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Trade and Industry

Volume 457: debated on Thursday 22 February 2007

The Secretary of State was asked—

Trade Links (India/China)

The Government promote trade with both countries in a number of ways. I recently visited China and India to promote trade and I was accompanied by a business delegation on both occasions.

But does the Secretary of State agree that we are not doing well enough? The Minister for Trade told the House on 30 January that we sell more to Australia, which has a population of 20 million, than to either India, which has a population of 1.3 billion, or China, which has a population of 1.1 billion. Is it still the case that Belgium is managing to sell more to India than us? We should be doing better than we are. What will the Government do about that?

The answer is that we can always do better. It is worth bearing in mind that the UK is certainly the fourth largest investor in India, and may now be the biggest investor in India as a result of recent investments by Vodafone. The links between both India and China and the United Kingdom are good. We are building up trade in many areas, particularly in financial services and other service sectors. Both China and India are moving away from an interest in heavy manufacturing, in which countries such as Germany have traditionally done well in trade with them, into sectors such as services in which Britain has an outstanding reputation. Of course, in respect of both countries, we need to do better, which is why I visited them. There are good examples of additional investment. We want to encourage that two-way process.

Unlike the hon. Member for South-West Bedfordshire (Andrew Selous), may I praise the Government for their tremendous efforts to build relations with India? In my lifetime, I have known no other Government make such an effort. But does the Secretary of State recall the joint declaration signed by our Prime Minister and Mr. Manmohan Singh, the Indian Prime Minister, on 20 September 2004? The declaration refers to plans to

“establish a Ministerially-led Joint Economic and Trade Committee to further develop a strategic economic relationship between the two countries”.

Can I therefore ask what progress has been—

If I might deal with the first part of my hon. Friend’s question, praise for the Government is always welcomed and much appreciated. In relation to the second part, while people are sometimes understandably sceptical about the value of committees, especially those set up between Governments, the Indian one has actually been extremely productive. When I was in India in January, we made progress in four areas: Lloyd’s of London will now be able to write reinsurance business in India; the Indian Government are now prepared to consider legislation that would allow Britain’s big accountancy firms to set up and practise there; the Bar Association of India is now engaged in a way that will, I hope, lead to British law firms being able to practise in India; and Premier Oil has been given permission to begin production in the Ratna field. Such examples of engagement by the Government have made a difference.

In the medium and long term, the prospects for good trading relationships between India and Britain are exceptionally good, because both countries have the same outlook. The more that we foster that relationship and encourage investment into India, as well as Indian investment into this country, the better it will be for both our countries.

Given that the global business community is looking for investment wherever it is most effective, will the Secretary of State assure us that he is continuing talks with China and India about the science base and the growth of science and expertise in those two countries? If we cannot prevent companies from moving to those countries and investing in new research laboratories, we must collaborate with those countries in order to gain expertise back into this country.

The hon. Gentleman makes an exceptionally good point. A few moments ago, in reply to the hon. Member for South-West Bedfordshire (Andrew Selous), I said that I thought that both countries were reaching a stage at which they were taking a greater interest in services and in the non-traditional manufacturing industries such as pharmaceuticals, biosciences and so on. On my visit to India, I was particularly struck by the number of firms that want to work jointly with those in Britain. It is not a question of them coming here and taking over our companies; they value our science base and our ability to innovate, for which we have a worldwide reputation, and they want to ensure productive capacity in both the United Kingdom and India, to capitalise on the strength of both countries. We want to encourage that.

China, too, recognises that we have something that it currently does not have, and as huge structural changes take place in economies across the world, we can capitalise on that. That is why we will continue to invest heavily in science: this year we spent about £3.4 billion, which is double the sum invested 10 years ago.

Obviously, as a member of the Select Committee on Trade and Industry, I recognise the importance of the joint economic trade committee agreements with both India and China. Will the Secretary of State ensure that those JETCO agreements will lift the barriers that still exist to British exports to India? I am sure that he can do that. Will he also ensure that Typhoon will be part of the programme for India’s purchases in the future?

