asked the Secretary of State for Trade and Industry what representations he has received about his Department's latest plans for reducing the burdens on small firms.

My Department's plans, together with those of other Departments, for reducing burdens on both small and large firms are outlined in the recently published White Paper "Building Businesses … Not Barriers". I have to date received no representations arising from the White Paper.

Is my hon. Friend happy that there is adequate liaison between his and other Departments of State, in particular the Department of Employment, which inherited the small firms unit? Is there still the will and momentum to rid small businesses in particular of petty burdens, which is probably the most significant factor nowadays deterring people from going into business?

I can assure my hon. Friend that there certainly is the will and commitment to continue with a deregulation policy. My hon. Friend the Minister for Trade and I were, as my hon. Friend will appreciate, originally in the Department of Employment, so on that level there is good liaison. In addition, three Cabinet Ministers—my right hon. Friends the Secretary of State for Trade and Industry and the Secretary of State for Employment and my right hon. and learned Friend the Paymaster General — are involved in the deregulation process.

Is the Minister aware that one of the biggest problems faced by small firms in Britain is that of cash flow? It would be of great practical assistance to them if he could lift the four-month moratorium on the payment of regional development grants and other forms of financial assistance to small firms.

I hear what the right hon. Gentleman says about the moratorium, but he will appreciate that the regional development grant scheme is demand led. However, I shall look at the point that he has made.

Does my hon. Friend accept that the greatest disincentive to the creation of small businesses, as shown in recent studies, is not a lack of capital, or indeed a lack of markets, but the administrative burdens placed on smaller businesses? Does he further accept that the Government have done a great deal in that respect already, but much still needs to be done? Will he look earnestly at and accept the recommendations of the Conservative Back-Bench small business committee?

I agree that administrative burdens are one of the disincentives to setting up new businesses, but the other significant point is the attitude towards small businesses. My right hon. Friend the Prime Minister has changed that attitude and there is definitely a feeling that small businesses should he encouraged and persuaded to set up and to prevail and prosper. I hope that it goes without saying that we listen carefully to any proposals put by my hon. Friend and his colleagues on the small business committee.

Is the Minister aware that the new Data Protection Act 1984 has placed considerable burdens on small firms, especially those seeking to use the new technologies to make themselves more efficient? Has his Department made any recommendations to the Home Office on how those burdens might be reduced or simplified in favour of small firms?

I am aware of the concern that the hon. Gentleman has raised, but, as he will appreciate, we must conform with what our European colleagues have agreed. However, the matter is kept under review.

As my hon. Friend will not reach Question 26 on the Order Paper this afternoon on precisely this subject, may I ask him whether he plans to make any changes in the accountancy rules for small businesses'?

My hon. Friend is a pessimist in these matters. I hope we can progress speedily and that we shall reach Question 26. My hon. Friend the Parliamentary Under-Secretary of State has direct responsibility for these matters and I expect that he will make an announcement in the not-too-distant future.

When, in due course, the Minister considers these matters, will he also consider the matter of selective assistance in cases where grants are not mandatory? Some firms fill in forms for civil servants, wait about six or seven months and then find that they do not qualify for grants. Is it not about time that we did something about this?

The hon. Gentleman raises a perfectly fair point. He probably realises, just as the House realises, that a review of regional grants and regional selective assistance is currently taking place. We are certainly looking at the precise point that he has mentioned. By and large, I receive many more plaudits than criticisms. Of course, there may be the odd reason for criticism. As I say, we receive mainly plaudits because the officials in my Department and in the regional offices are generally speaking, considered by all and sundry who apply for grants to be efficient and helpful in the processing of the necessary forms.

May I ask question No. 24? I hope that we shall reach question No. 24. May I ask my hon. Friend to have a word with his right hon. and learned Friend the Solicitor-General about the provisions of the Latent Damages Bill which require firms to keep records for 15 years? Does my hon. Friend not agree that that is an excessive period for small engineering and other firms?

I am hopeful that we shall reach question No. 24. My hon. Friend asked about the Latent Damages Bill. I do not pretend to be expert on that, but of course I shall raise the matter with my right hon. and learned Friend the Solicitor-General, and no doubt he and my hon. Friend could discuss the matter further.

In expressing our understanding of the very sad reason why the Secretary of State is not able to be with us today, may I ask the hon. Gentleman to express to the Secretary of State and his family our very deep sympathy and condolences?

I am most grateful to the right hon. Gentleman for what he said, and I shall certainly pass on his message.

asked the Secretary of State for Trade and Industry whether he has any plans to end the Post Office's monopoly for the handling and delivering of mail.

