To ask the Secretary of State for Trade and Industry if he will make a statement about trade with Cambodia.

In 1989 our exports were worth £530,000 and our imports £220,000.

Why does the Minister suppose that British-made mines found their way to Cambodia?

I assure the hon. Gentleman that there was no military material in those exports.

As we are dealing with Asia, will the Minister confirm that Government Whips have ordered the Scottish Office Minister with responsibility for trade to return from an important trade mission to Japan to vote against dog registration tonight? Does he agree that this represents a disgraceful order of priorities? The Minister is being asked to assist in defeating dog registration—

Order. What does this have to do with Cambodia?

Asia, Mr. Speaker. [Interruption.] Conservative Members may not like it, but they will have to listen to my supplementary question. Is it not—[Interruption.]

Order. I am unable to hear what the hon. Gentleman's supplementary question is about while there is so much noise in the Chamber.

Thank you, Mr. Speaker. Does the Minister agree that his colleague's return from Japan represents a disgraceful order of priorities? Dog registration is being elevated to a degree of importance above that of securing important Asian markets for Scottish commerce and industry. Is not it time that trade Ministers slipped the leash of the fanatic at No. 10 and started to put national priorities first?

The hon. Gentleman has a hazy knowledge of geography. I do not think that any of his questions arises from Question 1.

To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the steel industry in the United Kingdom.

I am confident that the United Kingdom steel industry will continue to perform well now that all of it is in the private sector.

Will the Secretary of State use his influence firmly to ensure that there is no dismantling of the strip mill at Ravenscraig until the Scottish Development Agency's report has been received and properly assessed, given the devastating impact of such a decision on the people of west central Scotland?

I entirely endorse what my right hon. and learned Friend the Secretary of State for Scotland has said and done about this. I believe that British Steel has said that it is awaiting the results of the SDA report on the steel industry in Scotland.

Will my right hon. Friend ensure, however, that any decisions about the future plate mill are made for proper commercial reasons? If those reasons show that such a mill should go to Teesside instead of propping up the Scottish steel industry, will not that be the correct decision?

Of course, the location of plant is a matter for British Steel now that it is in the private sector, and it will take such decisions on a commercial basis. I am sure that no hon. Member would wish firms to be forced to locate according to political rather than commercial decisions.

How can the Minister stand there and say that he expects the steel industry to improve and prosper when there is an imminent threat to the Clydesdale tube works in Bellshill in my constituency? Is he aware that any such closure at Clydesdale would mean huge job losses and, as it is the only plant in the United Kingdom that produces seamless tubes, a further deterioration of the balance of trade? Would not it be a tragedy if an expanding North sea oil sector were to fuel the steel industries of our competitors at a time when our steel plants are closing? Will not the. Minister step in now before the threat becomes a reality and ensure that the Clydesdale tube works is saved?

My right hon. and learned Friend the Secretary of State for Scotland has made it clear that we shall do all that we can to help this industry, like other industries in Scotland and the rest of the United Kingdom, to prosper. The Opposition seem to want to fossilise the economy and prevent all change. That is a recipe for turning Scotland and the entire United Kingdom into an industrial museum.

Does my right hon. Friend agree that British Steel's record since privatisation—it has broken all production records—should give the House confidence in the way in which its management goes about its business? Although Governments can advise, they should never deem to instruct managers on how to run their businesses.

My hon. Friend is absolutely right. British Steel and the British steel industry are very successful compared with almost every other steel industry in the world. In the first nine months of this year, our steel exports were up 7 per cent. and imports were down 8 per cent. Productivity has increased threefold over the past decade. That is good news, and it is sad that it is not welcomed by the Opposition.

How can the Minister satisfy the House that the Government can plan a sensible industrial and economic strategy when they have been denied essential business and financial details by companies as important as British Steel?

I did not realise that the hon. Gentleman was in favour of state planning.

Does my right hon. Friend recall the time when the subsidy to British Steel was about £14 billion or £15 billion—a great deal of money which could have been spent on hospitals, nurses, doctors, old-age pensions, children and the other welfare measures which we are now able to afford because such money is not being poured down the drain by a nationalised British Steel?

My hon. Friend is absolutely right. In the decade up to 1985, the total subsidy to British Steel, in present-day money, was £14 billion. It is hard to know where the Opposition expect to get such money, as they have already mortgaged the future with promises to spend on almost everything else. If they return to a state-controlled, state-regulated or nationally owned steel industry, we shall again be back in that loss-making era.

