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Trade And Industry

Volume 129: debated on Wednesday 9 March 1988

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Ec (Internal Market)


To ask the Chancellor of the Duchy of Lancaster what representations he has received regarding preparations for the realisation of the Economic Community internal market in 1992.

The Parliamentary Under-Secretary of State for Corporate Affairs
(Mr. Francis Maude)

Since we announced our awareness campaign we have received an encouragingly large number of representations from all sectors of British business. All have warmly welcomed the high priority that the Government are giving to completing the single market in Europe and the steps that we are taking to make British business aware of the challenge.

Has the Minister not read the comments made by the director general of the Confederation of British Industry, Mr. Banham, to the effect that he thinks that the Government are not taking the negotiations on standards seriously and are not spending enough resources or time on the problem? Surely this requires a rather wider answer than the Minister has given today, or was given to me by the Minister of State on 2 March, when I was told that the interests of the CBI were not necessarily those of the British nation. It is in our interest to be able to respond properly to the new training environment in 1992.

With regard to the hon. Gentleman's specific point about standards, we hold the chair of no less than a quarter of all the standards committees in Brussels. It is important that we should take an active role in setting European standards, and we do that. I assure the hon. Gentleman that that is a very high priority for us, and we are doing a great deal more now than we have done in the past.

I am very glad to hear what my hon. Friend said about the importance of our preparing people and making them aware of what is involved between now and 1992 and the steps that we must take to take advantage of that, but does he agree that it is important that the EC should not distract us in any way by such time-wasting foolishness as trying to introduce a common European car number plate?

I note what my right hon. Friend has said. In asserting progress towards 1992, we must decide on priorities, and the kind of thing to which my right hon. Friend has referred is plainly not a high priority.

Will the Minister assure us that the Government will not permit VAT on newspapers and books?

That is plainly not a matter for me to comment on here and now. It is a matter for my right hon. Friend the Chancellor of the Exchequer in due time. The hon. Gentleman is well aware of the remarks made by my right hon. Friend the Prime Minister about our right to impose our own VAT rates on our own products.

Does my hon. Friend accept that it is good news that the awareness campaign is going well? Is he aware of the fantastic efforts being made by all the chambers of commerce and business organisations in other European countries to get their businesses off the ground and their noses in ahead of us? Does he believe that smaller businesses in this country realise the immense opportunities that will be available for them as well?

No, we do not believe that smaller businesses are fully aware of the opportunities, and that is why we are launching a major awareness campaign. That campaign has not actually started yet, but, because the issue is being discussed far more widely than before, awareness is steadily growing. The opportunities available to competitive British businesses for opening up Europe to the free exchange of goods and services are enormous. However, there is a threat for uncompetitive businesses because opportunities for competitive British businesses are also open to competitive businesses elsewhere.

Information (Sale And Access)


To ask the Chancellor of the Duchy of Lancaster if he will introduce legislation to regulate the sale of or access to information held on magnetic tape by the telecommunications industry.

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

I have no plans to do so. The Director General of Telecommunications would consider representations on this issue in the light of his general duty to consider these where they relate to telecommunications services or apparatus.

Does the Minister realise that those magnetic tapes hold far more information than is available on telephone directories and that British Telecom in particular holds a substantial body of information on each and every one of us? My information is that that may be against the guidelines on the data protection principles. Does he realise that unless he acts now we may face a national scandal in two years' time if fanatics or purveyors of junk mail manage to get hold of that information?

The hon. Gentleman's question raises a number of issues, some of which are a matter for the Director General of Oftel. I hope the hon. Gentleman agrees, because he and I have pursued the matter with the Director General, that he can act vigorously and is a fast-moving regulator.

The other aspect of the hon. Gentleman's question relates to data protection. Clear guidelines and requirements are placed on the holders of data to preserve the interests of data subjects. I shall examine very carefully what the hon. Gentleman has said, but in the first instance I feel that I should refer it to the Data Protection Registrar to see that nothing untoward is at risk.

As I understand it, my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has contacted the Director General of Oftel, who, I understand, feels that he has no power in this regard.

This is a serious matter. British Telecom is not merely selling a telephone directory. What is contained on the magnetic tapes could be used for credit reference agencies, debt collecting and tracing agencies and other agencies wishing to examine the socio-economic groupings of certain individuals. There is much more on the tapes than is contained in the telephone directory, and, if it got into the wrong hands, it could cause distress and concern to many people. If, having looked at the matter, the Minister feels that the Director General can do nothing about the problem, will he consider bringing in legislation to protect these people?

The Government discharged a major part of their duties during the passage of the Telecommunications Act 1984. The hon. Gentleman, who was a member of the Standing Committee, will remember the long debates on whether we should have a statutory body, which might be rigid and might constantly require updating through legislation, or a fast-moving freer body with appropriate powers, like the Director General of Oftel.