No, Sir, but I remind my hon. Friend that there is already free competition for the collection and delivery of all mail, except inland letters charged at less than £1.

Although the Post Office has become more efficient and more profitable, surely my hon. Friend will accept that its suggestion to increase the postage rates by another penny when it cannot deliver more than 87·6 per cent. of post the next day is not exactly good news? Should not alternative services be offered? Is that not what the Conservative Government believe in?

The first point I make to my hon. Friend is that the chairman of the Post Office has given preliminary notice to the chairman of the Post Office Users' National Council that he is considering a rise of l p for first and second-class mail. It is worth reminding the House that after inflation is taken into account, the first-class tariff is now about 13 per cent. lower than it was in 1981 and the second-class tariff is 26 per cent. lower. When one sets that against the quite considerable efficiency that the Post Office achieves, it shows that the Post Office does not have a bad record.

My constituents reckon that the service is between 13 and 26 per cent. worse than it was some years ago. Although the expensive advertising campaign of the Post Office seeks to persuade us that inter-city postal services are very good, postal services in rural areas such as south Wiltshire have declined considerably. That is just not good enough.

Although I sympathise with my hon. Friend's point, I have to say that everybody tends to be aware of postal letters or packets that do not arrive and to take completely for granted the letters that do arrive and which form the vast proportion of the mail. I am sure that the chairman of the Post Office will avidly read this exchange in Hansard and will note my hon. Friend's remarks.

asked the Secretary of State for Trade and Industry what is Her Majesty's Government's policy towards the new round of funding for computer research, ESPRIT II, proposed at the recent European Economic Community in Luxembourg.

We have not yet received formal and detailed proposals for ESPRIT II, but we have made clear, in the Research Council, our strong support for programmes like ESPRIT which promote the competitiveness of European industry.

How do the Government propose to recover the ground on computer research and development which has already been lost to Japan and the United States? They will be unable to do so as long as they continue to spread thinly the relatively modest resources that they have put aside covering projects such as EUREKA, RACE, Alvey I and possibly Alvey II as well as ESPRIT. Would it not be much better to concentrate on the one scheme that is Communitywide and that would put the resources of Italy, Benelux, Spain, Denmark, and so on behind us?

The hon. Gentleman's question indicates, dare I say, a lack of depth on this matter. Those projects are not alternatives. There is no point in suggesting that we should concentrate entirely on a European programme if we do not at the same time maintain a reasonable national capability to complement that European activity.

I agree that there should be some depth in these matters, but have the Government reached any judgment about the effect on the ESPRIT programme of British and European participation in the strategic defence initiative programme?

The short answer is no. The time scales involved are rather different. Participation in SDI envisages participation in various technology programmes which look at much longer-term requirements than the ESPRIT II or even ESPRIT I programme would involve.

Will the Minister confirm that he is resisting Treasury pressure to treat every departmental contribution to European programmes as alternative funding that therefore involves a cut in national funds? The hon. Gentleman says that we must have a reasonable level of nationally-funded operations, but does he realise that unless we have very full funding for our national programmes we shall not be able to participate effectively in the European programmes? Will he therefore give an assurance that our contribution to Europe will not be made at the expense of United Kingdom programmes, and at the expense, in particular, of Alvey II?

I am happy to confirm that. As I said in response to the hon. Member for Colne Valley (Mr. Wainwright), we are not talking about alternative or substitutional activities. It is important to put that on the record.

asked the Secretary of State for Trade and Industry what proposals he is now considering for the Troon yard of Ferguson Ailsa.

We have accepted British Shipbuilders' decision that the operations at the Troon yard of Ferguson Ailsa should cease once the present order hook is complete. I understand that British Shipbuilders is now seeking potential buyers.

Is the Minister aware that when the right hon. Member for Ayr (Mr. Younger). the Secretary of State for Defence, recently visited the Ailsa yard at Troon he made two specific promises: that the Government would examine what orders, and particularly Ministry of Defence orders, might be brought forward; and that the Government would consider the report of the consultants Planning Industrial and Economic Development Advisers and the possibilities in it for the Troon yard? Will the Minister confirm that the right hon. Member for Ayr was speaking on behalf of the Government when he made those two pledges? When will we have a report on the result of those two promises? How will discussions now be undertaken with British Shipbuilders to ensure that it is aware of the implications of the right hon. Gentleman's promises?

As the hon. Gentleman takes a close interest in this matter, he will appreciate that my right hon. Friend the Secretary of State for Defence always speaks on behalf of the Government. The hon. Gentleman will also be aware that the remarks that I and my right hon. Friend made during the debate on shipbuilding were concurrent.

