To ask the Chancellor of the Duchy of Lancaster whether he has recently met the chairman of British Shipbuilders to discuss North East Shipbuilders Ltd.; and if he will make a statement.

I last saw John Lister on Thursday 7 July. North East Shipbuilders was among the subjects that we discussed.

The Minister will be aware that hundreds of lay-offs are to take place in the next few weeks because of the situation at NESL. Does he agree with Mr. Lister, the chairman, that the immediate hope for the yard is the Cuban order? If so, will he immediately give the intervention fund subsidy and suitable credit arrangements, rather than insist on privatisation first? The Minister's insistence and ideological obsession over privatisation are causing uncertainty and delay and could lose the one order that could save the yard. Will he now agree to the intervention fund and let us clinch the Cuban order? We can talk about privatisation and takeover later.

Negotiations are continuing on the Danish contract, but I accept that, because of the unfortunate situation, substantial lay-offs appear to be forthcoming in Sunderland and are likely to take place over the next few weeks.

Has not the nationalised shipbuilding industry lost well over £1 billion over the last decade? Is it not also a fact that the industry's decline in this country from controlling over one third of the world market to controlling just a paltry 1·5 per cent. has been due to excessively high wage demands, thus pricing British shipbuilding out of the world market? Is there not also huge over-capacity in the industry?

The decline has been due to a combination of features, including the last point made by my hon. Friend. There is a vast excess of shipbuilding capacity throughout the world, compared with any likely demand for ships from purchasers. For a variety of reasons, British Shipbuilders has made heavy losses, well above the intervention fund support that European rules allow us to give it. It would be reckless for contracts to be placed in yards on unacceptable terms to the taxpayer, with the likelihood that the British taxpayer would pay more than the Cuban for the resulting ships.

Does the Minister realise that the industry has been hugely slimmed down and that what remains of shipbuilding skills on the Wear and the Tyne is of great potential importance to this country? It would be industrial vandalism if the Minister did not safeguard the industry's future either in this case—as he does not appear to be doing sufficiently—or in the case of the Tyne, after the order announced on Monday.

Some shipbuilding is doing extremely well. The order won by Yarrow earlier this week was very good news on Clydeside. The shipbuilding industry is slimmed down, as it is in the rest of western Europe and the far east. The yards that will survive are those that have realistic prospects of continuing to find customers at an acceptable cost to the taxpayer. The taxpayer has proved his willingness to put money into British Shipbuilders when there is a worthwhile proposition to pursue.

Is the Minister aware that if, for reasons of dogma and because the yard is in public ownership, he refuses to provide intervention fund assistance and, as a consequence, the Cuban order is lost and the yard has to close, he will not be forgiven for that act of vandalism? Would it not make sense to secure the order first and then decide the question of ownership, if the Government's obsession with privatisation dictates that that is a real question? May we have an assurance from the Minister that the House will have an opportunity to call him to account for his part in this quite unnecessary drama before the House rises for the summer recess?

The Cubans have not yet placed an order and no price has been negotiated with them for those ships. If the Cuban order were obtained, it would not occupy the whole yard at Sunderland. My reservations about the prospects for the Cuban order are based, not on dogma, but on the fact that the last time British Shipbuilders built ships for Cuba it lost between 12 and 17 per cent. on the cost over and above the intervention fund support that we then gave for that order. I know that the Labour Government went in for a notorious Polish ship deal shortly before the 1979 election. The Government have poured money into British Shipbuilders, but we must do so on a common sense basis when we know what the cost is likely to be.

To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the role and extent of foreign investment in the economy of the north-west.

There are over 600 overseas owned firms operating in the north-west, making a major contribution to the region's employment and output. In addition, as elsewhere in the United Kingdom, new inward investment brings wider benefits through innovation in products, technologies and management practices, as well as generating additional demand for local sub-contractors and component suppliers.

With 75 American companies in Warrington-Runcorn alone, does that not provide much-needed employment and wealth in the north-west, and should that not be encouraged rather than narrow mindedly dismissed?

My hon. Friend is, as ever, right in drawing attention to the fact that the north-west is a success story. In particular, Warrington-Runcorn in his constituency is the jewel in that success story. I congratulate him on the work that he has done to encourage further investment in that area.

If the Minister is so keen on inward investment, why does he not give a little more encouragement to initiatives such as that taken by Oldham metropolitan borough council, which is organising a trade mission to China, but which has received little support from the Government despite the desperate need to bring investment and jobs to the area?

As a senior and distinguished Opposition Member, the hon. Gentleman will know that the organisation called INWARD is well involved in encouraging inward investment in Britain. It is not difficult to go to China to encourage inward investment. Preston borough council, which is also Labour-controlled, recently sent a delegation to do just that. If the hon. Gentleman has particular difficulties in relation to Oldham with which I am not immediately familiar, and he cares to write to me, I shall be more than happy to look into the possibilities to which he draws attention.

