To ask the Secretary of State for Trade and Industry if he will detail the vessels which are being constructed in United Kingdom shipyards with financial assistance provided by way of the European Community's seventh directive on the shipbuilding intervention fund; and if he will make a statement.

On 31 March 1991, 42 vessels were being constructed in United Kingdom shipyards with support from the shipbuilders intervention fund in England and Scotland and from intervention grant aid in Northern Ireland. This represents a total tonnage of 586,971 tonnes and a total value of £654·7 million. Assistance contributes £116·4 million or 17·8 per cent.

May I thank the Minister for his generous efforts on behalf of Scott Lithgow in attempting to have that shipyard redesignated for intervention subsidy? I am angry and deeply disappointed about the miserly reaction of Sir Leon Brittan. That conceited Commissioner should be told that United Kingdom shipyards deserve the same sympathy as is shown to the shipyards of other nations. Will the Minister use his good offices, and those of his colleagues in the Department of Energy, to ensure that Scott Lithgow obtains some of the offshore work? That must be better than such work going outside the United Kingdom.

I am grateful to the hon. Gentleman for his plaudits. He is right that we approached Sir Leon Brittan, who told me when he came to see me last month that he was unable to compromise on the matter and that shipbuiding intervention funds would not be available to Scott Lithgow under article 7 of the seventh directive until 1994. I shall certainly approach my right hon. and hon. Friends in the Department of Energy on behalf of the hon. Gentleman.

I congratulate the Minister and ask him to confirm that the restructuring of British shipbuilding means that it is imperative that other European nations continue to reduce their subsidies so that we have a level playing field. He knows my deep interest in Appledore shipyard. Will he confirm that his Department is doing everything that it can to help that small shipyard on which so much employment regeneration rests?

I know that my hon. Friend, who has come to see me on the matter, speaks up strongly on behalf of Appledore yard in her constituency.

What is the Minister going to do about it?

I shall tell the House what I am going to do about it. Appledore is in receipt of shipbuilding intervention funds and if it were to apply for the home credit guarantees schemes, we would consider that. My hon. Friend is right. The figures that I read out show that we subsidise shipbuilding to the maximum extent allowed by the European Commission. Given the problems of the former warship yards, particularly Swan Hunter and Cammell Laird—I see the hon. Member for Birkenhead (Mr. Field) in his place—it is clearly in the interests of those yards that we end subsidies as quickly as possible.

On behalf of the stewards at Lairds, may I thank the Minister for his efforts in trying to secure intervention funding? The stewards have asked me to ask the Minister whether they are right in assuming that the British Government pay the intervention funding, not the European Commission. The stewards wish to know what would happen if the British Government decided to pay the intervention funding without the approval of the Commission.

It is indeed the British Government who pay the intervention funding. The hon. Gentleman has asked me to do something difficult which we have not considered doing before—to go against the explicit direction of the European Commission. For such a communautaire Government as we are, that would be an inappropriate and wrong thing to do.

To ask the Secretary of State for Trade and Industry how many British firms have obtained contracts in Kuwait; and what is the estimated value.

I am aware of more than 35 companies which have obtained contracts worth over £140 million in connection with Kuwait reconstruction.

In relation to reports about torture and human rights, is there a penn'orth of difference between those whom we went to expel from Kuwait and those whom we went to defend? Do not we have to face up to the fact that Kuwait is now paralysed and that there is no chance of those who are there tackling the problem of the fires? Ourselves, the Americans and the Saudis should go in, take charge and do something about what is a major engineering project which cannot be left to relatively few firefighters in commercial terms.

It is clear that excesses have been committed since liberation and the British Government have made their views on that clear to the Government of Kuwait. If the hon. Gentleman sees no difference between the appalling outrages committed by the Iraqi Government and army and the excesses that have been committed since liberation, he has extraordinarily confused vision.