When matters have arisen that are legitimately for him, he has moved fast. He has not said that he has no remit to intervene. My understanding of his communication to the hon. Member for Edinburgh, Central (Mr. Darling) is that he accepts that two or three live issues have been raised which deserve consideration. However, I shall not second guess today precisely which body may take action to deal with the complaints that the hon. Gentleman has made.

Company Liquidations


To ask the Chancellor of the Duchy of Lancaster how many company liquidations there were in Derbyshire in the years 1983 to date.

Company liquidations are not analysed by county, but Derbyshire is part of the area administered by the Official Receiver's office in Leicester, which processed an estimated 415 compulsory liquidations in the years 1983 to 1987. During this period compulsory company insolvencies fell by 27 per cent. No regional analysis is available of creditors' voluntary liquidations.

Has there not been a substantial net increase in business activity in the area over the past five years? Has not that increase, which is very welcome, also gone hand in hand with a fall in unemployment, and has that not occurred despite the lack of regional assistance in the county of Derbyshire and the fact that many jobs have been lost in the coal industry, not just over the past few years but over the past 20 or 30 years? What conclusions does my hon. Friend draw from those facts?

I suspect that I draw the same conclusion as my hon. Friend—that industry in Derbyshire is very buoyant—and the fall in unemployment to which he refers is mirrored throughout the country. It is worth pointing out that between 1983 and the last year for which figures are available the number of new company registrations in Derbyshire rose by no less than 81 per cent.

Is it not true that, in Derbyshire, company liquidations from 1983 until the year of the election—when some special measures were introduced by the Government for electoral reasons—were at an all-time record, along with company bankruptcies; that half the north Derbyshire coalfield has been closed; and that, if the Government remain in office, there will be not 4 million people unemployed, as was the case a couple of years ago, but top side of 5 million? Derbyshire will suffer, and the hon. Member for Amber Valley (Mr. Oppenheim) will be part and parcel of it.

Telecommunications Supervision


To ask the Chancellor of the Duchy of Lancaster what discussions he has had with the Director General of Oftel on the implications for the system of telecommunications supervision of British Telecom's decision to ban its Talkabout telephone service.

Since British Telecom's decision to suspend Talkabout no further discussions have taken place, although the Director General of Telecommunications has kept my hon. and noble Friend in touch with developments. The matters involved are for the Director General who has demonstrated that he can and does act effectively.

I am grateful to my hon. Friend for that answer. Does he agree that that shows the effect that Oftel can have? The decision temporarily to ban Talkabout is welcome, and one hopes that Talkabout will never be reproduced.

It has demonstrated just that. A growing number of people now recognise the value of Oftel and the conspicuous and important role played by its current director general, who I think now has the respect of most sections of the telecommunications community, including Members of the House.

It is clear that my presence has been noted, Mr. Speaker.

May I be one of the first to add my support to the Director General of Oftel, particularly for his role in banning Talkabout? However, I warn the Minister against complacency. I do that specifically because of the chat lines which exist over the telephone. Such lines are still in operation today under licence from the Department of Trade and Industry. The Director General of Oftel has referred those lines in the same way as he referred British Telecom's Talkabout. I expect the Minister and the DTI to exert all the influence possible in this matter in order to ban those private chat lines as well.

The hon. Gentleman's presence on this whole issue has been significant and I congratulate him on the way in which he has pursued his campaign.

The question is whether the chat line services that are not sponsored by BT should equally be held up to examination. This is an important issue. It is open to the Director General, if he so wishes, to seek modifications to the licences of the public telecommunications operators, including BT, or—this goes some way towards meeting the point of the hon. Member for Worsley (Mr. Lewis)—he can seek changes to the class licences under which many of those services are provided.

When my hon. Friend next meets the Director General of Oftel will he discuss with him Sunday Sport magazine, which portrays itself as Britain's fastest growing family newspaper? It is full of hundreds of advertisements for telephone lines giving pornographic messages, which bring discredit on the telephone service.

Under section 43 of the Telecommunications Act 1984 we have already made it a criminal offence to send messages which are grossly offensive, indecent, obscene or menacing. I assume that under that section and under other aspects of the law my hon. Friend's point could be examined. I take seriously what has been said and I will see that my hon. Friend's message finds the appropriate home.

Rover Group


To ask the Chancellor of the Duchy of Lancaster when he next plans to meet the chief executive of Rover Group to discuss the company's future.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry
(Mr. Kenneth Clarke)

At the moment I have nothing to add to my statement to the House on 1 March.

Will the Minister tell the House what assurances the Government are seeking on future model developments in the British Aerospace talks? I am referring particularly to the update of the Rover 800 by 1992, the future of the R9, the Montego replacement, and other models. What would the Government do to make such assurances stick? For example, would they deploy their golden share in British Aerospace to safeguard the long-term position of vehicle production in the interests of balance of payments and employment in the industry?