My hon. Friend will be aware that foreign investment brings greater employment. He may also be aware that unemployment in my constituency is now down to about 7·5 per cent. Does he agree that if Opposition Members truly wish to encourage more enterprise and jobs in the north-west they should concentrate on talking about the positive aspects of the north-west, instead of the negative, which they so often portray?

My hon. Friend is right. The north-west is booming at the moment. Hon. Members on both sides of the House have plenty of examples to demonstrate that fact. If the Opposition drew the same attention to it as do my hon. Friend and many of my other hon. Friends from the north-west, the virtues and strengths of the north-west could provide an even better future.

Is not a properly trained and skilled work force one of the keys to attracting more inward investment to the north-west? Therefore, does the Minister agree that it will be disadvantageous to our prospects of attracting new industry if the employment training initiatives are turned away by some local authorities in the north-west, particularly Liverpool, where some £30 million-worth of Government funds and some 16,000 employment training places are at risk as a result of the turning away of training opportunities?

The hon. Gentleman makes an excellent point in his own way. I do not have particular responsibility for the training initiative, but the hon. Gentleman is right. I and many other Members of Parliament from the north-west think that the work force there is one of the best and most flexible in Britain. Given the right training, management and encouragement, it can do anything that it sets out to achieve.

To ask the Chancellor of the Duchy of Lancaster when he expects to respond to the Monopolies and Mergers Commission's report on Post Office Counters.

The Post Office will be producing an initial response to the findings of the Monopolies and Mergers Commission within three to four months of the date of publication of the report. I will then consider that response and report to the House.

Does the Chancellor accept that there is wide scope for the expansion of services at Post Office Counters within existing services and in the provision of new facilities? Why does he not welcome such initiative and enterprise by the public sector, as he would undoubtedly do if the same enterprise and initiative were being shown by the private sector?

I hope to have a further discussion with the chairman of the Post Office and some of his colleagues about that very subject this afternoon if other matters do not intervene and delay the meeting. We accept that it is right for the management of counters to take a more commercial approach and look for other activities which may be brought into the Counters business. We must ensure that the result will be fair competition with other private sector competitors and that we are not needlessly extending the Post Office, with its cross subsidy, into areas where that is not necessary.

As my right hon. and learned Friend will no doubt be aware, there is considerable concern in rural areas about Post Office Counters management of rural sub-post offices. Does he agree that the only way to ensure that sub-post offices continue to exist is for people to use those sub-post offices and the village shop usually associated with them? Will he also agree that it would be helpful if new initiatives could be taken, like that at Laverstock near Salisbury, where the local pub has taken on the business of the sub-post office?

The Government are entirely committed to the maintenance of the sub-post office network in rural areas. I have a rural constituency and I agree that it is right to remind the residents of villages that they should use the local post office and associated store if they want it to remain. We are constantly on the lookout for imaginative ways in which to strengthen the rural sub-post office network. Anything that increases the prospect of the network's survival will be welcome.

Is the Chancellor of the Duchy aware that many years ago the Prime Minister used to work in a little shop in Grantham in which cross-subsidisation used to take place? That shop was owned by Alderman Roberts, who did not believe in Sunday trading—

Order. But was it a post office?

Yes. In the corner of that little entrepreneurial outfit there was a post office. In those days the Prime Minister, along with her father, used to believe in the public sector and milked it if necessary.

The hon. Gentleman has studied the biography of my right hon. Friend the Prime Minister more closely than I have. Off the cuff I am not sure whether Alderman Roberts ran a sub-post office. I know that my right hon. Friend the Prime Minister, together with other members of the Government, is committed to the maintenance of the sub-post office network. We are encouraging the Post Office to take a more commercial view of the management of the network, which will enhance the prospects and future of all the offices.

Does my right hon. and learned Friend agree that the Post Office's insistence that a rural post office should be a full mile from another post office can be unduly restrictive and cause hardship? For example, at Cabus in my constituency the only suitable premises, a newsagents, is 0·8 of a mile from the nearest post office, but many elderly people must struggle a long distance to get to the existing post office. Will he consider bringing the problem of the mile restriction to the attention of those who run the counter services?

Depending on events, I might have the opportunity to raise that matter with the chairman of the Post Office this afternoon. It is a matter for him. I am sure that he will take steps to ensure that sensible rules are applied which improve the prospect of survival of rural post offices and their continued contribution to the network.

The Chancellor of the Duchy will be aware that among the largest customers of the Post Office counter services are the 2 million people with individual Girobank accounts. In addition, Girobank has large corporate accounts which also use the post office counters. Recipients of DHSS pay and unemployment benefit also use the counters. Will the right hon. Gentleman give an absolute guarantee that whoever buys Girobank when it is privatised will honour the five-year contract that the Post Office board has negotiated with Girobank for the continued use of Post Office Counters?