In my constituency lives the managing director of Reynolds and Wilson, a company which has been placed on the American blacklist. The Americans have told him that they have no evidence of malpractice and that there is no particular reason for the company being on the list, but that they do not intend to remove it. The company, which has traded in that part of the world for 60 years, is having the greatest difficulty winning contracts simply because of the Americans' disgraceful behaviour. Has my right hon. Friend any comfort for that company and others like it?

I assure my hon. Friend that my officials are discussing the matter with the United States authorities and are awaiting further information from them. I can reassure my hon. Friend that so far three firms have been taken off the blacklist and I expect others to be taken off in due course.

What possible help can it be to exporters to Kuwait or anywhere else to proceed with privatising parts of the Export Credits Guarantee Department? Now that there is no serious British bid, will he abandon the sale, which the British Exporters Association says is a shambles and which could put control in Rome or Amsterdam? This could become the second Government Bill to be rejected in another place within days. Frankly, it is privatisation for privatisation's sake.

The hon. Gentleman should be aware that in the European Community export credit facilities are issued by private sector companies in Germany, the Netherlands, France, Italy, Belgium, Portugal and Spain and that Denmark and Ireland are also considering privatising their export agencies, because they believe, as we do, that export credit for short-term business should be in the private sector. We believe that that is more in tune with the single market and it is in accord with our view that the private sector should be responsible for such matters. The hon. Gentleman thinks that all European countries are obsessed by dogma, but it is the Labour party alone which believes that this should be in the state sector.

Although I appreciate that my right hon. Friend wishes to help British firms in this context—he is doing a good job—will he bear in mind the interests of our allies who supported us during the Gulf conflict? For example, I have a constituent who works for an Australian company with special expertise in putting out appalling oilfield fires such as those to which the hon. Member for Linlithgow (Mr. Dalyell) referred. Will my right hon. Friend assure the House that there will be sensible co-operation with such companies?

Yes, I shall do so. I have passed on the information that the hon. Member for Linlithgow (Mr. Dalyell) asked me to refer to the group competing for contracts in the oilfields. There is every reason to believe that a group of British companies will be awarded the contract for damage assessment in one of the oilfields which is expected to lead to substantial contracts for extinguishing and capping burning wells and restoring oil production. Discussions on that continue with the Kuwait authorities.

To ask the Secretary of State for Trade and Industry what further steps he is taking to eliminate unscrupulous timeshare sales practices.

I have asked the Commission of the European Communities to prepare a directive to regulate the selling of timeshare properties. In addition, we propose to amend the Trade Descriptions Act 1968 to tighten controls on statements about services and to bring timeshare award schemes within the Act's powers.

Is not it a disgrace that it has taken so long to make such little progress with what amounts to a massive abuse by this so-called industry? Is the Minister aware that many thousands of people are receiving so-called prizes such as motor cars? This very day, my hon. Friend the Member for Newham, North-West (Mr. Banks) has won a "prize" of a motor car. He would tell the House about it himself, but he is a shy and retiring fellow. Will the Minister assure us that his proposals will come into force quickly and that timeshare cowboys will be booted out of British business life?

To some extent, I share the hon. Gentleman's impatience. The problem is that about 80 per cent. of timeshare properties are located abroad, so it is pointless for us to act unilaterally. We must persuade the Commission to introduce a cooling-off period and demand that companies provide a written prospectus and protect deposit moneys. I demanded just that when I went to see Commissioner van Miert a couple of weeks ago. I agree that receiving junk mail through the post is one of the curses of modern life, but one can apply to the mailing preference service, which covers 80 per cent. of such mail, to have one's name removed. Indeed, one can apply to have junk mail from Walworth house stopped if one wishes. It promises a place in the socialist sun, with reduced taxes and increased services. The British people should demand not only a written prospectus but protection of deposit moneys.

If my hon. Friend is saying that self-regulation is the best way of proceeding, does he think that the new Timeshare Council is likely to be any better than the Timeshare Development Association that it replaces? Given what he said about 80 per cent. of properties being purchased abroad, does not he think that European legislation would be the answer rather than national legislation?

