To ask the Secretary of State for Trade and Industry what representations he has received about the telecommunications duopoly.

I have received more than 190 written responses to the consultative document on competition and choice in telecommunications. The vast majority firmly supported the document's main proposals.

Is the Secretary of State aware that the 14 January deadline for submissions on the Government's consultation document has caused great consternation in the industry? Is two months long enough for comments on a document which proposes such fundamental changes to one of our most important industries—changes which the Government have considered for seven years?

The hon. Gentleman is right that everyone had seven years' notice of the consultation. Forty companies made representations before I even published the consultation document. Six of the 190 companies made representations after the 14 January deadline and we shall do our best to consider any late representations.

Will my right hon. Friend think twice about proposals to allow British Telecom to deliver entertainment services to households? Those of us who want massive investment in cabling in Britain fear that that might be a threat by British Telecom to deter investment in the cable industry.

I shall, of course, consider very carefully my hon. Friend's remarks and the other representations on that issue that I have received as a result of the consultation process. The considerations that my hon. Friend mentioned are those which originally led me to make the proposal in the consultative document.

When will the Secretary of State be able to respond to the representations that he received in relation to the consultative paper? Does he agree with British Telecom that there can be no effective competition without firm regulation on matters such as the price of access of potential competitors to the BT network? Will the Secretary of State modify the proposals in his consultative paper to ensure that there is effective regulation to protect the public interest and to protect a competitive environment, high technical standards, proper research and development and capital investment in the local loop?

I cannot give the hon. Gentleman a firm date by which the conclusions will have been reached. I shall endeavour to do so as rapidly as is compatible with proper consideration of the representations. I do not want an unnecessarily long period of uncertainty. I agree that regulation is necessary, although competition is desirable. Under the previous arrangements for a nationalised industry with which the Labour Government were satisfied, there was no regulator. In the words of the Fabian Society, the nationalised industry was left to regulate itself. We prefer a privatised industry but a firrn regulatory authority and that is what we have.

Will my right hon. Friend assure the House that when he considers the representations he will give greater weight—or at least equal weight—to the representations of user gorups and individual customers than to those of the massive formerly nationalised industry, which now puts so much pressure on the Government to stop free competition? Will equal access be speeded up so that more people can get into the telecommunications market and therefore force prices down through competition?

My hon. Friend makes a very good point. The consumer interest must and will be paramount. We place great emphasis on competition because that is the best way of ensuring the consumer interest, although, in some areas, as I said, regulation is essential to reinforce it With regard to my hon. Friend's point about equal access, I shall consider the responses to the proposal that I made in the document.

To ask the Secretary of State for Trade and Industry what plans he has to reduce import penetration.

The Department's policies aim to foster the competitiveness of British industry.

Is the Minister aware that, since 1979, import penetration in manufacturing industry has increased by 10 per cent., in chemicals by 12 per cent., in electronics by 21 per cent. and in computer and office equipment by 92 per cent? When will the Minister stop giving bland answers and support manufactures and manufacturing industry? Does he agree that on Friday our balance of payments deficit will be in excess of £15 billion?

Import penetration is a feature of advanced economies. Indeed, on the basis of OECD statistics, import penetration in the United Kingdom is a little less than that in Germany, which would imply that we are on a fairly level playing field.

Is my hon. Friend aware that I represent a seat which is thoroughly concerned with manufacturing industry and that the vast majority of my constituents agree with me that the only way to beat import penetration is for British industry to make products that can be sold successfully throughout the world?

As so often, my hon. Friend is absolutely right. I congratulate British manufacturing industry on the great increase in productivity and exports that it achieved in the 1980s.

Is the Minister aware that a United Kingdom company that has supplied a proven product to United Kingdom ambulance services for the past four years has been excluded from a contract valued at £3·8 million? That contract was awarded in favour of an overseas competitor. Does the Minister agree that all Government Departments and those who spend public money must support our manufacturing industry and, when possible, award contracts to British companies? Will he seek the support of the Secretary of State for Health and hold an inquiry into how that contract has been awarded and, if possible, have it suspended during reappraisal?

I am glad to be able to reasure the hon. Gentleman that more than 90 per cent. of the goods and services bought by the Government are from United Kingdom sources. Of course, the Government, as a purchaser, are looking to give the best possible value to the taxpayer.

The contract to which the hon. Gentleman refers is a matter for my right hon. Friend the Secretary of State for Health. Perhaps the hon. Gentleman would like to write to him about it.

As a manufacturer involved in the manufacturing of consumer goods, does my hon. Friend agree that the bottom line is that the consumer should want to buy English or British produce because it is more attractive in terms of price and design? At the end of the day that is what manufacturing industry in this country must achieve if we are to reverse import penetration.

My hon. Friend is absolutely right. I am glad that he mentions design as an important feature for a successful manufacturer and, of course, good service to the customer is also important. Being close to the market can be a great advantage to British manufacturers.

To ask the Secretary of State for Trade and Industry when he next expects to meet the president of the CBI to discuss manufacturing industry.

Ministers and officials from the Department of Trade and Industry regularly meet representatives of the Confederation of British Industry. Last week I met CBI representatives on two occasions, once to discuss wider ownership and once to hear their views on pay and productivity.

With high interest rates costing industry £30 billion a year, with investment falling, with output down for each of the past seven months and with manufacturing redundancies running at 1,500 a week, is not it now time for the Government to take up the call of the right hon. Member for Henley (Mr. Heseltine) in his leadership election manifesto for a more interventionist policy by the Government to save manufacturing industry from extinction?

The adjustment to get down inflation has some costs. The CBI itself asked for membership of the exchange rate mechanism and the Government have adopted that discipline. It is very important, as the CBI is now telling its membership, for higher productivity that the adjustments should take place. There are many market opportunities and big export opportunities. Manufacturing exports are at record levels and there are many opportunities for import substitution. Many good companies in British industry are now addressing those matters to offer jobs and prosperity.

Does my hon. Friend accept that the decline in our manufacturing industry has directly led to our economy becoming extremely vulnerable? Does he further accept that the level of interest rates and the level at which we entered the exchange rate mechanism continue to contribute to the undermining of our manufacturing industry? Will he accept from me the sad news that several leading United Kingdom manufacturers in high technology are considering locating manufacturing plants in other countries in the European Community where the economic climate is much more advantageous?

There are many fine companies and industries in our manufacturing sector. They are doing much better than they did under Labour in the 1970s and they will continue to do so. The aerospace, pharmaceutical and motor car industries are finding many new opportunities. I welcome the great expansion in the motor car industry where output is running at about 1·3 million cars per annum compared with a low point of only 900,000 cars less than 10 years ago. That is welcome progress. Of course, the Government want the adjustment to a low-inflation, high-productivity economy to occur rapidly. The sooner that that adjustment takes place, the greater the success will be.

Does the Minister share the concern felt by many that manufacturing output and investment are collapsing much more quickly than the Government predicted? Does he agree that that is partly due to the corporation tax system and its non-neutrality with regard to inflation? Will he and his colleagues urge the Chancellor of the Exchequer to reform the corporation tax system, for example, by increasing investment allowances to 40 per cent?

Corporation tax policy is a matter for the Treasury, not the Department of Trade and Industry. However, the hon. and learned Gentleman should know that corporation tax in Britain is one of the lowest in the free enterprise world. It is welcome that the tax burden is proportionately lower here. That may be a contributory factor to the large amount of inward investment which Britain has attracted in recent years. Many overseas countries and companies recognise that Britain is the place in which to invest and we intend to encourage such investment further.

Does my hon. Friend agree that today's refusal by the Monopolies and Mergers Commission to allow the takeover of ICI Agricultural Chemicals by Kemira has come much too late? Does he agree that if it had turned down Kemira's earlier bid for Fisons and if his Department had prevented that nationalised company from undercutting and wrecking the market in agricultural chemicals, many of my constituents would not face the prospect of unemployment as a result of today's announcement?