Will the Secretary of State remember that it is not the Secretary of State for Scotland but he, the Secretary of State for Trade and Industry, who is responsible for industry and for steel? Will he therefore meet the chairman of British Steel to discuss the Clydesdale rescue plan so that we can gain a higher share of North sea work? Will he tell him of his view, and that of the Secretary of State for Scotland, that there must be no demolition or asset-stripping at Ravenscraig before there is a discussion on and examination of the Scottish Development Agency's proposals? Will he set up an action team within the Department to consider the prospects for the steel industry, and will he explain to the high-productivity work force at Ravenscraig why, five months after Ministers promised that they would press British Steel to reconsider and review the decision on the strip mill, the Department has done absolutely nothing?

From time to time, I meet the chairman of British Steel, but it is sensible that the Secretary of State for Scotland takes the lead on this issue. I have read the so-called five-point plan for the future of the steel industry which the hon. Gentleman just summarised. Four of its points are contrary to the treaty of Rome, and one is simply the establishment of a committee.

To ask the Secretary of State for Trade and Industry what plans he has to increase spending on debt advice work.

Much of this work is done by local citizens advice bureaux, which are funded by generous Exchequer grant, of which the House will hear shortly this afternoon. The Department of Trade and Industry funds centrally the National Association of Citizens Advice Bureaux and Citizens Advice Scotland to the tune of £11 million in the current year.

I understand that the Minister wished to encourage building societies and other financial institutions to put money into the fund that he set up, but that they have failed to do so. Is not it a cheek that those institutions, which send junk mail to almost every person who has a bank account encouraging them to get into more and more debt, are not prepared to finance the advice given to people who are in serious difficulties? Will the Minister use his good offices to ensure that building societies and banks do more in this respect?

The private sector is already responding to the idea that it should help to finance schemes with local citizens advice bureaux, and the Government welcome that. I have explained that generous Government moneys are being paid through the local authority system to help with that work. Individual Members of Parliament can advise constituents who are in trouble that they should go immediately to the building society that gave them a mortgage and talk through their problem in good time, because often the building society can find a way of easing payments during a period of difficulty for the family. That is the best answer.

My hon. Friend is right that citizens advice bureaux do much work in dealing with this difficult matter. Is he aware that citizens advice bureaux in my constituency have perhaps more work than most in respect of credit and that they face difficulties in working within the budget that my hon. Friend outlined?

It is for each local authority to decide the right level of funding for its citizens advice bureaux. Some local authorities are increasing the budget for CABs because they think that they do important work, but that is a matter for local determination. In several parts of the country, there are money advice support units funded by private sector initiative, led by companies ranging from Mercantile Credit through Barclaycard to a consortium working in Greater Manchester, and they, too, are helpful.

Does the Minister realise that more than 2·25 million households are in debt, that we have had a decade of debt and bankruptcies and that the Government have been encouraging spenders, not savers? When will the hon. Gentleman stop being the irresponsible lenders' lackey?

That is complete nonsense, and the hon. Gentleman knows it. The Government have taken many measures to stimulate saving, with the welcome effect that the savings ratio has been increasing. As for serious debt problems, the hon. Gentleman may like to know that in the year to June 1990, the number of repossessions was only one third of 1 per cent. of the total stock of mortgages. That still means individual problems, and I have suggested to the House ways in which they can be resolved through the advice of debt advisers and Members of Parliament acting for their constituents.

To ask the Secretary of State for Trade and Industry what is his estimate of the United Kingdom's current share of world trade; and if he will make a statement.

Latest estimates of the United Kingdom share of the value of the main manufacturing countries' exports of manufactures was 8·2 per cent. in 1989. The United Kingdom's share has been broadly unchanged since the early 1980s, following decades of decline.

Bearing in mind the importance of our invisible trade, which at 17 per cent. of the total is more than double that of our nearest competitors, may I ask my right hon. Friend to do his utmost to remove the barriers to invisible trade? I hope that he will have the Opposition's full support, because no doubt their prawn cocktails were largely paid for by the City's invisible trade.

My hon. Friend makes a telling point. I agree that we must welcome exports of invisibles just as we welcome exports of manufactures and other goods. We are taking action in the single market negotiations to remove barriers to invisible trade as well as visible trade and taking action in the GATT negotiations to extend the agreement to free trade in invisibles. We naturally regret the obstacles put in our way in both negotiations by some of our partners who are not as enthusiastic about free trade as we are.

Why is the Secretary of State so complacent? Does he realise that British companies are finding it more difficult to export and keep up their share of world trade? Does he realise that we are facing the worst recession since the 1980s, due to the Government's disastrous economic policies? Instead of being his usual spineless self, will he stand up for Britain and tell the Prime Minister and the Chancellor that they are wrong? If not, the rest of British industry will go down the plughole.

