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Trade And Industry

Volume 406: debated on Thursday 5 June 2003

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The Secretary of State was asked

Inward Investment


What progress is being made with promoting inward investment in the north-west; and if she will make a statement. [116504]

The Parliamentary Under-Secretary of State for Trade and Industry
(Nigel Griffiths)

The United Kingdom attracts the lion's share of inward investment to the European Union, and we are keen to support the contribution that is made by my hon. Friend's area, the north-west. Last year, the Government and their agencies supported the attraction or retention of more than 50 firms, which secured or created almost 10,000 jobs, and we intend to continue that record.

I am very grateful to my hon. Friend for that reply. He will be aware that the Omega site in my constituency is vital to the development of well-paid, highly skilled jobs in the area. Will he therefore take a personal interest in the development of the site and liaise with other Departments to ensure that we have a procedure not only for the proper development of the site but to give people the right skills and to create the right public transport links to enable people from around the area to take full advantage of the jobs that will be created?

My hon. Friend, together with the local council, local businesses and Government agencies—the regional development agency and the Small Business Service—has championed the cause of inward investment in her constituency and the surrounding area. Yesterday, I had the opportunity, on behalf of my hon. Friend, to discuss with the Minister for Transport the transport infrastructure requirements and the investment that has already been made. I have also discussed with the Minister with responsibility for skills the vital need to ensure that there continues to be a skilled work force with the appropriate skills. All in all, it is a good news story. We want to reinforce the work that is being done locally and to promote those bold new initiatives to secure jobs for the present and the future.

Is not inward investment a relative term, because the fact that other European economies have been doing so poorly does not mean that we have been doing particularly well? Is not the real problem that taxes and regulations mean that foreign non-European companies no longer wish to invest to the same extent?

If the hon. Gentleman is the only Member—I suspect that he is—who does not believe that there has been a world slowdown, especially in Europe, I shall enlighten him. The strength of our economy has allowed us to attract the lion's share of inward investment and, according to the latest figures, to increase the share of inward investment into Europe at a time when countries such as Germany have experienced a declining share. I hope that he and his Front-Bench colleagues will welcome the positive action that the Department of Trade and Industry has taken to ensure that we have as secure a base as possible for manufacturing and for the other sectors of the economy that have enabled us to ride the global downturn better than almost any other advanced country.

May I bring the Minister's attention to my part of the north-west, where in the past two years we have experienced seven major manufacturing redundancies and lost 1,000 manufacturing jobs in my constituency? Last week, Peter Miles Engineering closed overnight, leaving 160 people out of a job—without even the courtesy of a text message, which seems to be the trend these days—and owed five weeks' wages. As well as looking urgently at the need to bring new investment to the Leigh economy, may I urge the Minister to do all that he can to speed up redundancy payments for local families who have been left in such a terrible financial crisis?

I heard of that report; I understand that the company makes parts for JCB-type diggers. I have had the opportunity to apprise the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis) of it, and he will liaise with my hon. Friend to ensure that payments are made quickly. Obviously, I deeply regret the loss of those jobs. I understand that some restructuring might be possible, and I should be grateful if my hon. Friend kept me advised of progress on that.

Post Office Closures


What recent discussions she has had with the National Federation of Sub-Postmasters on post office closures. [116505]

Department of Trade and Industry Ministers and officials are in regular discussions with the National Federation of Sub-Postmasters about a wide range of post office network issues, including closures.

I thank the Minister for his response. Has he had a meeting with the federation since Colin Baker, its general secretary, described the switch from benefit and pension books to direct payments as confusion and shambles, and referred to the possibility of civil disobedience? Does he agree that that shambles, combined with the restrictions that are placed on the distribution of literature about Post Office card accounts, threatens the future of many thousands of sub-post offices around the country?

I do not agree with those remarks. The important thing for everyone concerned about the Post Office—in the House, the National Federation of Sub-Postmasters and elsewhere—is to focus on securing a commercially successful future for the network. Thanks to the £500 million investment that we have made in universal banking, the fact that there are now 11 million current account holders who can go to any post office in the country and obtain cash free over the counter with their ATM card, and the fact that the £150 million a year funding support for the rural network was recently approved by the European Commission, the prospects for that commercially successful future are now very good, as long as we work together to ensure that we realise it.