Yes, I will. Any purchaser will be bound by the contract that has been freely negotiated between the Counters business and Girobank.

When my right hon. and learned Friend meets the chairman of the Post Office, will he raise the subject of security for the people who work in sub-post offices, who are at risk from criminal assaults? In my constituency there have been the most appalling attacks on sub-post offices in the rural areas, one of which involved a Most horrific murder.

Again, I will undertake to raise that point with the chairman. That is a serious problem for the Post Office, because sometimes substantial sums of cash are handled in quite remote rural areas and the Post Office must help sub-postmasters to protect themselves against risk.

To ask the Chancellor of the Duchy of Lancaster what is the latest balance of trade in manufactured goods.

To ask the Chancellor of the Duchy of Lancaster what is the cumulative trade deficit in manufactures so far in 1988.

In the five months ended May, there was an estimated deficit on trade in manufactures of £5·2 billion.

What excuse does the Minister have this month for the ever-worsening deficit in manufactures and the worst-ever deficit in overall trade? As the official Budget forecast of a £4 billion overall trade deficit by the end of this year has already been exceeded, is it not about time the Government gave us a revised estimate, or are they too ashamed to admit that their's is the most deplorable record of any Government in history?

My right hon. Friend the Chancellor of the Exchequer has stated that he will issue a revised estimate. Over 70 per cent. of the deficit is accounted for by increased consumer spending. That is a function of high earnings and a raised standard of living. We know that the Labour party objects to that and that it lost the last three general elections.

The Minister will be aware that his manufacturing industry policies have decimated manufacturing in Nottingham, North. There have been job losses at Plessey, Boots, Raleigh, Players, and the closure of Thorn EMI and three neighbouring pits. Are they what the Minister would call the problems of success? When will unemployment in my constituency of Nottingham, North be reduced to 1979 levels?

The decimation of manufacturing industry is a pure myth. Since 1981 our share of world trade has remained absolutely constant, and world trade continues to expand.

Does my hon. Friend agree that British manufacturing has never been in a finer state? The magnificent order that British Aerospace won with Saudi Arabia, for a huge sum in the region of £15 billion, is further evidence that we are producing the finest products at the right price to do the job that people want.

My hon. Friend is entirely right. Further testimony to the vigour of British manufacturing industry is offered by the readiness of foreign private sector capital to come here and start manufacturing operations. That point was made by my right hon. Friend the Prime Minister to the Leader of the Opposition only last week, just before he ran away to Africa for a fortnight's holiday.

Does my hon. Friend accept that it is undoubtedly true that British manufacturing industry is now doing better at home than it has done for many a long year? However, companies such as British Aerospace, Jaguar, Plessey and many others are finding their margins being squeezed because of the high rate of the pound. We must not go back to the days when we thought that a high pound was good for the country. We need a competitive pound, so that industry can export and compete with foreign manufacturers.

I do not know what my hon. Friend means by "competitive pound". The only solution that the Labour party has ever offered to that synthetic problem is continuously to depreciate the exchange rate. The most successful exporting countries are those that have the strongest exchange rates.

What will the £5·2 billion deficit be at an annualised rate? What will be the consequences for British manufacturing industry of the massive deflation that is now beginning?

I have already told the House that my right hon. Friend the Chancellor of the Exchequer will issue a new forecast. Why does the hon. Gentleman not have the honesty to recommend to the House the Socialist solution to the gap, which is the return of exchange controls and import controls, with all that they mean for confidence in investment and consumer choice?

To ask the Chancellor of the Duchy of Lancaster if he plans any new initiatives to reduce and simplify the COCOM control list.

Senior officials from COCOM member countries met last January and agreed steps to streamline control lists and improve the general effectiveness of COCOM. Work on the implementation of those steps continues.

Is my hon. Friend aware of the dramatic increase in American high technology exports to the Soviet bloc? Does he accept, from the evidence that I recently sent him of the experience of my constituent, Mr. Andrew Kuzan, who is now in an American gaol, that United States customs officials are not adverse to setting up and entrapping British exporters of equipment that is now obsolete but which remains on the COCOM list? Will he raise that matter with his American COCOM colleagues as soon as possible?

The particular case that my hon. Friend raises is still under investigation. I agree with him that there are elements within it that seem unsatisfactory. However, as both he and the House know, because I have said this before, the Government are anxious to reduce the scope and impact of the COCOM list. We have introduced a rolling review whereby one half of the list is examined in two parts every year, and we have had some success in deleting certain items from it.

Which are the "unsatisfactory" elements?

One must always be on one's guard that an international agreement is not manipulated by interested parties to gain commercial advantage at the expense of other parties who are more scrupulous in their observation of it.

