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Commons Chamber

Volume 201: debated on Wednesday 15 January 1992

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House Of Commons

Wednesday 15 January 1992

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

British Railways (No 3) Lords Bill

London Docklands Railway (Lewisham, Etc) Bill

As amended, considered: to be read the Third time.

Oral Answers To Questions

Trade And Industry

Inward Investors

1.

To ask the Secretary of State for Trade and Industry if he will make a statement on the impact of the Maastricht agreement on the relative attractiveness of the United Kingdom and other European countries to inward investors.

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Peter Lilley)

The United Kingdom is already the number one destination for foreign investment in the Community. The fact that we shall not have burdensome employment legislation imposed on us by Maastricht may make this country more attractive still for foreign investors.

Does my right hon. Friend agree with Commissioner Delors that the absence of a social chapter makes Britain by far the most attractive place for overseas investment within the European Community? Will he guarantee that if Commissioner Delors and his friends seek to impose a social chapter using other headings the Government will challenge their legal right to do so?

I entirely agree with President Delors that the exclusion of that aspect from the full Maastricht settlement would make Britain a paradise for inward investment, and I have had that message communicated to all trade attaches in our embassies throughout the world. We shall, of course, resist any attempt to introduce such legislation by other means. Legally, it will be harder for anyone to do so now that the separate protocol to which we are not party provides, for those who wish it, the opportunity to introduce such legislation.

Does the Secretary of State agree that one of the most successful recipients of inward investment has been and can continue to be the financial services sector? Does he agree with the chairman of that industry, Sir Patrick Sheehy, that to opt out of the single currency would be a foolish measure? Does he agree with Sir Patrick that the United Kingdom can retain its pre-eminent role in Europe in the financial services sector only if it subscribes enthusiastically to the principle of a single currency?

We shall have to consider that decision if and when the time comes, and we have a right in this House to do so. We should, however, recollect that one of the reasons for the strength of the City of London is that it has consistently followed a very open policy, which is not always followed on the continent and elsewhere. That is what has made us so attractive. Uniformity of policy throughout Europe would have prevented us from building up the strength of the City of London.

My right hon. Friend will remember that when the Government came to power the country was suffering from the problems of being hopelessly non-competitive. If a Government who embraced the social charter were returned from the Opposition parties, would we not soon be back in those waters and simply become an industrial desert?

That is, indeed, the risk that British industry foresaw, which is why it urged us to do what we did. That is also why it so much welcomed the successful outcome of the Maastricht agreement on those lines. It is pretty clear that Labour believes that it cannot get a majority for those policies domestically and therefore wants to achieve a situation in which they can be imposed on us by a majority of continental countries. I thought it particularly strange that the Labour party should label its new policy, "Made in Britain", when its strategy is to ensure that British policy is made on the continent.

Will the Secretary of State stop looking for scapegoats for Maastricht'? He boasts about inward investment, but is he not aware that following the last slump under this Government, between 1979–81, investment in manufacturing industry was so slow that the capacity is now hardly any higher than it was 12 years ago? Investment is falling back rapidly and all forecasts show that unless the Government's policies are changed there will be 4 million unemployed by the year 2000.

That is absolutely incorrect, and I take it that the hon. Gentleman is dissociating himself from Labour Front Bench policy on the Maastricht settlement. Comparing this point in the economic cycle with the same point 10 years ago, during that period manufacturing output has risen by a quarter, manufacturing investment by a third, manufacturing productivity by a half and manufacturing exports by three quarters.

Telephone Charges

2.

To ask the Secretary of State for Trade and Industry whether he will make a statement on the effectiveness of the system for regulating telephone charges since 1984.

The Government have set up an effective system of regulation. During the period of controlled prices, those that are under the regulator's eye have fallen by 27 per cent. in real terms. The three-minute cheap rate for local calls is now cheaper in cash terms than it was in 1981. That is effective Conservative regulation in action.

Will my hon. Friend confirm that 96 per cent. of phone boxes now work and that phone call charges have been cut faster in this country than in any other country, thanks to the Government's privatisation policy? Will he ensure that there is more competition in both phone and postal services, and will he bear in mind the excellent postal service provided in my constituency by Document Interlink Ltd?

My hon. Friend is right that this country has the best regulatory system for reducing real phone charges. He is also right to say that regulations improve the quality of service. Not only do a greater proportion of phone boxes work, but there are more boxes today than there were before we introduced the privatised control system. My hon. Friend may like to know that my right hon. Friend the Secretary of State today set out in a speech the importance of improving and strengthening competition in a range of postal services. I am well aware of my hon. Friend's constituency interest as I visited that company and know how good it is.

Will the Minister recognise that some of the benefits that he announced this afternoon are the result of cross-subsidy from the dirty, sleazy pornographic phone calls that he and his colleagues have encouraged for some time? Will he today resist the introduction of the 75p per minute further added value services now suggested?

The hon. Gentleman knows that that allegation is untrue, but I am glad that he accepts that the quality of service has improved and that there have been improvements in the pricing of a number of British Telecom services. Bearing in mind the hon. Gentleman's interventions and today's debates in the House, he may like to know that there has been yet further strengthening of the regulatory system in relation to the services to which he objects. I assure him that there is a common interest across the Floor of the House in seeing that nasty services of that kind are not allowed on the BT network.

Will my hon. Friend confirm that nearly half of the top 500 companies in the European Community are British, led by British Telecom?

My hon. Friend is right—United Kingdom firms have done extremely well in the list of top companies in Europe. That came as no surprise to us, as we know how good the business climate in this country has been in recent years with the success of deregulation and low taxation and the attractiveness of Britain as a home of inward investment. My hon. Friend is right to say that BT is one of the leading companies and has made an important contribution to our economy.

Why is the Minister so selective and defensive in his choice of statistics? Why will he not accept responsibility for the rise in telecommunication charges above inflation during the 13 years of the Government's misrule? Why does he not give the hon. Member for Bolton, North-East (Mr. Thurnham) a copy of last month's Department of Employment gazette, which shows that the rise in telecommunication charges during the past year has been 7 per cent. while the retail prices index has risen by less than 4 per cent? Is it not true that too many people have phone bills that are too high? Why has the Secretary of State failed effectively to tackle those problems and to take action against the excessive profits and unacceptable boardroom pay rises and perks?

The hon. Gentleman's question was as excessively lengthy as the price increases under Labour, with the nationalised industry in the 1970s, were excessively great—far greater than any under the regulatory regime set out by this Government. The hon. Gentleman should also know that the average residential bill has been falling. Of course, the extent of the fall depends on the use made of the service and on the balance between rental and call charges. Nevertheless, the average bill, assuming equal use, has been falling.

Rechar

3.

To ask the Secretary of State for Trade and Industry if he will make a statement on RECHAR.

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

The European Commission's approval of the programmes for RECHAR grants for British coalfield areas is overdue.

Is the Secretary of State for the Environment mistaken in pointing out that the Government's position on RECHAR has become untenable?

For a start, the so-called leaked document in question dates from last July. Discussions do take place within this Government—we are not so Stalinist as Labour's national executive committee in these matters.

Secondly, our position is clear: we will not allow the House of Commons to lose its control of public spending. Labour Members may be interested in devolving power to the nomenklatura of Brussels—we are not.

The Cannock Chase area badly needs these funds, not just in my constituency but in surrounding constituencies. Is my hon. Friend aware that we hold entirely responsible for this delay the former Labour Member of Parliament and now Commissioner in Brussels, Bruce Millan, who is playing a fairly despicable party political game? Will my hon. Friend do everything he possibly can firmly to nail the blame on Bruce Millan for the delay in these funds coming to the coalfield areas?

I find it difficult to understand Mr. Millan's position. On his own admission he is dissatisfied with additionality procedures in other countries—for instance, in Italy, the Netherlands and France—but, uniquely, he picks on this country, despite the fact that the structural funds have doubled and we are not receiving any benefit. Why is that? I understand that Mr. Millan is a socialist; could he be making a party political point? Is he an honourable man?

These funds have been administered in this way since 1975. When Mr. Millan was Secretary of State for Scotland he administered them in exactly the same way as that for which he criticises us. What is he trying to do?

The Minister himself was making a party political point in his reply. Will he come back to the question asked by my hon. Friend the Member for Edinburgh, South (Mr. Griffiths)? The Department of the Environment says that the Government's position is untenable. Is the Minister aware that France, Germany and Spain have carried out their undertakings under the agreement? Does he not realise that his party is being slaughtered in Scotland? We are job-hungry in Scotland and we need this money. Why does the hon. Gentleman not agree that the position is untenable and reach an agreement to bring the money to the areas which need it?

I agree with the hon. Gentleman to this extent—that the coal mining areas need this money. If Mr. Millan releases the money, every last penny of it will go to the coalfield areas. I have said that Mr. Millan is an honourable man—[Interruption.]—and I am sure that Mr. Millan wants the money to go to those areas. We pay in £300 million more to the European Commission than we receive back. The ball is now in the Commission's court. These moneys are genuinely additional. All that Mr. Millan has to do is to release the money and it will be spent.

Is it not outrageous that coalfield areas such as Nottinghamshire which have been waiting nearly two years for this money are still denied it because of the party political games played by the former Cabinet Minister and now Labour Commissioner Millan? Will my hon. Friend make sure that he or his officials contact the office of Commissioner Millan today and demand that the money be freed so that it can be well spent in areas such as the one that I represent?

My hon. Friend is quite right. There is another point: the additionality test is to ensure that the moneys are spent only because of the grant. Clearly, the moneys are not being spent, because Mr. Millan is holding up their distribution. What clearer laboratory or litmus test could there be to show that our methods are genuinely additional? I repeat that Mr. Millan has had his day in court. These moneys are genuinely additional and we await his decision. We want these moneys to go to the coal mining areas, many of which are represented by Labour Members. I hope that they will take the opportunity to ask Mr. Millan to release these moneys for the benefit of their areas.

Does the Minister accept that although some of us may have a disagreement with Bruce Millan, we have known him for many years and we know that he has always been, and is, punctilious in the exercise of his duties? He could certainly teach the hon. Gentleman how to master legislation. I have complete confidence in Mr. Millan's analysis of the situation. When will the Government own up to their responsibilities and release the money to areas such as Fife which need it?

The hon. Gentleman is quite right. When Mr. Millan was Secretary of State he was punctilious in operating a system that he now condemns. The House is entitled to ask why that was so. For the sake of the hon. Gentleman's constituency and areas such as the constituency of my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth), these moneys must be released. Some £109 million is being held up. We made it absolutely clear to Mr. Millan and the Commission that we were prepared to be flexible and to listen to any representations. At the end of the day, however, we must ensure that the House retains control of public expenditure. That is the reality of the dispute. Hon. Members must address that problem. Opposition Members may wish to make party political points, but do they want to lose control of public spending?

On a point of order, Mr. Speaker. In view of the Minister's unsatisfactory reply and the slur on Bruce Millan, I shall have to raise the matter on the Adjournment.

Inward Investors

4.

To ask the Secretary of State for Trade and Industry whether he will make a statement on the impact of the Maastricht agreement on the attractiveness of the United Kingdom to inward investors from the United States.

The United Kingdom has for many years been the preferred location for United States investment in Europe. The Maastricht agreement will help us to maintain that privileged position.

Is my right hon. Friend aware that my constituents fully recognise the enormous benefits of inward investment from the United States and elsewhere, from which my constituency has benefited greatly? Business men in my constituency believe that the Maastricht agreement set exactly the right tone for business in the 1990s. Does my right hon. Friend welcome the splendid announcement of a multi-million pound investment in my constituency this week by Smith Kline Beecham?

I am happy to welcome that investment, and I imagine that it owes much to the climate and environment that the Government have created and which might have been threatened by an alternative settlement at Maastricht such as the Opposition would have supported and implemented if they were ever elected. That is why we shall continue to pursue our policies. Our success in attracting more investment from the United States than has been attracted by all the countries of western Europe put together is proof that we have created a more attractive climate for investment than anywhere else in Europe.

Which aspect of this industrial investment paradise does the Secretary of State think is most attractive to inward investors? Is it that they will not be bothered by maximum working hours or minimum wages, or is it just that the trade union movement in this country has been crippled by repressive legislation over the past 12 years?