Future model development is a matter for the management of the company. It is a commercial rather than a political decision. British Aerospace has told us that it is interested in continuing the development of the Rover Group, and obviously it is seeking to acquire it as a going concern. If the negotiations result in a merger between the two companies, the new management will have to address itself to the question of model development in order to protect its role in the market in future. We would not use the British Aerospace golden share in any way, because it would not apply to new acquisitions. In the course of the negotiations we are considering what view, if any, we will take about the Rover shares when we sell them.

Will my right hon. and learned Friend, in discussions with the chairman of the Rover Group, ensure that any conditions relating to the deal with British Aerospace for the period prior to any final agreement will not exclude any offer that may be superior in terms of security to the work force or return to the taxpayer and that, in the period after such an agreement, they will not exclude future participation or joint venture by other motor companies?

As I explained to my hon. Friend when I made my statement, we agreed that at present the negotiations between British Aerospace and the Rover Group should proceed on an exclusive basis. We shall have to await the outcome of those negotiations, but, if they were to be successful, and if we were considering a final offer, we would have to consider what other offers have been forthcoming from other interested companies.

Having read about all the buying and selling that is going on between the Rover Group and British Aerospace, I should like to underline to the Minister the fact that the livelihoods and jobs of thousands of workers are involved. Does the Minister accept that there should be full consultation with the trade unions, and will he bear in mind the livelihoods of those thousands of workers, irrespective of who owns the undertaking?

There is no pie in the sky involved. These are all serious negotiations. The hon. Gentleman is right that the negotiations concern important businesses and that the well-being of thousands of people depends on British Aerospace and the Rover Group continuing to be a commercial success. We believe that the Rover Group will be best placed in the private sector. The present negotiations are worth encouraging and we are awaiting the outcome of them. In the end, we shall make our decision about the holding in the Rover Group based on our best judgment of the interests of the taxpayer, the company and the work force.

When my right hon. and learned Friend meets the chief executive of the Rover Group, will he discuss the amount of capital that is needed to update the Land Rover and Range Rover line, the van lines and the various new model developments? Will those costs be reflected in the price that is charged for the Rover Group to whoever may be buying it?

Anybody contemplating purchasing a company of this size must address himself to exactly the kind of issues to which my hon. Friend refers. In deciding on the final price, and when we judge any offer that may be made, we must take an overall view of the value of the company to the taxpayer and the balance sheet that the new company will require. We shall bear in mind all the relevant considerations, including the ones that my hon. Friend has given.

My understanding is that there is a prospect of development on the Bathgate site, and I trust that there will be some new development on that derelict site. It is now a matter for planning law in Scotland; it is not the responsibility of myself or of my hon. Friends at the DTI.

Is it not important that the Government should now stand completely aside until negotiations between the two companies are concluded? Should not both companies be seeking to convince City investment institutions of the merits of their case, without the Government being involved?

At present, the two companies are negotiating. Obviously, as the owner of 99·8 per cent. of the shares, we shall be closely involved. If the negotiations are successful a bid will be forthcoming for our shares, which we shall judge.

There is only one other way in which we are involved. My right hon. and noble Friend the Secretary of State is in Japan, or is about to land there, and no doubt he will repeat what we have been saying about our wish for Honda to continue to be involved in co-operation with the Rover Group, which has been welcomed by Honda and the Rover Group so far.

If the Minister has thought about the Rover Group and its future in any sense other than how quickly he can wash his hands of it, and if he has thought about British Aerospace—the proposed partner in this illogical and silly union—will he say what effect the rising pound, which is now up 14 per cent. in real terms compared with the end of 1986, will have on the business of both those groups? Does he agree with the Prime Minister and The Sun newspaper that the rising pound is good for Britain? Is it good for Britain's manufacturing industry?

I do not know whether the hon. Gentleman's only interest is to try to ensure that the Rover Group remains nationalised for as long as possible, or whether he is contemplating the renationalisation of British Aerospace. Such matters are best determined by making the best judgment of the commercial future of the companies in the private sector, and that benefits the work force as well. The rising pound certainly damages some industries and helps others, but the rising pound is a sign of the strength of the British economy. More stability in exchange rates is desirable, and my right hon. Friend the Chancellor of the Exchequer obviously welcomes the extent to which a strong pound keeps down inflationary pressures in Britain.

Link Programme Collaboration


To ask the Chancellor of the Duchy of Lancaster how much the Government expect to spend on Link collaborations over the next five years.

The Government expect to contribute about £210 million to Link over the next five years, provided industry matches Government funding.

Do not both partners benefit from such arrangements — the researchers, who see their projects come to fruition, and industry, which benefits from the research of universities and colleges? If that is the case, why are some universities and colleges not taking advantage of such opportunities, or not taking advantage of them in such a big way? What does my hon. Friend intend to do to encourage them?

We should like to see far more use of the research base currently inside our higher education institutions. If one compares our experience with that of the United States, one finds that we have an under-utilised national asset. If the Link programme can help to build more bridges between industrial and commercial research-based companies and the higher education sector, we would welcome it. To a certain extent the programmes are demand-led and on their merits. Five have come forward which are worthy of support. If some universities are not tuned into this yet, it is their own fault. The resource is there. It is demand-led and it is up to them to bid for it.