I hope that ICI finds some other solution for its agrochemical business, if there is a commercial and industrial way of doing so, because I want those jobs to be preserved. The MMC findings illustrate the wisdom of my right hon. Friend the Secretary of State when, as a matter of policy, he drew the attention of the MMC to the possibility that bids from nationalised industries could be more damaging and less fair than other bids. In its two reports published today, the MMC illustrated that that can be the case. In the case that my hon. Friend mentioned it found against the deal partly because of anxieties about the conduct of nationalised companies. The Government are determined to see fair play in markets. Part of that fair play must be to make sure that nationalised companies do not abuse their position in capital, product or service markets to the detriment of British jobs and industry.

But with manufacturing output down by £2 billion, manufacturing investment down 4 per cent., 100 companies going bankrupt every day and unemployment rising faster than anywhere else in western Europe, are not the Government, who began by provoking a manufacturing recession, causing yet another such recession far more severe than Ministers are prepared to admit? Is not it time that the Secretary of State for Trade and Industry, not just a junior Minister, spoke up for the needs of industry, ended the self-satisfied complacency and argued the case in Government, first, for a cut in interest rates and, secondly, for a budget for investment in industry?

My right hon. Friend speaks up well for British industry and is a great ally and friend of it. British industry is flourishing considerably more under this Government than it ever did under the Labour Government. Output in manufacturing is up, whereas it used to fall under the Labour Government, and our unemployment is considerably below the European average. Whenever something is adverse in comparison with Europe we hear about it all the time from Opposition Members, but that is not the case on unemployment because they know that we have a much better record than do some of our European partners.

Last year, more new companies were created than fell on hard times. There was an extremely satisfactory rate of new company formation last year and we welcomed it as a sign of a flourishing enterprise economy.

Is not it a credit to the increased efficiency of the British motor manufacturing industry—I pay particular credit to Rover in the west midlands—that, despite a decline in United Kingdom car sales, the export of British cars has been tremendous? That is largely due to the fact that we have achieved increased efficiency. As a result of the 44·7 per cent. increase in car exports those companies are now working to full capacity.

My hon. Friend makes her point extremely well. The British Government are extremely proud of the British motor industry and are proud of all those companies investing and located here. They have made great strides in improving the quality and performance of their products. They now have a number of world-beating products that will continue to go from strength to strength on world markets.

The latest figures for the export of motor cars are heartening. They show that the British economy can flourish based upon more exports to overseas markets where there are good opportunities for growth and based upon import substitution as, once again, British people back British products because they are well made and good.

To ask the Secretary of State for Trade and Industry what are the latest trade figures between Britain and Germany; and if he will make a statement.

In the first 11 months of 1990, United Kingdom visible exports to Germany were valued at £12 billion; imports from Germany were £18·5 billion. Compared with the similar period in 1989, exports are up by 18·5 per cent., while imports are virtually unchanged..

Why does not the Minister have the guts to tell us what the deficit was in 1979? Is he aware that the deficit between Britain and Germany was £1·6 billion when the Tories took over and that when the Government announce the figures on Friday, it will be £7·1 billion? No wonder the Germans told the Governor of the Bank of England to get lost yesterday. Is not it a sad reflection on this country that, after 1945 when everyone was throwing their caps in the air, the Government are now going cap in hand to the Germans? We know who the top dogs are now.

It appears that the hon. Gentleman has some reservations about the Government's economic policy. I should like to hear him pay tribute to the success of those parts of our industry that are exporting to Germany so effectively. Clothing industry exports have gone up 40 per cent. and medical and pharmaceutical exports are up 41 per cent. in the first II months of this year.

Is my hon. Friend aware that there are immense opportunities for British companies in the former Soviet sector of Germany, now eastern Germany, particularly for the infrastructural industries of transport, telecommunications energy and water? Will my hon. Friend use the full resources of his Department to draw those opportunities for trade and investment to the attention of British companies?

I very much agree with my hon. Friend. He will be aware that an extremely successful seminar was held last week, jointly sponsored by my Department and the CBI, with the Treuhandanstalt. That seminar drew the attention of British industries to investment and trade opportunities with the former East German territories.

But in relation to the deficit with Germany does the Minister ever go out and talk to manufacturers? If he does, what have they told him about going into the ERM at 2·9—almost 3—deutschmarks to the pound? [HON. MEMBERS: "You wanted it."' We did not want it at that figure. Those manufacturers would tell the Minister that it is not possible to be competitive at that rate. What is the Minister and the miserable team that he has round him doing about that? I know that none of them has any experience of industry—the Minister for Trade was kept in the back office of the family firm. The Minister and his team should at least get out and, in the words of the former Prime Minister, back British industry, and tell the Treasury that it was wrong.

I assure the hon. Gentleman that I make it my purpose to have contacts with industry nearly as close as those which I had when I spent 20 years in industry. I also assure the hon. Gentleman that, although it is sometimes suggested that a lower exchange rate would be helpful for exports, I frequently hear it suggested that a stable exchange rate and lower inflation are much more to be welcomed.

To ask the Secretary of State for Trade and Industry what was the level of manufacturing output for the past year; what was the level in previous years; and if he will make a statement.

Figures for manufacturing output are not yet available for the whole of 1990. Provisional estimates show that manufacturing output in the first 11 months of 1990 averaged 1190, based upon 1985 equal to 100, similar to the record annual level of 1989.

Will my hon. Friend confirm that the volume of manufacturing output increased by 8·5 per cent. during the first 11 months of 1990? Does my hon. Friend agree that that would not have happened had not our industry been made much more competitive as a result of the transformation achieved by the Government over the past 11 years—in terms of competitiveness and everything else?

My hon. Friend is right to draw attention to the transformation of British industry in the last decade. Output, productivity, exports and investment are all well above their 1980 levels and exports are at a record level.

Does the Minister agree that the steelworkers of Lanarkshire are only too willing to contribute to British manufacturing output—in particular the men of Ravenscraig, Clydesdale, Dalzell and Imperial who are losing their jobs? The Minister for Corporate Affairs tells people to buy British. When will he tell that to British Steel?

The prospects for British Steel have been transformed under this Government. Losses running into £1 billion in 1979, under the Labour Government, have been tranformed into profits of more than £600 million now. Opposition Members like to pose as friends of manufacturing industry. It is interesting that when they were last able to act on that friendship, manufacturing output fell.

To ask the Secretary of State for Trade and Industry if he will make a statement on the progress of the Uruguay round of the GATT.

To ask the Secretary of State for Trade and Industry if he will make a statement on the likely results of a successful completion of the GATT negotiations.

We continue to press for the early resumption of talks, as a successful Uruguay round would include fully for the first time agriculture, services, textiles, intellectual property and investment as well as significant reductions in tariffs, quotas and other barriers and improvements in disciplines and safeguards. Such an outcome would be highly beneficial for the United Kingdom and would provide a much-needed noninflationary stimulus to the world economy. Failure would mean a return to protectionism, trade wars and beggar-my-neighbour policies.

My right hon. Friend continues to press for a settlement of the Uruguay round. Although the House is now concentrating on the Gulf war, many of us are still concerned that the GATT round remains unresolved. Will my right hon. Friend confirm that the United States estimates that, by the end of the decade, non-inflationary growth in the world will amount to about $4 trillion? That would be of particular benefit not only to the United Kingdom but to many developing countries about which many of us are still deeply concerned.

My hon. Friend is absolutely right. The United States has estimated that, in terms of reductions in tariffs alone, a successful round would produce an extra $4 trillion of income in the world by the end of the century. My hon. Friend is also absolutely right to point out the importance to third-world countries of a successful outcome to the Uruguay round as those countries, more than any others, need an open and buoyant world trading environment.