We have carried out surveys to determine what aspects of the environment in this country are most attractive to inward investors. They are, first, the reforms of industrial relations which have created harmonious working practices, all of which were opposed and many of which would be reversed by a Labour Government. Secondly, this country has a lower burden of tax than many of our European partners, but the Opposition are determined to reverse that. The third reason is the end of nationalisation and the introduction of privatisation, which is being opposed by the Labour party. Finally, inward investors find attractive the measures that we have taken to improve training and skills, almost every one of which has been opposed by Labour.

Will my right hon. Friend ensure that the message goes out from British trade missions throughout the United States to American firms contemplating investing in Britain that we operate an open free market economy with low taxation and that we have no intention of introducing unnecessary social costs which would make business less competitive? Will my right hon. Friend ensure that that message is made known throughout the American business community?

I am sure that the whole House will wish to join me in congratulating my hon. Friend on the recognition of his distinction, not least in defending the business and small business communities in this country. I entirely endorse what he said: we need to maintain a liberal, open, free market society. That is what attracts investment from abroad and makes it profitable for domestic industry to invest as well.

Order. We are making rather slow progress today. I now propose to move on more rapidly, and would ask for brief questions and answers, please.

Industrial Policy

5.

To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-east regional CBI to discuss industrial policy.

Ministers and officials of my Department keep in touch with the CBI on a wide range of business matters. I shall be visiting the north-east again on 19 February.

Business failures are now running at 57 per cent. in the north-east and 65 per cent. nationally. Will the Secretary of State admit that the Government have made a right mess of the economy and of businesses of the north-east?

The north-east has been transformed for the better, not least by the flow of inward investment and the diversification that has taken place. I am surprised that the hon. Gentleman runs his region down instead of talking up its successes. Nissan is to employ 4,000 people by August 1992 and Fujitsu is creating 1,500 extra jobs. The Department of Trade and Industry alone has spent £1·5 billion in the past 10 years in the hon. Gentleman's region, the success of which is shown by the success of local businesses and industry. The hon. Gentleman should pay tribute to them.

When my right hon. Friend meets the CBI in the north-east, will he try to explain away the inconsistency that has occurred in the Labour party? Last week it announced a "Made in Britain" campaign; yet its deputy leader is a Birmingham Member of Parliament who drives a top of the range French Citroen motor car.

I thought that that was interesting news. It shows—we are not allowed to use the word hypocrisy, are we? [HON. MEMBERS: "Yes."] Then it shows the hypocrisy of the Labour party, which claims "Made in Britain" as its slogan while its Members of Parliament drive around in French motor cars and spend most of their time denigrating British industry.

Does the Secretary of State agree that trade and industry in the north-east need good communications and that the existence of direct rail links to the channel tunnel and a much better Al between the north-east and Scotland are extremely important to trade and industry? He has a legitimate voice in governmental discussions. Will he use that voice to get such projects approved?

In many respects, the hon. Gentleman is right. I have to be the voice of industry within the Government, arguing the case for the needs of business, and I do. The Government have given renewed priority to improvements in the infrastructure—in roads and railways and other transport. That shows through in many ways. We have harnessed the private sector. The channel tunnel is entirely privately financed. Had we relied on public sector finance, it would have been another century before we had such an opportunity for British industry, with all the infrastructure back-up that will flow from it.

Mr. Karl Watkin, the chairman and managing director of Crabtree, an engineering company employing 270 people in Gateshead, whom the Secretary of State knows, as he visited the plant last year, was last week voted north-east business man of the year. In his acceptance speech, he said that the Government's economic policy was damaging business in the north-east. Does the Secretary of State dismiss him as a dismal Jimmy, or does he agree with me that Mr. Watkin knows what he is talking about?

I have met Mr. Watkin, and found him a lively and stimulating character. Last time I met him, he said that words attributed to him in the House had not been words that he had uttered. Perhaps the same is true again.

Industrial Development Act 1982

6.

To ask the Secretary of State for Trade and Industry if he will make a statement on the working of the Industrial Development Act 1982; and if he will make a statement.

A description of the way in which the powers conferred by the Industrial Development Act 1982 are exercised is contained in the statutory annual report. This includes details of financial assistance to industry.

Copies of the most recent report for the year ending 31 March are in the Library.

I am well aware of the contents of the report. Is the Minister aware that many of the schemes in the report now appear dated, as do the geographical definitions of the areas that can benefit? For example, in Wales, the micro-electronics scheme has provided only £100,000, for a total of £80 million spent on it. Moreover, selective regional assistance in Wales fell, from £80 million three years ago to only £50 million a year ago. Will the Government please review the workings of the Act and make them more effective?

The Act is already very effective because grants made under it are selective. We spend about £567 million on regional selective assistance in the public expenditure survey round, and I think that most people now accept that it has been more effective than the automatic grants made under the regional development grants system. Wales benefits greatly: about £124 is spent per taxpayer in the assisted areas there, compared with £82 in Scotland and £41 in England.

The hon. Gentleman also referred to the assisted area map. That map will be reviewed, as it is once every Parliament, at the beginning of the next Parliament.

Will my hon. Friend ensure that, in areas of Devon and Cornwall where unemployment reaches levels as high as those in similar areas of Scotland and Wales, similar benefits under the Industrial Development Act 1982 will be available, as they are not at present?

My hon. Friend is wrong—if he does not mind my saying so—in the way in which he phrases his question. Regional selective assistance is equal wherever it is applied for in Great Britain, although the limits for Northern Ireland are higher. A large part of Cornwall is covered by assisted areas. The assisted area map may well change after the general election, but I can assure my hon. Friend that we ensure absolute fairness between assisted areas and that no one area is disadvantaged or advantaged in relation to the others.

Is the Minister aware that, after the general election, the assisted area map will change because the Government will change, and that changes are necessary? For instance, in the county of Northumberland, we have an assisted development area pattern that runs from east to west—to areas such as Ponteland and Darras Hall, a huge executive residential estate which does not want or require industry. The industrial pattern runs from the south-east to the north of the county and the assisted area pattern ought to be changed to reflect the needs of the county as a whole. The industrial pattern in Northumberland runs from the south-east corner to the north—to the area represented by the hon. Member for Berwick-upon-Tweed (Mr. Beith). That pattern needs to be changed now, not after the general election, to reflect the needs of industry and the county.

The European Commission allows assisted areas to cover about 35 per cent. of the population. 'We are up against a ceiling and if we added new areas to the map, we should have to remove other areas. If we are to maintain confidence in the system, there is no point in our mucking around with the map several times in each Parliament. It is much better to have one review and to have it at the beginning of the Parliament, and that is exactly what we shall do. The assisted area map will change not because the Government will change but because circumstances have changed since the last review. We shall ensure that the map is drawn objectively.

Investment Location

7.

To ask the Secretary of State for Trade and Industry what representations he has received from business men concerning the impact of the regulatory environment on decisions about location of investment.

Overseas undertakings investing in the United Kingdom often comment favourably on our regulatory regime. It is one of the reasons why the United Kingdom is the preferred location for United States and Japanese undertakings investing in the European Community.

As my hon. Friend has said, our regulatory climate has encouraged a lot of inward investment. How distressed and worried is industry in those regions that we might mistakenly have a Labour Government, which would do so much damage to inward investment?

Many people are asking worried questions about just that point. They do not like the prospect of higher taxation, the minimum wage, the social charter or the Maastricht social clauses. These would put a massive burden on business. It is very important, therefore, that the Conservative Government continue in power to ensure that the climate remains favourable for the attraction of the lion's share of foreign investment into the European Community.

The Minister will not be surprised to learn that my question concerns the regulatory environment of British Steel, in which the Government hold the golden share. Are the Government prepared to exercise their right, as the holders of that share, to ensure that British Steel agrees to implement its promise that it would either stay at Ravenscraig or sell the plant to somebody else?

That question has been answered very fully by my right hon. Friend the Secretary of State for Scotland and by other Ministers, and there is nothing that I want to add. These are commercial decisions and British Steel's actions are within the terms of the guarantees that it has given.

Political Risk Insurance

9.

To ask the Secretary of State for Trade and Industry what steps he intends to take to ensure that British firms are able to obtain political risk insurance with speed and on terms that enable them to compete on equal terms with their international competitors.

The Government have already ensured that competitive political insurance can be provided by the private market, supported where necessary by Export Credits Guarantee Department reinsurance facilities.

Can the Minister tell us how the Government are ensuring the speedy response necessitated by changing circumstances in other parts of the world, particularly areas with which Britain had close links in the past? I am thinking of the current situation in Somalia and of events in eastern Europe. How is the Minister making sure that in the new situation that the Government have created they are able to respond quickly and effectively? Other countries seem to do better.

I take it that the hon. Gentleman is referring to reinsurance provided by the private sector through the recently privatised insurance services group, which was formerly in ECGD but is now in NCM Credit Insurance Ltd. As the hon. Gentleman knows, we have put in place arrangements under which, in the very few markets that the private sector does not accept, reinsurance can be provided through ECGD. There are 200 countries in which the private sector is providing the necessary reinsurance.

Is not it a fact that the principal political risk against which British industry needs insurance is the risk of a Labour Government? In the event of the Labour party coming to power British industry would be overtaxed, over-inflated, over-regulated and overburdened with additional costs such as the minimum wage.

My hon. Friend makes his point very effectively. There is a growing awareness of the disadvantages to employment and industry that a return to the discredited and failed policies of the Labour party would create.

Industrialists (Representations)

10.

To ask the Secretary of State for Trade and Industry what representations he has received from industrialists on Government intervention in the strategic direction and investment in companies.

The CBI report "Competing with the World's Best" rejected the notion that the Government could or should

"be in the business of picking winners, or of engaging in direct intervention in the strategic direction and management of companies".

Does my right hon. Friend mean that British industrialists do not want to go back to national plans, solemn and binding undertakings, high inflation, nationalisation, high taxation and trade union unrest? That, after all, is the Labour party's policy for this country. Is it really true that industrialists do not want to return to such a situation?

My hon. Friend is absolutely right. When I meet industrialists their first question is, "How can we prevent a return to the policies still advocated by the Labour party?" On the specific question of picking winners, they remember all too well the failures of the national enterprise board, which invested in just over 100 companies. Of those, 35 were liquidated or went into receivership, 38 were sold at a loss, and only 29 were sold at a price that returned the initial taxpayers' investment. Industrialists know that that policy was a failure, and they do not want to go back to it.

Is not that the most open admission yet that, despite the honeyed words of the Secretary of State for Scotland, he has done nothing, is doing nothing and will do nothing to intervene in any way to help to save the Ravenscraig plant? The Government will not assist in finding a purchaser. They are refusing adamantly even to investigate thin slab technology. I remind the right hon. Gentleman of the Secretary of State for Scotland's words in a letter to my hon. Friend the Member for Dunfermline, East (Mr. Brown), in which he refused a meeting and stated:

"Ravenscraig shows the folly of political intervention in commercial decisions".
Does not that show that, despite all the promises and pledges, in the past five years the Government have carried out a sorry and tragic charade and have connived at every stage with Black Bob Scholey to sell off the Scottish steel industry?

My right hon. Friend the Secretary of State for Scotland made our position on that matter clear yesterday. What was not made clear then was the Opposition's position. When questioned on the radio, they admitted that their policy was to talk about the issue. When pressed and asked, "What if British Steel refuses to change its policy after talking?" the Opposition gave no indication of what they would do. I offer the Opposition Front-Bench spokesman an opportunity now to say what they would do. Would they renationalise British Steel, intervene in British Steel, subsidise British Steel or just talk about it?

Manufacturing Output

11.

To ask the Secretary of State for Trade and Industry what representations he has recently received about manufacturing output.

I have received the recent excellent report by the CBI's manufacturing advisory group which showed that there has been a transformation in manufacturing performance during the 1980s.

Has the Minister no shame about the fact that his Government have committed industrial genocide against Scottish manufacturing? Is he aware that, in addition to what is happening at Ravenscraig, the Paisley postcode area lost 76 per cent. of its manufacturing jobs between 1979 and 1989 and that a further 3,600 redundancies have been announced since then? Does he agree with the Prime Minister who told me in a letter this week that even that does not justify a special economic initiative or does he agree with local industry which is crying out for a partnership with Government to take Britain out of recession?

As the hon. Gentleman well knows, we are in the midst of a world recession. Even in the engine rooms of the world's manufacturing market place, such as Japan and the United States, output is falling. The first important point, however, is that compared with the same point on the economic cycle 10 years ago, manufacturing volume is up three quarters, productivity is up half and output is up one third. The second point is what I call the "two Ks" point. If one is in the midst of a worldwide tempest of economic recession, whom does one want on the bridge—my right hon. Friends the Prime Minister and the Foreign Secretary or their shadows, the two Ks?