My hon. Friend is right. We welcome the formation of the Timeshare Council, which I helped to launch last week. Self-regulation has an important part to play, but we have a right to demand that the timeshare industry puts its house in order. There is nothing wrong with the product, but we receive many complaints—indeed, more complaints than on any other subject—about the selling techniques of timeshare operators. The Government are right to act.

The Minister has had a damning report on this industry from the Office of Fair Trading since July last year. Why has he done almost nothing? Why is he still permitting misleading mailshots to this country, from which businesses in this country profit? Why does not he act now to ensure that people who receive the mailshots do not have to go to misleading and high-pressure sales in timeshare offices? Why does not he close offices that do not meet the standards that the public demand?

The Director-General of Fair Trading has power to act under the Control of Misleading Advertisement Regulations. As the hon. Gentleman well knows, award schemes are not covered by the Trade Descriptions Act. I have said that we intend to amend that Act. Unfortunately, Under-Secretaries cannot introduce legislation within a couple of months. We shall have to await our place in the legislative slot in the next Session or the Session after. The hon. Gentleman failed to say that 80 per cent. of timeshare properties are located abroad, so there is a limit to what we can achieve nationally. We must act with the help of a European directive, and the Commissioner has promised to take up my suggestion that he should introduce one.

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

The Government warmly welcome inward investment in the car industry.

Does my hon. Friend agree that the presence of three Japanese car manufacturers in this country clearly shows the success of the Government's policy in encouraging foreign investment in Britain?

My hon. Friend is absolutely right. The Japanese are perhaps the most shrewd international investors and the fact that they concentrate so much of their European investment in Britain shows that the Government's tax regime, for companies and individuals, and the framework of industrial relations law that we have created provide an excellent climate for industry, especially for manufacturing industry.

Despite the inward investment, does the Minister realise that demand for motor cars in this country is low? Indeed, 340 dealers went to the wall last year. Ford has announced 1,000 redundancies and matters will be made worse by the 2·5 per cent. increase in value added tax. Does the Minister agree that despite the increase in exports, if there is not a strong home demand for cars more redundancies. more short-time working and cuts in investment, training and research and development will follow? That will not augur well for the future of the British motor industry.

I should have hoped that the hon. Gentleman would applaud—as I do—the great success of the industry in increasing its exports. The Nissan factory expects to export about 80 per cent. of its production in the current year and that is having a healthy effect on not only employment but the balance of payments.

Does the Minister accept that for inward investment in this country to be brought to a successful conclusion, it is essential that the industry's products are freely traded throughout the Community? Can he assure us that that is accepted by the Commission and by the member states?

I agree entirely that it is essential that cars produced in the United Kingdom are freely traded throughout the European Community. I assure my hon. Friend that cars produced, for instance, in the Nissan factory to which I referred are as much European cars as are cars produced by a company owned by General Motors or by Ford in any part of Europe.

To ask the Secretary of State for Trade and Industry if he will refer the proposed takeover of the Tootal Group by Coats Viyella to the Monopolies and Mergers Commission.

On the advice of the Director General of Fair Trading, my right hon. Friend the Secretary of State has decided not to refer the merger. The House will recall that when a previous proposal was made for a merger between these two companies there was a full inquiry by the Monopolies and Mergers Commission.

Is the Minister aware that that reply will be received with considerable dismay by all Tootal employees, especially those at the Slimmashirt factory in St. Helens? What on earth is the point of his going up and down the country making speeches that cast doubt on the wisdom of hostile takeovers when, in practice, he is not prepared to do anything about them? Bearing in mind the recent Polly Peck fiasco, does he agree that the Monopolies and Mergers Commission could have investigated the amount and integrity of Coats' profits which emanate from South American sources about which shareholders clearly know very little?

In its previous inquiry, the MMC considered all the relevant issues, many of which are the same as under the current proposal, which led to the director general's advice. The speeches that I have made about the virtues and wisdom, or otherwise, of contested takeover bids were aimed at shareholders. In this case, no matters of public interest need investigation. There are many matters for shareholders which can properly be dealt with by them. I am sure that the shareholders of both companies will read the record of these exchanges and other matters, including an early-day motion, and that they will be aware of the House's view when they make the important decision about the future of the two companies.