My right hon. Friend will know that, before coming to this place, I spent my life in textiles and that I therefore have a deep interest in the outcome of GATT and in its effects on the multi-fibre arrangement and the textile industry. If there is a gap between agreement on GATT and the phasing out of the MFA, a dreadful vacuum will be created. Can my right hon. Friend reassure the textile industry about what he might do if such a vacuum were created?

My hon. Friend is right to emphasise the importance for the textile industry, in his constituency and more widely, of a successful outcome to the round. Failure to agree would mean that the existing multi-fibre arrangement would lapse in July of this year. That would be unacceptable to us, to the industry and to the world and would lead to the necessity for other arrangements. It would be better by far to have a successful conclusion to the GATT round by the target date of 1 March.

Will the Secretary of State ensure that his remarks are conveyed to those negotiating on our behalf? He must have received the same anguished letters as we have from manufacturers who say that unless the GATT regulations are strengthened and enforced, doing away with the MFA will bring further problems for the textile industry, which is already very weak.

The hon. Gentleman makes a good point. The embryonic agreement on textiles which would be available if we conclude the whole GATT round would result in a transitional phasing out of the MFA over 10 years, which would be more acceptable than its precipitate ending in July. We have done all in our power—and I continue to consult colleagues in the European Community, as well as in other countries with whom we established close relationships during the Brussels week of negotiations—to urge an early resumption of talks.

Can the Secretary of State tell us whether the Government are bringing forward specific proposals which might lead to the resumption of the talks, which are vital to all who represent constituencies not only with textile interests, where we see redundancy after redundancy, but with agricultural interests which are important to the rural community?

The GATT negotiations are carried out by the European Commission on behalf of member states, so it is essential that the Commission should use its negotiating power to the full and that it should seek to get back to the negotiating table as rapidly as possible. We have pressed for that within the Community, as is widely recognised.

I am afraid that I cannot speak with great volume today. The hon. Member for Oldham, Central and Royton (Mr. Lamond) was right in his plea for the textile industry in the north-west. The round of negotiations is critical for thousands of textile workers in the area. I implore my right hon. Friend to make sure that he gets it right.

I never thought that I would have difficulty in hearing my hon. Friend. I entirely endorse his message that the industry is of great importance to the north-west. We are very concerned to ensure a proper settlement within GATT. There is the basis of an agreement which would be satisfactory, I think, to the textile industry; certainly it would be much more satisfactory than failure to agree.

Has the Secretary of State seen the widespread criticism in the press of the Government's stance on agriculture within the European Community? Is he aware that agriculture accounts for 1·5 per cent. of our GDP while manufacturing, construction and financial services account for over 50 per cent? Surely the Government can find ways to help agriculture that do not put in jeopardy the major part of the economy.

I have not seen the widespread criticism. I recall the last Labour Prime Minister's son-in-law describing me as the hero of the GATT negotiations, but I do not think that that is what the hon. Lady was referring to. I have done all in my power, as have the whole Government, to bring about a successful conclusion to the talks, including success on the agricultural front.

To ask the Secretary of State for Trade and Industry if he has any plans to review the self-regulation of Lloyd's of London.

The Neill committee in 1986 reviewed regulation at Lloyd's thoroughly. Its 70 recommendations have been implemented in full and I think that the new system now requires a period of stability.

I thank my hon. Friend for that reply. He must be aware of the disquiet felt by people who are in dispute with Lloyd's because there is no form of independent appeals procedure. Will he express concern for my constituent, Mr. Cawen, who, after 25 years of exemplary service at Lloyd's, has been disbarred on a technical matter which would not occasion any form of prosecution in a court of law? Is my hon. Friend also aware that the United States Congress has expressed grave concern about the way in which Lloyd's is regulated? Will he therefore give an assurance that people in dispute with Lloyd's can look forward to a truly independent appeals system?

There is an appeals system within Lloyd's and a large number of independent members are involved in regulation at Lloyd's—indeed, they are in a majority. If my hon. Friend would like to pursue the case of her constituent, Lloyd's would be prepared to talk to her about it, if she has her constituent's consent in so doing—

indicated dissent.

I am telling the House today that I think that Lloyd's would be prepared to discuss the case with my hon. Friend if her constituent authorises her so to do. She is also welcome to come and see me about the matter, but regulation is for Lloyd's which has a system of regulation established under statute, and independence is an important characteristic in the appeals procedure.

Is the Minister really as satisfied with the system at Lloyd's as his remarks just now seemed to suggest? Not only are there internal problems, as the horn. Member for Billericay (Mrs. Gorman) pointed out—she has tried to talk to Lloyd's, but the response from Lloyd's has been negative and the Minister's response unacceptable—but there are difficulties at Howden and, as the Minister is aware, a record number of years of books are outstanding at Lloyd's. Is that what the Minister regards as regulation working?

The new system at Lloyd's is much tougher than the old one. The recommendations are wide ranging, as the hon. Lady would know if she had done her homework. That system is now tackling the problems that arose before 1986 and the fundamental review. It is ridiculous for the hon. Lady to describe my reply as unacceptable when I have told my hon. Friend the Member for Billericay (Mrs. Gorman) that she can talk to me about the case in question and also to Lloyd's. What more can a Minister do than offer to talk through a particular case and to see whether Lloyd's can provide satisfactory answers for my hon. Friend, who needs to know both sides of the story?

To ask the Secretary of State for Trade and Industry when he next intends to meet the chairman of the royal mail to discuss the quality of postal services in the United Kingdom.

My right hon. Friend the Secretary of State meets the chairman of the Post Office, Sir Bryan Nicholson, regularly to discuss various matters of mutual interest.

Is my hon. Friend aware that some post offices have run out of forces air mail letters? Will he promise to look into that shortage? Does he agree that the Post Office is doing an admirable job and playing a proper part in maintaining the morale of the forces in the Gulf, and none more so than the sub-post offices in our rural communities? Will he therefore ensure that those offices can compete on equal terms with Crown post offices in future?

On the latter point, we have received assurances from the Post Office that the sub-post offices will offer the full range of services provided by Crown post offices. Indeed, the Post Office Users National Council report seems to suggest that there is more satisfaction with the service at sub-post offices than with that at Crown post offices.

As for my hon. Friend's first and important point, I emphasise that the Post Office has a comprehensive service of providing free aerogrammes to the Gulf—the blueys —and parcels can be sent to the Gulf at the same rate as the inland parcel rate. I was disturbed to hear what my hon. Friend said about some post offices not having blueys. When our troops are prepared to pay the supreme sacrifice, the Post Office must ensure that their loved ones can communicate with them easily. I shall write to the Post Office today.

I am sure that the Minister is aware of this week's report by the Post Office Users National Council, which welcomes the significant improvement in people's feelings about how capably the post office has been handling first-class mail. Will he use this opportunity to state clearly once and for all—and to keep morale in the Post Office high—that the Post Office will not be privatised under this or any future Government?

The hon. Lady is right to draw attention to the Post Office Users National Council survey which shows that 86·2 per cent. of first class letters are being delivered the next day. As for her other point, the former Prime Minister, my right hon. Friend the Member for Finchley (Mrs. Thatcher) gave a commitment, which stands for the present Parliament. As regards the future, however, we are open minded and will consider all suggestions.

Is my right hon. Friend aware that one of the reasons for the fairly dismal performance of the first class letter service is the extensive restrictive practices still carried out by the trade unions represented in the Post Office? Will my right hon. Friend tell the House what steps he intends to instruct the chairman of the Post Office to take to break this union power?

There have been some alarming cases of trade union industrial action which have resulted in a less than perfect service to Post Office customers. We keep these matters constantly under review. All options are open.

To ask the Secretary of State for Trade and Industry what further steps he is considering to protect housebuyers from misleading property descriptions following his review of the Trade Descriptions Act.