Does this not represent a restriction on the way that already committed money is to be spent? It is in no sense an addition to research and development spending in Britain. Will the Minister acknowledge that a large number of industrial research directors are already warning that the attrition of the science base is threatening the viability of Britain as a base for applied industrial research? Finally, does he agree that the real need is for a proper incentive to industry to increase its support for research and development?

The DTI's role is to encourage partnerships between the public and the private sector and to see that the critical mass of research is enhanced and applied with relevance to the market at large. The hon. Gentleman has been an observer, commentator and practitioner in this area for a long time and I should have thought that he would welcome the fact that our budget for the totality of research, development and innovation effort is now running at about £500 million. That represents a major shift over the past five or six years, and we are beginning to see the benefit of it. Perhaps I may write to the hon. Gentleman about the industrial research directors' point. As he knows, there has been a complex build-up to this in terms of how it will apply. We are now through that and some of the sources of confusion and alleged over-complexity may now have been eliminated.

Does my hon. Friend agree that the investment of private industry in projects such as Link is a vital ingredient to their success? Is it not the case that unless one ensures that, for example, pharmaceutical companies, such as those involved in the eukaryotic project, find that research is encouraged by the repeal of the full licences of right, they may feel that it is not in their interests to proceed with such research?

I admire my hon. Friend's ingenuity in bringing the licence of right issue into this question. As he knows, we shall be addressing this matter at great length in Committee on the Bill that will come before the House after Easter. There is a eukaryotic genetic engineering programme within the five programmes that have been approved, and I hope that the pharmaceutical industry in particular will derive great benefit from that.

Inner Cities


To ask the Chancellor of the Duchy of Lancaster if he will make it his policy to ensure that the inner cities are given priority in departmental decentralisation plans.

Yes, Sir. The Government's policy is that Civil Service work should be located where there is best value for money and best service to the public. However, when such locations are in areas which are the focus of the Government's urban and regional policies, they will be considered particularly seriously.

While it is widely recognised that civil servants will do everything possible to resist moving out of cushy London, will my right hon. and learned Friend assure the House that the decentralisation plans will move forward apace? As he and his right hon. and noble Friend, the Secretary of State for Trade and Industry, are making it clear that the private sector must play a major part in this rejuvenation, surely we must also play our part by moving as much as possible of the Department to inner cities in the regions?

I do not think that the reluctance of civil servants is quite as bad as my hon. Friend says it is. One way or another, about 5,500 jobs have been transferred out of London since the Government came to power in 1979. The DTI recently announced the transfer of most of the Patent Office to Newport and part of the insolvency service to Birmingham. I am carrying out a review to look for further candidates for cost saving, while maintaining the quality of service in my Department.

May we assume from the Minister's reply that Bradford will be carefully considered for the relocation of any Government Departments? Can the Minister say in specific terms what benefits will flow to Bradford from the city action team being located in Leeds?

As I said in my previous answer, whenever we look for alternative locations for Government offices we pay particular attention to places that are the target of the Government's urban and regional policies. I think that great benefits will flow to Bradford from the work of the city action team. Its headquarters are in neighbouring Leeds, but its activities are particularly directed to the urban problems of Leeds and Bradford. It has all the resources and competence to tackle the problems of both.

The Government will be successful with their macro-economic policy of inner-city regeneration, but will my right hon. and learned Friend say something about the neighbourhood regeneration, on which he has been concentrating? Surely the success of the strategy lies in encouraging local people to be involved in the regeneration of their neighbourhoods and streets.

Civil servants have been posted to task force offices in 16 deprived neighbourhoods up and down the country. That approach has been particularly successful, not least because it has enabled those civil servants to get into close contact with local residents, and because it has targeted the Government's national programmes and additional money on projects where they are most needed in those districts.

I am intrigued by the decentralised free breakfasts that the Minister will be offering as part of his inner-city initiative. How many breakfasts will there be, which Ministers will be involved, and how much will the free breakfasts cost the taxpayer? If the right hon. and learned Gentleman is looking around for a menu, in view of the damage that the Government's policies have done to the inner cities, may I suggest thin gruel, hard cheese, and poached bullshit?

Order. That is a very unparliamentary word. Will the hon. Gentleman withdraw it and use another?

Breakfast is my least favourite meal; normally I do not eat it. The only reason why we are having these meetings at breakfast time is that that is the one time when all the leading citizens of a city tend to have their diaries clear, until they receive our invitation. We found that with "Action For Jobs" presentations—one gets a much better attendance if one turns up at breakfast time.

I can tell the hon. Gentleman that the menu is quite immaterial and entirely undistinguished on these occasions. What matters is the serious discussion that takes place, which I hope will lead in this case to follow-up action after the breakfasts bringing together leading industrial citizens of each city to help to steer the private sector contribution towards the Government's and the country's efforts.