Those of us who take a great interest in the textile and clothing industry will have the greatest regard for Coats Viyella, for its role in the industry and for the reputation of Sir David Alliance in seeking to maintain a meaningful and proper place for the textile and clothing industry in the United Kingdom economy. But is not my hon. Friend concerned that a monopoly will be created? How many other thread manufacturers will remain in the United Kingdom should the merger go ahead? What impact will the merger have on employment, which is critically important to the north-west of England?

I am grateful for my hon. Friend's comments in the first part of his question. The question of sewing thread was addressed fully in the previous report. The advice of the MMC was adopted and the correct action was taken to deal with that potential competition detriment.

Before a decision is taken on the matter, will the Minister accept that the textile industry has been particularly badly hit by the recession? Is not he concerned about the fact that hundreds of jobs have been lost, on a weekly basis, in communities that depend heavily on the textile industry such as Colne Valley, Batley and Spen and Keighley in Yorkshire and Pendle and Bolton in Lancashire? Does the Minister believe that those job losses have been caused by high wage settlements or, on reflection, does he believe that interest rates may have had a bigger impact?

The decision to which the question refers has already been taken. My right hon. Friend has announced his decision. Like the hon. Gentleman, I regret job losses wherever they occur. I should need to look at each individual case to decide what lay behind those particular job losses. However, a successful textile industry depends on the right goods servicing customers. I must point out the recent examples of inward investment in the textile industry; as with the motor industry, people see that Britain is a good place in which to invest and a good place from which to export.

While not taking any side in the bid between Tootal and Coats Viyella, my hon. Friend will be aware that the financial strength of the bidder can be bolstered by the use of pension fund surpluses. Many of my colleagues and I are most concerned about that. Surely the primacy in pension fund surpluses must belong to pensioners past, present and future. Will my hon. Friend consider that practice?

The question of gearing was considered by the director general when he reached his decision to advise against a reference. The specific question about pension fund liabilities is governed by other regulations and laws. Regulations prevent the inappropriate use of surpluses and there are rules to ensure that the interests of pensioners are looked after. After all, that is the whole point of a trust fund. It must ensure that moneys are available to meet future pension liabilities.

To ask the Secretary of State for Trade and Industry when he will next meet the chairman of the Post Office to discuss reorganisation and possible privatisation of the Royal Mail.

My right hon. Friend will be meeting the chairman of the Post Office on Tuesday 11 June.

Having created separate Post Office Parcels and Counters companies, and with the current reorganisation of the Royal Mail—[HON. MEMBERS: "Reading."]—into nine regional businesses—

Reading.

Order. The hon. Gentleman has only just arrived in this place. We should show consideration for our new colleagues.

and with the current reorganisation of the Royal Mail into nine separate businesses on a regional basis, together with an additional number of separate business centres, despite the known opposition of a certain person whose name and head appears on stamps, will the Secretary of State agree to consult that certain person before he proceeds with his disastrous programme of privatisation of the Post Office or any sectors of the Royal Mail?

I welcome the hon. Gentleman to our exchanges. [HON. MEMBERS: "Reading."] Yes, I was reading that bit.

Does my hon. Friend agree that the problem with the Post Office is not that it is not technologically advanced—it is—but that the trade unions have made poor progress in adjusting to modern conditions and equipment? Does he agree that they really must adjust to modern working practices much more quickly, for the benefit of all of us who use the postal system every day of our lives?

That is exactly why the monopoly is a privilege and not a right. That is why it is always appropriate for the Post Offfice—which is responsible for operational matters—to examine every part of its activity to see whether more choice and value for money, and better quality, are possible. Opposition Members, of course, never accept that. They are the reactionaries, the Bourbons of this debate; we are the Orléanistes, the pragmatists, ready to consider any kind of proposal from the Post Ofice that is aimed at improving the quality of service for the customer.

rose—

Order. Normally, I try to reach question 9 by 3 pm; we have only reached question 6. May we have briefer questions and briefer answers, please?