Will my hon. Friend remind Opposition Members that under this Government manufacturing output has increased by a quarter whereas it fell under the last Labour Government? Will he also remind them that we now have a surplus on steel products of £1 billion per year compared with a deficit of £1 billion per year under Labour? If the Opposition spokesman, the hon. Member for Dunfermline, East (Mr. Brown), has the guts and really cares about Ravenscraig, will my hon. Friend ask him to stand up now and commit a future Labour Government to keeping Ravenscraig open?

We shall wait to see whether the hon. Gentleman does precisely that. My hon. Friend is right to point to the transformation of British industry. For proof of that, one need only read the CBI's report which, among other things, stated that recent years have seen

"a transformation of Britain's manufacturing base … there is now a solid base on which to build. The performance of UK manufacturing over the last decade shows what can be achieved … Companies based in Britain are able to compete sucessfully in some of the toughtest technology-intensive markets in the world"
That is what this issue is about—making British industry competitive, and that is what we have done.

Industrial Policy

12.

To ask the Secretary of State for Trade and Industry when he will next meet representatives of the west midlands regional CBI to discuss industrial policy.

I shall be visiting a number of companies in the west midlands in March.

Does the Secretary of State accept that urgent action is needed in the west midlands if we are to halt the worst fall in manufacturing investment in history? What are the Government doing about the investment gap, the technology gap, the skills gap and the regional gap in the west midlands? I will tell the Minister what his Government have done; by their policies they have turned the west midlands from a productive landscape into an industrial desert.

That is not the view of local industrial leaders as expressed in an article in The Economist this month. It quotes the Confederation of British Industry in the west midlands as talking of

"the tremendous potential for the medium and long-term future of the region".
It talks of Chris Tillett, a Birmingham-based economist, saying that
"the 1990s 'will be the decade of the resurgence of manufacturing regions'. Sir David Lees, chairman of … GKN, says there are 'great opportunities ahead'. David Boole of Jaguar Cars describes the medium-term as 'healthier than for a long time'."
Some Opposition Members have been talking down the region. Indeed, we recently saw that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has taken actions to run down the region and its potential. We believe that its potential is enomous and we have every confidence that the people of the west midlands will achieve that potential under our policies.

May I take the opportunity to thank my right hon. Friend for accepting my invitation to address Wolverhampton chamber of commerce at its annual dinner, where he will meet many members of the west midlands region of the CBI? When he comes, will he take the opportunity to listen to them—the business men on the ground—rather than to the hon. Member for Wolverhampton, South-East (Mr. Turner)? If things are as bad as the hon. Gentleman says, will my right hon. Friend ask the business men why the west midlands has managed to attract so much investment in manufacturing from abroad, why foreign countries have chosen to locate in the United Kingdom and whether they believe that those people would stay if they had to experience the burden of heavy taxation, job losses and days lost in strikes that would occur with the return of a Labour Government?

I am very much looking forward to meeting my hon. Friend's constituents on that occasion. She is right in saying that the west midlands has benefited from a vast increase both in the amount and the share of inward investment into this country. Ten years ago only 6 per cent. of inward investment went to the west midlands. [Interruption.] I am responding to the supplementary from my hon. Friend. Now 24 per cent. of inward investment goes to the west midlands. I very much hope that the hon. Member for Wolverhampton, South-East (Mr. Turner), as well as my hon. Friend, will welcome the fact that whereas in 1979, 4 million working days were lost in the west midlands, recently days lost total little more than 100,000 a year.

Given that 100 companies are going under every week in the west midlands and that 1,000 companies are going under in England, Scotland and Wales, will the Secretary of State apologise to business and to the unemployed for the false promise throughout 1991 of a recovery which never materalised? Will he explain why he and the Chancellor have ruled out a manufacturing investment incentive as demanded by the CBI and other organisations? Will he explain why he is cutting the industry budget even as manufacturing investment and employment are falling and are predicted to fall further throughout 1992? Will he tell us how many thousands more people will lose their jobs while the Prime Minister tries to hang on to his?

The hon. Gentleman—a Scottish Member—refused to take the opportunity to tell us what he would do about his Scottish problem at Ravenscraig, but he has views about the west midlands. What the west midlands would like to know is whether he will now do what he has not already done, that is, repudiate the motion of the TUC to reject alien investment—as it describes Japanese investment—in this country. The west midlands, like the rest of the country, welcomes investment into the country. People there want to see more of it and they wonder why the Labour party will not repudiate measures which are designed to repel that investment.

Does my right hon. Friend accept that when he next meets representatives of the west midlands CBI or any other CBI—the north-west is my area—they are likely to raise the fact that the most powerful economies of the world, especially Germany and Japan are based on a substantial manufacturing base? Therefore, will he use all the influence of his Department to expand the shrinking manufacturing base of Britain? Manufacturing industry produces the only non-inflationary substantial economic growth—growth that is so necessary for Britain.

I entirely agree with the importance that my hon. Friend attaches to manufacturing. We cannot have a successful economy without a vigorous manufacturing sector. However, I refer him to the recent report on our manufacturing performance produced by the CBI entitled "Competing with the World's Best". It refers to the resurgence of manufacturing during the 1980s and the mistaken but widespread belief that manufacturing is still shrinking. Of course, it was shrinking when Labour policies applied and afflicted the manufacturing sector more than anything else. Manufacturing suffered from poorer industrial relations as a result of Labour's union policies, from nationalisation and from a lack of incentives. We will build up all the policies that have reversed that. We will bring about a resurgence of manufacturing. That is what we want to achieve in the 1990s.

Gatt Uruguay Round

15.

To ask the Secretary of State for Trade and Industry if he will make a statement on the negotiations over the Uruguay round of the general agreement on tariffs and trade.

The Director General of the GATT, Mr. Dunkel, issued a draft final agreement for the Uruguay round of multilateral trade negotiations on 20 December. Initial responses were given at a meeting on 13 January. There will now be a further, final, round of intensive negotiations, with the aim of concluding the round within the next few weeks.

Bearing in mind the importance of the conclusion of the Uruguay round of the GATT to many industries in Britain and to third-world economies, what does my right hon. Friend see as the prospects for overcoming the obstructionism of the socialist Government of France to a successful outcome?

I entirely agree that a successful outcome is important to not only the British and European economies but the economies of the developing world. The European Community has made clear its commitment to reaching an early agreement. It is true that several countries have problems with the agricultural part of the round, but those problems will have to be resolved. I emphasise that the Community has made it clear that it is ready to continue and to complete the negotiations according to the work plan laid down by Mr. Dunkel.

Has the Minister received representations from the British Textile Confederation? It simply states that present proposals are unacceptable because they do not retain a fair and equitable trading system. Will he press that where commitments are made to open markets for textile products, a proper verification procedure must be established? If not, thousands more textile jobs will be lost in the United Kingdom.

Not only have I received representations from the Apparel, Knitting and Textiles Alliance, but my right hon. Friend and I have had most useful discussions with it. I am glad to say that we were broadly in agreement on our approach to the round. The AKT welcomed features in the proposed text such as the improved protection of intellectual property rights—very important to the textile trade—more rapid and effective procedures for settling trade disputes and improved rules on anti-dumping subsidies and safeguards. Those features are all welcome to the textile trade.

Will my right hon. Friends ensure that they maintain a robust position in the final round of the GATT? It is most important to our textile industry that we reach a satisfactory conclusion. We need to preserve the jobs that we have. We have massive investment at present and we want to see it continue.

I can assure my hon. Friend that we shall continue to attach the greatest importance to achieving improved rules and disciplines, as we have throughout, along with better market openings, both of which are of importance to our textile industry, which wants lower tariffs on woollen textiles in the United States of America, where it already has a substantial export trade but where there is great further potential. We shall continue to press to achieve that objective for the benefit of that industry.

Will the Minister go further and give assurances that, however desperate the European negotiators are to achieve a GATT agreement, nothing will be done to sell out the interests of British textiles and clothing? Secondly, if the GATT round collapses, will he give an assurance that contingency arrangements will be made by the British Government to ensure that the multi-fibre arrangement continues and that everything is done to defend employment and the trading position of the British textile industry?

I can assure the hon. Member that there is no question of selling out any section of British industry because it is greatly to the advantage of British industry and the British economy that there should be a satisfactory outcome to the present Uruguay round.

Machine Tool Industry

16.

To ask the Secretary of State for Trade and Industry what new incentive to manufacturers he intends to introduce to stimulate the home machine tool industry.

The Government can best help industry—including the machine tool industry—by providing a stable economic framework and low inflation.

Is my hon. Friend aware of the dire state of the many east midlands machine tool companies? Is he aware of the real problems over on-going research? Will he consider some way to enable those firms to fund the costs of developing and bringing into use new and competitive machinery long before their existing equipment is out of date?

The Government spend about £3 billion a year on research and development, which is a higher proportion of gross domestic product than Japan spends, but I hear what my hon. Friend says. If there is a perceived market failure, we are prepared to act, as I have already shown by pointing out how much we spend. We found that a previous scheme, which was designed to help the machine tool industry—the small engineering investment scheme—was distorting business decisions. Normally the best way forward is to create a stable environment and to cut corporation tax so that businesses can make their own investment decisions, rather than to distort those investment decisions.

Industrial Policy

17.

To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of the Association of British Chambers of Commerce to discuss industrial policy.

From time to time I meet representatives of the Association of British Chambers of Commerce, or of individual chambers of commerce, to discuss industrial and trade policy.

Is the Minister aware that after two years of deep recession, 200,000 companies have gone under? As Britain entered 1992 with falling investment, rising unemployment, with the highest number of bankruptcies in western Europe, will the Government finally admit that manufacturing matters, and implement an industrial policy which will lift the United Kingdom from the bottom of the manufacturing league table?

The House will be interested to hear from another Scottish Labour Member of Parliament who will not tell us about the Labour party's policy on Ravenscraig. I made clear in my answer to my hon. Friend the Member for Macclesfield (Mr. Winterton) the importance that we attach to manufacturing and the success, which was acknowledged by the CBI, in bringing about the resurgence and renaissance in manufacturing. The fact is that manufacturing output fell under Labour. It is now up a quarter on what it was 10 years ago, investments are up a third, productivity is up by a half and exports are up by three quarters. We shall build upon that achievement in the 1990s.

Export Credits Guarantee Department

18.

To ask the Secretary of State for Trade and Industry what representations he has received about Export Credits Guarantee Department premium rates and the relative rates of the United Kingdom's principal industrial competitors.

First, may I thank my right hon. Friend for the courtesy which he showed in receiving a delegation from GEC Alsthom in my constituency? May I also thank him for agreeing to visit Rugby and Kenilworth? Is my hon. Friend aware of the growing concern among industrialists about the high premium rates of the Export Credits Guarantee Department, especially when compared with those of our overseas competitors? Is he further aware that many industrialists believe that those high premium rates will cost us business and jobs? Therefore, will my right hon. Friend meet with his opposite number in the Treasury to agree a much lower figure for the premium rates of ECGD?

I assure my hon. Friend that I very much look forward to visiting his constituency and to meeting some of the industrialists whose interests he energetically represents.

On the rates charged by the ECGD, my hon. Friend will be aware that it is necessary to strike a balance between the national interest in providing ECGD cover for capital goods exports and the interest of the taxpayer that that should not prove to be too expensive. My hon. Friend will be aware that as a result of the debt crisis, over the past few years the ECGD has accumulated a deficit of more than £4 billion which is, of course, a deficit that falls to the taxpayer.

Devon And Cornwall Development Company

19.

To ask the Secretary of State for Trade and Industry what support his Department has given to the Devon and Cornwall development company.

The Department has provided no financial support for the DCDC. However, my regional director has worked closely with it in its efforts to bring together the public and private sector throughout Devon and Cornwall.

The Minister should realise that it says everything that the Government should put in no financial support for the Devon and Cornwall development company. Many involved with its setting up feel deeply unhappy that they were misled when it was set up because the Government encouraged them and they believed that they would get direct financial support. Given the current job losses in the country, will the Government reconsider their appalling position?