I cannot ensure that the Indian Government will do any of those things because, at the end of the day, it is up to the Indian Government. However, they recognise they are reaching a stage at which unless they break down barriers to trade, India will lose out. That is especially important as we approach the conclusion of the world trade talks, at which India’s position is pivotal. In the discussions that I have had with the Indian Trade Minister and those that my right hon. Friend the Chancellor has had with the Indian Prime Minister, we know that it is important to persuade all countries—India included—to do everything they can to break down trade barriers. They need British investment in financial services, the pharmaceutical industry and across the piece, including engineering. We want to encourage that and build on it.

Ten years ago, this country had a balance of trade surplus. Today, we are exporting 20 per cent. fewer goods to India than we were two years ago. Our balance of trade today stands at a whopping £56 billion deficit, the highest since 1697. Will the Minister tell us why that is?

If the hon. Gentleman wants to make comparisons with 10 years ago, he may recall that inflation then was in double figures, at 10 per cent. We have now had the longest period of low inflation since the 1960s. At one point, 3 million people were unemployed. Unemployment is now the lowest that it has been in the time that anyone can remember. National debt doubled under the Conservatives. Today, we have a very strong economic position.

In relation to trade, as I said, our position with India and China is strong and getting stronger. Most of that is built on the fact that we have an extremely strong British economy and, crucially, unlike the Conservatives, we are willing to put money into things like science and innovation, which is critical to our country’s future.

May I join my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) in congratulating the Secretary of State on his very successful visit to India? May I also say that my right hon. Friend looked stunning with the garland that was placed around him on his arrival?

What practical steps will be developed as a result of the visit in terms of financial services, bearing in mind that both Mumbai and the City of London are key world financial centres?

I said that support for the Government is always welcome, and support for the Secretary of State is even more welcome, so I am grateful to my right hon. Friend for his compliments, if that is what they were. [Laughter.]

My right hon. Friend highlights an important area of future co-operation between Britain and India in relation to Mumbai. The Indian Government want to develop that city as a major financial services centre, not just for India, but for the region as a whole. We want to encourage that. The City of London is now able to open an office in Mumbai, and a lot of British companies are active there. We have been urging on the Indians a more liberal approach, allowing British firms to invest in Mumbai.

Some 23 Indian companies are listed on the London stock exchange and 13 are on the alternative investment market. That shows two things: first, the growing closeness and relationship between India and Britain, and, secondly, that the London stock exchange and the City of London are pre-eminent across the world and recognised as a very good place to do business. It is important that we keep it that way.

Energy White Paper

5. What recent discussions he has had during the drafting process of his Department’s energy White Paper; and if he will make a statement. (122136)

Ministers have held numerous discussions with other parties and colleagues over the course of the energy review since it was launched in 2005. As I have set out in a written statement today, following last week’s court judgment it is now likely that the White Paper on energy and the new consultation on nuclear energy will be published in early May. If we can do it earlier than that, we will, but that time scale will enable the Government to make a decision on nuclear and on other issues arising from the White Paper in the autumn.

Does the Minister accept Ofgem’s criticism, and that of others, that the Government’s renewables obligations policy is unbalanced in how it treats potential sources of renewable energy? When will he deal with that criticism?

No, I am not convinced by Ofgem’s criticism. It has put forward an alternative means of encouraging renewable energy, but it seems to me to be broadly similar to the system that ran for many years until the late 1990s, which did not result in much in the way of renewable energy.

Two things must be said about the renewables obligation. First, and now for the first time, we are seventh in the world in terms of producing electricity from renewable sources. There are more and more applications to build wind farms as well as more investment in offshore energy generation, as well as wave and tidal power generation. Secondly, the industry needs some certainty. If we keep chopping and changing how we support renewable energies, we will run the risk that the whole thing will fall apart.

At the moment, we are discussing nuclear power generation and there are people who argue that renewables can fill the gap that may be left by a lower number of nuclear power stations. We need more renewable energy, not less, so I am yet to be persuaded by Ofgem’s submission. Of course I will listen to what it has to say, but it is important that we continue to provide some stability to energy policy.