My right hon. Friend the Prime Minister is extremely good at standing up for Britain and I endorse her stand. On the trade front, exports in the last quarter were up by 8 per cent. and imports were static compared with a year earlier. That is not a sign of the phenomenon that the hon. Gentleman tried to describe.

Will my right hon. Friend confirm that the strength of our world trade relies heavily on the strength of our financial and exchange markets? What would be the effect of a single currency and a single banking system being adopted by the European Economic Community, and liable to be dominated by Germany?

It is clear that it is not necessary, for success in international markets, to be part of a larger monetary zone. One need only think of Switzerland, for example, which is a very successful country even though it has a currency of limited circulation. Likewise, Canada, which has a closely integrated economy and is the biggest trading partner of the United States, feels no necessity to adopt the United States dollar as its currency.

Is the Minister so complacent as to be unaware of the problems faced by millions of people and by exporters in particular? What sense does it make to compound the evils of his high interest rate policy by hitting industry twice over, with cuts in the Department of Trade and Industry budget, a 25 per cent., cut in research and development, a 40 per cent. cut in technology transfer, a 60 per cent. cut in regional enterprise grants and even cuts in export services? Instead of blaming everyone but themselves, why do not the Government accept that this is a recession labelled "Made in Downing street"?

The hon. Gentleman still lives in a dream world and believes that the success of industry is in direct proportion to the amount of Government money that is spent on it. He has only to look at the success of Japan to realise that that is not the case. The Ministry of International Trade and Industry, the Japanese equivalent of the DTI, spends a smaller proportion of Japanese income on supporting industry than we spend here, but it is very successful nevertheless. We should learn from Japan's successes, not from socialist policies of higher spending.

Given the cant and nonsense that we have just heard, will my right hon. Friend tell the hon. Member for Dunfermline, East (Mr. Brown) what has happened in export services since we introduced charging in that sector?

I shall be delighted to do so, and it is most interesting. There was much suggestion that once we introduced charging, demand for the services would decrease, but it has, in fact, increased. By general consent, the services are much better now that they are more professionally provided and professionally used. There has been a great welcome for the improvement in the calibre of export services since they have been charged for. That is welcomed by industry and it will show up in higher export figures in due course.

To ask sthe Secretary of State for Trade and Industry what plans he has to boost manufacturing output.

The most important spur to the significant output growth by British manufacturing industry since 1989 has come from the competitive pressures of more open markets. The Government continue to promote this objective with policies such as privatisation, deregulation, elimination of restrictive practices and international negotiations to reduce trade barriers through the GATT and in the European Community. In addition, my Department continues to operate a range of schemes to improve business performance under the enterprise initiative.

Does the Minister realise that the United Kingdom is teetering on the brink of another recession? Does he further realise that the latest official figures for closures show that there has been an increase of 70 per cent. in winding-up petitions for businesses as compared with the third quarter of last year? In view of those alarming trends, what comfort can the Minister offer to industrialists and the unemployed in Easington?

It is perfectly true that we have been witnessing a slowdown in economic activity. That is a necessary prelude to the reduction of inflationary pressures in the economy. But it must be seen in the proper context which, to the hon. Member for Easington (Mr. Cummings), is this: unemployment in his constituency has fallen by 21·4 per cent. over the past 18 months, and by 10·8 per cent. over the past 12 months. As to the broader perspective since 1981, output in manufacturing industry has improved by 32 per cent., which contrasts with a fall under Labour between 1974 and 1979.

One of the biggest manufacturers in Nottingham is Raleigh Industries, which manufactures probably the world's most famous marque in cycles. My right hon. Friend the Secretary of State agreed to have a look at the correspondence initiated with his predecessor on the impact of Chinese imports into this country and how they affect one of our most efficient manufacturing industries. Will my hon. and learned Friend the Minister undertake to have a serious look at that before it becomes a real problem?

Very few people are more enthusiastic about bicycles than I am. Therefore, I shall ensure that my hon. Friend the Minister for Trade, who is sitting beside me, pays the fullest regard to my hon. Friend's point.

How can we hope to expand manufacturing industry when firms like Hurley-Moate and Cobden Chadwick in Oldham are falling like ninepins? Is the Minister aware of the comments by Mr. Peter Maybury, a past president of Oldham chamber of commerce and trade, who referred to the Government's lunatic economic policies and mickey-mouse financial structures? When will the woman in Downing street realise that there is a recession on? Instead of complacently shouting and bawling at the Dispatch Box, should not the Minister take a trip to the north-east—as his father did, with his cloth cap on—and see the position of manufacturing industry? He can ask his friends in commerce and industry there how they feel about it.