Does my hon. Friend agree—[HON. MEMBERS: "Reading."] I am not reading. Does my hon. Friend agree that when exporting electronic goods to the Soviet Union, and importing them from the Soviet Union into Europe, we must safeguard against dumping of such goods by the Soviet Union? One lesson to be learnt by British and European manufacturers is that they should make full use of the European Court to prevent such dumping.

There is something in what my hon. Friend says, but the question of dumping is entirely separate from strategic considerations affecting items included on the COCOM list and their export.

To ask the Chancellor of the Duchy of Lancaster if he has any plans to introduce new measures to increase industrial activity in Britain's regions.

My Department's enterprise initiative, launched earlier this year, is specifically designed to encourage enterprise and economic growth in all parts of the country.

Bearing in mind that we now have the lowest and least generous industrial regional incentives for many years, with the completion of the Channel tunnel and the introduction of the single European market in 1992, will not south-east England become even more congested and overheated at the expense of other regions?

Too many people in the regions place excessive emphasis on automatic subsidies to capital investment as an instrument of regional policy. We have abandoned the automatic regional development grant and are making very good use of selective regional assistance in order to encourage firms that would not otherwise become involved. In south Wales, the Valleys initiative of my right hon. Friend the Secretary of State for Wales is giving a further boost to development there. South Wales is one of the parts of the United Kingdom that are reviving most strongly, with a very encouraging level of investment, many new jobs and steadily declining unemployment.

Does my right hon. and learned Friend agree that one of the most effective ways of encouraging regional industrial development is by improving the transport infrastructure available to industry? Does he further agree that the biggest boost he can give west Yorkshire industry at the moment is to support the creation of a freight depot at Stourton and rapid transit from it, through the Channel tunnel, into Europe?

I shall certainly draw that point to the attention of my right hon. Friend the Secretary of State for Transport, because I agree that the right transport infrastructure is essential. One thing that has happened is that northern England's economy has revived so rapidly that all of us can see the result of that in traffic congestion. There is a great demand for more railway freight services, and we must rapidly respond to it.

Do not the Scottish steelworks make a major contribution to industrial activity? I put to the Minster the point that I made yesterday. The House has been misled by discrepancies in statements made by the Minister and by Sir Robert Scholey. Will the Minister take the opportunity today to make sure that the House is no longer misled, and will he confirm or deny Sir Robert's assertion that, some time ago, the Government were advised by him of the "probability"—I use Sir Robert's word—of the closure of the hot strip mill at Ravenscraig? If that information was given to the Minister, why was it suppressed and not given to the House of Commons in the past few months?

I have looked again at what I said in December, and at what Sir Robert Scholey said. I can see no inconsistency, and I do not understand what all the fuss is about in Scotland. In December I gave the House the forecast of the British Steel Corporation that, subject to market conditions, there was a continuing need for steel to be made at Ravenscraig for at least the next seven years. I also told the House that there was a problem with hot strip mill capacity, and that I therefore could not say the same about the hot strip mill, but that it would certainly be required until the end of this year. After that, as I made clear, everything will depend on market conditions. It is for the chairman and management of BSC to make their judgments about those conditions. As far as I am aware, BSC has as yet made no plans about the hot strip mill, and I do not imagine that it will do so until it sees the state of the market next year.

Surely the best new measure for the regions would be to alter the employment policy of the Transport and General Workers Union, which seems to put employment in the prosperous south-east above jobs for the unemployed in Dundee—although Opposition Members still seem keen to accept the union's sponsorship.

I would acid to my hon. Friend's legitimate complaint the union's entirely irresponsible attitude towards the Government's employment training schemes for the unemployed. It seems only too anxious to frustrate the Government's concern to help the unemployed to obtain the new jobs that we are creating. I should have thought that it is only the union's role as a kingmaker in the Labour party that stops it being denounced by more people on that side.

Industrial activity in my region of Scotland would be enhanced if the Government responded sympathetically to the floating hotel project being negotiated by Scott Lithgow. What is the present state of the negotiations with the Department of Trade and Industry?

I can add nothing to what the hon. Gentleman already knows. We have well-established rules applying to shipbuilding projects, under which intervention fund support is available to certain yards and always has been. We also insist that any Government support must be based on economic common sense and at a price acceptable to the taxpayer. As far as I am aware, no negotiations on the Scott Lithgow project have yet come to a head.

Is my right hon. and learned Friend aware that the economic attractions of the north-west have never been greater, and that the massive investment in fibreglass making by Pittsburgh Plate Glass near Hindley Green is a good example of an American company realising that? Does he agree that the only thing likely to stop that favourable trend is the emergence of further loony Leftism among local councils?