As the then Minister told the House in several written answers last year, it is the Government's intention to amend the Trade Descriptions Act 1968 to apply its provisions to descriptions of real property. That remains the Government's intention, subject to parliamentary time being available. However, an order under the Estate Agents Act 1979, dealing with the misdescription of property, will be laid before the House as soon as possible. This is part of a package of measures to curb malpractices in estate agency which was announced last April by the then Minister and was the subject of a consultation document issued by my Department last year.

Does the Minister realise that, because of the Government's refusal to introduce their own legislation on this, they have left the door wide open for hundreds of unscrupulous estate agents to mislead thousands of home buyers? How can the Government justify their lack of action?

On the contrary, the Government have listened to a number of representations. My predecessor gave a commitment on behalf of the Government, which has necessitated a full consultation period during which a number of problems have come up; but if the hon. Lady had listened to my answer she would have heard me give a commitment. She may also be aware that my hon. Friend the Member for Coventry, South-West (Mr. Butcher) drew a high place in the ballot for private Members' Bills and intends to promote a Bill to deal with misdescription of property.

Given the cost, inconvenience and occasional distress caused to house buyers by the more fanciful hyperbole of less scrupulous estate agents, will my hon. Friend agree that the measures shortly to be brought forward by the Government in regulations and in the private Member's Bill to which he referred are welcome not only for the benefit of consumers but for the benefit of the more responsible estate agents?

Yes. My hon. Friend is right to draw attention to the lacuna in the present law, in that the Trade Descriptions Act 1968 does not cover real property. We know this and intend to take action. We also intend to take action on the Estate Agents Act 1979. [HON. MEMBERS: "When?"] We have had to wait for time in the legislative programme, but, as I have said, my hon. Friend the Member for Coventry, South-West is bringing forward a Bill in the next few weeks which should cover the problem.

I know that the House will want to join me in wishing the hon. Member for Coventry, South-West (Mr. Butcher) a speedy recovery from his illness.

Will the Minister tell the House why he has failed to give house buyers the protection that was promised in the Government's press statement on 19 June 1990 and which a Minister pledged to implement by the 1st of this month? Why is that protection not in place now nor likely to be in place for some months to come?

The hon. Gentleman may be confused as between our determination to bring in primary legislation to amend the Trade Descriptions Act 1968 and secondary legislation under an order to amend the Estate Agents Act 1979. On the first of these, we must take our place in the legislative queue; on the second, the hon. Gentleman should wait and see.

My hon. Friend should be congratulated on the answers that he has given to the House. Will he agree with me that, while it is necessary to say "caveat emptor", or "buyer beware", to anyone buying a good or service, the steps that my hon. Friend has outlined should be brought forward at the earliest opportunity to protect young people, who, as first-time buyers, may take estate agents' details at face value and be deluded into buying a property which is suspect in some way?

My hon. Friend is quite right to draw attention to these matters. The Bill promoted by my hon. Friend the Member for Coventry, South-West has not been published, but we agree with its aims, in so far as we know what they are, and hope that the Bill will become law.

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

The Government promote continued growth of manufacturing industry with policies such as reducing rates of tax on profits, privatisation, deregulation, elimination of restrictive practices, trade union reform and negotiations to reduce trade barriers through the general agreement on tariffs and trade and in the European Community. In addition, my Department continues to operate a range of schemes to improve business performance under the enterprise initiative.

As manufacturing production has gone down by a staggering £2£5 billion in the past three months, 23,000 manufacturing workers are on short-time work, redundancies are running at more than 1,500 per week and high interest rates are costing British business £30 billion per year, when will the Government do the decent thing and either own up to their mistakes, overhaul their policy and start helping British industry or shut up shop and let the Labour party get on with the job of reviving British industry?

I assure the hon. Gentleman that we have no intention of shutting up shop, or of letting our industry fall into the tender hands of a party that managed to reduce manufacturing output when it was in power. The hon. Gentleman's list is entirely selective. He ignores the fact that the prospects for British industry have been transformed in the last decade in terms of output, productivity and investment. The cost of a 1 per cent. rise in interest rates, even sustained over a full year, is far less damaging to industry in terms of wage costs than a 1 per cent. rise in inflation. The Government are determined to lick inflation.

Does my hon. Friend agree that this question shows that there is a good deal of ignorance about what Governments can and cannot do? The one thing that Governments certainly cannot do is to boost manufacturing output. However, they can create the right climate. Will my hon. Friend use his influence with the Treasury to promote lower corporate and capital taxes for business to encourage it to make the decisions to expand and boost output?

My hon. Friend is right, and he well knows that corporation tax in Britain is among the lowest in the industrialised world. He is also right to say that we cannot simply boost output by increasing subsidies, as suggested by the Labour party; nor can we increase investment by piling up taxation. Inventiveness and hard work cannot be encouraged by imposing controls. Those are the policies of the Labour party, but they did not work in the past and will not work in the future.

If the Government are not responsible for the mess that industry is in, who is?

Industry is not in a mess. As I have said, the prospects for manufacturing industry have been transformed in the last decade. Output, productivity investment and exports are well above 1980 levels and exports are at a record level. I do not mind repeating that message, because we are proud of it.

To ask the Secretary of Stale for Trade and Industry if he will make a statement on the rise in the profitability of non-North sea industrial and commercial companies during the 1980s.

The profitability of non-North sea industrial and commercial companies recovered strongly during the 1980s and is now back to the levels of the early 1970s. The net real rate of return on capital employed was 8·3 per cent. in 1989, nearly half as high again as in 1979. The restoration of profitability has made possible increased investment in plant, research and development, and training.

I thank my right hon. Friend for that reply. Does he agree that that achievement has been brought about largely by the massive improvement in productivity in the past decade, which for manufacturing has been better than that of any of our competitors? Does he also agree that the 45 per cent. improvement in business investment during the first three years of this Parliament bodes well for future profits? Will he confirm that a recent survey by 3i shows that 80 per cent. of the 750 largest companies thought that they were in better shape to prosper now than they were in the 1980s?

My hon. Friend is absolutely right. Productivity rose by half in the past decade, which was faster than the position in any other major country in the world, including Japan. Profitability is the key to success, and the restoration of productivity leads companies to spend more on investment, research and development, and training.

Would not the profitability of car manufacturers increase if they could sell more vehicles in Japan? What is the position? Is a British manufacturer of cars allowed to sell motor vehicles in Japan directly through a distributing agent to the public or does the British manufacturer have to go through a trading company, in the same way as Nissan at present has to go through one in the United Kingdom?

Our exports in total to Japan have nearly doubled in the past three years. That includes a rapid rise in exports of motor cars, not least by the Rover company whose share of total imports of cars into Japan has risen significantly in the past five years and is rising at least as fast as that of other manufacturers. By and large, they are free to use whichever distribution channel they wish. There is a proposal by the Japanese Government to refer sole agencies to their anti-trust procedures. Last week I protested to them that they should not take that course, unless they also refer restrictive distributive practices by domestic manufacturers.

To ask the Secretary of State for Trade and Industry what was the value of exports of aerospace products to the United States of America for the last full year for which figures are available.

Aerospace products are included in a number of trade classifications. It is estimated, however, that the value of aerospace exports to the USA in 1989 was about £.1·5 billion.

Those exports far exceed imports, which shows the value of the aerospace industry to this country's balance of payments. Is my hon. Friend aware that aerospace products are usually priced in dollars, that the value of the pound against the dollar is currently unrealistically high and locked into the exchange rate mechanism, and that British aerospace companies therefore have the alternative either of selling products at a loss or of exporting manufacturing jobs? Is he aware that tens of thousands of jobs are at stake to dollar countries, such as the United States of America and Canada? The German Government have a Government-funded insurance scheme to cover exchange rate contingencies. Will my hon. Friend undertake to investigate that scheme and consider introducing a similar scheme in this country?