Despite the Minister's original answer and British Shipbuilders' decision to close the Troon yard, if Ferguson Ailsa wins another order will the Minister lean heavily on British Shipbuilders to ensure that the order is built at the Troon yard so that both yards can be kept open?

The hon. Gentleman has attended our shipbuilding debates and he will appreciate that such decisions are for British Shipbuilders to make. It is for it to decide in which yards to place orders. However, I listened carefully to the hon. Gentleman.

Though the difficulties of Troon are similar to those of other yards that are owned by British Shipbuilders, there being twice as many modern ships as there are cargoes to fill them, is there not a case for ensuring that ships and cargo rates are not dumped on the market by countries outside the EEC which are subsidising their shipbuilding and freight rates to such a great degree that British Shipbuilders and British shipping companies cannot compete?

The simple answer to my hon. Friend is yes. That is precisely what we are discussing at the Council of Ministers for a successor to the fifth directive.

asked the Secretary of State for Trade and Industry what meetings his predecessor, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) had with officials on the morning of 24 January in relation to the Westlands affair; what was the purpose of the meetings; and what conclusions were reached as to the action his predecessor should take.

My right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) held several meetings on the morning of 24 January. Some of these related to Westland, and some were attended by officials. His meetings on Westland were held to inform himself of latest developments.

Is it conceivable that civil servants of the quality and integrity of Sir Brian Hayes would have advised the then Secretary of State to remain in office if they had thought that the full story had been one of deception by their Secretary of State of their Prime Minister and of themselves for over a fortnight? Is it not clear from Linklater and Leigh in "Not with Honour" and from other information that the strands of the spider's web led to No. 10 Downing street? Is not the lawyer's letter the real reason why the House did not have Friday 6 June?

The hon. Gentleman will know that all questions relating to advice offered by an official to a Minister are confidential. Any matters that he cares to deduce from the book that he has mentioned or any other work is entirely a matter for him.

Is the Minister aware that in the book to which my hon. Friend the Member for Linlithgow (Mr. Dalyell) referred, while it is said that civil servants counselled the former Secretary of State, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), to stay, the politicians present, who presumably included the Minister, gave contrary advice? Was that contrary advice — namely, that the former Secretary of State should resign — coloured by their knowledge of the machinations which had gone on both in the Department of Trade and Industry and at Downing street over the discreditable Westland affair?

As it happens, I was chairing a seminar in the lower parts of the Department at that time. Therefore, I am unable to speculate on any of the reasons that any of my colleagues might have had for the statements that they made.

asked the Secretary of State for Trade and Industry what is the combined total value of United Kingdom exports for 1985 to China, Czechoslovakia, East Germany, Pakistan, Romania, Saudi Arabia and the Union of Soviet Socialist Republics.

United Kingdom exports to these countries amounted to £2·7 billion in 1985.

As these countries are just some of those which on any criteria cannot be called free and democratic, will my hon. Friend confirm that Britain does much trading with undemocratic countries and countries with oppressive regimes? In considering the morality of trading with South Africa, should not the Government in all consistency examine their trading policies with at least some other evil and undemocratic countries?

My hon. Friend raises an interesting point. Censorship, judicial execution—in many places in public —and imprisonment without trial are all characteristics of the countries that he mentions and a number that he does not. Were these elements to be a bar to normal trading relations, our trade would be even more circumscribed than it looks like being at the present, but such judgments are a matter for my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs.

Has the Minister any information that the Government of Saudi Arabia are seeking to restrict travel by British citizens to Saudi Arabia to two airlines, British Caledonian and Saudia?

I have no such information, but I suggest that the hon. Gentleman addresses his queston to my hon. Friend the Minister of State, Department of Transport on the next appropriate occasion.

Did my hon. Friend see the reported comment this week by Mr. Jing Shupeng of the China International Trust and Investment Corporation Ltd. that British businesses were losing out because they were too expensive? Does that not underline the Government's concern that our businesses have far too heavy overheads and are still not really competitive in world markets?

There are a number of things that can contribute to a non-competitive cost in a business tender. Certainly Her Majesty's Government are doing their best to compensate for that by the soft loan facility which offers finance to projects in China at an extremely high level of subsidy.

Is the Minister aware that British high-tech trade to the Eastern bloc countries since the late 1970s has halved to £40 million and, at the same time, the United States high-tech trade to Eastern bloc countries has increased eight times since 1981, to $2 billion and is forecast to double again next year? When will the Government stand up to attempts by the United States to control British high-tech trade by using United States law in Britain, since it is now clearly being used to advantage the United States and disadvantage the United Kingdom high-tech industry?