I am glad to say that my Department gave considerable help to Pittsburgh Plate Glass. I agree about the attractions of the north-west, where we find that the take-up of the new enterprise initiative is higher than would be expected. In view of the number of eligible firms, there is a great deal of inward investment. We need to get rid of the last councils that remain hostile to this kind of investment and take foolish actions that discourage investors from coming in.

Would the Minister care to address the impact of the dismemberment of Ravenscraig, on industrial activity? How can he argue that the continuing anti-Ravenscraig bias shown by Sir Robert Scholey is in any way compatible with his claim that Ravenscraig is somehow in genuine competition with other steel plants? Does the Minister really believe that, through privatisation, the Government can wash their hands of such a disgraceful betrayal?

I can never understand why Scottish interests so often lead to descriptions such as "the dismemberment of Ravenscraig" when nothing of the kind has happened. In December I gave a careful assessment based on British Steel's own forecasts of its needs and of the market place. That made our position clear, and nothing has changed since then. We can say only that the future of the hot strip mill is guaranteed until the end of this year. Thereafter it must depend on the market place and on British Steel's need to provide hot strip products in the most cost-effective and competitive way.

Does my right hon. and learned Freind agree that the upward trend in imports of capital goods, which accounted for nearly all the deficit last month and which adds to our productive capacity, is the best way in which our industry can expand to meet the great demand that is currently being met by imports, and that it will spread industrial prosperity through the region?

I agree with my hon. Friend. Much of the deficit to which my hon. Friend the Minister for Trade referred a moment ago is accounted for by imports of capital goods, which are part of industry's investment. Many consumer imports are attracted here by the growth of our market. There is nothing to worry about in that deficit, much of which is the inevitable result of the continued expansion of this country's economy. In the old days the trade deficit was based largely on public sector deficits, which is why they caused so much more concern than this deficit ought to cause now.

Has the Chancellor of the Duchy of Lancaster had time to read the latest publication of the Institute of Civil Engineers, which deals with urban regeneration? If so, does he agree that, like many other reports from both academic and professional bodies, it suggests that there is now a real call for planning and regional co-ordination, something which this Government have not done?

There has not only been a great deal of co-ordination, but a great deal of decision-making and action in relation to urban regeneration. The hon. Gentleman could visit many of our major cities in which he would see the physical and other signs of the revivals that are taking place in our inner-city areas.

To ask the Chancellor of the Duchy of Lancaster what discussions he has held concerning transport in relation to inner city policy; and if he will make a statement.

Inner city transport is, of course, a matter for my right hon. Friend the Secretary of State for Transport, but transport issues are raised from time to time in discussions I have with inner city business men.

Will my hon. Friend concede that the infrastructure of the north-west is second to none in the United Kingdom and that, coupled with many other excellent qualities, that wonderful infrastructure is attracting inward investment to the north-west and to towns such as Oldham and Rochdale? Will he also concede that many companies—not only international companies, but many from the expensive south—are coming to the north-west, an area which historically has always produced the lion's share of the wealth of the United Kingdom?

My hon. Friend makes his case perhaps better than I could. As a fellow north-west Member of Parliament, I can only agree exactly with what he has said. We have a superb infrastructure and there is every reason why not only the transport successes of the north-west but its many other successes will continue to attract many people to the north-west, which, as he rightly says, is the jewel in the crown of manufacturing in this country.

Does the Minister accept that transport of any kind is important for industrial development, and that in that sense the A1 and M1 can no longer cope with the desired capacity of traffic and there is a need to extend the M11 up to the north-east, across the Humber bridge? Does he also accept that it would help the development of the region to abolish estuary tolls in general, and those on the Humber bridge in particular?

The matters that the hon. Gentleman raises are largely for my right hon. Friend the Secretary of State for Transport. We are in constant touch with our colleagues in that Department to make them aware of the necessity for industry and commerce to use the roads to a greater extent. Obviously, the Department will have to examine the pressures on those roads in the normal course of events.

To ask the Chancellor of the Duchy of Lancaster if he will give details of the manufacturing technology employed in the production of the Airbus A320.

The latest developments in materials and manufacturing technology are employed on Airbus production to achieve benefits in terms of costs, weight, strength and ease of manufacture.

I thank my right hon. and learned Friend for that helpful answer. Will he expand on it and tell the House whether he is satisfied that progress is being made on achieving more effective control over the manufacturing process of that product, given that it is spread over a number of different locations? Can he respond to the recent investigations into the production process of Airbus and give us some encouraging news about cost control and increased future competitiveness?

Every time that I have attended an Airbus Ministers' meeting I have pressed the case for better management and financial control of the Airbus project. I believe that the four partner Governments and the four partner companies are broadly agreed. We have endorsed the report that we commissioned from the so-called four wise men—one leading industrialist from each of the four countries. We have another meeting in September, when I hope that the companies will report to us on progress and confirm that they intend to set up new and much better methods of running the project by 1 January next year.