Business Regulation


To ask the Chancellor of the Duchy of Lancaster what further plans he has to lift the burden of regulation on business.

Active efforts to reduce the burden of regulation on business continue in all areas of the Government's work. A White Paper on deregulation in the summer will give further details of our strategy and programme of action.

I thank my hon. Friend for his reply and congratulate the Government on their deregulation policies to date. There is a great deal more to be done, and we look forward to the White Paper. However, will my hon. Friend carefully examine the possibility of abolishing the statutory audit for small businesses?

We are certainly looking at that matter. A good deal of concern has been expressed to the effect that the statutory audit has placed an excessive burden on small businesses. I am grateful for my hon. Friend's remarks about the deregulatory programme. It is important. None of it is dramatic in itself, but the cumulative effect of lifting small burdens from business is dramatic.

Will the Minister assure the House that the Government will in no way attempt to diminish standards of health and safety at work? As he knows, each year more days are lost through industrial injury than through strike action. It would be a savage attack on workers if there were any attempt in any businesses to lower the standard of health and safety at work.

Will the hon. Gentleman tell us about the curious situation whereby business organisations claim to want the Government off their backs, but invite retired civil servants on to their boards?

The latter phenomenon demonstrates that public servants have a great deal to offer industry. One of the things that we are trying to develop is a greater flow of personnel to and from the public sector. It would be helpful for business if more people from the private sector were to be seconded into the public sector, and vice versa. The public and private sectors have a great deal to learn from each other.

We continue to attach high priority to health and safety at work. There are advances to be made by simplifying the burden of regulations so that users find it easier to comply with them.

Will my hon. Friend take encouragment from the deregulation programme so far? Does he accept that real obstacles and burdens make it difficult for firms to expand and grow, and that it is important to cut red tape? Will he consider placing before Parliament an annual report on progress made in all Government Departments, so that Parliament can see how far the deregulation programme has gone?

I am grateful for my hon. Friend's remarks. The White Paper that we propose to publish in the summer will effectively amount to that. Since the deregulation initiative started three or so years ago we have published two formal White Papers and a further paper. These papers outlined the progress that has been made right across the board. We shall continue to do that.



To ask the Chancellor of the Duchy of Lancaster if he will make a statement on progress made in discussions of the European Commission's proposals entitled "Shipbuilding—Industrial, Social and Regional Aspects".

Our discussions in the relevant European Council of Ministers on regional measures within the programme known as RENAVAL are well advanced. I have stressed to the Council how important I believe it to be that we should make rapid progress. The Commission's proposals on other aspects of its programme have yet to come to Council. The Commission seeks to assure me that work within the Commission is well in hand.

Although help to enable new businesses to go to shipbuilding areas is to be welcomed, will the Minister assure us that it will in no way be a sop to allow a further rundown in British shipbuilding? May we be assured that the money will not be a substitute for the financial support that the industry needs if it is to survive and play an essential role in Britain's industrial future?

I am anxious to get support from the Community for shipbuilding areas as quickly as possible. Obviously, we need the encouragement of other businesses in such areas. Looking back, no one can doubt the extent of the Government's financial commitment to British Shipbuilders. At the moment, its external financing limit is £180 million, which is about £20,000 for each employee working in the yards. As I told the House when I announced that figure last year, it is a heavy figure, and the outlook for British Shipbuilders is still difficult.

Will the discussions include the inducements offered by many European companies to attract custom and orders away from British shipbuilding and repair yards?

We have agreed on a European sixth directive, which is meant to impose limits on the extent to which any Government within the European Community can give inducements to win orders. It is the British Government's view that the sixth directive should be adhered to, to stop pointless and wasteful competition, with taxpayers in each country pouring money into loss-making orders.

Will the Minister take this opportunity to repudiate the report that appeared in The Guardian a few days ago to the effect that the Government are contemplating removing all help to British shipbuilding? That would mean reneging on the sixth directive. It would also cause utter devastation in shipbuilding areas such as the one that I represent.

Obviously, I have to keep in close touch with the trading position of British Shipbuilders because of the very large sums of money that are involved, as I explained to the hon. Member for Gateshead, East (Ms. Quin). We have taken no new decisions about the future of British Shipbuilders, but the position of the business has to be kept under review while it is in such a difficult state.

Will my right hon. and learned Friend confirm, first, that the worldwide shipbuilding industry is in a state of extreme recesssion? Secondly, while I welcome his answer to an earlier supplementary question, will the Government strive to make certian that all the EEC countries conform to that directive once it has been signed and agreed and that there are no hidden subsidies from our EEC partners?

The shipbuilding industry throughout the world is in a pretty parlous state, with major lay-offs and closures taking place in Japan and in Western Europe. Although there is some prospect of the market improving, there is a general lack of orders to match the present world capacity of shipbuilding. I agree with my hon. Friend that we must stop unfair competition breaking out within Western Europe. We seek to adhere to the sixth directive and the Commission seeks to endorse it. The last complaint received was against ourselves and the French.