The hon. Gentleman is wrong. This says nothing about the Government's industrial strategy, because although the Government give nothing to the DCDC, they give more than £500,000 to the Devon and Cornwall development bureau, the inward investment bureau. The hon. Gentleman is also mistaken because he has ignored the fact that in the past three years alone, £10 million of Department of Trade and Industry money has gone to the assisted area in west Cornwall. We are fully committed to reinvigorating the economy of west Cornwall.

Apex Trust

3.31 pm

(by private notice): To ask the Secretary of State for Employment if he will make a statement on the future of the APEX Trust.

The APEX Trust was established 27 years ago to assist with the employment and rehabilitation of offenders. It is one of a number of organisations working in that field, and it has made a valuable contribution. APEX has been involved with the employment and training programmes of my Department for many years. It has participated in employment training since the launch of that programme in 1988. It has also received core funding from the Home Office.

In April 1990 the first training and enterprise councils were established. In 1990–91, 51 TECs were set up. The remainder were established in the current year, 1991–92. The TECs took over the task from the Department of contracting with providers locally for training. In the spring of 1990, the Department recontracted with employment training providers, with some adjustments in volumes and unit price. In doing so, we of course gave the providers the necessary contractual notice. When all the TECs had been established, my Department ceased to have training contracts with APEX.

All TECs have available working capital loans to meet initial costs and to enable them to advance funds to providers where they have thought that appropriate. The position of APEX was no different in those respects from that of any other training provider.

In March 1991, my Department agreed to make available up to £500,000 to assist APEX in adjusting to the new contractual levels of employment training. So far, APEX has been paid under that arrangement £250,000 at the end of March 1991 and a further £100,000 at the beginning of October. Meanwhile, APEX has concluded contracts with a number of TECs and has generated revenue from those contracts.

My Department made a duplicate payment to APEX in April 1991. It is difficult to know how that payment could have added to APEX's financial difficulties. The effect has been to provide APEX with an interest-free loan. We have told APEX that we shall be willing to phase the recovery of that sum over a substantial period.

In autumn 1991, APEX was again in touch with my Department and with the Home Office as a result of its continuing financial difficulties. My Department has been helpful to APEX in a number of ways, as Baroness Seear has recognised. I am sure that the House accepts that it would be wrong to make payments of taxpayers' money to an organisation that is on the brink of liquidation. The trust has announced that it plans to call in receivers at the end of the week. I have today instructed my officials to get in touch with each of the training and enterprise councils which have contracts with APEX to make it clear that I expect them to ensure that all APEX trainees continue their training with other providers.

I thank the Minister for his statement. Will he agree with me that, if APEX Trust closes, over 130 trainers will be made redundant, hundreds of training places will go, and that it is unlikely, because of the nature of the work, that other organisations will take its place? Will he confirm that, up to today at least, not one word of criticism has passed ministerial lips? Indeed, the opposite is the case: it has been highly praised, not least by himself, for both its work and the manner of its operation.

As to the facts about the sum of £250,000, will the Minister confirm that a year ago, when it was clear that there would be a reduction in funding and employment training, APEX Trust entered into negotiations with his Department about the financing of costs associated with the closure of certain of its centres and the making redundant of about 100 staff; that APEX Trust then put to his Department a figure of £500,000 as the reasonable estimate of the cost of the rundown, and that this was agreed by his Department as a reasonable estimate; that on 20 March it was told that it would receive £250,000 as an advance, that on 27 March it received one payment of £250,000, and that on 16 April it received a further £250,000, making £500,000; that on two occasions APEX Trust called the Department of Employment, checked that it could go ahead and use this money and was told that it could go ahead and use it; that the Department of Employment's accountants spent some time with APEX in September, examining its accounts because of problems in relation to further funding; and that in early October, at a meeting with the permanent secretary to the Department of Employment, it was confirmed that any difficulties it had related to funding from the Government, not the running of its business, and its accounts were subsequently drawn up and certified?

To recap, will the Minister confirm that APEX sought £500,000, was given £500,000, checked that it was all right to use the £500,000, was told that it was and went ahead and used it? Will he also confirm that the first that the people at APEX knew about any difficulty with one of the cheques for £250,000 was a letter posted from his Department on Christmas eve and received on 3 January, demanding immediate repayment of one of the cheques and saying that it had been a mistake? As APEX has been given the money, taken it in good faith and used it, how can he justify attempting to snatch it back when the fault lies entirely with his own Department?

Are not the training places that will be lost at APEX part of a much wider picture—the closure of Fullemploy last week, the shutting of information technology centres throughout Britain, and the failure of the Government over their youth training guarantee which still persists even now? Will the Minister now admit what we have constantly said and what he has constantly denied—that training provision is being devastated by cuts in funding from the Government?

Will the right hon. and learned Gentleman confirm specifically that, according to his Department's own figures, 110,000 places have been lost for the training of young people and the unemployed in the past 12 months? At a time of recession, rising unemployment, bankruptcies and still crucial skill shortages in Britain, how can he justify the crass irresponsibility of shutting another training provider?

In relation to APEX and other centres, when will the Secretary of State and his colleagues realise that spending on training is not a cost but an investment in people that allows them to make a contribution to society and that is vital to the success of our economy? A Government who betray our country's training betray our country's future.

On the first question of the hon. Member for Sedgefield (Mr. Blair). I made it plain earlier that I have asked all the TECs involved to make arrangements for the continuation of training of those trainees who are presently receiving training under contracts between various TECs and APEX.

I said earlier that the circumstances surrounding the duplicate payment are under investigation. However, contrary to the hon. Gentleman's suggestion, and as I have already made plain, there is no question whatever of my Department seeking to "snatch it back"—to use the hon. Gentleman's words. We have made it clear to APEX that we are prepared to consider with it arrangements for the repayment of that sum over a substantial period. I hope that the hon. Gentleman accepts that we have a duty to recover taxpayers' money that was paid in error. That is what we are seeking to do, but in a manner that is as sympathetic as possible to any difficulties in which APEX may find itself.

There is no question whatever of that payment being the critical element of the difficulties in which APEX now finds itself. If the hon. Gentleman seeks to give that impression, he is misleading the House. APEX has made it clear, as it did at its press conference this morning, that it needs an infusion of a substantially larger sum of money if it is to avoid calling in the liquidators at the end of the week. It is wrong of the hon. Gentleman to suggest that that sum is the critical factor in the sequence of circumstances.

On training in general, I have made it clear on a number of occasions that we have a duty to those who require training, but that we have no duty to training providers. Other training providers have effectively adjusted to the changed circumstances in which they must now operate. It is a matter for considerable regret that APEX does not appear to have done so.

As to resources, the essential fact is that the Government are providing two and a half times as much money in real terms for training as was provided by the previous Labour Government. Whenever the hon. Gentleman says that the resources devoted to training are inadequate, the shadow Chief Secretary to the Treasury says that training would not be one of the two immediate spending priorities of any incoming Labour Government. The hon. Gentleman must not mislead the country by suggesting that the election of a Labour Government would lead to an immediate increase in training. The contrary is the truth, as the shadow Chief Secretary constantly points out.

Order. I remind the House that the private notice question that I granted was on the future of the APEX Trust. Questions should be confined to that, please.

Would my right hon. and learned Friend comment on the following phrase extracted from a letter of 2 December and repeated in a letter of 7 January:

"I wish to state for the record that Apex Trust is fully solvent and has over the last few weeks extracted itself from the TEC-caused cash flow crisis"?
The Minister may like to know that that letter was written by the chief executive of APEX.

I understand that the letter was written then. All the circumstances of the matter will no doubt be investigated. The facts are as I recounted them in my statement.

The House will be grateful for the Secretary of State's admission that the Government were responsible for the error of the payment of £250,000, but it will not be grateful for his failure to acknowledge that it is that which has tipped the company into liquidation proceedings. How can he make a lengthy statement from the Dispatch Box without even mentioning the predicament of the ex-offenders who have been served so nobly by APEX over the years? How can he fail to recognise that 65 per cent. of APEX's clients have been re-employed or given further education and training? For those who leave prison, reoffending is one of the major problems and prisoners are a third less likely to reoffend if they are employed as a result of the work of organisations with records such as that of APEX. The Government cannot wash their hands of the responsibility and must not knock that organisation, which has the best record for the re-employment and retraining of ex-offenders.

I paid tribute in my statement to the work that APEX has carried out, and I indicated my determination to ensure that proper arrangements are made for the continuation of the training of those presently in receipt of training. We give prisoners preferential access to our training programmes and shall continue to do so. Other organisations in that field, including specialist organisations, work to provide training for ex-offenders, and I have no doubt that they will continue to do so. Both my Department and the training and enterprise councils will continue to afford them every assistance in their valuable work.

Has my right hon. Friend been advised as to what are the main factors leading to the financial crisis within APEX, and does he feel able to comment on that?

I was not present at the press conference that APEX held this morning and I have not yet had an opportunity to examine exactly what was said. On the information available to me, it is clear that the payment of £250,000 was not the critical factor precipitating the difficulties in which the organisation finds itself.

My Select Committee produced a report on those matters in November. Is the Secretary of State aware that two thirds of adult males released from prison will be reconvicted within two years, but that those who obtain suitable work are three times less likely to reoffend? In that area, APEX has had 26 years' experience and in 1990 it helped 9,000 prisoners and ex-offenders with employment and training.

Two problems have hit APEX: first, the major cuts in ET funding from the Government, and, secondly, the fact that it must now negotiate with 82 different TECs, many of which have not given priority to that work or renewed the contracts. The Minister's Department gave money for closure costs. The Treasury is now asking for some of it back, and that is what has pushed APEX into insolvency.

Is the Minister aware that Judge Stephen Tumim, the chief inspector of prisons, told the Select Committee that he deplored the reduction in financial resources for APEX, and the National Association for the Care and Resettlement of Offenders. What he said is particularly important now. As Judge Stephen Tumim is against what the Minister is doing, may I appeal to him to go away, review the matter and return with a rescue package for that valuable organisation? It will not be cost-effective to shut it down.

The hon. Gentleman is right to stress the considerable importance of providing training opportunities for ex-offenders and those who leave prison. I am determined that arrangements for that training should continue to be in place, but that task is not the monopoly or preserve of a single training provider. Other training providers operate in that area and do valuable work. NACRO is the most conspicuous example and I have no doubt that NACRO and other organisations will continue to provide the valuable training to which the hon. Gentleman referred.

I am sure that my right hon. and learned Friend will accept that many Conservative Members wish to pay tribute to the work that APEX has done and would be sorry if it were to go into decline or be liquidated. Does he agree that the principal need is for the training of ex-offenders, not to support any specific provider? If my right hon. and learned Friend were to intervene centrally to dictate to TECs over who should provide any particular type of training, that would undermine the central plank of the success of TECs.

My hon. Friend is absolutely right. If one takes the view, as we do and the Opposition—or at least the Front-Bench spokesmen—claim to do, that the devolution of responsibility for training to the 83 TECs is a sensible way of dealing with matters and should be supported, we must accept the logic that it is up to each TEC to make the appropriate arrangements for training in its district. We encourage TECs to make training available for ex-prisoners. I believe that the TECs take that responsibility seriously, but neither we nor they are committed to any particular training provider; the interests of trainees are paramount, as my hon. Friend rightly recognises.

Order. This is a private notice question, so I shall call two more Members from each side of the House, then we must move on.

In view of the Secretary of State's previous answer, does he not appreciate that NACRO schemes have also been decimated? If a former offender is prevented from reoffending, or if an offence that may have been committed is not committed, does that not represent a substantial saving to the Treasury? Would not those sums have shown a good return on investment?

NACRO continues in existence and continues to provide valuable training opportunities for ex-offenders, and I have absolutely no doubt that it will continue to do so.

I do not think that the overheated political response that we have just heard from the Opposition is very helpful. I can speak only for the Battersea branch of APEX, but I am sure that my right hon. and learned Friend would agree that it has provided an invaluable service to former offenders in that district. Does he also agree that, although we hope that APEX will continue, if that is not possible, it is important to ensure, as he wishes to do, that the training of ex-offenders continues? Will he talk to those concerned at the TECs to ensure that they fulfil the other half of the role of APEX: to educate employers so that they feel able and willing to take on former offenders once they have been trained?

I agree with my hon. Friend that that is an important matter. His question affords me the opportunity to emphasise not only the training role of APEX, which we very much hope will continue—perhaps through other means—but its other responsibilities. My right hon. Friends the Home Secretary, and the Minister of State, Home Office—my right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten)—who is present, are determined that the Home Office should ensure that the other work of APEX also continues.