To ask the Secretary of State for Trade and Industry what plans he has to meet the chairman and chief executive of British Steel to discuss the future of steel making in Scotland; and if he will make a statement.

My right hon. Friend and my noble Friend the Minister for Industry meet the chairman of British Steel from time to time to discuss matters.

Does the Minister accept that the information given to the Select Committee on Trade and Industry on 6 December by the chairman of British Steel—that the European Commission would oppose any sale of Ravenscraig—was incorrect? is he aware that, on 25 March, the Secretary of State for Scotland was not only given that information by the European Commissioner, but told that Scholey himself knew that he had gone too far in his evidence to the Select Committee? Can the Minister explain why the Secretary of State for Scotland has not given that information to the House of Commons, the Select Committee or I he general public?

Briefly, please.

Now that the key reason given by British Steel for not selling Ravenscraig has been discredited, will the Minister intervene to force such a sale before the assets are destroyed by the private-sector monopoly that he has created?

My right hon. Friend is considering his reply to the Select Committee, and will give that reply by 14 May, which is the deadline for it. There are two matters that are specifically for his consideration, and he will deal with them when he produces his full and considered response.

When my right hon. Friend meets Bob Scholey, will he tell him that Conservative Members respect the way in which he has so dramatically changed the fortunes of British Steel? He has made it profitable and increased productivity, and the company is now a net exporter of steel. We have no intention of insulting him or the work force, as the Scottish National party has done.

I am grateful to my hon. Friend for his comments. He is right to point out that the Scottish National party has upset the trade unions in this case, which, I am sure, is a matter of concern to the House. He is also right to point out that British Steel's success under its management in the private sector has been phenomenal. It is a world beater—a very profitable and productive company, which has transformed the fortunes of our steel industry in the past few years. I should have thought that most sensible Members of the House would welcome that, and would support the management that had delivered the goods.

rose—

Make way for the well-known steel worker.

Clearly, the hon. Gentleman's brain is as large as his body. [Laughter.]

Order. A question please.

We appreciate the fact that the Secretary of State for Trade and Industry is trying to match the Prime Minister in dithering. As he has now had the Select Committee's report in his hands for some time, can he tell us what action he proposes to take?

I thought that the hon. Gentleman was good at anatomy, but his first remark implies that even that is not his strong subject. I can promise the hon. Gentleman that we shall make a considered reply to the Select Committee within the due time, but I cannot tell him what my right hon. Friend will say, because he has not yet finalised his response. If he had finalised it, it would now be available. I am sure that you, Mr. Speaker, and the House will want a considered and full reply, and that is what my right hon. Friend will produce.

Will my hon. Friend remember and remind his right hon. Friend the Secretary of State that he is no longer the owner of British Steel and that British Steel's owners are now the many thousands of people who work in that company, as well as the many thousands of small and, no doubt, larger shareholders around the country? Does he agree that British Steel has been successful because politicans have not interfered in it during the past few years, and will he—as I am sure that he will—resist any temptation to do so in the future?

I am grateful to my hon. Friend who is right that we need a productive and successful industry to provide the jobs that we all wish to see in the steel sector. It is remarkable how much more successful British Steel has been since politicians stopped issuing lunch-time directives and making direct interventions in its management, and that is how we intend to continue.

To ask the Secretary of State for Trade and Industry when he will next meet representatives of the north-west regional CBI to discuss the recession in industry.

I have no present plans to meet representatives of the north-west regional CBI, although my officials do so regularly, and on Monday I met the CBI's presidential committee.