I join my hon. Friend in paying tribute to an industry which in the past decade of Conservative government has doubled both productivity and turnover in real terms. In addition, it has trebled its exports—an achievement to which we should all pay tribute. As my hon. Friend will know, the dollar weakness affects all other currencies, not just the pound sterling. He referred to a particular German scheme. We are very keen that our industries should be able to compete on a level playing field, although that is perhaps not quite the right metaphor for the aerospace industry. My hon. Friend may be aware that there are doubts about whether the scheme to which he referred is permissible under GATT rules and I understand that it is the subject of a formal complaint to the GATT subsidies code panel.

Everyone hopes that hostilities in the Gulf will end quickly. Will the Minister therefore confirm that the long-term viability of the aerospace industry depends on the development of civil projects and that we should not depend on military expenditure solely, to the exclusion of virtually all other projects in the United Kingdom? Will the Minister express a sympathetic view to any approaches from the industry to support civilian ventures in the same way and to the same massive extent as the Government pours money into military ventures?

I assure the hon. Member that we by no means depend on military aviation. We have had a number of notable successes in civil aviation. For example, GEC was awarded a contract to supply fly-by-wire systems for the Boeing 707; Rolls-Royce is taking a market share in the United States. The United States airline, America West, has signed an agreement with Airbus Industrie for the purchase of A320s. The civil aerospace industry is doing extremely well and I hope that it will continue to do so.

To ask the Secretary of State for Trade and Industry if he will make a statement on progress in liberalising the telecommunications market.

The Government have taken steps to introduce competition in all sectors of telecommunications. We now have the two largest cellular telephone networks in the world, the first telepoint services, and we are leading the world in the introduction of personal communications networks. Since British Telecom was privatised, quality of service has increased dramatically, prices have fallen by over 20 per cent. in real terms, and Mercury Communications has become established as a serious competitor. I made further proposals in the duopoly review for liberalisation to increase competition and choice for the consumer.

I welcome the additional competition and liberalisation in this country. Will my right hon. Friend now apply himself to overcoming the trade barriers to our manufacturers in Europe and Japan?

I have just visited Japan, where I had talks with the trade Minister, aimed at liberalising trade. In particular, I encouraged him to take the big ticket items where Japan has a tendency to favour American rather than British imports.

We have sought liberalisation in other markets. We believe that one of the fruits of the liberalisation of our markets is that our manufacturers and telecommunications companies will be better placed to participate in those markets when they catch up with us, as they are beginning to do.

Does my right hon. Friend accept that the liberalisation of the telecommunications market that he proposes, and which I welcome, will nevertheless have a substantial—perhaps dramatic—impact on some existing and future players in that market? In that context, is he considering the use of techniques such as computer modelling to ascertain what the effect is likely to be? Such an exercise would help us to judge what his proposals should be.

The duopoly review that I presented was a joint initiative with Sir Bryan Carsberg, Director-General of Oftel. His organisation has carried out the sort of modelling that my hon. Friend suggested to consider the impact of various regulatory and deregulatory proposals. We have endeavoured to take into account that line of reasoning.

To ask the Secretary of State for Trade and Industry if he will review accounting and auditing practices in the United Kingdom.

The Companies Act 1989 made important changes in the law on company accounts, including improvements to the enforcement of accounting standards. It also provided a new regulatory framework for company auditors. The new Financial Reporting Council, Accounting Standards Board and Financial Reporting Review Panel have been established. Arrangements are in hand to strengthen and widen representation on the Auditing Practices Board. I shall be taking a close interest in how those changes work in practice.

Is the Minister aware that his amazing smugness and complacency about the likely effect of the Companies Act 1989 flies in the face of experience? Is not the wide talk of profits for companies now largely fiction and a matter of opinion, with figures being massaged by standard accountancy techniques? Is the Minister further aware that such a state of affairs is not in the interests of the accountancy profession, the companies concerned or the reputation of Britain as an industrial centre?

The hon. Gentleman and his hon. Friend the Member for Great Grimsby (Mr. Mitchell) have tabled 436 questions on accountancy in the past two years, but they seem to have learnt nothing about the enormous strides that the profession is taking in improving the regulatory framework. They have not understood the important provisions in the Companies Act 1989 which began the debate. Rarely have so many questions been asked by so few hon. Members to try to do damage to one profession. I wish that the Opposition would lay off the profession, because their intention is malevolent. If they did that, they would recognise that the profession has extremely high standards and that, wherever those standards might lapse, disciplinary and regulatory action is being taken.

Is my hon. Friend aware that United Kingdom accounting and auditing practices are the envy of much of the world, especially in eastern Europe where many British accounting firms now have offices doing a considerable amount of work? Is my hon. Friend also aware that the Companies Act 1989, which his Department brought into being, has set up a substantial regulatory framework to ensure that our accounting profession stays at the top compared with the rest of the world? Can my hon. Friend give any reason to explain why the Opposition continue to knock the United Kingdom accountancy profession?

My hon. Friend is quite right. The hon. Member did not need to table 436 very expensive and time-consuming questions in order to grasp the main point —that British accountants are doing extremely well in many world markets. My hon. Friend is also right to draw attention to eastern Europe where British accountants' skills are highly prized and where they have been spearheading export efforts in the service industries. I wish I could explain the reason for this persistent campaign by Opposition Members, but they will have to speak for themselves.

asked the Secretary of State for Trade and Industry what is his current estimate of the capacity of, and employment in, the United Kingdom shipbuilding industry.

Around 28,000 are employed in shipbuilding in the United Kingdom, of whom about 6,500 are in merchant shipbuilding. Merchant shipbuilding capacity is 205,000 compensated gross tonnes. Comparable figures are not available for warshipbuilding.

Will the Minister come clean with the House and admit that the Government's policy proposals under the seventh directive will accelerate the decline in the shipbuilding industry? Can he point to even one policy measure from this Government which will arrest and reverse that decline rather than making the industry's problems worse?

Contrary to what the hon. Gentleman says, it is in the interests of the United Kingdom shipbuilding industry for subsidies to be reduced. That is why we argued for a reduction in the intervention funding and why it has been agreed to reduce it from 20 per cent. to 13 per cent. for large ships and to 9 per cent. for small ships. That reduction is in the interests of the United Kingdom because we have led the way in restructuring European shipbuilding. It will be particularly helpful to warship-building yards such as Cammell Laird and Swan Hunter.

I beg to move, That the clause be read a Second time.

We have tabled the new clause because we cannot separate the Bill from the shambles of the Government's policy on the poll tax and poll tax capping generally. It is designed to deal with the situation arising out of a substitute bill to be set by the Government consequent on a capping order. We now know from the statement of the Secretary of State last Thursday that the bills that will go out next year will be related directly to the rates that were previously set. The formula involves a £104 difference between the old rates and the assumed bill for the current year plus whatever is levied by the local authorities for the coming financial year.

The Secretary of State not only controls the "assumed" bills but, under the capping arrangements, he controls the bills that will go out next April. He controls both future and present arrangements. It should be left to the authority to try to justify the charge that it thinks should be levied in relation to a given level of services, which the Government are to determine for each individual authority.

Matters are made far worse by the fact that the standard spending assessment formulas which the Secretary of State confirmed on Thursday will he unchanged, are universally acknowledged to be flawed. The assessment of need, the distribution of grants, the fixing of bills and the determination of capping are all in the hands of a Government who decline under the present Bill to take into account known information that would allow logical decisions to be made about the level of services and the raising of cash to contribute to the collection fund. That is why I described the Government's policy as a shambles. I would have called it a dog's dinner, but the dog takes offence at such remarks.