Following last week's High Court ruling that the energy review consultation was “seriously flawed”, the Prime Minister said

“This won't affect the policy at all”.

Today, the Secretary of State has announced a new consultation, but in light of the Prime Minister's pre-emptive comments, surely that consultation is set to be as seriously flawed as the previous one.

Well, the hon. Lady might do worse than to read the judgment. It is perfectly possible—indeed it is highly desirable—that Government take a lead in promoting policy. The Government have to have a view on nuclear. I appreciate that, being a Liberal Democrat, the hon. Lady has never had that problem, because the Lib Dems do not have to have a view on anything. I see that her hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) is not here, but, as she knows, his view is different from hers.

In relation to nuclear, the Government's position is that, especially at a time when the amount of electricity generated by nuclear will fall from about 20 per cent. to about 7 per cent. of the total market over the next 15 to 20 years, there is a case for replacing that amount of energy generation with new nuclear generation. What the judge found was that the process of consultation was flawed, and I fully accept that. I therefore intend that we will carry out a full and proper consultation, so that people can have their say. One thing is clear: the issue will not go away. We need to have greener sources of electricity generation and to ensure security of supply. That is something that the Liberal Democrats are constitutionally incapable of doing.

I note the Secretary of State's comments and welcome the fact that the White Paper will be published in May, if not before. Conservative Members are obviously disappointed that it has taken so long. Is the Minister aware of my constituents’ concerns about the Government's apparent lack of a coherent and credible energy policy, and their scepticism about the consultation in the light of the decision to approve the waste incinerator in Belvedere, where the consultation with local people and experts was not taken into account? Will this be a real consultation or just another sham?

It is important that there is a full and proper consultation. I used to be deeply sceptical about nuclear power. I changed my mind because the facts changed in two respects. First, the science on climate change is now very clear. Unless we get ourselves into a position where we can produce more electricity from low-carbon sources, we will continue to pump carbon into the atmosphere, and that cannot be justified. Secondly, the amount of oil and gas in the North sea is slowly but surely declining. That means that, if we do not do anything about it, we will import more oil and gas from other parts of the world. That is an especially serious prospect when we consider that that oil and gas will, in many cases, be coming from areas that have huge political problems. I therefore think that nuclear needs to be part of the mix.

That is my view and it is the Government's view, but I have given an undertaking that we will consult on that because people need to engage with the argument. As I said earlier, that argument will not go away and it is essential that we engage with it. If people have better solutions, let us hear them, but for goodness’ sake do not think that, by putting off the decision, we will not be faced with the difficult choices that any Government worth their name have to make.

In the Secretary of State’s discussions with the Chancellor of the Exchequer on the energy White Paper, will he pay specific attention to the needs of industry? There is a fashionable London view that only services count and that every product with metal or steel in it can be imported into this country, and that that is the future. I am not sure that that is the case, and our steel, glass and other industries need a coherent energy-pricing policy, which they have not had in recent years. I know that the Secretary of States has made good efforts in that respect, but please will he, with the Chancellor, focus hard on sending out the right signals for our industry electricity users?

My right hon. Friend is right. Last winter, there was a shock to the system in that we did not get the expected gas supplies. The result was that wholesale prices went up and the prices being paid by steelmakers and other heavy industrial users were far higher than they should have been. This year, because we now have additional gas coming from Norway, the Netherlands and Belgium, and because we now have greater capability in terms of bringing in liquefied natural gas, and have taken other new measures too, wholesales prices have come down by about 60 per cent. and, thankfully, those prices are about to be passed on to domestic consumers as well as industrial consumers. However, my right hon. Friend is right: if we do nothing—if we ignore the problems that we can see arising in the next 10 to 15 years—we will have very severe energy problems. I am prepared to put up with a six or seven-week delay because, frankly, it is better to get right how we deal with the big problems over the next 20 to 30 years.