May I suggest that the Secretary of State arranges an urgent meeting with the CBI to discuss the disastrous fall in manufacturing employment in the north-west? After two Tory-inspired recessions, manufacturing employment has fallen by an appalling 301,000, which is a colossal 31 per cent. When he has that urgent meeting with the CBI, will the right hon. Gentleman tell the CBI that the Government have abandoned their prejudice against manufacturing industry, and will he join the Labour party in giving hope to thousands of unemployed people in the north-west by saying in future that manufacturing industry matters to the regions?

I have recently made a number of visits to the north-west, where I visited businesses in Bolton, Bury, Clitheroe, Ellesmere Port, Liverpool, Manchester, Skelmersdale and Warrington. I was impressed by the progress that has been made in diversification and modernisation over the past decade. Most impressive of all was the Ellesmere Port Vauxhall works, which started exporting cars for the first time for 11 years last September and which now exports 40 per cent. of its output and takes on a new foreign market every fortnight.

The principal constituency employer of the hon. Member for Manchester, Withington (Mr. Bradley), is the health service, but no less than 55 per cent. of employment in Pendle is in manufacturing. Although trading conditions are not easy at present, may I advise my right hon. Friend that the vast majority of manufacturing employers are keeping their nerve and fully support the Government's policy of steadily bringing down interest rates and inflation?

I am glad to hear that from my hon. Friend. When I was in the region, I was impressed by the fact that the number of firms trading in the area has increased over the past decade by nearly one fifth, and that the number of manufacturing firms has increased by one quarter. That is very good, and shows a strength and ability to resist the downturn and to diversify away from traditional industries.

To ask the Secretary of State for Trade and Industry if he will make a statement on the Government's policy regarding the provision of Post Office services in rural areas.

The Government remain committed to Post Office services which meet the social, industrial and commercial needs of the United Kingdom, including both urban and rural areas.

I wonder whether the Minister realises that, if he were so minded, he could send a 1 kg package to Iceland or a 0·5 kg package to Tibet by international datapost more cheaply than he could send the equivalent packages by datapost to Orkney or Shetland. Does he accept that the revenue received by the Post Office as a result of the 75 per cent. surcharge on datapost to the Scottish islands is small compared with the adverse effect that it has on businesses in the islands? Just as the Government have accepted that social and political considerations outweigh commercial considerations in sustaining some forms of rural post office network, will they consider the case for taking into account similar social and political considerations with regard to datapost charges?

The hon. Gentleman is right in one respect. We attach enormous importance to maintaining a uniform tariff structure for normal letter delivery to rural areas. However, the hon. Gentleman referred to datapost, which operates in a competitive and commercial market because it is above the 1 lb limit. First, it would not be right for me to comment on operational matters, which have always been the responsibility of the Post Office. Secondly, if through me the hon. Gentleman asked the Post Office to subsidise the service, he would ask it to do so at the expense of its competitors. I am not sure that that would be entirely right.

Will my hon. Friend assure the rural communities in North Yorkshire that the availability of a strong network of village post office counters will remain a key feature of the Government plans for the Post Office, as will universal delivery at a common price of the royal mail throughout the United Kingdom? The excellent service provided by rural village post offices is greatly valued by my constituents, and we ought to do what we can to keep it.

I entirely agree with my hon. Friend. I live in a rural area myself and I find the service provided absolutely excellent. My post and, indeed, my red boxes are delivered on time.

To ask the Secretary of State for Trade and Industry what plans he has to assist manufacturing output in the west midlands.

The hon. Gentleman asks about the policies of the Department of Trade and Industry. They were recently set out by my right hon. Friend the Secretary of State on the question of helping manufacturing industry. [Interruption.] I thought that we were on Question 11.

Correct. Is the Minister not answering Question 11?

I am answering Question 11.

That confusing reply will send shivers down the spine of most manufacturers in Birmingham and the west midlands. Does not the Minister know or care that manufacturing investment is set to fall by 17 per cent. this year and that, since 1980, 370,000 jobs in the manufacturing sector in the west midlands have gone? Does he not realise that, in this second recession, the car industry in particular in the west midlands is being crippled? When will he start doing something to assist the manufacturing sector, on which we rely for our economic success?

