short time and in a small area, nearly £3 million of grants have been offered which have led to the creation or safeguarding of more that 1,200 jobs. The overall effect is, of course, impossible to assess only a matter of months after the policy came into existence, but I shall certainly be happy to report to the House from time to time on the effects.

I agree that one cannot judge the effectiveness of regional policy solely in terms of the money spent, but does my right hon. and learned Friend agree that arguments that regional policy is ineffective because it does not create additional net jobs in the economy as a whole also miss the point? Obviously, all new jobs are welcome, but is not the key feature of regional policy the fact that it is intended to transfer jobs into areas where assistance is available? Measured against that test, is not the policy quite successful?

My hon. Friend is right. The figure of about 500,000 jobs in the region has been mentioned and I do not think that we need be embarrassed or ashamed about the fact that we are spending money—effectively now, I hope—to redress the balance to which reference has been made from both sides of the House.

Cars (Overseas Components)


asked the Secretary of State for Trade and Industry what information he has as to which motor vehicles, by name, although seemingly British-made, have over 40 per cent. and over 50 per cent., respectively, of foreign-made components.

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

Detailed information in the terms requested by the hon. Member on the imported component content of vehicles is, I regret, not available.

It is appalling that the information is not available; it should be available. Will all Ministers in the Department of Trade and Industry come to Sheffield to see the vast ex-industrial area of the east end so that they may realise what havoc they have wrought in the past six years? Do they realise that many factories are closing and there is a major strike in a so-called privatised firm in Sheffield because the steel that we make in south Yorkshire, which should be going to the motor trade, cannot go there because of the importation of foreign cars? What will the Government do? It is incredible. Unemployment seems to be out of control and the Government have no plans to do anything about the steel industry.

The reason why it is difficult to obtain those figures is that the car companies would have great difficulty, after a long period of time, assembling the information in the form that the hon. Gentleman has requested. The performance of the steel industry depends on the performance of its users, and until such time as our car industry starts to make major inroads in its share of domestic and international markets, the steel industry will continue to have difficulty in getting volume production back to historical levels. Of course we are concerned about this, and that is why we have supported the steel industry over the last five years.

Instead of criticising General Motors in the way the Opposition Front Bench has done, ought not people to remember the extent of General Motors' investment in truck factories and component part factories here? Will my hon. Friend confirm that it is Government policy to do things that encourage more General Motors investment in this country?

The Government can do a number of things to encourage General Motors to increase its investment in the United Kingdom, but I am bound to echo the remarks of my right hon. Friend that the onus is on General Motors to increase the British content of its United Kingdom products and to increase the share of the British market which it satisfies from its British assembly plants. We welcome the great strides the company has taken in the commercial vehicles sector and in particular I should mention the great innovations it has made in electrically driven vehicles.

Does the Minister agree that one of the problems concerns the policy of the multinationals in relation to putting up "screwdriver" plants? Is he aware that many people buy Ford Capris and Granadas believing they are buying British-made cars? What are the Government doing to remedy this situation? Is it not true that they are soft in dealing with multinationals, and is it not about time they were tougher, in the interests not only of British workers and British consumers, but in the interests of the economy?

In the context of the original question and the question posed by the hon. Gentleman, we have some weaponry available to tackle this problem. The Trade Descriptions Act 1972 requires imports bearing a United Kingdom name or mark also to bear a conspicuous indication of their country of origin. I am advised that enforcement of the Act is via the local authorities. There are no central statistics on prosecutions, but three recent cases in the west midlands were taken up precisely to attack the issue of badged cars.

Diesel Engines (Exports)


asked the Secretary of State for Trade and Industry if he will make a statement on the exports prospects for British-made diesel engines of all kinds.

Detailed assessments of market prospects are a matter for the companies themselves. I note, however, that the industry has an excellent record in this difficult market exporting engines and components worth some £700 million a year, either directly or as parts of other products. This amounts to about 70 per cent. of its production. British diesel engine companies are at the forefront of new technology and new products, including engines for the growing diesel car and van markets, and my hon. Friend can be proud of the contribution made by his constituency to the sector's success. I am therefore confident of the industry's ability to sustain its substantial export performance.

I thank my hon. Friend for his reply. Will he join me in congratulating Perkins Engines of Peterborough on the production of its 10 millionth diesel engine? That is more than any other company in the world has produced. Will he also bear in mind that about 80 per cent. of everything produced by Perkins is exported? If the company is to build on that enviable record, it w ill need less volatility in exchange rates.

I join my hon. Friend in congratulating Perkins on its performance. I visited the plant last year and was impressed in particular by the engineering capability. The company has a magnificent export record. Exchange rates are a matter for my right hon. Friend the Chancellor of the Exchequer. I hope my hon. Friend was encouraged, particularly in the context of Perkins, by the recent changes that we made in streamlining the approvals procedure in ATP and by the moves we are making on soft loan facilities.

The question refers to diesel engines of any kind. With regard to marine diesel engines, if the press speculation on the re-engining of the QE2 in West Germany is correct, will the Minister urge upon the Cunard company a policy of specifying British engines? Would that not be a marvellous export order for the British marine engine industry?

I am not in a position today to speculate. There has already been enough speculation on that question.