Does my hon. Friend accept the concerns of sub-postmasters that if the footfall in our post offices falls, many of them will have to decide whether their businesses are viable? Why has Post Office Ltd been prevented from promoting the Post Office card account as a product in its own right?

I completely agree with my hon. Friend about the importance of footfall. That is why it is so important that we now have 11 million current account holders, many of whom will, for the first time, have a compelling reason to go into their local post office to obtain cash with their ATM card. The Post Office wants to increase that number, and a successful banking business is the key to a successful post office network. I have seen a variety of quite bright and attractive literature from the Post Office about direct payment, in which the Post Office card account features clearly. The important thing is that everybody has access to clear, accurate information, and I believe that that information is now being provided.

Will the Minister tell us what the average rural post office will lose in revenue in this coming year as a result of the ill-thought-out changeover to automated credit transfer?

What I can say to the hon. Gentleman is that there has been a very sharp reduction in rural post office closures—115 in the last financial year, which is the lowest for eight years. That is the result of our commitment to prevent avoidable closures—which is now backed up by the £150 million this year, next year and the year after—to safeguard the rural network and the incomes of rural postmasters, and to ensure that there continues to be wide access to post office services throughout the rural parts of the country.

Is my hon. Friend aware that, following a vigorous campaign by Labour councillors in Arbury ward in Cambridge, the Post Office has decided to delay the closure of Victoria road post office? Will he ensure that the Post Office remains sensitive to the needs of its customers and listens carefully to their views?

I congratulate my hon. Friend on the campaign for Victoria road, in which she has been very active. I am aware of the progress that has been made in that case. We have provided specific funding to enable Postwatch to scrutinise each of the urban closure proposals, and it has put very thorough procedures in place. I am very pleased with the evidence that those procedures are working.

The Minister will be aware that many small village retail outlets are viable only because they have income from the Post Office. He has told us this morning how many million accounts have now been opened. Will he tell us how many people still have neither a bank account nor a Post Office card account? What further encouragement will be given during the transition, and will people—especially the very elderly—still be able to hold on to their pension books?

The hon. Gentleman asks an important question, and I can give him the figure. There are 3.5 million people across the whole country who do not have a bank account or a Post Office card account—the latter, of course, is very new. Our view has always been that it is important to give those people the opportunity to open a bank account because there are many benefits available to them if they do so. The Department for Work and Pensions has made it clear that, at the end of the two-year transition to direct payment, there will be what it describes as an exceptions service available for those few people who have difficulties with the arrangements that will be in place by that time. Their interests will certainly be safeguarded. This is an important commercial opportunity for rural post offices, and an opportunity to promote financial inclusion by extending bank accounts to many more people who, in the past, have just not been able to get them.

Is the Minister aware that more than three quarters of the people who claim benefits in the Jarrow constituency use their local post office? What is the logic in the Post Office's decision to close branches in Hedgley road and Bede Burn road in Jarrow? Will he use his offices to ensure that Post Office Ltd., which is on a different planet from Members of the House according to what we have heard today, resists any closures in areas of high dependency?

I am not familiar with the cases in my hon. Friend's constituency, although I will certainly have a look at them. If he has not already done so, I would encourage him to raise his concerns with Postwatch. Of course, all those people who use the post office to obtain benefits will continue to be able to do so under the new arrangements, through either a bank account or the Post Office card account.

In addition, people who do not use the post office, but who have ordinary current accounts, will be able to go to their local post office to obtain cash. The post office will receive a payment for that, and there will be the benefits of extra footfall as people use it to buy additional items. It is widely agreed that the number of urban post offices needs to be reduced because the network is very dense, but, beyond that, the prospects are very good.

Why did the Minister duck the question from my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley)? Is it because the Government are against small post offices and do not care how hard they make it for vulnerable old people to continue to collect their pensions in cash? Will the Minister confirm that Post Office management are rewarded if they speed up post office closures? That policy, coupled with the obstacles that he is constantly putting in the way of people who want to open Post Office card accounts, is leading directly to more post office closures and more problems for vulnerable old people.

The hon. Gentleman should welcome the fact that the number of rural post office closures has declined so sharply. The number last year was significantly fewer than that when the Government he supported left office. We are making a great deal of progress. We have made the commitment to ensure that there should be no avoidable rural post office closures and we have provided the funding to make a reality of that commitment. That is widely welcomed in rural areas, and he should congratulate the Government on the progress that we have made compared with the failure of the Government he supported. His points about incentives for Post Office managers are simply not correct.