Does my right hon. and learned Friend agree that the fly-by-wire technology employed on the A320 is not only the most advanced in the world, and has contributed to the fact that that aircraft received the most advance orders of any civil aircraft since the war, but that it was British-inspired? Does he further agree that the decision of British Airways to put the A320 back into service shortly after the recent crash fully confirmed the technological safety of that system and that all passengers should be reassured that the technology is well proven, sound and tested?

The A320 is certainly the market leader in its field. I agree that it has the most advanced technology of any of its competitors. The Airbus products are the next generation of aeroplanes, and some of its competitors are still producing face-lifted versions of older aeroplanes using older technology. We are awaiting the inspectors' report on the tragic French accident. I cannot possibly anticipate that, but I share my hon. Friend's confidence that it is likely to prove that the technology of the aircraft is as safe and spectactular as we believe it to be.

Could the curious among us be told what factors led the Minister to take the initiative in talking to the management about management control? Is that not rather unusual? It may be justified, but will he explain to the House why he did it?

The Government do not believe that the best way to build a modern technological product is by having the management in the hands of what is, in effect, an enormous committee of four Ministers from four different Governments and representatives of four different companies, all collaborating in partnership with a selling organisation based in France and detached from the remainder of the management. We want a new management structure, but I can reassure the hon. Gentleman that it is not my intention that I or any other Minister should take over commercial management decisions. We want managers to take those decisions, and we want the managers to have the right authority and the right information to run the project in the ordinary way.

To ask the Chancellor of the Duchy of Lancaster what assessment he has made of the potential market for industrial lasers, and if he will make a statement.

The Department commissioned a study of the industrial laser sector in 1986 and has access to assessments made under Eurolaser, the Eureka programme, to promote the development of high power lasers and their use for materials processing in manufacturing industry. However, it is principally for industry to assess the market potential for industrial lasers.

I thank my hon. Friend for that wideranging, full and eloquently delivered answer. Has he the statistics with which he could illuminate the statement that he has just made?

Yes, Sir. About £260 million was assessed as the total market for industrial lasers two years ago. I am advised that that is growing by about 18 per cent. per annum.

To ask the Chancellor of the Duchy of Lancaster when he will next be visiting the Northern council of the Confederation of British Industry to discuss industrial progress in the northern region.

I have no present plans to visit the northern council of the CBI, although I regularly meet northern businesses. During my most recent visit to the region I was encouraged to hear business people themselves confirming the report of industrial progress and prospects for further growth which have figured in successive CBI surveys.

Will the Minister seek an urgent meeting with both sides of industry in the north to discuss the proposed closure of Marconi Radar in my constituency? Does he agree that the loss of 450 high-quality jobs such as those, and the decision by Marconi to concentrate production in the south-east, represent a trend opposite to what we wish to see? What action will he take to ensure that the jobs are not lost to the northern region?

I am extremely concerned to hear that Marconi has decided to reduce or close capacity at Gateshead and Chelmsford. However, those are matters for the company management, which is best placed to judge the market, or lack of it, for particular products.

Does my hon. Friend agree that if he goes to the north-east to meet the northern council of the CBI, the Northern Regional Association of Councils or the Teesside chamber of commerce in my area, he will find nothing but expansion, growing job expectations, declining unemployment and the regeneration of the area improving day after day?

My hon. Friend does his area and region a great service by never ceasing to tell us how strongly and how importantly the north-east features in the scheme of things. My hon. Friend is right to say that, although there are still difficulties in the north-east, things are improving. Opposition Members would do better to talk about the successes, rather than continually talking about the weaknesses.

May I remind the Minister of the acute shortage of large-scale factory space in the northern region? Can he tell the House what measures he will take to bridge that gap, thereby not holding back the recovery in the northern economy and helping us replace the jobs that have been tragically lost at Marconi and those that will be lost at Swan Hunter as a result of the announcement the day before yesterday?

The hon. Gentleman and many of his colleagues have rightly and understandably raised the problem of the shortage of factory space in the north-east. He will know that when I answered the Adjournment debate that he raised in the House I said that that was a problem of success. I have received a number of representations and contributions, not least from the hon. Gentleman, whose paper we are considering, and I have discussed the matter, together with my right hon. and noble Friends, with English Estates. We hope to be able to tell the House a little more about progress in the not too distant future.

Is my hon. Friend aware that if he consults the regional reports of all the councils of the CBI for the past year, including that for the northern region, he will find that they are couched in terms of unremitting confidence and that the only problems they outline are those associated with growth, such as temporary shortages of labour and so on?

My hon. Friend is quite right. There are things happening in the north-east and the northern region that are extremely good for the local and national economy. We have to ensure that that success is built upon. The problems to which hon. Members have referred, such as the shortage of factory space, have to be addressed. I repeat that that, ironically, is a problem of success.