Financial Advice Services


To ask the Chancellor of the Duchy of Lancaster what is his policy towards providing advice services for the growing number of people with financial and debt problems; how he intends to finance such services in the future; and if he will make a statement.

A great deal of advice and help on debt problems is already provided free of charge by citizens advice bureaux. The National and Scottish Associations of Citizens Advice Bureaux are funded by my Department to the extent of £8·9 million in the current financial year. They have been encouraged to seek additional funding for money advice services from the finance industry, and two money advice support projects, one in the south-east and one in the north-west, are already under way as a result of private sector funding. I understand that agreement has also been reached on two more major schemes, which will be announced soon. I believe that this will be widely welcomed.

Does the Minister appreciate that there are vast increases in the numbers of people experiencing debt problems, and that there is an increase in the complexity of those debt problems? Does he accept that a large number of Government decisions, particularly the recent social security decisions and the way in which the Government are implementing them are placing increasing pressure on people and increasing the likelihood of their getting further into debt, particularly those on the lowest incomes? Does he accept that the finance that he provides is to associations that give national back-up, and not direct to the services? The Minister should accept responsibility for providing proper funding for advice services in view of the way in which the problem is likely to accelerate under present Government policy.

The funding of local citizens advice bureaux has always been a matter for local authorities. They know about local needs and it is for them to decide how to allocate money within their budgets.

As for debt increasing, of course there are people who get into trouble with debt, but there are far more people whose problems have been alleviated by having access to credit. The fact remains that the principal protection against getting into debt is for people to think carefully before doing so, and to look around carefully for the best terms. There are widely differing ranges of interest rates available, and if people were to look around more carefully the problem of getting into debt would be reduced.

Is the Minister satisfied that the Government are doing enough to control extortionate credit demands?

The courts have the right to re-open a credit bargain if the case is made to them that the terms on which the bargain was made are extortionate. That power lies with the courts, and we are looking to see whether it could be extended to give the courts the right to re-open a bargain on their own motion without a plea being made by the plaintiff. We have yet to see whether that is practicable. I believe that the Government are doing enough. Our system of consumer credit regulation is based on making the maximum information that is sensible available to the potential debtors so that they can work out whether the commitments into which they are entering are within their capabilities. That is the best protection we can provide.

Does the Minister accept the view of the citizens advice bureaux and of every reputable consumer organisation that there is an element in the loans market that behaves in a totally unacceptable way and peddles its loans to those who are desperate or ignorant? Does he also accept that many people are simply unaware of the powers of the courts to set aside high levels of interest demanded by some of these loans sharks? Why will he not take on board the representations of those bodies and introduce tough new legislation to protect the consumers and the public interest?

I have announced today some improvements to the advertisement regulations to make more, clearer and simpler information available to people seeking credit. As for making further advice available, I believe that it is helpful for advice bureaux to seek funding from the finance industry. There is much to be said for the finance industry making that money available, because if more people are helped to pay off their debts, obviously that is in the commercial interests of the industry.

Action For Cities Campaign


To ask the Chancellor of the Duchy of Lancaster what response there has been from the private sector to the Government's action for cities campaign.

The Government have been working very closely with many private companies and private sector and voluntary organisations for many years. There has been an encouraging response from the private sector to the action for cities campaign launched on 7 March. Business organisations, including the CBI, Business in the Community, the Industrial Society and Investors in Industry as well as individual companies and business leaders have reaffirmed their commitment to work with the Government to make inner cities prosperous. With ministerial colleagues I will be taking our proposals further with business leaders in a series of regional meetings, starting on 13 April in Newcastle upon Tyne.

To get the wheels of commerce turning, will my right hon. and learned Friend ensure that firms that are willing to invest in those areas, in the way that he has just described, have access to information about the extent and ownership of derelict land? If it is found that public bodies or Government Departments own any derelict land, will he ensure that it is auctioned off at an early date?

It is certainly true that we still have far too much derelict land in our inner-city areas which, on examination, turns out to be in the ownership of some public body or other. It is for that reason that we started the register of land and, as I announced a few days ago, my right hon. Friend the Secretary of State for the Environment is taking steps to make sure that more public use is made of the information contained in the register and to ensure that the land is shaken out into development.

Does the Minister recognise that it was the private sector and private entrepreneurs in the past that failed, especially in the north-west and in other manufacturing areas? People are not fools, and they will not fall for glossy packaging and the Prime Minister's own brand of clap-trap, because they know full well that that will not provide jobs, homes or the medical needs of the inner-city areas.

The industrial prosperity of Manchester was based on the success of its entrepreneurs, industrial leaders and private sector industry. It is true that Manchester's economy has undergone considerable change and that it has gone through great difficulty in the upheavals of recent years, but, in my opinion, Manchester is now coming back strongly. It must be in the interests of the people of Manchester to attract leaders of industry, investors in new business and private sector activity back into the city. I hope that the hon. Gentleman will not react in the same way as his city council does from time to time, by being positively hostile to private sector investment in that city.