Things would not be so bad if the Government were willing to accept the new clause, thus acknowledging that those who are in control of decision-making should recognise the need to obtain the maximum up-to-date information on which to base their decisions. The new clause would require them to do that. The Government want to take responsibility for the benefits, as they see them, of poll tax capping and for the new relief scheme, but they do not want to take responsibility for the circumstances relating to the collection fund and consequently for the cuts involved in capped authorities and their effects on residents and citizens.

The hon. Gentleman referred to a shambles and to decisions that have to be made by decision-makers. Will he comment on the shambles in many Labour-controlled authorities, one of which is Islington? A QC's report on Islington council said:

"Having the cash office staffed by the innumerate, the filing done by the dyslexic and disorganised, and reception by the surly or charmless seems to us a recipe for administrative chaos."

That is where the chaos surrounding the community charge really lies—with Labour local authorities which could not organise a celebration in a brewery. Will the hon. Gentleman now address the real problem?

I think that some Conservative Members know more about celebrations in breweries and the consequences for their party funds than they do about decentralised offices in Islington. I might put on record in relation to Islington the fact that the Prime Minister made a remark yesterday, in answer to questions about empty housing in Islington, which was grossly inaccurate. Islington has one of the best records in London on vacancies; they now run at less than 2 per cent., which compares extremely favourably with the operation of Government Departments.

The hon. Member for Teignbridge (Mr. Nicholls) quoted counsel's opinion on a collection office in Islington which stated that it was manned by people who were innumerate and dyslexic. I believe that he was using the terms in a derogative fashion. Will my hon. Friend confirm that "dyslexic" describes people who have a medical condition and is not a term of insult?

Yes. I hope that the hon. Member for Teignbridge (Mr. Nicholls) will withdraw that. Although none of us wants circumstances in which those who are operating decentralised offices are alleged to be innumerate, all of us accept that dyslexia is an educational medical condition, but that it can be overcome, as Conservative Members well know. I give credit to those who have overcome the problem, not least on the Government Benches.

The hon. Gentleman asked me to withdraw what I said. I do not think that the hon. Member for Barnsley, Central (Mr. Illsley) understood my point. I was not making disparaging remarks about dyslexics. I was quoting a report by a Queen's counsel on the way in which Islington council chooses to organise its affairs. Whatever one may say about the handicaps of dyslexics, to put them in charge of operations such as filing seems a curious way to help them. It is the condemnation of the Labour council which matters. That is the point to which the hon. Gentleman should respond, but which he will seek to avoid.

It is not a point that I seek to avoid. I made it clear that people who are innumerate should not be dealing with the administration of area offices, whether or not QCs have done an investigation. Dyslexia does not come into it, whether it is in the Department of the Environment or a decentralised office in Islington. I take considerable offence at the idea that the two conditions are synonymous.

The hon. Gentleman referred to the Prime Minister's remarks yesterday about housing in Islington. In the light of what he said, will he comment on the eight flats rented from private landlords by the council at great expense—using Government money—which were kept empty by the council for between 40 and 83 weeks? Is that how the council uses Government money to help homeless people?

Order. The hon. Member for Sheffield, Brightside (Mr. Blunkett) is being very generous in giving way. I am sure that he will not be deflected from new clause 1.

I certainly will not.

Lettings, whether on a leasing arrangement that is being set aside or direct from the housing revenue account, are not the responsibility of the House. There is a direct relationship between the electors of the borough and those they elect. The point of the new clause is that those who have responsibility should be accountable for the decisions that they take. Through the clause, we seek to ensure that those who have the temerity to take decisons about poll tax levels, capping provisions and the necessary resources to meet a given level of service should be accountable for their decisions and should seek the maximum information on which to base their decisions.

Otherwise—I come back to where I left off earlier—the Government will be happy to take responsibility for fixing the poll tax and cuts in general, but will not be happy to take responsibility and to be held accountable for the misery caused by the cuts that they inflict on the electorate of for the confusion and administrative difficulty that they cause to authorities.

The hon. Gentleman mentioned manifestos. Which Labour-controlled authority included in its manifesto the figure that it was going to charge in ensuing years, if elected to office, so that community charge payers knew what they were voting for in monetary terms?

In London and the metropolitan areas, the poll tax is fixed in February or March. The bills are sent out at the beginning of April, and—unlike central Government—the elected representatives have the temerity to stand for election each year at the beginning of May. There can be no more direct relationship between the bills sent and the judgment of local citizens than that. I am amazed that Conservative Members do not know how the system works—

rose—

I am delighted to give way to the hon. Lady, who will make an outstanding contribution that will enlighten her fellow Tory Members on how the system works.

The hon. Gentleman may be right that there is a relationship under some unitary authorities, but he is wrong about authorities such as mine. The county council spends 9p in every 10p, so there is precious little for local district authorities to do once the money has been blued by the county council.

The hon. Gentleman does not care about that.

The hon. Gentleman says that I do not care about that; I care greatly about it. We have proposals to improve the operation of local democracy: annual elections in local authorities, the development of unitary government, giving people clear responsibility by removing capping, sensible standard spending assessments and needs systems, reinstating equalisation between different local authorities. All these would introduce direct accountability and would help the hon. Lady's electors to make a direct judgment on what was happening in their area.

I was most interested in the hon. Gentleman's list of proposals for the future of local government. Will he come and discuss them with the Secretary of State and me?

I repeat what I and my hon. Friend the Member for Dagenham (Mr. Gould) have often said: we are happy to hold discussions on this issue if the Secretary of State will accept the simple principle that the poll tax should be abolished. I welcome the interventions this afternoon, not least because they reveal the paucity of knowledge among Conservative Members, who appear extremely concerned by the clause, which merely seeks to ensure that information is available to Ministers when they make their decisions and that they are held accountable by local electorates for what they do.

I appreciate the hon. Gentleman's courtesy in giving way so often on this point. I am worried by his complete failure to mention any funding commitments by a future Labour Government. Last July the hon. Gentleman condemned the £3 billion increase in external funding as "peanuts". If that was peanuts, by how much would a future Labour Government increase funding? Will he answer that in a straightforward way?

Order. The hon. Gentleman will find it somewhat difficult to answer that question within the confines of new clause 1.

I would find it as difficult to answer that question as hon. Members would have found it difficult eight days ago to guess how much the Secretary of State was going to get from the Treasury or from cuts in public services to make up the extra £1 billion. I am glad that the Conservatives are pouring money into the system to try to hold down the poll tax—not just because it helps people, but because it will make our lives a great deal easier when we transfer to a modern property tax based on ability to pay. It will certainly make much easier my arguments and those of my hon. Friend the Member for Dagenham with the new Chancellor when we take office.

I return to the Bill. I was simply saying that cuts in services will be initiated by the Government, not only by capping authorities but by using a formula of A minus B minus C over D instead of using the relevant information that is available at the time and taking into account changes that have occurred between the original decision on capping and the order laid for the individual authority's poll tax. Those things are important because, for every £1 that cannot be raised towards the collection fund, £1 of cuts must be made in local authority services or be carried over into the following financial year. This must be picked up by local taxpayers, sometimes entailing the need to borrow; charges are incurred on the borrowing and this pushes up the actual charge necessary to meet what would have been the previous poll tax or local authority tax. The position is made much worse.

In other words, the Bill is ill-timed, unnecessary and out of date not only because of the Government's change of heart towards the poll tax, but because of last Thursday's statement. Since the conclusion of Standing Committee F, therefore, we have even more reason to reject the Bill and to carry this new clause, which seeks to make some sense of what is before us.

It is clear that we must ask the Government to justify what they are doing. When we did so in Committee we had some interesting replies. The Under-Secretary of State said:

"All authorities must make their best estimate of income and expenditure at the beginning of a year and live with the consequences".—[Official Report, Standing Committee F, 15 January 1990; c. 108.]

Who would disagree with that? But, of course, once the authority has been capped, the situation changes. If the authority has taken into account all the circumstances and has made all the necessary adjustments, it will be ruled out of order.