Exchange Rates


If she will visit Bridgend to assess the impact of exchange rates on future employment. [116506]

Although I have no current plans to visit Bridgend, I am well aware of the difficulties that the weakness of the euro, until very recently, has caused for British industry, particularly manufacturing.

My right hon. Friend would be warmly welcomed in Bridgend, where there is an important manufacturing sector; Sony and Ford are the two major contributors. Although I would not expect her to say anything about the euro, about which we will hear something on Monday, does she agree that something close to the current exchange rate would be one that British industry could welcome in terms of any entry to the euro in the fairly near future?

I agree that the recent strengthening of the euro has significantly improved matters for Sony and Ford as well as for many other manufacturing companies that export to the eurozone. The views of those two companies and many others on the exchange rate and the single currency are very well known, as are mine, but the fuller answer that my hon. Friend would like will have to wait for the Chancellor's statement on Monday.

Will not future employment be affected not only by the exchange rate, but by the collapse in business investment and the slowdown in productivity growth? Will not it be affected by the worsening strike record and the deteriorating trade deficit? Does the Secretary of State accept responsibility for those failures or does she blame them on rogue elements in the Department of Trade and Industry? Is she aware that business people are today hoping that she may indeed be promoted in the forthcoming reshuffle? They are praying that that will be one case of rewards for failure that she does not attempt to block.



What steps her Department is taking to increase the UK's manufacturing industry productivity; and if she will make a statement. [116507]

The Government's manufacturing strategy, published last year, identified seven key areas of activity for Government and industry that are vital for manufacturing success. We are taking action in all those areas to help British manufacturers improve productivity in very difficult global conditions.

How much importance do the Government ascribe to research and development and diversification as ways of sustaining our manufacturing base in the face of increasing global competition?

The manufacturing strategy puts great emphasis on research and development, which is key to the driving up of innovation. We have put £300 million from the comprehensive spending review into scientific research and technological development, and invested a further £100 million to improve the flow of skilled scientists and engineers. That is crucial if we are to succeed. We will not succeed on the basis of low pay and low skills, nor should we want to. The only way in which we can compete in a fiercely competitive global manufacturing world is by innovating and adding value.

Is the Minister aware of the latest figures in the House of Commons Library, which show that although there has indeed been a superficially impressive growth in manufacturing productivity over the last five years—13.5 per cent.—it is derived from two negatives, a decline in output of 3.5 per cent. and a collapse in manufacturing employment amounting to 17 per cent.? Do the Government distinguish between manufacturing productivity improvements achieved through contraction and mass sackings, and improvements achieved through growth and investment? When do they expect to complete the transition from the former to the latter?

We have never crowed about improvements in manufacturing, or in manufacturing productivity. Manufacturing is still going through a terrible time. It is going through a terrible time in Germany, it is going through a terrible time in Japan, and it is going through a terrible time in America. There are no easy solutions. However, the manufacturing strategy, which is about hard slog rather than quick fix, has involved the industry and trade unions and has established measures that should have been introduced many years ago. It will take a long time for the measures to bear fruit, but as manufacturing is worth a fifth of our gross domestic product, 4 million jobs and 60 per cent. of our exports, it is worth making the effort to help manufacturers.

I was not aware of the statistics in the Library. I shall hurry away to have a look at them after Question Time.

May I draw my hon. Friend's attention to the anger that is felt in Stoke-on-Trent and north Staffordshire generally about Waterford Wedgwood's shock announcement that it is to cut 1,085 jobs? We urgently need new, real jobs. No matter how productive factories such as the two that are to be closed may be, we cannot compete with labour costs abroad. Will my hon. Friend ask the Secretary of State to request the Cabinet to take a personal interest in what is happening in Stoke-on-Trent, and try to find quick ways of securing new jobs, retraining and other help for those who are to lose their present jobs?

I sympathise with my hon. Friend and her colleagues in Stoke-on-Trent. It was dreadful to hear that more than 1,000 jobs are to be lost. I believe that the HR1 notices have already been issued.

As my hon. Friend will know, I went to Stoke-on-Trent a few months ago and spoke to the council and people in the ceramics industry. They are having a very difficult time. Waterford Wedgwood says that it is moving to China, where labour rates are 70 per cent. lower than those in the United Kingdom. As I have said, we cannot compete on that basis. Protectionism is not the answer; the answer is to introduce measures such as those we have introduced through the Ceramics Industry Forum with the aim of increasing innovation and driving up research and development.