Both Opposition and Conservative Members have this afternoon expressed their admiration for the APEX Trust. The Secretary of State was badly prepared to explain to the House how, if the Government were to fail to help the APEX Trust, he could ensure that his guarantee would be worth anything and trainees would find places in equivalent schemes through TECs. Will the Minister now undertake that he will make a further report to the House about saving APEX Trust and the negotiations taking place with his Department or, if not, about sound guarantees and named places for the transfer of those trainees who will lose their places?

The hon. Lady is entirely right to highlight the importance of ensuring that those who currently receive training from APEX continue to do so. The responsibility for delivering that training rests with the TECs involved. My officials are today in touch with the relevant TECs to emphasise the importance that we attach to maintaining training for those people. I am answerable, and will continue to be answerable, to the House for the training responsibilities of the TECs. The hon. Lady will have ample opportunity to question me about those and other matters in the weeks ahead.

Does my right hon. and learned Friend, as a fellow lawyer, agree that many of the problems of prisoners stem from the fact that they have never done an honest day's work when they go to prison, and that far too many of them emerge from prison not having been properly trained to do an honest day's work? Surely we should concentrate our resources on training prisoners while they are a captive audience in gaol, not afterwards.

I note my hon. Friend's suggestion. We have looked carefully at the extent to which we can introduce effective training schemes for people who are in prison. More of that is taking place now than ever before. I agree that it is an important part of the measures that we should have in place to assist with the rehabilitation of offenders.

Environmentally Sensitive Areas

3.55 pm

With permission, Mr. Speaker, I should like to make a statement.

I shall today lay before both Houses of Parliament five statutory instruments providing for revisions to the environmentally sensitive area schemes that were first designated by my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) in 1987. They cover the Broads, the Pennine dales, the south downs, the Somerset levels and moors and west Penwith——

They were not; they are an entirely new extension.

These upgraded schemes signal a further significant step forward in the development of my Department's environmental policies. I am therefore glad of this opportunity to inform hon. Members of the steps which I plan to widen the coverage of the scheme and to secure further conservation and enhancement of our countryside through the encouragement of environmentally friendly farming practices.

As I was Minister of State in MAFF when the ESA scheme was first launched in 1987, I know only too well how important a step we took, breaking new ground in our approach to agricultural support. It provided the clearest possible recognition of the dual role of farmers as producers of the nation's food and custodians of the countryside.

The Agriculture Act 1986 provided the legal base, but within a short period the European Community was sufficiently convinced of the merits of our approach to make similar provision in EC law and to go on to provide an element of support from Community funds. Our pioneering work was thus, in due course, followed by similar actions by other member states, including Denmark, France, Germany, the Irish Republic, the Netherlands and Italy.

We remain, however, firmly in the lead in promoting this policy and there is no doubt that the European Commission would now like to see much greater application of these measures throughout the Community. Indeed, the package of agri-environmental proposals linked to Mr. MacSharry's proposals for common agricultural policy reform include provisions aimed at encouraging wider adoption of such measures.

I am sure that most hon. Members understand how the scheme works, but to assist those less familiar with the scheme, I have deposited in the Vote Office copies of a single-page leaflet describing the arrangements. I am also writing to all hon. Member whose constituencies include an existing ESA or are likely to do so when the boundaries of the proposed new ESAs are determined.

This afternoon, however, I want to underline the first objective of the scheme. It is to single out those areas which have environmental features of national importance, which are threatened by impending changes in agricultural practices, and to encourage the continuation of traditional, but less remunerative systems. Our second aim, which characterises the new schemes, is to give farmers the opportunities to restore environmental losses already sustained. This is the key change that we have made and it will increase the cost of the original ESAs from about £5 million to £11 million a year. In these ways ESAs ensure that some of our most valued landscapes and wildlife habitats may continue to be protected and enhanced by farming methods.

When the schemes were opened for application in 1987, our first year's expenditure was £2·8 million. In 1988 we designated five further areas. These were Breckland, North Peak, Shropshire borders, Suffolk river valleys and Test valley, and by 1991 the expenditure in the 10 areas designated in England had increased to £9·5 million. The schemes in England now cover more than 330,000 hectares, which is almost 4 per cent. of agriculture land, and involve more than 3,000 agreements with farmers and landowners. The changes now proposed to the first five areas, together with the proposals that I announced in December for designating a further 12 ESAs in England. will more than treble the area of land covered by the scheme, and by 1994 expenditure is expected to reach £45 million in England—£65 million in the United Kingdom.

The approaches pioneered in the first five schemes have gained the full support of environmental interests and, importantly, of farmers whose voluntary participation is essential if the schemes are to succeed. Given its experimental nature, we decided in 1987 that we should carry out a thorough review of the impact of the schemes after they had been in operation for five years. To assist in our evaluation, we set in place a comprehensive monitoring programme to measure the environmental benefits achieved and the effect on farm incomes. The results of that work have been published and the reports are in the Libraries. They show that the schemes have largely achieved their objectives. In virtually every case, damage to sensitive landscapes and habitats has been averted and in some areas we have recorded positive environmental gains. To take but one example, in the Pennine dales there has been an increase in the floral richness of some grassland that was previously more intensively managed.

In the Somerset levels and moors, however, we found that the scheme had been less successful in conserving the wetland habitats so important to wading birds, and there was evident need for some fairly radical changes to that regime.

My proposals for modifying and upgrading the five schemes were the subject of extensive and detailed consultations with all the interests in the second half of last year. I also had the benefit of the advice of the Countryside Commission, English Nature and the Department of the Environment. My conclusions are incorporated in the new statutory instruments which I shall today lay before the House. The important point to note is that, in all the areas, the schemes have been reoriented to provide greater rewards for agricultural practices designed to deliver positive environmental gains while continuing to conserve what is already there. I have also introduced a greater range of conservation options. All participating farmers will also now be able to submit a conservation plan for their holdings and obtain payments for carrying out work on specified environmental features which will enhance the particular character of the areas.

I will not go into the details of each of the five schemes, but as examples I would mention that in the Pennine dales, we have again focused on the importance of maintaining and enhancing the flower-rich meadows, and the designated area has been considerably expanded to take in a further 18 dales bringing the total covered by the new scheme to 28.

In the Somerset levels and moors, the important change is the introduction of a new option aimed at encouraging the raising of water levels in those parts of the ESA where there is the greatest potential for farming under the wetter conditions that are vital to the breeding bird populations. We have had long discussions with the Royal Society for the Protection of Birds on these matters. It is most concerned that this important area should be protected and enhanced, and by these major changes I seek to make that possible. This is an internationally important wetland and I am especially anxious to encourage farmers, with the co-operation of the NRA and the inland drainage boards, to return to the traditional management of the area.

The revised schemes tabled today will effectively open for business in February when the new scheme literature and application forms will be distributed. New agreements will begin to be made from 1 April——

That may be a hint from the hon. Gentleman although I have no idea of its meaning.

As I say, new agreements will begin to be made from 1 April with payments to farmers in October. Perhaps to the hon. Gentleman that is also a hint. This year I shall review the second round of ESAs designated in 1988. I expect to outline my conclusions and any proposals for their future development during the summer. After the usual consultations, the schemes will be renewed early in 1993, when I shall be happy to renew them.

Following my announcements of the proposed new designations to be made this year, detailed work has been in hand to define the boundaries and appropriate prescriptions for the areas concerned. I expect to announce during February my proposals for Exmoor, Hampshire Avon, lake district, north Dorset and the south Wiltshire downs, north-west Kent coast and the south-western Peak. Following a period of consultation, I plan to lay the necessary statutory instruments before the House so that the schemes can be open for applications in July.

Also during this year work will begin on the designation of the further six environmentally sensitive areas in the Blackdown hills, the Cotswold hills, Dartmoor, the Essex coast, the Shropshire hills and the upper Thames tributaries. Following the same procedures for designation and consultation, those schemes will open for business early in the summer of 1993.

All that amounts to a substantial development of my Department's environmental policies, which I know will be welcomed by farmers and environmental interests as well as by all Members of the House. The proposals have been followed and copied extensively in Europe and beyond. They represent a major revolutionary step initiated by my right hon. Friend the previous Minister of Agriculture, Fisheries and Food—now the Leader of the House. We in Britain have every good cause to be proud of them.

The Minister of Agriculture, Fisheries and Food is quite right that we welcome the Government's intention to extend the concept of environmentally sensitive areas. I look forward to accepting the right hon. Gentleman's invitation and standing at that Dispatch Box this summer to announce the extension of the scheme, as the right hon. Gentleman suggested.

As the Minister knows, the Labour party has been a long-time supporter of environmentally sensitive area schemes. The right hon. Gentleman will recall that I advocated such a scheme first, in my successful private Member's Bill, now the Wildlife and Countryside (Amendment) Act 1985. Unfortunately, as the Minister will also recall, at that time the Government had not quite seen the light and they managed to block that section of the Bill, but we were delighted when, a year later, they did an about-turn and accepted our ideas about a scheme for environmentally sensitve areas.

We welcome the Minister's announcement. We have long argued the case for environmental objectives to be incorporated into the very core of the agricultural support system. That is right. But we believe that the people in the country want value for money out of all these schemes. We do not want farmers to receive money for doing nothing, as so often appears to be the case under the set-aside scheme. Farmers must not be given the idea that environmentally sensitive area schemes are a soft touch. It is important to get that message across.

The whole scheme has environmental objectives. They must be attainable objectives that can be measured and paid for by results.

The Minister devoted considerable time—more time than he spent on any of the other ESAs—to examining the case of the Somerset levels. That specific case seems to us an example of an ESA that has not given value for money either for environmental purposes or in financial terms.

That ESA was designated to protect its wading birds, especially snipe and black-tailed godwit, and to preserve its rich meadow flora. According to research conducted by the Royal Society for the Protection of Birds into sites of special scientific interest, the dramatic decline in that bird population has not been arrested. Vast sums of taxpayers' and consumers' money have been poured into the scheme area—more than £550,000 in SSSI management agree-ments and ESA payments, to which must be added approximately £3 million in price support under the common agricultural policy agreement, also paid for by taxpayers and consumers. In short, the scheme has absorbed huge sums of public money, for virtually no discernible environmental benefit. [HON. MEMBERS: "Nonsense."] Conservative Members may say that it is nonsense, but I think that, in that particular case, the Minister will agree with what I have said. That is why he has announced the changes.

As we understand it, one of the major problems with the scheme has been the action—or, rather, inaction—of the drainage board. Does the Minister agree that that is one of the major problems and, if so, can he give the House a categorical assurance that he has the powers to deal with the drainage boards and to force them to integrate environmental objectives into their operations?

Has the Minister received any results of any work that has been done to try to ascertain the cost savings on the CAP Community price support systems that have accrued as a result of the ESA schemes, because there is also a financial gain to be made from environmental payments?

The Minister mentioned the reform of the CAP. Is he satisfied that the environmental provisions of the MacSharry proposals are included not in the main text of the proposals but in a bolted-on package that will require individual state funding? Will he follow Labour's policy of advocating the incorporation of environmental premiums and criteria into the main thrust of agricultural reforms?

Does the Minister accept that the green premium payment system advocated by the Labour party would extend the benefits of environmentally sensitive farming not only to the restricted areas but gradually throughout the country, so that all farmers could benefit from such environmental objectives?

I thank the hon. Member for South Shields (Dr. Clark) for his first couple of sentences, in which he was kind enough to thank us for the considerable expansion of the schemes. 'When I made some notes on the sort of questions that I might be asked, I thought that there would be no need to be party political because this is an issue on which we all agree. As the hon. Gentleman raised the issue, however, I remind him that the leader of his party has said that any saving from the CAP reform will be spent on Spain and Portugal and on cohesion and that none of it will be available to help Britain. The hon. Gentleman has so far failed to convince the Leader of the Opposition.

In answer to a question about how the regional and social fund and the cohesion fund should be paid for, the right hon. Gentleman said that the common agricultural policy would be the major source of reoriented finance for the development of cohesion in the Community. That means that the only ESAs that Labour would support would be those in Spain and Portugal. It is outrageous for the hon. Member for South Shields to try to make a party political issue out of something which he knows has hitherto been accepted by all sides. He has once again failed to rise to the occasion and recognize—as hon. Members on both sides of the House could and should have done—that the proposals are valuable to us all.

The hon. Gentleman mentioned the need to ensure that we get the best value for money. That is why we monitor these matters carefully and why the customers—those concerned with environmental matters and the farmers—have agreed that the scheme is very successful.