The Bill deals with the sort of position in which Lambeth found itself when it made a calculation based on its circumstances. Lambeth also made a calculation of what would happen if it was tax-capped. When it went to the High Court, it won. We are debating this Bill on Report and Third Reading and moving the new clause precisely because Lambeth won the case. It was adjudged to have taken due care in its decisions and to have properly weighed the information available to it at the stage to which the Under-Secretary of State referred.

That made us wonder whether everyone who supported the Bill really understood what it was about and what it was intended to do.

The hon. Gentleman makes it sound as though Lambeth council is a well-organised London borough. Will he confirm that Lambeth council could not send poll tax bills to people earlier than the day before the local elections in May? Can he say whether many people in Lambeth have received their bills from the council? It is our understanding that most people in Lambeth are still waiting for their bills. Lambeth council is in chaos.

Whatever the rights and wrongs of the debate about the effectiveness of services in Lambeth, the council can hardly be blamed for not sending out the bills by 1 April, consequent on the decision of the Government to cap it. If the hon. Member for Surbiton (Mr. Tracey) examines the logistics of the position, he will be forced to conclude that the best that Lambeth could do was to announce what figure it intended to levy if it were free to do so. The electors in Lambeth made their decision precisely on those figures, with the debate in the House still to take place and with a court judgment on the validity of the Government's action also pending.

Everybody knew about Lambeth's bill because the Government made their best efforts to publicise what it would be and what their substitute setting would be. Therefore, a clear judgment could be made about whether to accept the Government's bill or that of Lambeth council. People made that judgment and voted Labour, and no one can cast aside the result of a clear democratic election that was held only a few weeks after the decision to set the poll tax had been publicised.

In Committee, the Under-Secretary of State said:

"All authorities are in the same boat."

That is the flagship that is rapidly sinking. He said:

"Opposition Members are trying to put capped authorities in a boat by themselves".

It would have been appropriate for the Minister to say "a lifeboat". He continued:

"But there is no justification for that. There is no reason why a capped authority should have an opportunity that is not available to other authorities to reconsider matters such as its estimate of non-collection when resetting its charges after capping."

As I said, Lambeth council had an opportunity to weigh up the information available to it before capping and at the point at which it set its poll tax. That was upheld by the court and the Bill deals precisely with that situation by disqualifying the council. Far from us trying to get capped authorities into a lifeboat, which in other circumstances and in another connotation we would seek to do, we are trying to ensure that capped authorities are on all fours about being able to use the information that is available to them.

I do not wish to be the tail that wags the hon. Gentleman's dog. I know that he is scrupulously fair: if he reads on in column 109, he will find that I said:

"Moreover, it is clear that under the present statute a capped authority cannot change its non-collection estimate to allow for the fact that it has been capped. Haringey tried to do that this year when it reset its charge after capping, but that was subsequently quashed by the divisional court."—[Official Report, Standing Committee F, 15 January 1991; c. 108–9.]

Once again the Opposition are confusing the existing statute with the Bill.

We are not confused and we have shown that not only by our interventions and contributions but by the words that I read to the House. We understand very well what we are trying to do. In this somewhat limited and irrelevant Bill, we are trying to prevent the Government from having the power to set poll tax levels without using the necessary information and without making sensible judgments about the impact on the collection fund and, consequently, on the following year's poll tax or on the cuts that will have to be made. In Committee, we went into detail on matters that would affect those judgments.

The level of the collection fund will be affected by the precept that is levelled by the precepting authorities and by the national non-domestic rate pool which draws on the collection fund. Of course, it will also be affected by section 95(4) of the 1988 Act, which deals with withdrawal of the local authority's general fund requirements, and by how much is collected. We made a substantial case, and shall make it again, about the importance of bearing in mind when making decisions the consequences of capping itself. Those who cap should be wary of enforcing algebraic formulae on authorities that have to live with the consequences. If collection rates are affected by a delay that inevitably occurs because of capping, it should be taken into account. It is common sense to recognise that collection rates can and will be affected.

The Government do not have to take our word for it, or even the word of local authorities. We know that the Audit Commission is concerned about the difficulty in some areas of collection, such as the 4 million people who are at the bottom income levels and who are charged the minimum poll tax. There is also the question of those who move house and who local authorities, particularly in inner-city areas, are endeavouring to chase for their poll tax payments. In other words, depending on the area of the country, the 10 to 40 per cent. turnover rate in the locality will have a substantial effect. In my authority, between the date at which the relevant population was asssessed and the beginning of the financial year there has been a 6·3 per cent. population change.

4.30 pm

We also pointed out that it was important to understand the difference between the "relevant population" and the "equated population". In a council such as Haringey, it made a difference of £ 1 million in income—a substantial amount for day nurseries, nursery schooling, home helps and meals on wheels. These things matter greatly, especially in an authority which had to make cuts of £28 million to get within the capping criteria in the first place. The amount that would come off poll tax this year in Haringey was affected by about £6; it would have been £70·70 for the relevant population and £64·30 for the equated population, making a difference of £1 million in terms of neglect. The consequences had to be dealt with not by Ministers but by local councillors struggling to make the budget balance.

That is why we tabled the new clause. We want the maximum information about what is happening to the collection fund and its likely outturn, a matter that we would expect any local authority to take into account. This is called fiduciary duty. Under the 1988 Act, local authorities have something called a whistleblower. We would like a whistleblower on Conservative Members. Time is up for the poll tax and the way in which Conservative Members have colluded with a lie. It is a lie that one can enhance democracy by taking it away; that one can increase accountability by removing it from local people and their elected representatives and by taking responsibility but then trying to shift the blame on to the shoulders of local councillors.

The Government want to have the best of both worlds. They want capping, the poll tax and the gerrymandering of bills as a result of last week's announcement, and they want cuts. They want all this without having to deal directly with the consequences and without having to spell out, as we ask in the new clause, the consequences of the expected cuts. They are oblivious of the long-term increase in the poll tax because of the deficiency on the collection fund. For all those reasons, I ask all hon. Members to vote for the new clause.

I oppose new clause 1, not on any ideological account and not because I do not take seriously the interesting and demanding questions posed by the hon. Member for Sheffield, Brightside (Mr. Blunkett). Indeed, I pay tribute to the hon. Gentleman's great courtesy in giving way so many times. The only reason I did not ask him to give way was that I wanted to make a slightly longer series of points in response to his comments.

The hon. Member for Brightside referred to the fact that this was a fundamental platform. He pointed out that every £1 capped equalled a cut of £1. That presupposes both perfect efficiency in every local authority and a level of service throughout that is constant. That would then achieve the result suggested by the hon. Gentleman—every £1 capped would equal £1 of cuts.

Of course, we know that that is not true. That has not happened. In September last year, the National Association of Local Government Officers conducted a survey of the capped authorities, and the union-owned newspaper Public Service reported that Basildon had said that no redundancies were anticipated; Brent had said that no cuts were required as a result of capping; Bristol had said that there would be no redundancies, no cuts in services and no charge increases; Calderdale had said that it was holding growth, increasing some charges and cutting some non-essential services; and Camden had said that no cuts were necessary. The cap was £4·4 million, but Camden council said:

"Our income is sufficient for us not to need to make cuts."

Greenwich said that some redundancies were expected, but that there would be no large-scale job cuts, and Lambeth said that it had managed to avoid closure of front-line services and that there would be no redundancies.

The hon. Lady is reading out an interesting list—

I have a longer one.

In that case, perhaps the hon. Lady will tell us what the list says about my authority, Barnsley, and what cuts it had to make.

I do not intend to list the cuts, results of cuts, or results of capping for every hon. Member's local council. Of course, if I did it would not take too long, as there are so few Opposition Members present for a debate about a matter which they claim causes them great concern.