The Department has contributed to an investment of £20 million in the Chatterley Valley project, which is expected to bring 4,000 jobs to Stoke-on-Trent. I hope that that will, to some extent, mitigate the problems experienced by my hon. Friend's constituents following the recent announcement.

The Minister's own departmental statistics show that manufacturing productivity has halved since 1997 and that over the same period 650,000 manufacturing jobs have been lost. Yesterday, we heard that jobs will be lost at Wedgwood and that 1,500 jobs will be lost at Cable and Wireless. The hon. Member for Leigh (Andy Burnham) mentioned the number of jobs that have been lost in his constituency. Are we not suffering the consequences of the Government piling more and more burdens on businesses and removing our opt-out from the social chapter? Does he have a manufacturing policy to reverse those trends, or is he just going to sit back and do nothing?

Pick the nuts out of that one. According to the party that wants to be the official Opposition, we have increased manufacturing productivity. Now we are told that it is in a worse position. The two Opposition parties need to tell us what their pouch of fairydust is for solving the problems in manufacturing. If they have one, let us know about it.

The hon. Gentleman said that one of the reasons why manufacturing is suffering is that we signed up to the social chapter. I am really pleased that he has emphasised the fact that his party still opposes basic workers' rights. I have not heard one manufacturer mention the issue of the social chapter. The Conservative party was not just an embarrassment to this country—



If she will make a statement on the level of competition in the broadband market. [116508]

The Government target is for the UK to have the most extensive and competitive broadband market in the G7 by 2005. The latest assessment indicated that at the end of March we had the third most competitive market—we are ahead now of the USA—based on measures of choice, price and regulatory framework.

I am afraid that the reality is not matching the Minister's rhetoric. He must be aware that in suburbs of London and in the home counties there are areas where broadband is not available. What is needed is more competition. BT runs an arcane system of registration before it will introduce broadband to an area. Will he explain why his party defeated a Conservative party amendment to the Communications Bill that promoted more competition in broadband?

The reality is well ahead of my rhetoric. We passed the 2 million mark on broadband last month, only eight months after we reached 1 million. In April alone, another 163,000 broadband connections were added. That is probably the highest monthly figure ever. The two million connections are evenly divided between ADSL—asymmetric digital subscriber line—and cable. There is fierce competition going on—exactly the competition that the hon. Gentleman calls for. In the ADSL market, there are more than 100 competing resellers of the BT wholesale product. Indeed, I received an e-mail last week from a company offering broadband at less than £19 a month, so the competition is working. We need a competitive market. That is what we are getting and we are seeing the benefits of it.

What is the Department doing to ensure that public sector investment in broadband, particularly in education and health, can be piggybacked by communities that do not have access to broadband? In many areas, there is no competition because there is no broadband. If the public sector is investing in broadband, surely that investment should enable local communities in those areas to get access.

My hon. Friend is absolutely right. It is an important part of the answer in rural areas in particular. I am chairing a ministerial steering group addressing exactly the issues that he raises. The public sector as a customer will make a key contribution. We will spend £1 billion across the public services on broadband over the next three years. That will lead to investment in telecommunications infrastructure for the public sector, which will then be available to other users such as small businesses and residential customers. Our task is to ensure that we manage that process to maximise the benefits in areas such as his. We are firmly committed to that, as are my colleagues in education, health and the other public services. I believe that we can be very optimistic about the outcome.

Renewable Energy


What representations she has received from the Wood Panel Industries Federation on the Government's renewable energy policies. [116509]

Representations from the Wood Panel Industries Federation have been received on the impact of the renewables obligation on the industry and, in particular, on the encouragement given under the obligation for the use of UK forestry material by co-firing power stations.

I thank the Minister for that reply, but he has not addressed the seriousness of the situation. Some 15,000 jobs in this important industry are threatened because these so-called green power stations will be able to outbid woodchip mills for the basic raw material that they need—woodchip, much of which comes from freshly felled trees. Surely the purpose of these power stations was to burn biomass produced by farmers on surplus acres, rather than to consume sustainable material that has a future in the furniture and kitchen manufacturing industries, and in the building trade.