While the Government's initiatives on the inner cities are welcome, will my right hon. and learned Friend bear in mind that certain local authorities obstruct the private sector through their use of planning powers? Will he take to himself powers to ensure that that obstructionism does not succeed?

I agree with my hon. Friend. We are often pressed on the contribution that local government should make. Indeed, it needs to make a contribution, and the best contribution that it could make would be to be business friendly and to seek to attract to the cities the private sector investment that is needed by the residents if they are to have the hope of new jobs. I deplore any obstruction—through the planning process or in any other way—on the part of just a few councils to the idea of fresh private investment corning to their areas.

Is the Minister aware that after the hype of the launch on the inner-city initiatives and all the gloss that went out, two sobering statements were made, by the Confederation of British Industry and by the Association of British Chambers of Commerce? The CBI stated:

"Firms will have to be able to justify their contribution to shareholders."
It was stated of the Association of British Chambers of Commerce, which represents 65,000 companies:
"The association was scathing about the lack of recognition of the chamber's key role in a range of business and social issues."
The Minister is asking local authorities to be business friendly but, quite honestly, when one considers the declaration of UDC status such as took place in Sheffield, when even the chamber of commerce was not invited to the launch, which it had to gatecrash, that type of co-operation does not appear to have been taken on board by the Government.

I do not know what the opposite of hype is, but the Labour party has certainly been guilty of it in recent years with regard to just about every new idea for inner cities that has come forward.

They whinge.

I agree with my hon. Friend that the Opposition whinge about absolutely every measure that anyone proposes and they take the general view that it is all a waste of time.

Our major aim over the summer is to try to attract private companies to take part in inner-city activity. I agree that we have to get the message across to those companies that it is in their commercial interest to do so. It is sensible, commercial practice for a large company that wants, at the same time, to be a responsible corporate citizen, to take part in such activity. That is the American experience, and we and the CBI agree. That is the message that we shall be giving.

I am sorry if we did not acknowledge the valuable work of many chambers of commerce. I have worked extremely closely with chambers of commerce and their members in many parts of the country, and they have been actively involved in our work.

I must remind the hon. Gentleman that the announcement of an urban development corporation for the Don Valley is one of the best bits of news that Sheffield has had in recent years. It will bring that derelict land back into use because the decision-making processes of UDCs have proved, in practice, to be extremely quick and effective. There is, of course, a substantial commitment of Government money behind the UDCs.

Will my right hon. and learned Friend take this opportunity to praise the work of the private sector, especially in Nottingham, and in particular the work of David White and his colleagues on the Nottingham development enterprise hoard? That board has done much to ensure that the private sector responds to the need to renew those areas of Nottingham that require such renewal.

I agree with my hon. Friend. David White chairs the Nottingham development enterprise board. He has got together a group of the leading business men of the city, who are financing their own secretariat, commissioning reports, as well as setting out a policy on how different parts of the city will be revived. They have the active co-operation of the Conservative-controlled city council and the Labour-controlled county council. I am glad to say that the completely negative attitude of the Opposition Front Bench has made no impact in the inner-city area of Nottingham.

Inner Cities


To ask the Chancellor of the Duchy of Lancaster what representations he has received on the future of inner-city policy.

I have the benefit of a great deal of advice, solicited and unsolicited, on inner-city issues, some of which is reflected in the document "Action for Cities", published on 7 March, which has been very well received.

In view of the praise that has been heaped on Glasgow in recent months by the Minister, the Secretary of State for Trade and Industry and the Prime Minister regarding the GEAR project and inner-city improvement, will the Chancellor take the opportunity to pay due credit to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who instituted the scheme for GEAR when he was Secretary of State, the Labour-controlled Glasgow district council and the Labour-controlled Strathclyde region? Is not the lesson of Glasgow and the improvements that have been carried out there that the Government should give the resources and the powers to locally elected Labour-controlled authorities to get on with the job?

I agree with most of what the hon. Gentleman has said. I gladly pay tribute to his right hon. Friend and to the local authorities. I trust that he will also pay tribute to the Government, the Scottish Development Agency, my right hon. and noble Friend for his major contribution, and to the private sector. The private sector has been the vehicle by which most of the investment has gone into GEAR. If we can maintain the sort of policy that has, in recent years, flourished in Glasgow we will make progress. I only wish that the hon. Gentleman would have words with some of his hon. Friends in cities such as Manchester and elsewhere who do not appear to have picked up the basic message of co-operation.

Does my right hon. and learned Friend's inner-city initiative include the ability to help finance the start-up costs of business incubators or business technology centres, which will help small businesses to establish themselves?

It certainly does. The Government have a multiplicity of ways in which they can support business start-up premises, managed workshops and technology centres of the type described by my hon. Friend. Various Departments of state have their different agencies and funds and any projects that come forward will be looked at eagerly by all my right hon. and hon. Friends.