There is a great deal in what the hon. Gentleman says and I regret this state of affairs very deeply. Her Majesty's Government are always ready to protect those firms which wish to resist—

Wet.

It is not that. I cannot put it in any stronger language. Her Majesty's Government are always ready to resist claims of extra-territoriality on the part of the United States, but in each case it has to be left to the commercial judgment of the firm concerned. If it is the firm's judgment that by so doing its status in relation to its primary supplier will be altered and damage its commercial prospects, who are we to override that?

Does my hon. Friend agree that it is best for individual traders to decide with whom they would like to trade rather than for Governments to attempt to impose sanctions?

Indeed, I welcome that. If traders make that choice and ask for our protection they will have it.

asked the Secretary of State for Trade and Industry what is his most recent assessment of the impact of lower oil prices on the manufacturing and exporting base of the United Kingdom economy; and if he will make a statement.

Lower oil prices will benefit United Kingdom manufacturing and non-oil exports. They will provide the non-oil sector with a great opportunity to build on the substantial gains of the past five years and to expand output further.

I thank the Minister for that reply. However, does he agree that his Department must remain concerned about the effect that that will have specifically on the oil sector and the oil-related sector? Will he give his Department's view of the fact that the Chancellor based his entire Budget strategy on an average oil price levelling out this year at about $15 a barrel, but that the Scottish Development Agency has carried out a computer projection which has shown that if even that price is attained and persists it will lead to a 40 per cent. cut in spending by oil companies, with all the attendant catastrophic effects which that will have on the Scottish economy? What action does he propose to take?

The hon. Gentleman asked a direct question as to whether I still agree with the analysis in the Chancellor's Budget statement in terms of manufacturing output being at around a 3 per cent. increase this year. The answer is yes. I would expect the two to match each other. Therefore, I think that the Scottish economy can gain. The hon. Gentleman makes the point. For the oil sector there will be a compensation the other way round.

Does my hon. Friend agree that the competitive advantage of lower fuel oil costs will quickly be squandered if pay claims in manufacturing industry continue to be settled at levels above the rate of inflation?

I agree with my hon. Friend. Ultimately, the increase in better productivity—and to be fair we have had much better productivity during the past five years—is the key to an expanding manufacturing sector and the ability to gain or regain markets.

Does the Minister agree that it will be tragic for this country if, when the long-awaited upturn in world trade at last takes place as a result of the collapse in oil prices, we see yet another aspect of the Government's wanton destruction of manufacturing industry in their complete failure to invest oil revenue, so that we lack the breadth of industrial base to take advantage of the upturn? Do the Government not feel at all guilty over the fact that in the event of an upturn we shall be mere spectators and the new wealth and the new jobs will go to our competitors?

The right hon. Gentleman is being his usual pessimistic self. He will recall that a Select Committee report in another place predicted gloom and doom in the event of a substantial drop in the price of oil, but no one could have anticipated that that drop would take place in such a short period. Nevertheless, the outlook for the manufacturing sector remains extremely good.

Does my hon. Friend agree that our main competitors will also benefit from lower costs so it will not he so easy for us? Heavy engineering uses a great deal of energy. Will he impress on the Secretary of State for Energy that it is crucial that energy costs to industry in this country should fall by at least as much as for our competitors in other countries?

I agree with my hon. Friend that we live in an international market-place so we must ensure that our productivity gains are as good as, if not better than, those of our international competitors. I also agree that the cost of energy, especially for heavy users, is a key element in that productivity.

Given the previous concentration of the oil industry in Scotland, is it not simplistic for the Minister to assume that any of the benefits of lower oil prices will extend to the Scottish economy in view of the spending cuts that have taken place? Will he consult the Scottish Development Agency for an assessment, and if it is shown that Scotland will suffer particularly adversely as a result of the fall in oil prices will the Government restore the cuts in regional aid that they made two years ago?

I assure the hon. Gentleman that, with my responsibilities for regional policy, I keep closely alongside the Scottish Development Agency. He should he aware that at present the agency is looked upon eagerly and with some envy for its great success and ability to attract new industries to Scotland, and I congratulate it on that.

asked the Secretary of State for Trade and Industry if he will make a statement about his Department's new unfair trade unit.

asked the Secretary of State for Trade and Industry if he has any plans to take steps to improve the way in which complaints by British firms about unfair trading practices by foreign competitors within and without the European Community are dealt with by his Department; and if he will make a statement.

On 13 May I announced the formation of the unfair trade unit to co-ordinate work on complaints about all forms of unfair practices in international trade. I intend the new unit to enable the Department to respond more quickly to such complaints. The establishment of the unit does not represent any change in policy away from open international trade and towards protectionism.