My right hon. Friend will be aware of the many practical examples of renewable energy measures that have been introduced into the UK, with or without an energy White Paper, over the past 10 years. Will he join me in congratulating npower in Swindon on its plans for a wind turbine on Windmill hill, and will he further tell me what steps he is taking to encourage local councils—

My hon. Friend is right that wind power is very important. I am just sorry that so many applications are now blocked. [Interruption.] Before the hon. Member for Rutland and Melton (Alan Duncan) stands up to berate me, as a I fully expect him to do, he might like to tell me what steps he will take to persuade Conservative councils not to block applications, as we know we need such renewable energy.

Businesses in my constituency also raise the issue of the fluctuation in energy prices and the effect that that has on their trade and competitiveness. Given that, what is my right hon. Friend doing to bring the energy companies along with him in respect of the energy White Paper and other long-term measures, to ensure that such fluctuations in costs are minimised in order to give local companies more stability to plan ahead?

Again, my hon. Friend is right. What is needed more than anything else is stability, which is why energy companies—everybody, really—ought to be concerned that we have a stable policy framework that will allow generators to choose what form of generation is most appropriate. The two matters that should be concentrating our minds are, first, how to get cleaner, greener sources of energy, and, secondly, how to ensure that we have security of supply in the future. There ought to be cross-party consensus on that at least—although we can, perhaps, argue about how we actually achieve that. Those are the two big issues that face this country, and countries around the world, and I intend to address them fully during the forthcoming consultation period. As I have said, I intend to reach conclusions by the autumn.

Does the Secretary of State agree with the following two recent conclusions of the Select Committee on Trade and Industry: first, that nuclear power is generally a very low-carbon source of electricity, and secondly, that although local energy generation has interesting potential, it is not a short-term panacea for the real problems we face? If he does agree, does he also share my fear that the uncertainty created by the further delay that he has been forced to announce today risks there being investment in new gas-fired power stations—with all the implications of that for climate change and security of supply—rather than in nuclear power stations, which I agree with him are necessary?

I agree with the first part of the hon. Gentleman’s question. Nuclear is, without doubt, a lower carbon form of producing energy—it is not carbon free, but it is much lower. I also believe that although distributed energy—small-scale energy—is an important part of the mix, it can never be an answer despite what Greenpeace and others have suggested from time to time. We could not possibly end up depending on thousands of different producers to make sure that we have enough electricity, for example, to provide for our needs across the entire country. Distributed energy does, however, have a part to play.

On the delay, my soundings are that industry would prefer that we got the consultation right—that we put up with a six or seven-week delay before we publish the White Paper and the associated consultations—as long as we reach decisions in a reasonable time. I think that we will do so before the end of this year—in the autumn. If we can get that right, there is no reason to believe that we cannot make sure that we have an energy policy that is back on track and that can provide for us in the way that I have described.

Does the Secretary of State accept that a key issue for the White Paper is introducing mechanisms to enable carbon to be traded at a high and stable price not just in the UK, but in Europe and, ultimately, globally?

Yes, I do, which is why the Government have spent a great deal of time and effort persuading other European countries that the EU emissions trading scheme ought to be strengthened. If there is no carbon price, it will be very difficult to persuade people to go for the low-carbon options. That issue is very important; indeed, it is equally as important as clean coal—coal was mentioned earlier—and carbon capture. All those things should be part of an approach that will get us secure and greener supplies.

The whole energy review is clearly in a complete mess. It began back in November 2005, and it was two months before the consultation document was published. Six months later, the report came out and said virtually nothing. The High Court now says that the process was flawed. The Government are delaying the White Paper yet again, and we will have no decision on anything until the autumn, which means that this supposedly urgent policy will have taken more than two years. I suspect, Mr. Speaker—

I immediately withdraw that assertion, Mr. Speaker.

Is it not clear for all to see that the Government are totally paralysed, and that we Conservatives are better prepared for government than the Government themselves?

I was tempted to ask the hon. Gentleman, if he is so well prepared, whether he has a policy on nuclear yet. As I understand it, his policy is to wait to see whether anything else works and to come to a decision at the last moment. On his general point—if there was one—most people can see the thrust of what the Government are proposing in a broad range of measures. We need to ensure that we have the right sources of electricity and other energy generation, and to concentrate on reducing our demand for energy, which is a key part of any approach. We need to make sure that industry and households have incentives to use less gas and electricity, but we also need to ensure that we get the generation capacity that we will need. We should remember that a third of all our power stations will come out of commission in the next 20 years, so decisions need to be made. However, having spoken to many people in the industry over the past nine months since becoming Secretary of State, my sense is that they are more concerned that we get the consultation process right. Frankly, given that we are establishing policies that will last 20 or 30 years, a six or seven week delay—although we would ideally do without it—is something that we can live with.