How does the Minister expect local authorities to be business friendly in the inner cities, and how does he expect them to finance debt services, when, after the introduction of the poll tax, central Government will control 75 per cent. of what was peviously local authority funding? Is it not time that the Minister became local authority friendly?

But central Government and private business between them have always paid for the majority of local government expenditure. That is true under the present system and it will be true under the new system. Domestic rates and the community charge provide only for the minority of local government expenditure in any event.

As my right hon. and learned Friend is aware, the serious problems affecting our inner cities also affect the centres of many smaller towns. Will he assure the House that the initiatives announced in the Government's "Action for Cities" campaign will apply to those smaller communities?

The urban programme and urban priority areas can cover a wide range of communities. I agree with my hon. Friend that many of the problems affecting inner cities—lack of economic activity, high unemployment and so on—are found in other parts of the country as well. I hope that in England all those in urban priority areas are benefiting from our proposals, and I trust that my hon. Friend will find that my right hon. Friend the Secretary of State for Wales tackles the problems in his constituency vigorously.

The Prime Minister has told us that there is not a single new policy for the inner cities, and the Minister has been unable to tell us whether any substantial new resources will go into the inner cities, at least to compensate for the massive reductions in rate support grant. Why does the right hon. and learned Gentleman expect the same package of measures with virtually the same resources to succeed in the future when it has failed in the past?

The hon. Gentleman is not the first to pick up a phrase used by my right hon. Friend the Prime Minister and use it somewhat incorrectly. As he knows, there were no fewer than 12 new announcements at the conference that we held on Monday. Although all the money came from the existing PESC provision, £250 million or thereabouts was directed to new policies in the inner cities to which it had not been directed before. The hon. Gentleman's wholly false analogy with arguments with local government over rate support grant represents another failed attempt to denigrate a very substantial policy.

Steel Industry


To ask the Chancellor of the Duchy of Lancaster what was (a) the number of employees in and (b) the output of the steel industry (i) when last nationalised and (ii) for the latest year for which figures are available.

The British Steel Corporation employed 251,000 people in 1968. At the end of 1987 it employed 51,500 people. Its liquid steel output in the first full year after nationalisation was 23·6 million tonnes. In 1986–87 its output was 11·3 million tonnes, although it will be higher this year. The reductions in part reflect the privatisation of certain BSC activities in recent years.

I thank my hon. Friend for that reply. Now that quota arrangements in the EEC have failed to bring down output in certain countries that agreed to bring their output down, and now that our productivity in the steel industry is so good, is it not time that we pressed for quotas to be abolished and allowed a privatised steel industry to go in and clean up the market in Europe?

I am grateful to my hon. Friend, who will know that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has been leading the way in doing just what he asks in Europe, and we shall endeavour to keep up that campaign.

Has the Minister considered the fact that, had the industry not been taken into public ownership—with all the investment that stemmed from it—it is unlikely that we would have a steel industry left today?

Let me make it clear that most of the money that the Government have put in over the years has been to support uneconomic operations and maintain capacity that the market did not need. It is not, I emphasise, a debt; it is an accumulated deficit and it has gone for good.

Would my hon. Friend care to note that the excellent figures that he announced include those for Teesside steelworks, which has shown the best improvement in productivity of all and has become the most competitive steelworks in the country? The improvement would have been even greater if the Cleveland county council rate had not increased by 30p this year to cover the cost of an additional 2,000 employees engaged by Cleveland county council in the past two years, none of whom produces anything.

My hon. Friend makes his point in his usual cogent way. I would point out that productivity has increased from 13·2 man-hours to 6·2 man-hours since 1979–80. That is an indication of the vast improvement in productivity in British Steel in recent years.

Does the Minister agree that those figures represent a profound disturbance in the lives of tens of thousands of steelworkers and that we lack any authoritative survey of the social costs of the changes? Will he agree to consider initiating a scientific, objective study of the effects of those changes? A few people's lives were transformed for the better, but there have been enormous changes, including an increase in mental and physical ill-health and other problems among steelworkers' families. Will the Minister tell us that the social factors will be examined and included in the equation?

The hon. Gentleman makes a fair point about the numbers of people who have left the steel industry as a result of the slimming down of the industry, improvements in productivity and a variety of other factors. I pay tribute to those within the work force, led by the trade unions, who negotiated and understood that productivity agreements and the slimming down that took place were necessary. Health and worries about unemployment are not matters for me.

European Regional Development Fund


To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.

Is my hon. Friend satisfied that the size and extent of the grants, which are impressive, have been sufficiently well publicised? If not, what does he intend to do?

I am satisfied that publicity arrangements for ERDF grants are satisfactory. As my hon. Friend will know, the grants are announced in batches at various times throughout the year by the Commission through press notices. At the same time, interested Government Departments issue press notices, and where appropriate local notices are issued as well. There is always room for improvement, and I am grateful to my hon. Friend for the opportunity that he has given me to re-emphasise the importance that we attach to the grants.