While I welcome my hon. Friend's reply and the establishment of the new unit, which I believe will have a useful part to play, may I ask whether he is aware that many business men, and especially those in the paper industry in my constituency, feel that they are suffering as a result of unfair foreign trade practices but are not sure how to tackle the problem and to whom they should go for advice? What support can my hon. Friend offer business men in general and the paper industry in particular?

That is precisely the kind of instance for which the new unit has been set up. Unfair trading can arise from a number of sources—as a result of dumping, for which there are recognised procedures, as a result of subsidies, agency arrangemens in restraint, counterfeiting, and so on. If my hon. Friend's constituent will write to the Department the matter will be referred to the unit and he will receive immediate advice on appropriate steps to try to obtain redress.

Is my hon. Friend aware that many British firms are mystified as Ito what to do about unfair competition from abroad? Even Government Departments seem to be unaware of the facilities that can be offered by the unfair trade unit and its predecessor. They are not co-ordinated in Brussels, so often the reaction there to a complaint is indifferent and off-putting. Will my hon. Friend assure us that this unit will adopt a public identity that will counteract the previous tendencies of other Government Departments, and will he ensure that it gets all the resources that it needs?

Certainly that is my intention. I am grateful to all my hon. Friends for allowing me to publicise this in the Chamber. The anti-dumping unit was concerned only with the narrower question of dumping. The unfair trade unit has been expanded and is intended precisely to embrace all the different aspects of unfair trade that in many cases baffle business men. As my hon. Friend has said, they do not know how to start correcting them. I hope that all my hon. Friends and all Opposition Members will take note of the existence of the new unit and will encourage their constituents to refer cases to me so that I may pass them on to the unit for immediate investigation.

Is the Minister aware that one of the unfair trade practices that baffles the public is that which allows mountains of food and lakes of drink to accumulate when people are starving? Will this unit deal with that source of unfairness, or turn a blind eye to it?

The unit is concerned with imports.

Is my hon. Friend aware of the reprehensible practice of some foreign companies of cross-subsidisation between subsidiaries to conceal the true cost of their products? A textile manufacturing firm in my constituency called Bentley Engineering has been hit particularly by this reprehensible practice.

It is in my constituency.

Can my hon. Friend assure us that such activity will be within the purview of the unit?

Certainly it will be considered. Such activity is difficult to trace, for obvious reasons, but I should not want a case not to be referred to the unit simply because it seemed to be too difficult or elusive. I should be glad if my hon. and learned Friend would write to me about that.

Does the Minister agree that in order to extend the freedom of international trade it is essential to have strong defences against economic warfare conducted against us by contries where export trading is in the hands of the state? If so, can he reassure the House that his welcome unfair trade unit will not be handicapped and shackled by crude numerical reductions in the manpower of the Civil Service?

I can assure the hon. Gentleman that I shall do my best to ensure that that does not happen. I do not see any sign of it.

Does my hon. Friend agree that for six years we have been promised that the country that indulges in more unfair trade practices than any other country on the face of the earth, Japan, would be dealt with? Does this mean that at long last those promises will become fact and that the Japanese will have to compete fairly rather than being allowed to destroy one high-tech industry after another when it does not suit them to have competition? Will they keep their word at long last?

Whether they keep their word is a matter for them. Certainly those who have doubts that they may should be fortified by the promulgation of the unit. Indeed, I expect that imports from Japan are likely to be among the first to feature in the programme. The two successful anti-dumping cases in the last year both related to Japanese products.

asked the Secretary of State for Trade and Industry what steps are being taken to follow up the initiative of the Prime Minister at the Tokyo summit when she pressed the Japanese Prime Minister to remove the tax-duty discrimination faced by Scotch whisky bottled in Scotland.

We are continuing to press strongly for the removal of Japanese discrimination in the tax and duty facing Scotch whisky and other imported alcoholic drinks. The European Community is to have further talks with the Japanese shortly, and we continue to take every opportunity to press the case bilaterally.

Although I am encouraged by that reply, may I ask whether the Government made it clear to the Japanese authorities that their grading of liquor taxes represents a tax on quality, and therefore discriminates strongly and unfairly against this unique quality product from Scotland? Has it been pointed out to the Japanese that if we were to indulge in similar fiscal tactics against Japanese products, which are equally strong in their market sector, that might be a lesson which they would begin to understand?

I agree with my hon. Friend about the quality of Scotch whisky. The Japanese practice of grading alcoholic drinks is practically impossible to define in any sense which makes it possible to contest it. For example, Bourbon whisky is rated lower in duty terms than Scotch whisky, although the price is the same. My suspicion is that this relates more to political relations between Japan and the United States than to some abstruse factor in the grading.