Can the Secretary of State tell us what the Chancellor’s view is on nuclear power, and can he explain how his own policy of having nuclear power only as an option to be considered by companies in any way matches the Prime Minister’s assertion that we must and will have nuclear power? How does the Secretary of State’s “it may/will happen” policy tally with the Prime Minister’s “it definitely will happen” rhetoric?

The Chancellor and I are in complete agreement on this and most other matters, so that deals with the hon. Gentleman’s first point. On his second point, the Government are saying to generators that, whereas successive Governments have been very reluctant to sanction additional nuclear capacity, nuclear—subject to consultation—ought to be part of the mix. In other words, generators need be able to consider the option of nuclear alongside others. It is not for the Government to decide that it has got to be nuclear, as opposed to oil or gas.

I think that the difference between us and the Conservatives—inasmuch as I can understand their policy—is that they have not got a clue on nuclear.

I welcome the Government’s decision not to appeal Mr. Justice Sullivan’s judgment, which was scathing, to put it mildly. He did not apply the term “misleading” to the economic section, but he did call it “jejune” and an “empty husk”. In the consultation that is to take place, the Secretary of State will be aware that most of the supporting documents for the economic case have not been put into the public arena or have been put in only in much reduced form. Can he give us an assurance that he will provide those documents to this consultation, or can he tell us which aspects of the economic case he is not willing to make public?

As I said to the hon. Member for East Dunbartonshire (Jo Swinson) a few moments ago, we did make a considerable amount of economic data available. I fully accept in retrospect that it probably should have been made available when the consultation was launched back in January 2006. I want to ensure that we can have an informed debate in the House and among the wider public. All I would say to the hon. Member for Richmond Park (Susan Kramer) is that she, too, should perhaps open her mind to all the options, because it is not clear to me that she has a policy to deal with the two pressures of security of supply and achieving greener sources of energy. Until she does, I strongly advise her to reflect further before venturing into the public domain.

Sustainable Development Technologies

3. What assistance his Department gives UK manufacturers seeking to develop sustainable development technologies. (122134)

The DTI is working with business to encourage the development of sustainable development technologies and sustainable consumption and production practices. This support covers a wide range of activities including support of the UK science base, the technology programme and our joint work with the Department for Environment, Food and Rural Affairs on sustainable consumption and production.

Does my right hon. Friend agree that we are right to focus support increasingly on clusters of manufacturers and their supply chains by sectoral activity? If she does, and bearing in mind our ambitious target for renewable energy, does she agree that there is an urgent need to expand our base of clusters for renewable energy? If she is with me so far, could she bear in mind for the next time we meet that Stafford is an excellent location for such a cluster, because of its 100 years of experience in power and its existing experiences with solar, wind and biomass, and because we have the only factory in the whole of the UK manufacturing transformers, with worldwide experience in transmission and distribution?

I agree with my hon. Friend that clusters are an important way to provide strength and build key capacity in such areas. I congratulate him on the work that he is doing in his own constituency to try to ensure that Stafford develops such a cluster and I have no doubt that in his discussions with the regional development agency and in our considerations through the technology strategy we will bear in mind the strong case that he makes.

Following the excellent question from the hon. Member for Stafford (Mr. Kidney), and the Minister’s reply, with especial reference to sustainable production, I seek her advice and assistance, and that of the Government. Earlier this week, AstraZeneca, the largest employer in my constituency, announced 700 job losses at its manufacturing site in Macclesfield. I am pleased to say that the job losses will be spread over three years, but one of the reasons the company gave for that decision was the cost of energy. Can the Government give any advice or assistance on that question, because the shedding of 700 manufacturing jobs in a high technology industry such as pharmaceuticals is a very dangerous and unfortunate development?