To ask the Chancellor of the Duchy of Lancaster how he measures changes in the competitiveness of British industry in the last year; and what comparative information he has for West Germany.

A variety of factors affect the competitiveness of British industry. Price and non-price factors are both important and there is no single measure of competitiveness.

Does the Minister accept that we are now at least 10 per cent., and probably 15 per cent., less competitive than the West Germans than we were at the beginning of last year? When will Government policy on exchange rates and interest rates do something to help rather than hinder British industry?

As has been said, an appreciating currency has been a trend that German manufacturers have coped with brilliantly over the past two and a half decades. They have concentrated on non-price as well as price factors, and we should do the same. They have concentrated on things such as quality, design, marketing and so on. The hon. Gentleman is entirely wrong. If we take an independent measure from the IMF, which incorporates movements in exchange rates, productivity and labour costs, we find that on an index of 100 the United Kingdom, compared to West Germany, was at 112 in 1981, 93 in 1984, moving down to 79·6 in 1986 and 72·2 in 1987. Our productivity is improving in great measure.

Jaguar's motor car production is about 49,000 cars. Is my hon. Friend aware that, in Germany, BMW alone produces 490,000 vehicles? Is not one of the ominous realities that, despite the welcome recovery, we remain a low-output economy in leading manufacturing sectors? As my hon. Friend has attested, the Germans have managed with a high-currency policy to build up their industry and output, mainly through massive investment in new assets and innovation in high technology. When is my hon. Friend confident that we shall be able to do the same? Will he join me in setting a target of overtaking Germany, and how many years does he think that that will take?

I ask my hon. Friend to study the policies that were the foundations for the German economic miracle. He should look at the three principles of those policies, which were put together by Euchen and Erhardt, and he will find strong parallels with British domestic policies today.

Is the Minister's complacency not shaken by the fact that industrial production in engineering has fallen by 2 per cent. in the first three months of this year? Does he not realise that it will take us 25 years to catch up with Japan in the number of industrial robots that we have? Is he not aware that in advanced technology industries we fall further and further behind, as was instanced by the closure of Marconi Radar in Gateshead a day ago?

No, I do not accept that for a moment. At long last British industry is showing a real return on capital. There are very healthy trends in investment programmes in crucial sectors. We are hauling in on the lead of some of our major international competitors. To catch up with Germany, we would need to grow at a faster rate than Germany well into the 1990s. I consider that to be a legitimate objective. If we continue with current policies, what has been mooted as a British economic miracle can happen.

To ask the Chancellor of the Duchy of Lancaster if he will undertake to compensate investors in Barlow Clowes at an early date in respect of any responsibility borne by his Department which may be discovered in the course of the current investigation.

It would be wrong for me to prejudge the outcome of the consideration my right hon. and noble Friend and I shall give to the Barlow Clowes case, including the report of Sir Godfray Le Quesne's inquiry into the facts.

Is my hon. Friend aware that in 1983, following the intervention of the parliamentary ombudsman in the case of the collapse of Langford Scott—a holder of a Department of Trade and Industry licence, which was a key element in the ombudsman's recommendations that the DTI pay compensation—his Department did, indeed, pay compensation? Will he take account of that precedent in dealing with the case of Barlow Clowes?

I am aware of the case to which my hon. Friend referred, but he will understand as well as anyone that no two cases are the same. I do not think that I can add to what I have already said. We shall have to await the outcome of the report and consider what to do then.

Has the Minister read the ombudsman's comments to me on this major scandal? Is he still satisfied that a Department of Trade and Industry inquiry is enough, when at least one other Department may be involved in the scandal? More important still, can he tell me what immediate help he can offer my constituent, Leslie M ullard, who, in his mid-70s, has lost his life savings?

The Parliamentary Commissioner has felt unable to comment on the terms of his correspondence with the right hon. Gentleman, as it was written to the right hon. Gentleman in confidence. I was surprised to read reports in today's newspapers that the Parliamentary Commissioner had felt able to conclude that there was an apparent case of maladministration for my Department to answer. I gather that he has since clarified his views in a statement issued earlier today. He stressed that any decision that an investigation is warranted in principle in no way indicates a view as to the merits of the case. Indeed, it could not possibly do so. The Parliamentary Commissioner had not been in contact with my Department at all and the statements by Ministers on which he is reported to have based his view carried no implication of maladministration. It is entirely a matter for the Parliamentary Commissioner whether he investigates individual cases. He is not in any way inhibited from undertaking his own investigation by the independent inquiry that is being undertaken by Sir Godfray Le Quesne.