A review of the renewables obligation is under way, and account will be taken of the points made by the hon. Gentleman. Indeed, there is a further question, about an existing—perhaps I should say almost existing—biomass plant in Yorkshire, which I shall deal with a little later. By and large, the current problem is not an excessive number of biomass plants consuming all the United Kingdom's timber—on the contrary. However, it is clearly important that we get the balance right, and the Department for Environment, Food and Rural Affairs is offering grants for the growing of trees for specific use in biomass plants. I can assure the hon. Gentleman that full account will be taken of the points that he makes on the industry's behalf.

Does my hon. Friend accept that the rather relaxed tone that he adopts towards the DEFRA review is not in keeping with the time scale with which the timber processing industry is confronted? For example, 50 per cent. of the available timber in Scotland has been bought by a single power station on the back of substantial subsidies for renewable generation. There is every possibility that in the ensuing 12 months there will be insufficient timber to enable Scottish processing plants to continue. Will my hon. Friend therefore accede to the request, made to him by a number of colleagues on both sides of the House, to meet him to discuss this urgent matter as soon as possible? I wrote to him two weeks ago and I await a reply; I am anxious that I get one as soon as possible.

The request for a meeting has yet to reach me, but I shall of course agree to one. I have never refused my hon. Friend—or, I think, any other Member of this House—a meeting, and I should be delighted to discuss this issue.

We support the aspiration in the energy White Paper to increase the percentage of electricity generated from renewable power sources, as, of course, does the Renewable Power Association. Sadly, the RPA estimates that the Government will fail to meet their 2010 target of 10 per cent. generation from renewable sources—only some 7 per cent. will be so generated—and their 2020 target of 20 per cent. generation from renewable sources, with only some 12 per cent. being so generated. How do the Government answer this absolutely fundamental criticism of a central plank of their energy policy from those whom they expect to implement it?

The Government will fail to meet these targets only if a number of conditions have not been met. One reason why they would not be met is if we remained almost exclusively dependent for our renewables targets on hydro and onshore wind—the only technologies that are contributing significantly at the moment. That is why we are backing biomass, photovoltaics and wave and tidal. We have to extend the range of technologies that can contribute. If we start from a defeatist point of view and say that we will not meet the targets, they will indeed not be met. They can and will be met only if we do a great deal to give substance to the words that we have committed ourselves to, and it is my job to make sure that that happens.

World Trade


What recent discussions she has had with the World Trade Organisation on the impact of international trade liberalisation on the relief of global poverty; and if she will make a statement. [116510]


What action she is taking to promote the interests of developing countries in the world trade round. [116511]

I welcome the reaffirmation by G8 leaders earlier this week of their commitment to a successful conclusion of the Doha development round, which would bring significant benefits in trade to developing countries. That is why we are working so hard to make progress in the WTO talks. In addition to the visits that I have recently made to South Africa, India and Thailand, I have today accepted an invitation from Christian Aid to meet producers and farmers in central America, on our way to the WTO meeting in Cancun in September.

My right hon. Friend the Member for Tyneside, North (Mr. Byers) said that current free trade orthodoxy is wrong in forcing poor countries to open up their markets to competition, and in reducing their Governments' protection of vulnerable industries. Does the Secretary of State agree with her predecessor that the World Trade Organisation rules of international trade are indeed stacked against poorer countries, in favour of fat-cat multinationals? Would not managed trade with a focus on poverty reduction be a better alternative? Why can the scales on ministerial eyes be removed only with a P45?

Since I became Secretary of State I have said that it is essential that market opening in developing countries is phased to take account of their state of development, and that the liberalisation of markets is accompanied by effective regulation. We saw the effects of the lack of such regulation in the financial disasters in some developing countries a few years ago. However, I do not agree that subsidies and long-term protectionism are the way forward for developing countries. It is important that we in the developed world listen to the increasingly urgent pleas of developing country Governments themselves—and their producers—who want access to trade, and in particular to trade on free and fair terms with the developed countries. The developing countries would also benefit from reducing the tariff barriers that they put up against one another.

The WTO is a rules-based organisation, and one of the key ways of helping developing countries is to provide capacity building to empower them to play by those rules. The most significant current issue is the EU agricultural meeting later this month. The fact is that the best thing that the EU could do is to reform the common agricultural policy, in particular by removing export subsidies that effectively prevent developing country farmers from accessing overseas markets. Can my right hon. Friend assure me that she will do all in her power to press the EU on that point?