I was direct enough to include the Somerset levels in those areas that I intend to discuss. The problem there is that the water levels cannot be dictated by one farmer entering the ESA if his neighbour does not enter. By means of this improvement, we seek to build on the considerable benefits already provided by the Somerset levels ESA. We wish to secure further benefits by encouraging more farmers to come in so that the water levels may be raised further. I believe that this step will make that possible. Having had very long discussions with the various bodies concerned, I believe that it will be a success.

It is my intention that this should be a voluntary matter. It saddens me that the Labour party never wants people to do things voluntarily; it wants to force everybody to do everything. The Opposition spokesman says that he will not even discuss the issues that I have raised. He asks, "Do you have the power to force them?" The Labour party has only one prescription for everybody: people ought not to be encouraged to do something better, but forced to do what the party wants them to do. Sadly, that attitude characterises the hon. Gentleman's view, which represents a fundamental departure from any proposals that he made either before or after the passage of the Agriculture Act 1986. We have advanced very considerably by voluntary means, and we intend to continue along that road.

The hon. Gentleman raised the question of the common agricultural policy. I have always said that, as a central feature, the common agricultural policy ought to enhance and improve the environment. Mr. MacSharry's proposals have other failings, and this is an add-on package that is not central. All along I have insisted that it should be central. It would not be proper to agree a common agricultural policy without achieving agreement on this measure as part of the total package.

On the question of the financial reform of the common agricultural policy, I remind the hon. Gentleman that it has been made clear by the leader of his party that, despite the fact that the MacSharry proposals will cost more than the present common agricultural policy, the Labour party is committed to taking money from British farmers and giving it to farmers abroad.

I am relieved to hear that this is a non-political matter. That being the case, we shall no doubt be able to get through questions very rapidly. I shall allow questions to continue until 4.45 pm, when we shall have to move on to the next business.

Does the Minister recall that when the scheme began, some farmers—particularly those in upper Dentdale in the north of England—were immediately suspicious about it? However, they discovered that it was both voluntary and generous, and it has been a huge success. Indeed, it has been so successful that all the farmers in lower Dentdale have demanded that they be included. Can my right hon. Friend confirm that the extension to the scheme will take in not only lower Dentdale but Garsdale and Mallerstang? The addition of those to the extra 18 dales—the number in the north of England having gone up from 10 to 28—will assure the new scheme of a warm welcome from many hundreds of farmers in the north of England and in much of the rest of the country. My right hon. Friend deserves the warm congratulations of people who farm in those areas, as well as people who visit them for their natural beauty.

My right hon. Friend created the idea and has won support for it right across Europe. We have tried to carry further forward the proposals that he outlined in the Agriculture Act 1986. I agree that farmers and conservationists were suspicious to start with but, throughout the country, both farmers and conservationists have learned to use the method to work together.

I am sad that the Opposition's first questions on the statement sought to cast some doubt on the way in which farmers have been treated in the environmentally sensitive areas. Throughout the conservation movement. ESAs are widely welcomed as an affective way of using taxpayers' money to enable farmers more properly and effectively to look after the land. Casting aspersions on farmers may be electorally convenient for some parties, but people in the countryside will remember from where those aspertions came.

I welcome the extension to the ESA scheme and I am delighted that it is voluntary. As a practising farmer, I can advise the Minister from my own experience that farmers are pleased with the present scheme. However, does the Minister agree that Britain may have too many environmental schemes at present? Might it not be advisable to have one scheme in this country which could be administered by the Countryside Commission and which, in the end, would produce the same results? I am sure that the Minister is aware that many farmers farm within our national parks and that they unfortunately cannot apply for such grants. It is a great shame that those farmers will never have the opportunity to do so.

I thank the hon. Gentleman very much for his support. However, I do not think that the Countryside Commission would agree with him, because, when we had that argument originally in Committee on the first Bill, the Opposition—not the hon. Gentleman's party but the Labour party—argued that the Ministry of Agriculture, Fisheries and Food should put the scheme into commission with one of the countryside organisations. We argued firmly that there were two reasons why that should not happen. The first was because I wanted an increasing number of MAFF officials to be trained in conservation matters so that when they moved on to other things, conservation as well as production would have been part of their training process. Those officials therefore became concerned not only with the farmer's job of producing food, but with his duty to care for the countryside.

Secondly, I said that if we did not introduce the provisions in that way, the farmers would be unhappy because they would be worried about whether, in the end, the scheme would make it impossible for them to make a living because they did not have the same relationship with some of the organisations as they had had historically with MAFF. I believe that that experience shows that we took the right decision.

The Countryside Commission has now said publicly that it would be happy to hand over to MAFF the administration of the scheme that it has started. I am pleased that we are now discussing with the Countryside Commission how best we can draw its countryside premium scheme into the ambit of our provisions so that it is easier for people to make their choices and to know about the scheme.

The ESA scheme is not suitable for the whole country. There are specific detailed prescriptions for each area. As the hon. Member for South Shields (Dr. Clark) pointed out, the prescription for the Somerset levels is wholly different from that for west Penwith and the like. Therefore, we need to aim specific work at particular areas. I believe that we now have the right balance. However, I am looking at ways in which I can get closer to what was said by the hon. Gentleman by bringing together the schemes, many of which are pilot schemes, so that, when they become fully fledged and we know about the detail, they can work together more precisely.

Does my right hon. Friend agree that this is a wholly admirable extension of the wise policy that was introduced a few years ago by my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling)? Can he confirm that my right hon. Friend the Secretary of State for Scotland has similar policies in mind for extending the ESAs in Scotland, where they have also been successful? Does he agree—I believe that to some extent he has already done so—that conservationists, of whom I have been one for many years, feel that this is a worthwhile extension? After some misgivings at the beginning, the scheme is now accepted as being the right way forward, bearing in mind the fact that this is a much simpler method than that used for dealing with developments within sites of special scientific interest.

My hon. Friend is right about the conservationist view. He is also right about the fact that my right hon. Friends the Secretaries of State for Scotland and for Wales will be making announcements about further extensions to ESAs in the near future.

I welcome the extension of ESAs. Does the Minister accept that, if the quality of life and the health and vitality of rural areas within ESAs are to be maintained, it is essential that the presence and activity of the majority of farmers, particularly small farmers, are sustained in those areas? Does he accept that he has failed to secure any advantage for those farmers? Does he agree that, until such advantage is secured, his Government will have failed disastrously?

The hon. Gentleman is entirely wrong. ESAs will help farmers considerably and they have shown that they are being helped. We are supported cross-party on that basis. The hon. Gentleman has not considered the facts. I am sorry about that, because the first part of what he said is right.

If he has not already done so, will my right hon. Friend consider extending the north Peak ESA to cover the village of Marsden in my constituency? There is a pressing problem there. Sheep wander off the moor into people's gardens and homes. Indeed, sometimes they wander on to the very busy A62 Manchester road. An extension would provide incentives to farmers to take sheep off the moor. An extension of the north Peak ESA would not only be environmentally friendly but would bring long-awaited relief to many of my hard-pressed constituents in Marsden.

I shall be reviewing the north Peak this year, together with the second round ESAs, and I shall take account of the sheep problems.

May I press the Minister further on the extension of ESAs to national park areas? Bearing in mind that one fifth of the land area of Wales is within national parks, is he aware that many farmers find it difficult to understand why an area designated as a national park is not important in ESA terms? It would be much more beneficial to bring the ESA benefits into national park areas rather than to put greening criteria on to the hill livestock compensatory allowances, as is proposed. Can he consider again an extension to cover national parks?

Some parks and national parks are in ESAs and get the full benefits. The hon. Gntleman proposes that all national parks should be covered by ESAs. On that I am advised by the Countryside Commission, by English Nature and by the Department of the Environment. That was not the order of priorities which they gave me. I took in large measure the order of priorities which they put before me. It was difficult because the different bodies had slightly different priorities. I tried to get the right balance. That was not the proposal which they put forward. Probably it would be wrong to make all national parks ESAs. I should not like to deny the greening of HLCAs. Wherever possible, receipt from the common agricultural policy should have cross-compliance of an environmental kind. I wish to keep that in the forefront of my policy.

My right hon. Friend's statement amounts to another considerable step towards environmentally friendly farming. Can he say whether restoration of environmental losses will involve the inclusion of payment for more conservation headlands in more ESAs? As to wetlands, I hope that there will be payments in other ESAs besides those in the Somerset levels.

We are now considering the prescriptions for the new ESAs announced in the first round. Later there will be a second round. I shall take my hon. Friend's comments into account. Certainly our intention is to ensure that the losses sustained by farmers in the way wanted by the Community are properly recompensed. The fact that farmers can opt out after five years of the 10-year period and that there will be regular review of payments on that basis should give confidence.

Why does not the Minister of Agriculture have the decency to admit that ESA stands for election sensitive area? Is he aware that, in Derbyshire and other coalfield areas throughout Britain, one of the most environmentally important issues is opencasting, which has doubled during the period of the Government's tenure of office? While he is here, will he deal with the environmental issue in Bolsover—the dioxin problem which has not yet been cleared up? Will he have a public inquiry and pay the environmentally conscious farmers who have to put up with the problem some compensation?

The idea that English Nature or the Countryside Commission is in some way electorally involved is insulting to those organisations and unacceptable to the House. As the decisions about the areas are based on their advice, the hon. Gentleman should realise that, while it does not matter if he mixes it with people in the House, to those outside who provide independent advice his comment is unacceptable.

On the dioxins problem, the hon. Gentleman knows that we are doing research in his area and paying the farmers while we do so.

I commend my right hon. Friend on the extension of this British initiative. I am delighted that it is finding its way in the rest of Europe, and particularly pleased that 10 per cent. of the cost will be refunded by the European Community. The beauty of the scheme is that it redeploys resources from the common agricultural policy budget to promoting environmental protection instead of encouraging and paying for surpluses.

I have a specific question for my right hon. Friend. I am delighted that his second tranche includes an area of north-west Kent. Will he have a quiet, urgent word with his right hon. Friend the Secretary of State for the Environment and let him know that the east Thames corridor is not simply a stretch of derelict land? There is some good agriculture there, some wonderful wild marshes which are among the last in the United Kingdom, and some green belt. I welcome my right hon. Friend's initiative in the area. Will he ensure that the Secretary of State for the Environment is mindful of it?

My hon. Friend knows that I spent much of my childhood in wellington boots around that very area in All Hallows, Cliffe marshes and the rest, so she will not find me unwilling to press the case for that wild area so near to London. That is one of the reasons why we especially want to protect that whole area, including her neighbour's area of Sheerness. I take my hon. Friend's point and will put it to my right hon. Friend.

Have you noticed, Mr. Speaker, the extraordinary way in which the Secretary of State manages to turn every announcement that he makes from the Dispatch Box into something akin to news of the relief of Mafeking? He has made an important statement, but will ESAs be as cheerfully destroyed as the Government have allowed the sites of special scientific interest such as Oxleas wood and Rainham marshes to be destroyed? What sort of protection will the ESAs be given by the Government?

I find it difficult when Opposition Members can find nothing nice to say even when a good statement is made. It must make people outside wonder whether Opposition Members can be believed about anything. The Government have announced some major improvements, yet the Opposition can do nothing but complain. Therefore, no one can take any complaint that they make seriously.

The hon. Gentleman knows perfectly well that the SSSIs have been clearly championed by the Government. They were given considerable support under the Government's Acts. The Government introduced ESAs and have extended them. I have announced further extensions today. The Government are clearly guardians of the countryside, which from the comments of Opposition Members, clearly the Opposition are not.

In view of the churlish remarks and attitude of certain Opposition Members, may I assure my right hon. Friend that his announcement today will be welcomed, especially by the farmers, as well as the conservationists, in west Penwith? I would go so far as to say that some farmers have been saved by the ESA scheme. Will my right hon. Friend confirm that the statutory instruments for the first five areas amount to an expansion of all those ESAs, including that at Penwith moors? If so, by how much will the area of that ESA be extended?

On the west Penwith ESA, the main changes are not the extension of the area but the change in the prescription: increased payments of £65 per hectare; the option for farmers to earn additional payments under conservation plans when they carry out works to improve the characteristic works of west Penwith; and an extension in the period of agreements from five to 10 years. When we originally drew the line in West Penwith, it was viewed by most people as accurate and reasonable. However, if my hon. Friend wishes to raise a point about that, I shall be happy to talk to him.

