To ask the Secretary of State for Trade and Industry whether he intends to make any proposals to counter short-termism in British industry.
Like my right hon. predecessor, to whom I pay tribute, I recognise the importance of this issue. Companies' ability to invest for the long term is a function of their profitability. The profitability of British industry has returned of late to the highest level for 20 years and business investment has consequently reached record levels.
Can the Minister tell the House that on his appointment he was able to convey to the Prime Minister the magnitude of his task in repairing the damage that has been done to British industry because of short-termism? Does he recognise that it is also a malady which appertains to his own job? Can he again assure the House of his long-term commitment to industry?
I have a long-term commitment to industry—have no fear—although I understand that the time customarily spent in this Department is shorter rather than longer. I shall certainly do all in my power to ensure that British industry continues to be profitable and therefore remains in a position to invest for the long term, as it has increasingly done under the Government.
I congratulate my right hon. Friend on his appointment to this important job. Will he consider whether short-termism is largely due to the fact that because of our tax system too much of British savings is channeled to institutions whose fund managers are subject to short-term pressures? Is not the solution to encourage individuals to save more directly in United Kingdom industry?
I am grateful to my hon. Friend. I am sure that he has hit upon an important point which lies behind some of the measures that we have taken in recent years to encourage direct individual saving in industry. Companies benefit from and welcome a large mass of individual direct shareholders and we are glad that there are now 11 million direct shareholders in British industry.
I welcome the Secretary of State to his new post. On countering short-termism, as the right hon. Gentleman has moved from the Treasury, does he agree with the Chancellor on economic and monetary union that
or does he agree with his predecessor, who said in his resignation letter that"we are all committed to this goal",
Does he agree with the Chancellor—[nterruption.] This is about the long-term future of British industry—"economic and monetary union … would be a disaster"?
Order. I am no great expert on economic matters, but surely the question relates to short-termism.
On the question of the long-term view for this country and for industry, does the Secretary of State agree with the Chancellor that the hard ecu is one possible route to a single currency, or does he hold to the view that a single currency without a single European Government is almost inconceivable—[Interruption.]
Order. That is a very long question.
I am grateful to the hon. Gentleman for his kind remarks, and I am glad to find myself opposite him again. It should be no surprise to him that I entirely endorse the position of my right hon. Friend the Chancellor, and indeed the whole Government, on the issue of the hard ecu and EMU. That should be no surprise as, until a few hours ago, I had some responsibility under the Chancellor for that policy.