I share the hon. Gentleman’s concern about the loss of jobs in his constituency, although I would draw his attention to the fact that we perform well in the pharmaceutical sector. The Government need to continue to provide the conditions that will enable that to continue into the future. That means providing the right business environment and ensuring that we invest in research and development so that we have the innovation necessary to keep us one step ahead.

The hon. Gentleman is also right to draw attention to the fact that energy prices last year did create difficulties for many sectors of industry. That is why my right hon. Friend the Secretary of State referred to the steps that we have taken to secure energy supply for this winter and beyond and, through the energy White Paper, to bring down energy prices so that we remain internationally competitive in manufacturing, especially in areas such as the pharmaceutical industry.

May I point out to my right hon. Friend that perhaps the most sustainable source of energy actually lies within the earth’s crust, but that historically this country has underdeveloped and under-researched geothermal energy sources? I ask my right hon. Friend to work with the construction industry and other Departments with a view to promoting that source of energy within new construction, which will help not only our carbon footprint, but companies such as Forkers in my constituency that are at the cutting edge of geothermal technology.

My hon. Friend is right to draw attention to this important source of conserving energy and sustainable development. Indeed, I am working with the construction industry to look again into what further steps we can take around sustainability in construction to ensure that we conserve our energy resources. We support, and are in various ways investing in trying to promote, geothermal capacity.

The Minister said that she is encouraging sustainable technologies development, so can she explain why the DTI’s supplemental budget published this week shows that she has cut research council funding by £68 million?

I simply draw the hon. Lady’s attention to the statement, which shows that that is an underspend. It is money that was not spent, which we are drawing back into the remaining overcommitments in the Department’s budget.

One of the ways in which the Minister’s Department supports renewable technology is through the low carbon buildings programme, which is so successful that it runs out of money every month. As a result, people who miss the cut-off date have to apply again the next month. As that does not encourage householders to apply under the scheme and is destructive of industry, will the Minister consider providing more funds for the low carbon buildings programme, so that we do not have that arbitrary cut-off period every month?

I understand that my hon. Friend has tabled a question that may be reached later this morning. Up to 2008, we are providing £12.8 million to meet the issues that he has raised.

Is the Minister aware that the director of the Renewable Energy Association has described the programme as descending into farce? At the beginning of each month when the allocations are opened, they close after shorter and shorter periods. This month, they closed within hours of opening on 1 February. The scheme was set up to encourage the development of renewable technologies in this country, but how can that possibly happen when the scheme stops and starts as it does?

This is a demonstration programme—we have demonstrated its success and will build beyond that into the future.

In answer to the previous question, the Minister mentioned the potential for carbon capture technology. There is an exciting potential development at Peterhead, but it is apparently being put in doubt because of the delay in the Government’s announcement of financial support for this technology. Can she tell us when a decision will be made and announced on support for carbon capture?

I question the hon. Gentleman’s assertion that there has been a delay in our decision making on how we can better promote carbon capture. That is not the case. We are pursuing, with all the vigour that we can, the important issue of conserving our energy resources.

Limited Companies

The number of company insolvencies in England and Wales in 2006 totalled 17,819, while 190,742 companies were struck off the Companies House register.

I am grateful to the Minister for that response. Does he acknowledge that many of those companies were small companies? Given that small companies are the driver of the British economy, does he agree that any new tax on small or medium-sized companies would be a retrograde step? What discussions has he had with his counterparts at the Treasury about the possibility of a new local business tax resulting from the Lyons review? Would he oppose any such tax?

The hon. Gentleman is asking me to anticipate the outcome of the Lyons review and to make pronouncements before it has been completed. We are in close touch with the Treasury on all business matters, and it is certainly the role of the DTI to provide business support. We do that through Business Link, which is attracting a great deal of interest and received more than 700,000 hits last year from businesses, helping them to stay in business and to develop. We have also published our better regulation simplification plan for all businesses, and the small business forum is part of the ministerial challenge panel that I chair, and helps to ensure that small businesses can survive in today’s competitive market.