Would it help if I were nice to the Minister? Halvergate marshes in the Norfolk Broads has been a success but how is it that, as my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley) has said, for £4 million in the Somerset levels we now have fewer breeding waders? Does he accept that when I was the guest of the National Farmers Union in West Lothian last week I became exceedingly uncomfortable at what its members were saying about the value for money involved in set-aside?

First, on the Somerset levels, we must not think that the only purpose was to ensure that we improved and continued opportunities for wading birds. There are a range of interests there and the previous prescription met a number of those needs. If there is an experiment, as was the case there, clearly there are lessons to be learned. One lesson is that we have not satisfactorily provided a mix to deal with wading birds, and that is what I have added. That is a proper way to extend and that does not mean that we have wasted money until now but that the money has bought some environmental benefits, although not enough. I shall therefore spend some more money, with a different prescription, to extend the mix and to try to ensure that we get all the environmental benefits that we want. I happen to believe that it will work, but if it does not—or if any of the other prescriptions do not work—the purpose of individual prescriptions is for us to learn by them. That is why I told the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) that I was anxious to have a staff who were increasingly in day-to-day touch with environmental matters.

First, may I thank my right hon. Friend for his courtesy in advising me of the creation of an ESA on the Dorset side of the River Avon in my constituency and of its relevance to the River Stour in Dorset? Will farmers be able to include in submissions that they make to his Department, alleviation of the problem of Blandford fly? Will he include the Department of Transport in his consultations? Is he aware that there has been a suspicion in my constituency since the Dorset structure plan was approved that the removal of the word "outer" from the proposed Christchurch relief road plan has meant that the preferred plan could be jeopardised by his announcement today? Will he please consult the Department of Transport and let me know—although he cannot do so today—how his announcement might affect the ultimate choice for the Christchurch relief road by that Department? Finally, on aircraft noise—[Interruption.]

Order. What the hon. Member has already said was rather wide of the statement, and aircraft noise is even wider.

Certainly during debates on the Agriculture Act, 1986, it was said that an ESA designation would not be used for planning purposes. It purposely does not carry a planning designation, because one of our greatest problems when trying to get farmers to come into the scheme was that they felt that, if they signed up for 10 years, they might be signing up to planning blight for that time. I think that that answers the second part of my hon. Friend's question. I am not intimately connected with the Blandford fly and my knowledge of it is not sufficient to give him a direct answer, but I shall do so as soon as I can.

Is the Minister aware that the beautiful and unique Gwent levels in my constituency, which provide a habitat for wildlife virtually identical to that of the Somerset levels, are not now protected as environmentally sensitive areas? Although the Gwent levels in Newport have been jealously protected by the Newport and Gwent councils, the levels have been destroyed on the Cardiff side and they are now little better than a semi-rural, semi-industrial slum. There is a need for such areas to be protected. Will the Minister liaise with his colleagues in the Welsh Office to ensure that the Gwent levels are included as a future environmentally sensitive area?

The hon. Gentleman should first address himself to those who advise me and the Secretary of State for Wales on where the areas should be designated. Those organisations are statutorily required to do that. In those terms, he will understand why I had to reply to his hon. Friend the Member for Bolsover (Mr. Skinner) as directly as I did. If the hon. Gentleman applies himself to those advisers, they will no doubt consider his proposals and they may revise their propositions in light of them. I know the area well and I know the problems to which the hon. Gentleman refers. I saw the area last week and noticed, as the hon. Gentleman has, that there is a degree of growth of rather less than good development which does not help the wildlife as the hon. Gentleman wishes.

Will my right hon. Friend accept my congratulations on behalf of areas such as Exmoor? Will he accept my thanks for the lifeline that he is throwing to the hard-pressed farmers of upland north Devon? A little more help is needed because, in years to come, although the environment will he there, the farmers may not be.

My hon. Friend is right to say that the farmers are essential if our beautiful countryside is to be conserved. I am only sorry that I could not look further and do something for Bodmin moor. It was not recommended, largely because it is an area that has no basic management arrangements to enable me to do anything, let alone establish an ESA. I very much hope that something can be done in that part of the world because it is another place where we need, one way or another, to try to enhance the environment.

Is my right hon. Friend aware that my constituents are extremely grateful for the proposed extension of ESA status to Exmoor and to the Blackdown hills? We hope that he will consider including the Brendon hills within the designation of Exmoor.

On the Somerset moors and levels, I am grateful that my right hon. Friend recognises that there are farmers in my constituency—based on North Curry and Stoke St. Gregory—as well as wading birds, who have interests there. I visited that area a short while ago to see the consequences of a rise in the water level. I hope that my right hon. Friend has the balance right there.

Will my right hon. Friend accept that there is a need for administrative back-up for the ESAs to continue from Taunton and that it should not be moved to Bristol?

I do not accept my hon. Friend's last comment. Administrative back-up is most importantly carried out in the ESAs themselves. That is the most important location so the rest of the work can be done just as efficiently from Bristol as from Taunton. I have made my changes to use our money effectively. If I carry out a considerable expansion of ESAs, I must ensure that I do not waste money on ill-organised administrative systems. I must use the benefits of modern technology to be able to centralise in major centres the supply of services to farmers and to others in the way that we should expect in the spirit of the citizens charter. That is why I have made those changes.

My hon. Friend is right to say that there must be a balance in the Somerset levels and moors. However, farmers in that area will have to recognise that the importance of those levels and of the water support for the future of our wading bird population, and the whole question of how one ensures that their interests are looked after is of national and international importance. It cannot be thought of as a mere secondary matter. As those matters have to be decided jointly between neighbouring farmers, which is the only way in which one can get the levels right, and as they have to be carried through by drainage boards, it is important that the farmers get the kind of return that makes it possible for them to farm with higher levels of water. That is what we have sought to do and that is why we have sought to do it on a voluntary basis and not by diktat. I am sure that a voluntary system is likely to get far better results in the end.

Will my right hon. Friend accept a strong welcome from the Yorkshire dales for the improvements that he has announced to the Pennine dales ESA? Will he accept an even stronger welcome if, as I hope and as I have suggested to him, upper Wensleydale and the smaller dales that surround it are included in the ESA in future?

Will my right hon. Friend remind the House that, without his announcement today, many of our finest pastures and meadows in the area would soon have been lost for ever? As a result of the announcement, much of our finest countryside will he preserved and many of our hardest-pressed farmers—hill farmers—in that area will be given greater assistance in preserving it.

My hon. Friend is right to say that this is a major change. There is a threefold increase in the designated area to bring in 18 new dales and to cover 46,000 hectares of land. We could have dressed it up and said that it was a new ESA because it is as large as many individual ESAs, but I felt that it was right to run the whole area together and that the Pennine dales were better run as a unified group.

It is one of the areas in which we have learnt most from the association between conservationists and farmers. I well remember meeting farmers, who may have been my hon. Friend's constituents, who proved to the conservationists that they had their dates wrong if they wanted to ensure that the hay meadows were cut at the right time. I am pleased that that incident shows that the practical experience of farmers can often enhance the theoretical views of the scientists and that conservationists are able to teach farmers things that farmers originally felt that they did not need to learn. It is the fact that throughout the country, both farmers and conservationists are now praising the others' part in the ESA system, which makes the system a significant contribution to the countryside.

I thank the Minister warmly and comprehensively for including Dartmoor in his second tranche of ESAs. That is magnificent and he has scored a unique double with the ESAs of giving pleasure to millions and of continuing the livelihood of the farmers who allow the ESAs to be continually beautiful.

When my right hon. Friend thinks further on the matter, will he bear in mind the Culm measures which meant so much to the late Professor George Allen of the Council for the Protection of Rural England, who died tragically last week, and which are of large importance in my constituency and in the neighbouring constituencies?

I thank my hon. Friend for her remarks. Dartmoor, like Exmoor, was made possible only by the clear method of management which has been achieved in the area. I congratulate the county council on its work which made it possible for me to make those areas ESAs.

The Culm areas are less well dealt with by an ESA. I understand that the Countryside Commission is discussing those matters along with its associated scheme, which would probably deal with patchy individual areas which are rather more complex than the areas that we cover. I hope that we shall be able to deal far more effectively with such areas through that system. As we work so closely with the Countryside Commission on those areas, I hope that they will not fall between the two schemes.

Local Authorities Etc

4.47 pm

I beg to move,

That leave be given to bring in a Bill to oblige local authorities and the providers of public utilities to communicate to one another the notice received by any one of them of the decease of a chargepayer or customer.

The Bill is a small measure, but it has a strong humanitarian purpose in today's complex and bureaucratic society. The background to it is that a constituent of mine whose mother died found that his mother was taken to court by a public utility for the non-payment of outstanding bills. What causes concern is how that came about.

About 600,000 people die every year, about half of whom die intestate. No problem arises if there is a will, because executors are appointed and the business of death progresses. If there is no will, there is generally a total lack of experience among the relatives and friends of the deceased person. The bereaved people at a time of stress do not know how to progress.

In the instance that was brought to my attention the district council was informed, because it was a council house tenancy, and took the necessary action, but the water and electricity authorities were told by telephone, and somehow or other the message failed to get through. As the bereaved people thought that the matter had been seen to, the business of getting the bills paid just did not happen. As a consequence, the courts were approached by the water authority, which in due course achieved a judgment in the county court, to the extreme distress of my constituent, the survivor of the deceased person.

On the face of it, this is not a big issue—in fact, it is a very small one—but in talking to other hon. Members, I find that it strikes a very strong chord in all parts of the House and at all levels. People who die intestate are generally those who have relatives who are not prone to writing letters and giving formal advice to those authorities, but rather resort to the telephone to tell them. We all know how unreliable the telephone message is.

If the bereaved person has transmitted, as he believes, to the authority the facts which are necessary for the closing of the account on the death of a relative, he then believes the matter to have been dealt with; accordingly, he takes not much notice of other pieces of paper that come through and, as a result, this distressing situation arises with far greater regularity than I had realised until I started digging into the matter.

The purpose of the Bill, therefore, is to oblige the local authority, the water authority, the electricity company or the gas company to advise the other utilities of the notices that they receive of the death of one of their customers or charge payers. They have the kit to do this. They are doing it already. They are taking administrative action when they receive notice.

If one of those undertakings is contacted by telephone and another by letter, therefore, all will eventually be put in the picture about the death of a particular housholder or customer, and the cause of the distress will be removed. The purpose of this very small measure today is to prevent distress among people who do not understand and are not adequately geared to this complex society—the sort of distress that my constituents, and, I gather, those of many other hon. Members, have undergone.

Question put and agreed to.

Bill ordered to be brought in by Mr. Colin Shepherd, Mr. Kenneth Hind, Mr. Michael J. Martin, Mr. James Kilfedder, Mr. Lawrence Cunliffe, Mr. Roger Gale, Mr. Dafydd Wigley, Mrs. Margaret Ewing, Mr. Geraint Howells and Mr. Charles Wardle.

Local Authorities Etc (Notices Of Decease)

Mr. Colin Shepherd accordingly presented a Bill to oblige local authorities and the providers of public utilities to communicate to one another the notice received by any one of them of the decease of a chargepayer or customer: And the same was read the First time; and ordered to be read a Second time upon Friday 24 January and to be printed. [Bill 51.]

Orders Of The Day

Coal Industry Bill

Not amended (in the Standing Committee), considered.

No amendments on consideration. Third Reading what day?

4.53 pm

On a point of order, Madam Deputy Speaker. May I draw your attention to a certain aspect of the new clauses that were placed on the Amendment Paper today, and also seek your advice? I am in no way questioning Mr. Speaker's ruling that none of the new clauses will be called.

It will not have escaped the attention of the House that virtually all the new clauses are in the name of various Liberal Members, and also that, when the Bill was in Committee, the only Liberal member of the Committee, the hon. Member for Southwark and Bermondsey (Mr. Hughes), who has just arrived, attended not one sitting of the Committee. A number of Government Members and a number of hon. Members representing the Labour 'party desperately wanted to serve on the Committee and could not do so because the place was taken by the hon. Member for Southwark and Bermondsey. I regard that as a positive insult to the House; and the insult seems to have been aggravated today by the new clauses on the Amendment Paper.

Order. It is very observant of the hon. Member for Berkshire, East (Mr. MacKay) to notice that no Liberal Members were present in the Committee, especially as he was not a member of the Committee himself, but I have to tell him that there has been no breach of the Standing Orders. I hope that we can now get on with the Bill.