I was not at all surprised by that survey. The hon. Member for Brightside should not be surprised either, despite his bland statement that every £1 capped should equal £1 of cuts. The reason why I was not surprised is that I have had practical job experience working both inside and alongside local authorities, be they district councils, county councils or that great departed monolith whose death I welcomed and whose funeral pyre I should have liked to light myself, the Greater London council.

My work with local authorities was during my pre-parliamentary years, when I worked in industry, in business and in the voluntary sector. I well recall the appalling shock that I received, as someone who believed in the high level of services that local authorities were supposed to provide—I knew less then and I was more naive about the massive incompetence in some of the geographical areas—when I went to the GLC to do a job for the computer industry. You are highly computer-literate, Mr. Deputy Speaker, so you will know that it is crucial that different forms of machinery and different forms of software interlock—[Interruption.] Of course Mr. Deputy Speaker is computer literate; everybody with a farming constituency is computer literate these days.

I was genuinely shocked, in a real professional sense, when I discovered that the GLC had made massive incompetent investment in four different mainframe manufacturers, none of whose equipment or software was compatible at that time. The GLC had four huge teams of staff, each pursuing different sorts of machinery and software and trying to carry out different sorts of task. I found that a professional abomination and I was deeply shocked. It was because of the GLC's incompetence that the company for which I was working as a general consultant was called in to do one of the simplest jobs of all—to create a computerised payroll for part of the GLC organisation. Although it appears funny retrospectively, I did not find it amusing at the time when I asked for some software manuals for a particular part of the job and the staff were absolutely astounded. They opened a cupboard, and out fell a load of empty whisky bottles. Such was the enormous competence of the GLC.

Subsequently, when I was in the voluntary agency field, I worked alongside social services department people and I recognised with great sadness the enormous disparity in the level of services that they were able to supply—not, I hasten to add, because of their desire to provide less than efficient services, but because of their incompetence in some areas and in certain parts of the country. There is great disparity in levels of competence. That is where new clause 1 comes in.

In the course of his speech, the hon. Member for Brightside made the discredited comment that every £1 capped equalled £1 of cuts. This has clearly not happened in the past 12 months and never will, given these disparities of service. It presupposes perfect efficiency in every local authority.

Subsection (4)(a) of the new clause demands that the Secretary of State shall specify

"an estimate of the additional community charge in the following financial year likely to result from the losses estimated under section (1) above."

In the cases of the seven district councils that I have listed which had charge capping last year and where no cuts resulted, I suggest that the Secretary of State would be offering a nil forecast. He would be offering a nil forecast because capping has meant that councils have been forced to look again at their incompetence and inefficiency and have been forced to tighten their belts.

Would my hon. Friend like to speculate what the Labour-controlled authorities would be doing with all that money that they would have had without charge capping? They have not had to cut any services, so what would they have done if they had managed to get their grubby hands on all that money?

I am very sorry to say that we would have had even higher staff levels in those local authorities and even slower provision of services to the electorate outside. As we all know, when one builds up a so-called core of administration, even with the best well-meaning people, the line between the centre and the elected gets slower and slower in achievement.

I hope that the Minister will consider this seriously. I believe that we should go further than just putting in agency provisions for the delivery of Government services; we should go out to private companies, put them under stringent rules and allow them to provide the services, which they will do at perhaps half the cost incurred by so many of our local authorities at present.

The hon. Member for Brightside suggested—and I wholly support him—that those who take the decisions should be accountable. Those were his very words, but he related those words to the Government. He suggested that those who take the decision to charge-cap should be accountable to the electorate. I suggest that the Conservative philosophy reflects those words in local authority action. The local authority should be accountable. From the Conservative perspective, these caps are only a method of creating local accountability. Indeed, as we have seen from the figures I have read out, this has in some measure already occurred.

The hon. Member cannot say that we tell a lie—that is a word I would not normally use in this place—about enhancing democracy by taking it away. We have, in fact, enhanced democracy. Yes, we have done so with some difficulty; yes, with some elements that I cannot support; and yes, with some points that I know we are already clearing up and others that need further clearing up. Nevertheless, we have increased democracy and we have brought closer to the people of the United Kingdom the decision making which should be theirs alone—the decision making undertaken on their behalf by local authorities. We have given them the ability to call the tune. There has been no gerrymandering of bills and there may have been a misunderstanding of that word.

Finally, I question the still confused thinking that has been displayed by Opposition Members about the operations of local democracy. I was fascinated to see the utter dichotomy, the contradiction in terms, offered by the hon. Member for Brightside when he called both for the removal of SSAs and for the equalisation of local authorities. He is speaking against himself, because the point of SSAs is to equalise the services offered throughout the United Kingdom. One cannot have equalisation of local authorities without some form of redistribution of income, and SSAs offer a moderately simple way of doing that.

Incidentally, I do not necessarily pay tribute to the eternal values of equalisation of services throughout the United Kingdom. I believe that we may have gone too far on that one. Nevertheless, I call into question the hon. Member's illogicality, which I am sure he does not intend, when he offers two opposing aspects and suggests that they reach one solution.

The hon. Lady said that charge capping enhanced democracy and increased accountability. Surely charge capping has done just the opposite. If the Conservative Government had wanted to increase accountability, they would have allowed the electorate to decide on the poll tax bills of the charge-capped authorities. That is the idea of accountability; it is not just a matter of the Government imposing on these local authorities a poll tax which they then have to sell. The hon. Lady also said that SSAs equalise resources. If that is so, why does Manchester get more money to pay for its standard level of services than many other metropolitan districts such as Westminster?

I agree that in a perfect world we could give complete freedom to local authorities to set their own bills and allow complete freedom to the electorate to turn out those local authorities which failed to deliver the services at the sorts of costs people require. However, as the Opposition's Front-Bench spokesman himself said recently, if a Labour Government were in power they would consider keeping some sort of power in reserve for something like a charge-capping exercise.

rose—

I will give way to the hon. Member when I have finished making this point. The shadow Environment Secretary who was the predecessor to the hon. Member for Brightside said that, in extremis, there must always be that reserve power. He made that statement on Radio 4 on 27 March 1990. The shadow Environment Secretary before him stated in Hansard:

"the Labour party's policy makes it clear that what the Government provide to local authorities would, of necessity, be controlled and limited"—[Official Report, 18 February 1988; Vol. 127, c. 1218]

I agree that in a perfect world there would not need to be these controls and limits. I suggest that it is a mere short-term view, simply because of the profligacy of some of the Labour councils which has been so appalling that one shudders to think what the poorer members of society would suffer if these councils were allowed to go full tilt down the road of massive expenditure.

I simply want to put the record straight, and there is no point in not doing it now. My hon. Friend the Member for Dagenham (Mr. Gould) made it clear that his remarks which the hon. Lady has mentioned, on Radio 4's "Today" programme, referred to propriety and financial probity. The Labour party's position is unequivocal. We will not introduce capping for local revenue raised and spent by a local authority, as distinct from Government grant which in all circumstances has, by its very nature, to be determined by the Government.

The hon. Gentleman tempts me to go a little further down the path, although I had in fact finished. The former shadow Environment Secretary went on to say:

"It is really just a hypothetical question to ask us to define what would be extreme circumstances. What I am saying to you—I am not ducking your question in any sense—I am saying in extremis the reserve power would have to be reserved but that it is impossible to say in advance what those circumstances would be".

In other words, the Labour party has no policy. It has failed to recognise honourably and honestly that it is Labour councils which overspend in a way that is unacceptable to the electorate. Labour councils spend on themselves in terms of their central staffing, central comforts and they do not give to the electorate those things that the electorate deserves.

I cannot support new clause 1 or the Labour party's policy on the community charge. I look to my right hon. Friend the Secretary of State and to his most able Ministers to deliver the right and proper answers within the Conservative philosophy.