The hon. Gentleman will no doubt be the first person to greet me when I visit the north-east on Thursday. I go there nearly every six weeks, as the hon. Gentleman knows. As he clearly does not know the area, I can tell him that the economy of the north-east is extremely buoyant, the number of jobs is increasing rapidly and the people have very good morale. I suggest he goes there.

Will my hon. and learned Friend make it clear that if there is increased output and productivity in industry, everyone should be happy to see higher wages because those higher wages will have been earned?

Absolutely, but those basic lessons are not understood by the Labour party.

To ask the Secretary of State for Trade and Industry what was the balance of trade in manufactures with the European Community in (a) 1979 and (b) 1989.

The United Kingdom trade deficit in manufactured goods with the European Community was £3·1 billion in 1979, and £14·4 billion in 1989.

As we have ended a decade under this Government with a deficit, as the Minister said, to the tune of £14·5 billion, and with a manufacturing deficit in excess of £11 billion for the first nine months of this year, when do the Government intend to introduce industrial policies specifically related to training, research and development and export promotion? Those policies are essential to turn round the trade deficit which the Minister so blandly announced.

It is surprising that Opposition Members so constantly try to denigrate the performance of British industry. With manufacturing output, manufacturing productivity and manufacturing exports at record levels in 1990, we should commend that achievement.

Does my hon. Friend agree that Britain has been the country most favoured by non-EC countries for inward investment and that that has dramatically improved the chances of performing well in manufacturing during the 1990s? Does he also agree that we have a particular interest in the successful completion of the 1992 programme and in the application of all the directives by every member country?

I very much agree with my hon. Friend. There is no doubt that the environment that the Government have created for industry and enterprise is proving attractive not only to those seeking to invest in Europe from outside Europe, but to other Community countries.

Has the Minister had time to read the second report on state support within the European Community, which was produced in July? If he has, will he comment on the fact that in member states, support per person in high-tech industries, in technology transfer and research and development—all within the rules—is 100 per cent. greater in France and 50 per cent. greater in Germany? Why have not the Government supported high-tech industries at least to try to have a level playing field, which major manufacturers have in the rest of Europe?

I suppose that it is only to be expected that a Labour party spokesman always looks to the state to provide some form of what he calls support. The most effective support for British industry—any type of British industry—is the provision of a climate in which enterprise is rewarded and recognised.

Will the Minister consider the Scottish economy and its contribution to export performance? How much consideration did his Department and the Treasury give to the high valuation of the currency in the exchange rate mechanism, which will certainly inhibit exports from places such as Scotland? Would he care to comment on the effect of our exchange rate in the ERM and the prospects for exports?

If one examines the central rate against the deutschmark over the past decade, one sees that the entry rate for the ERM was very much along that central rate over an historical period. In addition, if one looks at purchasing power parities, one sees that most analyses show that the entry point was at the lower end of the range.

Will my hon. Friend take note of the fact that the Dutch electronics company, Philips, which, over the years, has lobbied extremely successfully for more and more subsidies and protection from the European Community, at the expense of other industries and consumers, now finds itself in the most tremendous mess? Should not that ring some alarm bells about the simplistic, interventionist prescriptions being proposed by Opposition Members? Is not it time that the Government stopped tamely acquiescing in the failed industrial strategies that have been propagated by the European Community over the past 30 years?

My hon. Friend draws attention to an interesting point when he refers to Philips. That company's failure to pay sufficient attention to productivity has led to its problems. We should spend our time praising rather than denigrating British industry because productivity in British manufacturing industry is at record levels.

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

My Department regularly receives representations about many areas of industry, including the engineering sector.

Will the Minister comment on yesterday's report by the Confederation of British Industry, which predicts that manufacturing investment will fall by 6·7 per cent. this year compared with its level last year? Will he comment also on last month's report by the Engineering Employers Federation, which predicts that, over the next year, output in the engineering industry will fall by 5 per cent? What hope has the Minister to offer the engineering industry as it faces a recession?

The advice that I would give is that those things have to be kept in perspective. One important piece of perspective is the growth of employment in the hon. Gentleman's constituency of Carmarthen. Over the past 18 months, employment there has risen by 24·3 per cent., and over the past 12 months it has risen by 15·5 per cent. I regard that as good news. Taking a broader perspective, in the quarter ended September 1990, output in the engineering industry increased by 3 per cent. compared with the previous 12 months.

Does my hon. and learned Friend accept that this country is now a favoured location for investment by Japanese, United States and many European companies that are involved in engineering and manufacturing processes? Does he further accept that, once they have been set up in this country, companies such as Nissan in the north-east produce goods of such high quality that they are capable of being re-exported back to countries such as Japan?