Order. The matter has been dealt with. No further point of order arise.

On another point of order, Madam Deputy Speaker.

Yes, Madam Deputy Speaker. As a member of the Standing Committee, I can confirm that the hon. Member for Southwark and Bermondsey (Mr. Hughes) did not attend.

Order. This is an abuse of the House. The point of order has been dealt with.

Order. No further points of order arise. The matter has been dealt with and there has been no breach of Standing Orders.

On a point of order, Madam Deputy Speaker. I seek your guidance.

Is it a new point of order and not further to the original point of order?

I was the Whip responsible for organising the Opposition membership of the Committee. We left a place for a minority group representative and one was appointed, but he never attended the sittings of the Committee.

Hon. Members are now going round in circles. The Minister had better move the Third Reading.

4.57 pm

I beg to move, That the Bill be now read the Third time.

The Bill has been extensively discussed and has passed through all its stages so far without amendment. It is a necessary measure for the achievement of a productive industry whose future is secured by the sale of coal to willing buyers. We want the largest possible economic coal industry that the market can support.

It has to be recognised, however, that fundamental changes in the nation's fuel requirements are reducing overall demand for coal, and indeed this process has been going on for many years under successive Governments. Coal faces increasing competition from other fuels, in the industrial market, in the domestic market and in power generation. The coal industry also needs further to increase its productivity, building on the substantial and impressive improvements of recent years.

Heavy restructuring has been required, as the House knows. Colliery closures and substantial job losses are involved. This is why clause 1 of the Bill extends the overall limit on the payment of restructuring grant by a further £1·5 billion and makes it available for a further three years beyond the original time limit.

The money goes predominantly towards redundancy costs, enabling British Coal to offer lump sum payments to redundant coal miners which are perhaps the highest in any industry. Restructuring grant also supports the financing of transfers between collieries, retraining for jobs outside the industry and the work of British Coal Enterprise. The rate at which these payments will be made is a matter for British Coal, but by the end of this financial year some £1,340 million in restructuring grant will have been paid. The existing ceiling of £1,500 million is therefore likely to be reached in the coming year. That is why clause 1 is necessary.

Clause 2 provides the power to repeal the Coal Mines Regulation Act 1980. Hon. Members on both sides know that the 1908 Act is widely ignored in practice. That was conceded many times by Opposition Members in Committee. If the Act were to be enforced, which no one advocated in Committee, miners' pay would be cut and productivity reduced. Certain collieries with long journey times between shaft and coal face would be particularly hard hit and jobs would be threatened if the 1908 Act were enforced.

The Minister has just said that the 1908 Act is to be repealed. However, I understand that health and safety issues come under the jurisdiction of the Department of Employment and the Health and Safety Commission. Can the Minister tell the House why the Department of Energy has chosen to pilot the repeal of the 1908 Act when responsibility for it comes under the jurisdiction of the Department of Employment, the Health and Safety Commission and, in turn, the Health and Safety Executive?

I will explain that very point.

The issue of safety has been raised on a number of occasions during our consideration of the Bill. It is the Government's view that safety is of paramount importance and we want recent and continuing improvements in safety standards to be maintained. We also strongly believe that repeal of the 1908 Act will not prejudice safety standards. I remind the hon. Member for Midlothian (Mr. Eadie) that a number of other provisions on the statute book deal specifically with safety. He will be aware that the Mines and Quarries Act 1954 and the Health and Safety at Work etc. Act 1974 are directed specifically at safety.

It is true that the Health and Safety Executive and the Health and Safety Commission come under the general jurisdiction of my right hon. and learned Friend the Secretary of State for Employment, and we have been careful to ascertain the opinion of those bodies. I assure the House that neither the HSE nor the HSC regards the 1908 Act as a relevant safety measure. They would prefer, as we do, to lean on specific safety legislation to safeguard the health and safety of workers underground.

The House is obliged to the Minister for his comments, but nothing he has said detracts from the point I made on Second Reading. I said then that on 7 November 1988, during this present Parliament, the then Secretary of State for Energy—the office remains even though the occupant has changed—gave categorical assurance that no changes to safety law would be made during this Parliament.

On Monday, on the television programme "Panorama", a Department of Employment Minister gave an assurance to millions of viewers that the Government would not act in such a way as to separate us from practices prevailing in Europe. The European regulations governing the number of hours worked in mines are different from those envisaged under the terms of clause 2. Therefore, the Government have a great deal of explaining to do.

On Second Reading the Minister said nothing when I reminded him of the assurance given on 7 November 1988. However, he must comment on the assurance given on television on Monday and explain why a Minister in another Department is offering a certain assurance while he is maintaining a different position today.

Let me repeat that I assure the House that the repeal of the 1908 Act will not diminish safety in British coal mines. That is not just my opinion, but that of the HSC and the HSE. The hon. Gentleman will be aware that one third of the members of the HSC are drawn from the membership of trade unions.

It was conceded in Committee that the 1908 Act is disregarded in practice and has been for many years. It belongs to a past era when coal mining was a pick-and-shovel operation. That Act is irrelevant to the needs of a modern, highly mechanised industry. Mechanisation has been under way for many years, which is why successive Administrations have not enforced the 1908 Act. They would have enforced that Act had it been crucial to the health and safety of workers underground.

In Committee a number of hon. Members spoke about the timing of the repeal of the 1908 Act and when it will take effect. Let me restate the Government's position. The 1908 Act will not be repealed until either the proposed European Community directive on working time is implemented or, if agreement is not reached, an alternative United Kingdom measure is introduced. The repeal of the 1908 Act will not take effect on enactment of this legislation. Hon. Members are aware that, if the proposed European Community directive on working time is agreed, it will be necessary for British Coal to comply with it immediately. British Coal and the mining unions will not be able to negotiate sensibly on new and alternative working arrangements within the limits set by the directive until it is clear that the 1908 Act is to be repealed. British Coal has to give six months' notice before renegotiating working hours agreements.

Powers to repeal the Act are therefore needed well in advance of the date when the directive may be implemented, which may be as soon as 31 December 1992. If agreement on the directive is not reached by that time, the 1908 Act will not be repealed. If no agreement on the directive can be reached, alternative proposals for the coal industry will be brought before the House and repeal of the 1908 Act will take effect at that time.

The provisions of the 1908 Act will continue until such time as the Secretary of State shall implement its repeal. The Government have no plans to implement the repeal until either the European Community directive or an alternative measure is brought into force. There will therefore be no gap between the repeal of the 1908 Act and any replacement measure.

If the Minister found that British Coal was breaking the law of the land, would he insist that it should be prosecuted?

Not only British Coal, but all the workers concerned would be in breach of the 1908 Act. Any coal miner who works overtime in excess of the seven and a half hours provided for under the 1908 Act is technically in breach of that Act. That situation has obtained for many years, certainly during the currency of Labour Administrations, and hon. Members on both sides of the Committee accepted that that was so. The Committee therefore concluded that the Act was obsolete. If the Labour party believes that an Act that has not been enforced by any Government in recent years should nevertheless remain on the statute book, that is a bizarre position to adopt. Perhaps we can seek clarification on that during this debate.

I am aware that Opposition and Conservative Members wish to speak in the debate. I have set out the Government's position on this short Bill and shall seek to respond further later in the debate. At this stage, I commend the Bill to the House.

5.9 pm

The Coal Industry Bill is just as objectionable today as when it was first published on 1 November. It still represents a squalid effort to reduce safety in British mines and to use taxpayers' money to pave the way for coal privatisation. It is intended to fund the rundown of the coal industry from the existing 56 working pits to just 14, or possibly even 12, working collieries. It would also replace the limit on miners' hours with a general European directive that makes no special provision for the hazards of working underground.

Since the Bill was published and has been debated on Second reading and throughout its Committee stage, it has not been amended in any way, and we shall vote against it tonight, as we did before, because it represents a threat to safety.

Although the Bill is unamended, much relating to it has changed. For instance, the position in the coal industry has changed for the worse. Since the Bill was published, three collieries have closed in the Nottingham coalfield alone. The European Energy Commissioner has made it clear that he regards the Government's policy of running down the British coal industry as stupid and short-sighted. Furthermore, the commercial director of British Coal is in the process of being sacked for expressing similar views. The Maastricht summit has been and gone but, despite misleading briefings to the British press—in many cases accepted by them—the European directive on working time remains.

Clause 1 seeks to increase the restructuring grant, as it is strangely called, from £1,500 million to £3,000 million to fund the rundown of the industry. Yet again, the Government have refused to say why an increase on that scale is necessary. Fortunately, we are in a position to tell them that the money is needed because of the scale of the pit closures that they envisage, as set out in successive Rothschild reports. The first Rothschild report reduced to just 26 the number of collieries to be considered as candidates for survival. Of those, just six were to remain in the Nottingham coalfield.

When I said that on the news media in the east midlands, the hon. Member for Sherwood (Mr. Stewart) responded that I did not know what I was talking about—[HON. MEMBERS: "Hear, hear."] I said that the existing 15 collieries in Nottinghamshire would be reduced o six, and that nine would close over three years. Three have closed in just two months. Since the Bill was published, Creswell, Gedling and Sherwood have gone.

The second Rothschild report gave even worse figures. It revealed that Rothschild—the great expert in money but certainly not in coal—had whittled down the original 26 to 14 or possibly 12 collieries, in this case including just four in the Nottingham coalfield.

What is in the third Rothschild report, which the Government have received? Will the Secretary of State confirm that it says that the prospects for the industry are even more gloomy than the second report envisaged? Will the Secretary of State tell us, or is it to remain a squalid secret between Tory merchant bankers and money-grabbing Tory politicians, when and how many British miners they intend putting out of work? Apparently, for the time being at least, it is to remain secret—[Interruption.] I am sure that the Secretary of State will not guarantee that it will remain secret.

If such large sums are needed, it must be because closures on the scale that we predicted are envisaged. When an order for the smaller sums was being debated a couple of years ago, the then junior Minister said that, each year, the Government, to convince the Treasury that the money was necessary, had to produce rough and ready estimates of the number of pit closures.

Now that we are in the 10th month of the financial year, we are entitled to ask about the Government's estimates of the number of pit closures in this financial year. We do not expect the Government to look very far forward—they never do—but we are entitled to know what estimate they gave the Treasury for this year. How many closures does the Secretary of State expect there to be between now and the end of this financial year? I shall give way to the Secretary of State or the Minister of State if either of them is prepared to tell us——

I am not sure whether it is golden, but there is certainly silence.

One reason I ask that is that we are now becoming concerned about whether even the enormous sums concerned—£3,000 million, an addition under the Bill of £1,500 million—will be enough to cover closures on the scale envisaged. Those funds are used to finance redundancy and concessionary coal and to continue certain welfare payments. Obviously, those have first call on the money, but we are worried about whether enough money will be left to finance the training and job creation necessary if the money is to be spent properly in Britain's coalfields.

The position has changed, and the demand for jobs and training is growing. When pits were closed in the past decade, the miners who retired were considerably older than the ones who now face redundancy. Relatively speaking, they received a bigger lump sum, so they had more to get by on. Many were retiring early and, after two or three decades down a pit, who can blame a man for wanting to retire early? Even in their early or mid-50s, miners regarded redundancy as an opportunity to retire early. Some of them may have wanted to retrain or find another job, but many were satisfied with the possibility of a part-time job.

Requirements for retraining and new jobs within the coalfield communities were relatively limited, but the position has now substantially changed. The average miner today is 32 years old——

I am happy to be corrected. He is therefore much younger than the miners who were made redundant five or 10 years ago. They still receive their redundancy payment and there is still a requirement for them to receive concessionary coal and for other immediate benefits. However, is there enough money to give those young ex-miners the retraining and job opportunities that Parliament was told that they would receive when the funds were forthcoming? We doubt whether the sums are sufficiently substantial.

Young men cannot retire at the age of 33. The general level of settlement for redundancy payments is more than £30,000, which seems like a few bob, but I remind hon. Members who are paid at least £30,000 a year that the redundancy payment is a one-off, one-life payment. That sum is just as much as the chairmen of the East Midlands or Yorkshire electricity are paid every two months of every year, and it is not a vast amount.

There is no question of young miners who have been made redundant ceasing work altogether. Nor can there be any question of anyone suggesting that the redundancy pay will fund those former miners through a period of retraining and help them to obtain another job.

Mr. Peter Rost
(Erewash)