I completely agree with my hon. Friend, and I have been working closely with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs to that end. Our Government are the leaders in pressing for radical reform of the common agricultural policy across the European Union. Not only does the CAP cost the average European family of four an extra £475 a year on our food bills, but as my hon. Friend rightly says, it condemns farmers in the poorest countries of the world to absolute poverty. Commissioner Fischler's proposals on CAP reform provide an excellent opportunity to move that agenda forward, above all for the sake of producers in developing countries. I hope that the Agriculture Council will seize the opportunity and agree those proposals next week.

Will the Secretary of State tell us where she will be on Saturday 28 June? Will she be in her constituency, as I will, supporting trade justice day and her constituents who are making a real effort to draw to the Government's attention the failures of the world's developed community in that respect?

Does the Secretary of State not accept that the liberalisation of agriculture is, as we have heard, a potentially double-edged sword for developing countries? The Government of the Philippines, for example, have argued that opening up markets to the large agribusiness conglomerates of the western world could undermine local food production systems in the developing countries.

When I last met the Trade Minister for the Philippines, his main concern was to ensure access to European markets for their canned tuna exports. That was a major issue, as the hon. Gentleman may recall, at the discussions in Doha. The main issue is to ensure that the European Union and the United States stop preaching free trade abroad while practising protectionism at home. The WTO rules already permit "special and differential treatment", to use the jargon, so that developing countries can open their markets in an appropriate fashion. That is the way to proceed and, with the majority of WTO members being developing countries, that is how we can proceed, providing that we in the European Union and the United States face up to our own responsibilities

My right hon. Friend will know that protectionism is regarded nowadays by the international community not as a 13-letter word but as a four-letter word. How can we ensure that the same fate that befell Zambia, Haiti, Mali, Nepal and Peru does not befall other developing nations? What measures will the Government propose to avoid unfettered liberalisation happening too rapidly in those markets?

My hon. Friend raises an important point. The Government have led the way in supporting investment in developing countries for trade-related capacity building, so that they can engage more effectively in the negotiations within the WTO, and also so that they can ensure that they put in place the necessary regulation to help them with a phased opening of their markets.

Of course, it is possible for developing countries to take advantage of greater trade and economic reform only if they also put in place the necessary reforms to their own systems of governance. That is an issue to which we direct much support and attention through our aid and development work.

I could not possibly be as unkind to the Secretary of State as the hon. Member for North-West Leicestershire (David Taylor) was. Given that protection and export subsidies in the agricultural sector of up to £1 billion a day now represent five times the level of international development assistance and are doing grave damage to the poorest and most vulnerable people in the world, does she agree that it is now time—consistent with what she has said—for the developed world to stop being so selfish and to start to recognise that genuine free trade, subject to the normal checks and balances, is the greatest wealth-creating mechanism known to mankind and the best source of help for the most vulnerable people the world over?

I agree with the hon. Gentleman. Our experience in the European Union is a good example of how countries—six of them, initially—came out of the devastation at the end of the second world war, through a process of free and fair trade among them, to the prosperity that we enjoy today. It is simply not acceptable that we in the European Union subsidise our dairy farmers to the tune of $2 a day for every head of cattle in Europe, when more than 1 billion people in the developing world live on less than that amount. Nor is it acceptable that the United States continues to subsidise its cotton farmers by a total sum significantly greater than the economy of several poor African countries. That argument is being made with increasing force in both the developed and the developing world. The issue for the Agriculture Council next week, and for the US Administration, is whether we will produce significant measures that will meet the commitment that we made at Doha to reduce, with the aim of phasing out completely, the trade-distorting subsidies that we put on our agriculture exports.

Renewable Energy


If she will make a statement on the prospects for renewable energy plants fuelled by willow coppice. [116512]

The Government are committed to the development of all forms of bioenergy, including renewable energy plants fuelled by wood coppice. We provide support, ranging from research and development to the creation of a market for energy generation from energy crops, including wood coppice, through the renewables obligation and the bioenergy capital grants scheme.

Does my hon. Friend agree that the future of the Arbre plant near Selby, which is fuelled by willow coppice, has implications not only for the 50 growers who supply willow coppice to the plant, but for confidence in the entire energy crops sector? Will he ensure that a meeting takes place urgently between his officials, the new American owners of the plant, representatives of the European Commission, which has invested £10 million in the plant, and the Non-Fossil Fuels Purchasing Agency, which has a contract with the plant, to see if there is a viable way forward?