My hon. Friend makes an important point, and it can be exemplified. Mechanical engineering output has increased by 15 per cent. since 1985, while it fell between 1974 and 1979; electrical and electronic engineering output has increased by 23 per cent. since 1985 while it fell between 1974 and 1979. The plain fact is that this country is the magnet for inward investment in Europe. We receive about 41 per cent. of American inward investment in Europe, and about one third of Japanese investment in Europe. We can be sure that that investment would not be coming in if the Labour party were in power.

May I bring the Minister back to the report from the Engineering Employers Federation? Is the Minister concerned about its prediction that 80,000 jobs will be lost in the industry between mid-1990 and mid-1991? Do the Government accept any responsibility for that disastrous state of affairs? Will they now recognise that there is a need for an active industrial policy, as seen in the successful economies in Germany and Japan? Will the Minister announce a package of emergency measures in the Gracious Speech?

We have an extremely effective industrial policy. That is why we saw output in manufacturing industry increase by 32 per cent. between 1981 and the present; it is why we have seen investment rise by 60 per cent. between 1981 and today; it is why we have seen exports in manufactured goods rise by 55 per cent. since 1981; it is why we have seen profitability at its highest-ever level; and it is why productivity has improved so much. We have an extremely good and successful industrial policy.

To ask the Secretary of State for Trade and Industry what was the outcome of his recent discussions in Berlin with his West German counterpart on the opportunities for British firms that wish to compete in the markets of the former German Democratic Republic.

I met my German counterpart, Dr. Haussmann, with a team of business men on both sides. It was a very useful opportunity to learn about the economic opportunities in the former GDR, and to raise with the German side certain problems inhibiting investment. My Department is seeking to increase awareness in the United Kingdom of the business openings in eastern Germany and eastern Europe.

Despite the best endeavours of my right hon. Friend—and, indeed, the Parliamentary Under-Secretary—I should like to know whether any British firms have been able to take stakes in the key industries in East Germany. Have they been able to invest in the banking industry, the insurance industry or the state airline? Will British Gas be able to take a stake in the gas industry, or is the real position in Germany the most protectionist since Chicago in the 1930s?

I believe that one of the companies that accompanied me—Ready Mixed Concrete—has taken a major stake in a German concrete firm since that meeting. My hon. Friend is right, however: we were anxious to ensure that the Treuhandanstalt treated British applications fairly, especially in the sphere of utilities. In that sphere, we have the great advantage of privatised companies, which are able to bid, take part and contribute, and which can therefore bring competition—and a degree of comparative competition—on to the German scene. There was a great deal of interest among the German press and the German business men who were present when I was there, and who were hoping that that would happen. We shall do all in our power to ensure that British firms face a level playing field when they make applications.

How can British manufacturing industry be expected to compete effectively in the former GDR against foreign competitors when 62 per cent. of our industrial work force are unskilled, compared with 38 per cent. in Germany, 21 per cent. in Italy and 20 per cent. in France? Will the Minister have a word with his right hon. Friend the Prime Minister and tell her that it is about time that, instead of continually criticising our European partners, she stopped carping and started learning?

One thing that I learnt from the German business men present was their method of encouraging and financing training among the large number of people whom they take on after school. The trainees effectively financed themselves by accepting pay that was only 40 per cent. of the adult wage. I understand that that practice has largely been banished from British industry because of pressure from British trade unions, but I shall convey the views expressed by the hon. Gentleman when I next meet the unions.

Has my right hon. Friend considered the position of Prescold, which has been taken over by the Germans, who now dominate the market? They closed down the company over here, and all the manufacturing is now taking place in Germany. That is one industry which has gone from this country to Germany.

Happily, that is a rare occurrence. We are now the most favoured location for investment from West German companies and companies elsewhere in the EEC, as we are for countries outside the EEC, which are investing in the EEC to take advantage of the single market. We have received major investments from West German, Japanese, American, French and Italian companies because we provide an environment in which they can prosper. None of that investment would have come here had the Labour party been in power.

In connection with the proposed sale of Interflug, the East German airline, in which both Lufthansa and British Airways have declared an interest, has the Secretary of State made any representations to the German authorities to ensure fair play when considering British Airways' interest, or has he abandoned the matter to the Commission of the European Community?

I made representations at the time and they were well received by the Minister, who recognised the strength of our point.

To ask the Secretary of State for Trade and Industry what plans he has to assist small and medium-sized firms in developing new products and processes.