Will the Minister give more information about the state of the welcome bilateral pressure to which he referred? Which of our European allies are being more helpful to the United Kingdom and the constituency needs of the hon. Member for Moray (Mr. Pollock), myself and others north of the border, and which are being less helpful in regard to this disgraceful exhibition of protectionism and disincentive against a United Kingdom export to Japan?

While the Community is putting together a case to take to the general agreement on tariffs and trade, it would be invidious of me to differentiate between those which are in favour and those which have reservations. The House knows that, regrettably, we are to some extent circumscribed in the multilateral trading system by being a signatory of the treaty of Rome and by the GATT. In the last resort, when those inhibitions continue to restrict action and abuse continues without adequate control or compensation, and if we cannot get the support of our Community partners in a European initiative, we would certainly have to consider unilateral action.

My hon. Friend will be aware that there are many products that can be described as quality products and that they can be manufactured anywhere, but that Scotch whisky is unique and can be manufactured only in Scotland. It is the product of Scotland and is regarded by the Scots as their flag bearer, as 90 per cent. of the product is exported. If the Japanese are allowed to get away with the practices in which they have indulged recently, others might decide to follow, and that could be very damaging for the Scottish industry.

My hon. Friend is right. Discrimination also exists in Korea and we are doing our best to correct that. When, two weeks ago, I was in Korea, I had talks on this subject. My hon. Friend will be glad to hear that I found the Koreans more receptive to our view than the Japanese have so far managed to be.

The Minister told us a little while ago that his judgment is that the Japanese are exercising political discrimination in favour of the United States in respect of Bourbon whisky and, presumably, political discrimination against the United Kingdom in respect of Scotch whisky. Will he tell us what political action the Government intend to take?

I should have thought that there was very little that we could do, short of increasing our gross national product to approximately the same level as that of the United States. The right hon. and learned Gentleman knows perfectly well that there is a special relationship, if one can use that phrase without being discourteous, between Japan and the United States, and I believe that the arrangement is in recognition of that. If we had the clout, I do not doubt that the Japanese would accede immediately. The fact is, however, that there is no comparison between the leverage which the United States can exert on Japan and that which we can exert.

asked the Secretary of State for Trade and Industry what is the most recent figure for output in manufacting industry; and how this compares with the figure for the same month six years ago.

Manufacturing output in April 1986 is estimated at 104·4 based on the 1980 average of 100. This is 1 per cent. higher than in April 1980.

Is my hon. Friend not concerned that manufacturing output has not only fallen over the last six years but that it is substantially lower than it was in 1973? Is he aware that 1973 was 13 years ago, and can he think of any comparable period since the industrial revolution when manufacturing output in this country fell?

I am aware that manufacturing output fell between 1973 and 1979 by 4 per cent. — the five years of the last Labour Administration. However, in the last five years, output has increased by 11 per cent.

Contrary to what the Minister has said, according to the CBI there has been a dramatic fall in manufacturing output, and without a booming manufacturing industry other jobs fall by the wayside. Will the Minister re-phrase his answer to his hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) and give the exact figure?

I am quite happy to give the exact figure. Manufacturing output continued to fall from 1979 to 1981, which means that the current level is below the 1979 level. I am concerned. However, during the last five years, output has increased by 11 per cent.

Does my hon. Friend agree that the problems of manufacturing industry in the late 1970s and early 1980s were almost directly the result of the hyperinflation from which this country was suffering? Surely the best help for manufacturing is to get ourselves competitive and to keep inflation down to the level that this Government have achieved.

I certainly agree with what my hon. Friend has said, but one could add several other elements. Perhaps it had something to do with very low productivity and the fact that strikes were very much to the fore during that period. That has a lot to do with output going down. Equally, now that the strike record is a lot better, it has a lot to do with output going up in a very satisfactory way.

Does the Minister not agree that the position in the last seven years has been the worst in British history since records began? Does his concern take him so far as to analyse the position in competing countries? If so, does he not accept that Britain's record is far worse than that of our competitors and that the competitors who have fared very well indeed have been those whose Governments have taken an entirely different approach from that adopted by the present United Kingdom Administration? Does he not think that there are lessons to learn from our competitors?

As the hon. Gentleman will have heard in an answer to a previous question, I am always concerned about our relative position in the international market place. I agree that we must look very carefully indeed at our Japanese, German and United States competitors and,g where we can, learn lessons. I am sure the hon. Gentleman will also note that since 1980 we have had a 30 per cent. increase in output per head. That is a very satisfactory base on which to build.