Does my hon. Friend agree that the figures that he has given to the House provide only a partial picture of what is going on in UK business, because much business formation consists of sole traders and partnerships, rather than limited liability companies? To put the matter in context, will he tell the House how many limited liability companies were registered during that period, to give us an in-and-out measure?

My hon. Friend is describing the positive position of British business, and I can tell him that the three-year survival rate—a key indicator—for businesses registered in 2002 was 71 per cent., and that three-year survival rates have been increasing since 2000. The number of registrations at Companies House has exceeded the number of deregistrations each year between 1995 and 2005. That is a very positive image of British business.

With both individual and corporate insolvencies now on the increase, is it not the case, as my hon. Friend the Member for The Wrekin (Mark Pritchard) said, that the small business man is increasingly feeling the heavy weight of this Government’s regulations and stealth taxes and, in many cases, simply closing up shop?

The hon. Gentleman gives me the opportunity to say a little more about the Government’s priority of better regulation. We are the first Government to quantify administrative burdens and publish the results, and we have committed ourselves to a 25 per cent. reduction by 2010. Business has always identified the administration burden as one of its top priorities. The DTI’s contribution to the £2 billion of savings that we have identified to be achieved by 2010 is £700 million a year, and we are working closely with all levels of business to ensure that we are addressing this issue. If the hon. Gentleman has any suggestions for improvements in better regulation, he can either hit the better regulation website or drop me a line. I will be very happy to hear from him.

Waste Electrical and Electronic Equipment Directive

6. If he will make a statement on the role of his Department in implementing the waste electrical and electronic equipment directive. (122137)

Mr. Speaker, in 10 years of answering questions at this Dispatch Box, this is one that I did not want ever to have to answer. You will see why.

The Department of Trade and Industry has lead responsibility for the regulations that implement the majority of the provisions of the WEEE directive in the United Kingdom. These were laid before Parliament on 12 December 2006 and come fully into force on 1 July 2007. The DTI will shortly be issuing detailed guidance on the regulations and will continue to work with industry, local authorities and other parties to ensure the establishment of—wait for it—an effective WEEE system in the United Kingdom.

I thank the Minister for that response. A recent survey showed that 43 per cent. of large firms were unsure about how to implement the electrical waste directive, and that 70 per cent. of small firms did not even know that it existed. In the light of that, and of the sheer lack of recycling industries in the UK, is not an electronic waste mountain now inevitable? Do we not now need strong cost departments and urgent action?

It is true to say that this is one of the most complex pieces of legislation to come out of Europe. It is not true, however, to say that the Government and industry are not working together on it. All the proposals that have been implemented at local government level and at national and regional level have been implemented after full consultation with the British Retail Consortium. The arrangements and financial resources that have been put in place in local government and the industry itself reflect their requests about the operation of the scheme. Unless we put the scheme in place by July 2007, companies will increasingly be liable to dispose of those electrical goods themselves. That cannot be right. We have to have a comprehensive and effective system. We are taking our time over this matter to ensure that producers, distributors and local authorities are at one and that the scheme will be managed effectively.

I do not think that the Government could have got a more appropriate Minister to answer on the WEEE directive. Some of the electrical items may have been bought from Tiny in the past, but we will not go there. Will the Minister praise local authorities—including Ribble Valley—that have places in their recycling depots where people can bring their electrical waste items? In the implementation of the directive, will he ensure that enough thought is given to the unintended consequences, thinking not only of fridge mountains, which we saw in the past, but fly-tipping, which will take place in a number of areas throughout the country?

I was going to ask Mr. Speaker to stop people taking the Michael out of me on this subject. This is a serious issue. The hon. Gentleman is right in this sense: I will congratulate local authorities. Local authorities and the British Retail Consortium have taken a leadership role on the issue. That is why there is something like an additional £10 million, from the retail sector itself, for local authorities to upgrade their civil amenities sites in advance. Alongside of that, we have changed legislation to give greater powers to local authorities to deal with fly-tipping, which is a serious social problem, as it always has been. The difference between this scheme and the fridges scheme is that this scheme has been well thought out and, from the beginning, there was a buy-in from local authorities and the industry. I believe that we have an effective scheme in place to start operating from July 2007.