My right hon. Friend the Secretary of State plans to launch in early 1991 a new scheme to support small and medium-sized firms to develop new products and processes. The scheme will be called SPUR.

Despite the present difficulties, does my hon. and learned Friend agree that small and medium-sized firms in the south-west are well placed to take advantage of the single European market? Will he state the proposed level of funding for this splendid new initiative and will he continue to build on it with further initiatives to help innovation?

We have a variety of initiatives in place, most notably SMART—the small firms merit award for research and technology—the consultancy initiative and REG—regional enterprise grant. Those are all familiar terms to some hon. Members but not, it seems, to the Labour party. Investment will be about £30 million over three years.

Will the Minister acknowledge that the finest assistance that could be given to small and medium-sized firms in Britain, and St. Helens in particular, would be a substantial fall in the appalling level of interest rates, which is currently crippling them?

As a matter of fact, the best assistance by far is a profitable industry. The House will like to know that profitability in British industry has increased substantially in the past decade. It is up 1·75 times since 1979, up 2·5 times since 1980 and up 3·5 times since 1981. The House will also like to know that between 1974 and 1979 profitability increased not at all.

Following on from that reply, does my hon. and learned Friend remember that during Labour's last period of Government its response to the lack of output from small companies was to increase employers' national insurance contributions by imposing a national insurance surcharge? Does he recall that during the 1980s we removed it progressively and output increased? Has he made any representations to the Treasury about reducing the current high level of employers' national insurance contributions of 11·5 per cent. to perhaps 5 or 6 per cent., which it was in those days?

My hon. Friend referred to an important point. Under the Labour Government of 1974–79, manufacturing output actually fell. If the House would like to have the figures, they are these. In 1974, output was £109·1 billion. In 1975, it was £106 billion. To be more precise, production of cars between 1974 and 1979 fell by about one third, from just over 1·5 million to just over 1 million. So, Mr. Speaker, you can well understand why we regard the protestations of the Labour party that it is a friend of manufacturing industry as simply absurd.

I was wondering where the continentals got the term "thick bricks" from. How does the Minister propose to aid technology transfer by cutting the budget by 40 per cent?

I am afraid that the hon. Gentleman has not studied the matter carefully. The SPUR scheme, which is the most interest—

What is it?

The hon. Member for Redcar (Ms. Mowlam) wants to know about the SPUR scheme. Well, I shall let her know about it. It has three elements. The first is to assist firms to pay for consultants, to help with the introduction of advanced manufacturing systems. The second is to assist small firms with product developments that have a novel, technological edge to them. The third is to assist with the provision of technological expertise to deal with short-term problems. I should expect ringing applause from the Opposition, but I know that I shall not get it.

To ask the Secretary of State for Trade and Industry what was the growth of manufacturing productivity in (a) the United Kingdom and (b) other G7 countries during the 1960s, 1970s and 1980s.

In the 1960s Britain had the slowest rate of growth in manufacturing productivity of any of the seven major industrial countries. In the 1970s we again had the slowest rate of growth in manufacturing productivity of any of those countries. In the 1980s we had the fastest rate of growth in manufacturing productivity of any of those countries.

Will my right hon. Friend join me in congratulating British manufacturing industry on its remarkable achievement? Does he agree that increasing productivity leads to lower unit costs, which lead to increased sales, profits and investment, which is the best way to expand our manufacturing base?

My hon. Friend is absolutely right. We should congratulate British industry because its manufacturing productivity has increased even faster than that of Japan. Scottish Labour Members make comments about the performance of industry, but we should note that Scottish manufacturing productivity has grown even faster than that of the rest of the United Kingdom. Scotland has outstripped even Japan and I pay tribute to Scottish industry for that. It never receives a word of praise from Scottish Labour Members.

If industrial production was so bad in the 1960s and 1970s and is supposed to be so good now, why do we have the worst balance of payments deficit in our industrial record, of £20 billion?

The hon. Gentleman should realise that a balance of payments deficit normally reflects an excess of demand that is growing even faster than rapid output. If a country spends £520 billion and produces £500 billion worth of output, it has a £20 billion deficit. That reflects not competitiveness, but excess demand. That is why my right hon. Friend the Chancellor of the Exchequer has slowed the rate of growth in demand. The deficit is already diminishing and will continue to do so.

To ask the Secretary of State for Trade and Industry what action the Government have taken to encourage green policies in industry.

In May 1989 my Department launched an environmental programme. It set up an environmental helpline, which has already handled 6,000 queries. In April 1990 an environment unit was set up within the Department and in October 1990 I had the pleasure of launching two schemes—one jointly with the Department of the Environment, the environmental technology innovation scheme, to encourage research in green technology, and the DTI's environmental management options scheme, to spread best practice in green matters. They are positive steps forward and represent a major commitment to encourage British industry to pursue green policies.