I agree entirely with my hon. Friend, and contact has been made with the company already. The decision to sell to that company was made by the liquidator. It is very much in everyone's interests that there should be the sort of contact that my hon. Friend seeks, and that we do everything possible to encourage the new owners to take Arbre forward as an ongoing and, I hope, viable proposition. I should make it absolutely clear that we have never turned down any request for support for Arbre. It is, of course, open to the new owners to talk to us about that as well.

What percentage of our energy will be provided by willow coppicing, and how does that compare with the possible percentage that could be produced through encouraging the burning of waste paper and packaging?

I cannot give the hon. Gentleman those figures, for the very good reason that we do not have prescriptive targets for each particular technology. There is a great deal of potential in the biomass sector, and willow coppice is only one of the sources. So far, however, very little of that potential has been fulfilled. I agree with the implication of the question, which is that waste technologies contribute more in the short term 'when they are counted as renewables, and they have the potential to contribute much more. I have visited a number of such plants, and I have been impressed with some of the technologies involved. We should not rule out any of the technologies, but it is extremely important that we test, sooner rather than later, some of the assumptions about whether the technologies will contribute anything of significance to the targets. We are putting a lot of money into biomass, and we want to see some return on it soon.

My hon. Friend will be aware that most of the product burned in the renewable energy plants is not willow coppice but waste wood products. What is the economic or environmental sense of a subsidy that allows wood products to be purchased at £40 a tonne, when the wood panel industry can buy it at £20 a tonne? That industry keeps 15,000 people in jobs. Instead of burning wood products and producing carbon, it recycles the material and ensures that the carbon is locked in. Surely there is a need for an urgent review, as was suggested earlier? We need to protect those 15,000 jobs and end carbon emissions to the atmosphere by recycling and locking that carbon in.

As I said in response to the earlier question, this is an important matter. A review of the renewables obligation and of any anomalies that it might throw up is under way. I should be very pleased to meet industry representatives and any hon. Members who might have a proper interest in this matter.

Community Pharmacies


What representations she has received on the future of community pharmacies. [116513]

The Parliamentary Under-Secretary of State for Trade and Industry
(Miss Melanie Johnson)

A very substantial number and range of stakeholders have been feeding in their views on the Office of Fair Trading's report, both through the appropriate Health Departments and directly to the Department of Trade and Industry.

Does the Minister agree that the present structure of community pharmacies provides a high level of access to patients, including vulnerable patients such as those who are elderly, in rural areas and on lower incomes? Does she agree that when the Government consider the OFT report it is very important that health policy should not lose out to competition policy?

I agree that we need to achieve a balanced package in this area, and proposals for such a package will be offered for consultation before the summer recess. We have made it clear that we favour change to open up the market and to improve quality and access. I agree with the hon. Gentleman that access is very important, but we do not want to diminish pharmacies' crucial role in local and rural communities, and in respect of people who do not have easy access to transport.

I am concerned that my hon. Friend's comments make this issue sound predominantly a rural matter. However, inner-city areas such as my constituency have a disproportionately high number of elderly people who use community pharmacy facilities. Given the low level of car ownership among those people, is not it essential that the existing community pharmacy network is maintained?

I can only agree strongly with my hon. Friend that community pharmacies are as important to inner-city areas as they are to rural and poorer areas. We have been well aware of that in our work to produce a balanced package. The Department of Health, which leads on the health policy aspects of the package, has had considerable input, and it is very conscious of these matters.

While I fully endorse the remarks of my hon. Friend the Member for Gosport (Mr. Viggers) on health access, does the Minister understand that in rural areas, where there may be only one independent pharmacy in a small rural town, it will be difficult for that pharmacy to compete with large out-of-town supermarkets? Does she understand that such a pharmacy provides not only health advice but a range of social services advice, and that, when combined with the loss of many other rural facilities—for example, post offices, magistrates courts and police stations—it will be a heavy blow if the only independent pharmacy is forced to close because of full competition?

It is for just that reason that we are balancing health and competition and that we have put the emphasis on continuing, and indeed broadening access. That issue obviously needs special consideration in respect of rural and more isolated pharmacies. Indeed, the Department of Health already has support systems for essential small pharmacies in any event. The hon. Gentleman may like to know that in March 1992 there were 9,765 pharmacies, as against 9,756 in 2002, so pharmacy distribution and the number of pharmacies has been maintained at much the same level over the past decade or so.