China

We are engaging with our Chinese counterparts at the highest level through our annual summits and joint economic trade commissions—JETCs—as well as the Deputy Prime Minister’s China taskforce, which has a substantial trade element. Indeed, the taskforce is meeting as we speak. During my visit to China, I established a rapport with the Chinese Government, which I have used to good effect—pressing China to further open its markets, marketing the United Kingdom’s strengths, lobbying on some of the key company issues, and assisting in the realisation of major contracts, such as the Rolls-Royce £400m engine contract with Air China and Arup’s contract to design Kunming airport.

The UK trade deficit with China in the past five years has been £3.8 billion, £5 billion, £6 billion, £7.3 billion and, finally, £9.4 billion. The Minister mentioned the China taskforce under the Deputy Prime Minister, which has as one of its four priorities the promotion of trade and investment between the UK and China. To what concrete achievements of the China taskforce in promoting trade with China can he point?

It never ceases to amaze me that when we are trying to promote the United Kingdom in one of the world’s growing market, we get no continuity of support for either British business or British investment. It is not just the taskforce that is promoting trade with China—that is also happening at prime ministerial level, between the two Prime Ministers, and at Secretary of State level across the economy. It involves business after business and the City of London. There is now a 19 per cent. increase in UK exports to China. Our exports to China are growing faster than imports from China. That never happened under the Conservative Government. In the service sector, there is a 2:1 balance in favour of trade with the UK. We have the right policies, the right programmes, the right relationship and the right businesses to do business effectively with China.

Asbestos Claims

9. What investigation has been undertaken into his Department’s performance in handling asbestos claims associated with British Shipbuilders. (122142)

The day-to-day handling of such claims is undertaken by the solicitors Eversheds. The Department’s internal audit partner, PricewaterhouseCoopers, undertook a high level review and made a number of recommendations, but overall was complimentary about Eversheds’ handling.

I am grateful to my right hon. Friend for that answer, but she will be aware that many of the people who have been exposed to asbestos while working for British Shipbuilders have developed mesothelioma cancer, which means a very short lifespan. Will she therefore ensure that any delays that have been identified are removed so that claims can be settled quickly? She will also be aware that the Department for Work and Pensions has introduced a fast-track system. Will she ensure that her Department works within the framework of that fast-track system to ensure that mesothelioma sufferers are paid the money before they die?

First, I congratulate my hon. Friend on his consistent hard work over a long time in the House on behalf of mesothelioma victims. I will take note of his wise words, and we will ensure that claims are settled quickly. When preparing for this morning, I found that there was some slowness last year because of a lack of proper information regarding the settlement of claims. He is right to draw attention to the fact that mesothelioma victims tend to have the prospect of a short future life, so it is crucial that we act quickly. We will examine the DWP fast-tracking scheme to determine whether we can learn anything from it.

Trade Balance

The deficit on trade in goods and services was £4.9 billion in December 2006, the most recent period for which figures are available from the Office for National Statistics. There was a robust growth in UK exports of goods and services in 2006. The value of exports of goods and services was up 12.7 per cent. on 2005. The value of UK goods exports was up 15.2 per cent. on the previous year. The stock of inward investment in the UK rose to £483 billion at the end of 2005, a rise of £119 billion over the stock at the end of 2004. The UK is the second most popular destination for inward investment in the world today.

Throughout the whole of the last Conservative Government, we used to listen to Labour Members telling us how important it was to have a surplus in goods and services, but we have not had a surplus since January 1998, and we now have the worst deficit ever. Will the Minister tell the House exactly what this wretched Labour Government are doing to promote exports?

When it comes to wretched Governments, the hon. Gentleman should know one—he was a sycophantic supporter of them before he lost his seat. Under his Government, we had inflation at 10 per cent., 3 million on the dole, 1,000 businesses going to the wall every week, national debt doubled and 350,000 young people on the dole. This is now a different country with a world-class economy and a Government who are committed to British business. We are providing 2.5 million new jobs. This is a different country—thank God—with a Labour Government.