May I welcome the establishment of the environment unit and the other measures that my hon. Friend mentioned? What financial support are the Government giving to companies, such as Scotts in my constituency, with their environmental programmes?

The funding for the various schemes amounts to £20 million over three years. We expect British industry to fund most research and development into new products and to promote its work to improve standards on pollution control. We believe in the "polluter pays" principle and that the main role of the Government is to set standards, which the House has been doing through the environmental protection measures.

Do not we have much catching up to do in this particular area? Will the Minister confirm that West Germany, for example, spends three times what we spend on environmentally related research and development?

I cannot confirm that particular figure and I do not know where the hon. Lady got it. The British experience is not at all bad by international comparison. The standards that we are setting will be good ones, which many parts of British industry can already meet. There a re many problems throughout the continent of Europe and the further east, the more difficult the problems.

Drawing a veil over the environmental consequences of socialist Governments in eastern Europe, is my hon. Friend aware that engineering firms in the west midlands accept the thrust of Government policy to improve the environment, but are concerned about the capital costs of some of the standards under discussion in the technical committees? What contribution is my hon. Friend's Department making to the consideration of those technical standards, taking into account best available technology not entailing excessive cost? Would it be possible to extend assistance provided by the Industry Acts to meet environmental objectives?

My Department is active in discussions with other Departments in Whitehall on the green initiative, for the reasons that my hon. Friend has described, if not for other reasons. We want sensible standards that industry can meet. The purpose of the exercise is not to drive industry out of business, but to provide a stimulus for better practice and better products.

To ask the Secretary of State for Trade and Industry if he will make a statement on the number of firms affected by the withdrawal of contracts from Iraq.

We do not have a complete count of United Kingdom firms affected. The Department of Trade and Industry, the Bank of England and the Foreign and Commonwealth Office have dealt with a large volume of inquiries since the beginning of the crisis. The Export Credits Guarantee Department is in contact with most of the firms that insured their contracts and it will be meeting established claims.

Is not a year a long time? If I had asked this question a year ago, Ministers would have been falling over backwards to tell us about all the wonderful contracts that we have with Iraq. Those contracts were operating at a time when Iraq was fighting a war against Iran, so what has changed?

If the Department and the ECGD had not provided the normal range of export help to what was a very good market—a market for civilian equipment and civilian exports—we should have been open to criticism. Since 1983, £2·7 billion of new exports have been secured for the United Kingdom in that market. That must have meant a lot of jobs.

Does my hon. Friend agree that the only way in which we shall have peace in the middle east is to defeat Saddam Hussein? Those who complain about the costs of losing a few contracts fail to recognise the high stakes for which we are playing. They are the sort of people who would have appeased Hitler in the 1930s. The price of appeasement then was war and the price of appeasement today would also be war.

I agree that the whole House, or nearly the whole House, is united in the determination to see that Saddam Hussein gains nothing from his invasion of Kuwait and that his withdrawal from it is total and unconditional.

Is not it a fact that a short time ago we were exporting what were called oil pipes to Iraq, and the Government did not seem to know that we were actually exporting long-distance gun barrels? Will the Minister examine his conscience about that, instead of talking so glibly?

The hon. Gentleman is well aware, I hope, that that matter is sub judice.

To ask the Secretary of State for Trade and Industry if he will make a statement on his Department's and Her Majesty's Government's research and development expenditure as a percentage of gross domestic product; and what comparable information he has in respect of Japan.

Total Government-funded research and development as a percentage of gross domestic product was 1.0 per cent. in 1988. This was twice the corresponding figure for Japan.

As my right hon. Friend is well aware, the Cambridge phenomenon has had important side-effects elsewhere in East Anglia and I hope that those effects will increase in my constituency in the future. Will my right hon. Friend confirm that he is encouraging industry to collaborate with university and polytechnic science and technology departments to establish science parks and other developments?

My hon. Friend makes an important point. The success of science-based industries around Cambridge is due to the close collaboration between industry and the university science base there. We are anxious to encourage that throughout the country and so have encouraged the establishment of science parks around universities—there are now 39 of them and another 19 are planned. I am anxious that we should consider building more around polytechnics and Government research establishments so that they can benefit from similar effects.

Does the Secretary of State accept that the LINK scheme to promote links between industry and higher education, which his Department launched, is in a state of collapse because of the ridiculous red tape and restrictions surrounding the rules of that scheme? That is evidenced by the withdrawal from LINK of Celltech, an important new British high technology company, only this week.