Does my hon. Friend agree that the figures he has just quoted might be even better if there were a little more sympathy and compatibility between VAT deadlines and actual trade credit? Will he have a word with industry and his right hon. and hon. Friends at the Treasury to see whether they can improve cash flow in business?

As my hon. Friend would expect, I am always concerned to convey to my right hon. and hon. Friends at the Treasury particular aspects that bear directly on how they are able to operate in industry, and I shall certainly take his comments on board.

Does the Minister recollect that world trade in manufactures has increased by more than 17 per cent. since this Government came to office? Will he now give us the figure which until now he has so coyly avoided? How much lower is manufacturing output today than it was in 1979?

I am not avooiding it. In fact, I had not been asked that question until the right hon. Gentleman put it to me. There has been a fall of 6 per cent. since 1979. I know that the right hon. Gentleman does not like the good news, but he will appreciate that the major fall happened in the first two years, and since then there has been a very significant increase over the following five years.

Does my hon. Friend agree that output in manufacturing industry would be much higher if British manufacturing industry were even more competitive than it is now? One factor in that is the unrealistic increase in wages that has taken place in recent years. Does my hon. Friend agree that if the representatives of manufacturing industry spent less time wailing about factors beyond their control, such as interest rates and exchange rates, and more time considering matters within their control, such as wage rates, the state of British manufacturing industry would be much better?

I agree in part with my hon. Friend, but I do not think that the picture is as black as he likes to paint it. Obviously I agree with his main premise that the better the productivity, the greater the output. From my visits to every part of the country I know that productivity gains in many companies, both old and new, are significant. In those companies employment is now secure, whereas it was not secure seven years ago.

asked the Secretary of State for Trade and Industry what his Department is doing about the dumping of foreign goods in the United Kingdom.

Anti-dumping action is the responsibility of the European Commission. My Department works closely with United Kingdom industry on the preparation of complaints in order to ensure that appropriate protection is given against unfair competition.

This is all very well and interesting, but is my hon. Friend truly satisfied that the anti-dumping process is sufficiently rapid and effective? If he is not, what will he do about it? Many of my constituents are sick to death of trying to trade with one arm tied behind their backs.

I would like it if my hon. Friend could give me specific instances rather than say that a number of his constituents are trading with one arm tied behind their backs. I am keen to help them. It is my principal purpose in this position to assist firms that have suffered from handicaps of this type. If he cares to give me the details.. I will see what can be done. I agree that at present the procedures are rather cumbersome and long drawn-out., and that in many cases the onus of proof is higher than one would like, especially in regard to proving injury, but to some extent we are the captive of Community and GATT rules. To say that nothing is being done is unfair. At present we are involved in 14 cases and further cases are under review. If my hon. Friend passes his constituents" cases on to me, I do not doubt that we shall have some more.

Is the Minister aware that I am aware that the Government are not doing very well on this problem? I realise that the Minister is trying his best to renegotiate the multi-fibre arrangement, but with the Government's attitude it appears that anybody can come from anywhere in the world and dump what they like on these shores. It is about time the Treasury Bench applied for the Chiltern Hundreds.

I am obliged to the hon. Gentleman, as I am to all hon. Members who express their indignation at what is going on in the so-called international free trading arena. I accept much of the argument that they put to me. Will they give me the benefit of the doubt in the sense that the unfair trade unit itself has been in existence for less than a month and I am doing my best to correct these cases? However, I depend on hon. Members for reference of individual cases. The unit is set up, the personnel are there and we are ready to examine in detail every case that is referred to us.

If my hon. Friend wants a specific incident, is he aware that at present in docklands there is a large silo of cement which the Greeks are seeking to dump on the British market? Is he aware that that would cause great harm to British makers of cement, such as Rugby Portland Cement in my constituency? Will he look into the matter and do his best to ensure that an antidumping application is pursued with all due vigour in Brussels?

I am grateful to my hon. Friend. The House must forgive me if I read. It is the first time this afternoon. Both my Department and the Department of the Environment have maintained close contact with the cement industry and are fully aware of the concern expressed at the threat from an increased level of low price imports. The European Commission has completed the necessary investigation and a formal announcement of its findings is expected shortly.

asked the Secretary of State for Trade and Industry what is the most up-to-date state of the United Kingdom balance of trade in manufactured goods.

In the three months ended April there was a deficit of £1·1 billion.

Does the Minister not have an iota of shame in him when he stands at the Dispatch Box month after month giving an appalling account of his stewardship? Does the Minister realise that if he were in charge of an industrial manufacturing company he would be sacked for gross incompetence and dereliction of duty?