Is my hon. Friend aware that several leading financial institutions wrote letters to many people encouraging them to invest in Barlow Clowes? Is he further aware that one of my constituents received a letter from the head of marketing of Age Concern, which gave him considerable comfort in becoming an investor in that organisation? Will my hon. Friend give a pledge that the DTI inquiry will look into the activities of intermediaries, financial institutions and charities, such as Age Concern, in this saga?

The activities of intermediaries is obviously an important matter in the investigation and it is certainly an area which has been carefully examined. My hon. Friend will be aware that FIMBRA has already taken steps in respect of two intermediaries which applied for membership of it.

Does not the principle of compensation in the case of Barlow Clowes have implications for the wider over-the-counter market? Will the Minister reject the comments of Mr. Wilmot, of Harvard Securities, who talked about the loss of one third of an investment portfolio as being acceptable? Is it not clear that the over-the-counter market is just a gigantic con? Will he close it down before many thousands of small investors lose more money that way?

It is only fair to say that a good many small companies manage to raise money and create jobs by the over-the-counter market, but it is nevertheless well understood to be a risky form of investment. Those who sell securities on the over-the-counter market make that clear.

Has my hon. Friend seen the leader in The Times today, and is he aware that it says that his Department's inspectors are good at producing colourful, well-researched reports after the event, but are poor at prevention? What steps will he take to improve his Department's performance on that?

One development is that we now have a completely new regime of investor protection, which is being undertaken by organisations outside my Department. Lessons from the developments which have taken place recently will be an important aspect of our considerations. We shall need to look at what happened and what the outcome of the investigations is, and decide what steps we need to take.

How many people invested their redundancy money through this organisation and saw their only prospect of a cushion in retirement being lost, relying when they did so on the existence of the DTI's inspection system'? Will the Minister take that into account when considering the issue of compensation?

I am certainly well aware and, I suspect, better aware that most hon. Members, of exactly how many people invested all their spare money in this company and of the anxiety and distress that has been caused. It is important to make a distinction between the two companies involved: Barlow Clowes Gilt Managers, which was United Kingdom-based and subject to United Kingdom regulation, and Barlow Clowes International, which was Gibraltar-based and not subject to United Kingdom regulation.

Will my hon. Friend make it absolutely clear to the House that whatever the Parliamentary Commissioner may or may not have said, he would want to ensure that the report of Sir Godfray le Quesne is with him in September or October, so that this matter can be brought to some sort of finalisation as soon as humanly possible?

I entirely agree with my hon. Friend that it is important that these matters move fast, and they are moving fast. The Parliamentary Commissioner may well prefer to wait for Sir Godfray's report before undertaking his investigation, but that matter is entirely for him. He is not in any way inhibited from undertaking his own investigation before then.

Is not the Barrow Clowes case yet another instance of the unacceptable face of capitalism? What comfort can the Minister offer the thousands of people, many of whom are retired, with life savings at stake, who relied on his Department's supervision and who suffered calamitous loss as a result? Does he accept that what they require of him is not that he should take refuge in the delaying tactic of a departmental investigation, but an acknowledgement of his Department's responsibility in this matter and its willingness to compensate them for the loss of their life savings, which they have suffered by virtue of his Department's default?

It is pretty disgraceful that the hon. Gentleman seeks to exploit the genuine distress that many people have suffered in this way. It is frankly outrageous that he should suggest that my Department is in any way seeking to delay matters. We have been extremely frank. We have set up an independent inquiry headed by someone of great distinction and independence, and for the hon. Gentleman to say that we should give our response to that inquiry at this stage is manifestly absurd. We must wait to see what it says—wait for an authoritative version of what happened—and we shall decide what to do then.

To ask the Chancellor of the Duchy of Lancaster what initiatives his Department is taking to help small firms understand and take advantage of the legal consequences of the 1992 single European market; and what information he has on the 1992 advertising campaign initiatives in the rest of Europe.

Our "Europe Open for Business" campaign aims to encourage firms throughout the country, large and small, to prepare for completion of the single market. About 45 per cent. of all business inquiries we have received on the single market have come from firms with fewer than 20 employees. I understand that only France and Ireland have so far launched major Government awareness campaigns, although I understand that several other countries are planning them.

I am grateful for that encouraging reply. Is my hon. Friend aware that one of the reasons why unemployment in west Norfolk has almost halved in the past four years has been the effort and contribution made by the small firms sector? Is he also aware that small firms in west Norfolk will not sit back and let 1992 happen? They are already getting geared up to make the most of it. What extra help, assistance and advertising will be given by the small firms service? What effort will it make to help small firms get geared up for 1992?

As my hon. Friend said, small firms are already gearing themselves up very well. We shall continue to provide such help as is appropriate for them. My hon. Friend is right to draw attention to the fact that small firms, as much as big ones, have a great deal to gain from exploiting the opportunities that the single market will bring, and they must look to their laurels to ensure that they remain, and become more competitive, to meet the challenge that will come from the continent.