No, I do not accept the hon. Gentleman's premise. We are introducing a new scheme in which it will be much easier for small companies to participate without having to go to the length of collaborating with a range of other companies. An increasing number of applications and programmes are going ahead under the LINK scheme. I am sure that the hon. Gentleman will welcome that and be pleased to know that he was mistaken.

Has industry's funding of research and development decreased or increased during the Government's term of office?

Research and development by private industry, which is most important and valuable, has increased substantially since industry's profitability increased. Over the past five years research and development by business went up by 50 per cent. We have increasingly focused Government support on getting better co-operation between universities and the science base and industry.

To ask the Secretary of State for Trade and Industry what is the latest estimate of the balance of trade in information technology.

According to the latest estimates, the United Kingdom had a deficit of £685 million in the manufactured products of the electronics and information technology sector in the first quarter of 1990. Those figures are for hardware only. There are no separate figures for trade in software.

Is not that a deplorable gap in a valuable world market? Should not we encourage our own product base in that important sphere? When will we invest in the research and development necessary to do that?

The hon. Gentleman has not reflected on those matters. All major OECD countries, with the exception of Japan, have a deficit in information technology. The United Kingdom has a substantial surplus of £900 million in its trade with the rest of the Community, including France, Germany and Italy. I am sure that the hon Gentleman will be pleased to know that output in electronic and information technology industries in the United Kingdom has increased by 37 per cent. since 1985. Perhaps he should do a little more homework before he asks a question.

What view does my hon. and learned Friend take about the fact that we are now almost completely dependent on Japan for the chemicals used in the manufacture of semiconductors?

Whenever possible, we welcome inward investment in those sectors. I am glad that generally throughout the IT industry there have been substantial improvements in our domestic capacity. I welcome that and attribute it, at least partly, to Government policy.

What will be the effect on our trade in information technology of our entry into the ERM at the ludicrously inflated rate of DM2·95? How long will it be before we have to devalue?

I am sorry for the hon. Gentleman because he is normally a bright fellow who does his homework, but he has not done so today. At present our surplus with West Germany is £470 million, our surplus with France is £557 million and our surplus with Italy is £212 million. I expect that happy trend to continue.

To ask the Secretary of State for Trade and Industry if he will make a statement on the United Kingdom's trade with Germany.

Germany is the United Kingdom's second largest export market. Our visible exports in the first three quarters of this year increased by 19 per cent. to £9·4 billion, compared with the first nine months of 1989. Germany is the United Kingdom's largest supplier and our visible imports increased by 3·4 per cent. in the same period, reaching £15·3 billion.

As last year's figures show that for every pound of goods we sent to Germany, Germany sent us back more than £2 worth, and as the deficit was more than double our deficit with Japan, does not that seem to show either a considerable amount of non-tariff discrimination or that the exchange rate of DM2·95 is wholly artificial? Will the Minister examine that problem and see what can be done about our worst trading partner, not our best?

There are clearly considerable opportunities for British companies to increase their exports to Germany. It is our second largest export market and there has been good growth in it. I hesitate to say this to my hon. Friend, but our opportunities to export to that market would be reduced—there would be more obstacles to our trade—were we not both members of the European Community.

To ask the Secretary of State for Trade and Industry what discussions he has had in Europe about import ceilings for Japanese cars after 1992.

I attended an informal meeting of Community Trade Ministers and the Commission in September, which discussed that matter. The Commission is proposing a transitional period of continuing restrictions lasting until the late 1990s. The United Kingdom continues to press for early liberalisation. We remain adamant that cars made in the EC by Japanese-owned companies must continue to be allowed unlimited free circulation throughout the Community. I believe that that has now been accepted by other member states and the Commission.

Has not the Minister got himself and the nation into a trap, because he has not been strong enough or tough enough to get full agreement to the exclusion of Japanese cars made in this country from the Japanese quotas? He is driven, as a result, to want an increase in the Japanese quota; rumour has it that he has been urging an increase from 11 per cent. to 29 per cent. If so, that would decimate jobs in the British motor industry. Why does not he beef himself up to get those cars included as British?

The hon. Gentleman is mistaken. The voluntary restraint agreement 11 per cent. restriction is no longer being fully met simply because Japanese cars are now being produced domestically, so there is less need to import them than in the past. There is therefore no question of imports of Japanese cars being expected to rise to the figure that the hon. Gentleman stated. He is correct, however, to say that there is still opposition from the Italians and to a lesser extent from the French to reaching an agreement on that. He can always apply his own sanctions and abandon his Fiat motor car if he wants.