I offer the hon. Gentleman and the House some figures which I think will assist the hon. Gentleman in taking a sensible view of the matter. In 1970 the value of exports of manufactures was 50 per cent. higher than imports. In 1985 the value of exports of manufactures was 10 per cent. lower than imports. Over that 15-year period there had been a decline. The hon. Gentleman will be aware that British consumers had formed the view that British-produced goods were not well enough produced, well enough designed, properly priced or adequately supported by after-sales service. They had voted with their cheque books and bank accounts to buy imported goods. That is the criticism of the manufacturing industry.

Is my hon. Friend appreciative of the detrimental effects on the balance of trade if British Airways buys American engines rather than Rolls-Royce engines? In the circumstances, will he convey to the chairman of British Airways that hon. Members feel strongly that Rolls-Royce should get the order, in the interests of the British aerospace and aero-engine industry?

I am sure that the chairman of British Airways reads the Official Report with the same attention as the chairman of the Post Office, to whom I referred earlier. I hope that he will read the opinion by my hon. Friend. We are in close touch with the Department of Transport on the matter and we hope for a satisfactory outcome.

I thought that I heard the Minister say in an earlier answer that the deficit in the first quarter of 1986 was £1·1 billion. If that is correct, is it a revision of the figure of £1·4 billion, which is in the latest statistics issued by his Department? In addition, will the Minister tell us why he thinks it is adequate to blame British industry for the deficit in our trade and to accept no responsibility whatsoever for the policies of the Government, which have been deeply inimical to the success of British manufacturing industry?

Yes, I will. I attempted to give a 15-year view of the fact that the manufacturing capability of this country appears, over that period—under successive Governments — to have been unable to meet the requirements of a variety of different markets both abroad and in this country. Therefore, companies find that their prospects and sales diminish and some go out of business. Then we have complaints from the hon. Member for Falkirk, West (Mr. Canavan). The answer is to follow policies, which the Government are doing, which improve the competitiveness of companies in this country so that their products and services will be more attractive.

asked the Secretary of State for Trade and Industry whether he is satisfied with the present level of encouragement given by the information technology and electronics based industries to information technology training and skill development in education.

I welcome the steps taken by some leading firms to promote the provision of relevant education and training. But, as my hon. Friend pointed out in his recent study, there is room for industry to collaborate much more with the education system at all levels to meet skill requirements.

I thank my hon. Friend for his reply. Is it true that the plethora of Government schemes, some of them run by the Department of Employment and some by his own Department, and the plethora of training schemes run by private industry are, in many ways, confusing? Is it not time that the Department of Trade and Industry, the Department of Employment, and industry tried to get together to work out some national system of training on the German model?

I do not know whether the German model is necessarily the best one to follow. There is a great deal of activity at present. Industry has set up the information technology skills agency and yesterday the ACARD report on the future of the software industry in the United Kingdom was issued. One of the report's main recommendations was that British industry should place major emphasis on training, which is very much to be welcomed.

Is the Minister aware that the ACARD report, which no doubt he has read—

indicated assent.

I am pleased that the hon. Gentleman has read it. Is he aware that, reading between the lines, the report amounts to a terrible indictment of the Government because of their neglect to provide real support measures for the software industry? That sector is growing even more rapidly than the information technology industry as a whole. For example, in 10 years' time, 40 per cent. of IBM's total revenue will come from software sales. Is the hon. Gentleman aware that urgent action needs to be taken by the Government? We want not words from him but action by his Department.

I wonder whether the hon. Gentleman has been reading the same report. The report's analysis is substantially in line with the measures that we are already taking. The report contains interesting ideas. In line with our response to all ACARD reports, we shall consider this one carefully and, no doubt, report in the autumn.

asked the Secretary of State for Trade and Industry what steps his Department is taking to assist British industry to secure major export contracting and other orders.

My Department provides a wide range of services for all exporters through the BOTB and ECGD. For the larger orders these can include assistance towards the cost of bidding as well as support with financial packages.

I thank my hon. Friend for that reply. Is he aware that British Shipbuilders is pursuing a large order from China which, if won, would result in vessels being built at Govan Shipbuilders, a successful yard on the. Clyde where a number of my constituents work? Will my hon. Friend assure me that his Department will spare no efforts in enabling British Shipbuilders, and ultimately Govan Shipbuilders, to be successful in winning this important order?

I assure my hon. Friend that I am aware. of what British Shipbuilders is doing in trying to get that order from China. I can give him the assurance also that the Department is doing everything possible to help British Shipbuilders to secure that order. I shall personally keep closely in touch on this matter.