That was a confusing question. The hon. Gentleman does not seem to recognise the great achievements of the 1980s or the fact that investment reached record levels by the end of that decade. The adjustment downwards in investment still leaves it well above the level of the 1970s, when the Labour party had a chance to do something for manufacturing industry but let it down so badly. All the Government's economic policies are geared to creating the conditions in which enterprise can flourish. Healthy industry depends on competitive markets, low taxation, the attraction of inward investment and the proposals set out by my right hon. Friend in his statement yesterday, which clearly showed all that the Government are doing through the DTI to assist manufacturing industry. The hon. Gentleman should look at the facts and see that many overseas countries and companies are now investing here, because they know that the climate is good for manufacturing investment.

When my hon. Friend has met manufacturers in the west midlands and elsewhere, has he found that they understand that, during the past decade under a Conservative Government, manufacturing investment and output increased by 20 per cent., manufacturing productivity by 60 per cent. and manufacturing profitability by 250 per cent?

What my hon. Friend says about the success of the nation as a whole is right. If Opposition Members claim to speak for the west midlands, they should start to recognise how much success there was in that region in the 1980s, and how that success will continue in the 1990s if we stick to the right policies for manufacturing industry. The fact that so many firms are investing in the area—only the other day Brose announced a major investment in car-related supplies—shows that international investors know something that the Labour party does not know: that Britain is getting it right and will be a major manufacturing centre in the 1990s.

To ask the Secretary of State for Trade and Industry what was the trade balance in manufactured goods in (a) Germany and (b) Britain in 1990.

The United Kingdom had a deficit of £13·7 billion. Germany had a surplus of £60·2 billion.

Will the Minister admit that these figures emphasise the true state of the British economy? Does he realise that our trade in manufactured goods shows a performance worse than that of any other industrialised country, with the exception of the United States, since 1979? In the face of declining investment, a fall in output, and major problems for British exporters, when will this "do nothing" Department of Trade and Industry do something?

I am sorry to find the hon. Gentleman joining those of his colleagues who spend their time denigrating the performance of British manufacturing industry. Manufacturing output, manufacturing productivity and manufacturing investment last year were at record levels. Let us look a t British manufacturing exports to Germany against British manufacturing imports from that country. Interestingly, the ratio, at 59 per cent., was higher last year than in any year between 1975 and 1979.

Is it not right that, in 1990, Britain's share of world trade in manufactures increased, for the second year running, after being more or less stable throughout the 1980s and having fallen catastrophically during the previous three decades? Is that not a remarkable sign of a real turnround in the performance and competitiveness of this country's industry?

My hon. Friend is quite right to draw attention to the significance of the fact that our manufacturing exports reached a plateau—did not fall, but reached a plateau—in the 1980s after decades of decline. That is a tribute to the increase in productivity to which I have referred—an increase that is essential if our manufacturing industry is to continue to prosper in the 1990s.

Will the Minister now admit that the prospects for an improved trade balance are not helped by the fact that his proposed sell-off of the Export Credits Guarantee Department has turned out to be a complete fiasco? Can he tell us why there is no British bidder left for the ECGD? Will he confirm that the Government's lack of commitment to export credits for not-so-easy markets, and in the long term, has caused both bidders and exporters to react with alarm and dismay?

I am sorry that the hon. Lady refuses to recognise that the Confederation of British Industry, among others, has welcomed the proposed privatisation of the insurance services group of the Export Credits Guarantee Department. I am sure that the CBI has given this welcome because it realises that a privatised insurance services group will be able to provide a better, more flexible and more responsive service to its customers—British industry.

If the United Kingdom's trade balance in manufactured goods is to compare favourably with Germany's, will it not be necessary, first, for this country to equal Germany's performance in respect of inflation and competitiveness? Is not that precisely what the Government's anti-inflationary policies are designed to achieve?

My hon. Friend has put his finger on an extremely important point. One of the major factors in the success of German industry since the war is the relatively stable inflationary environment in which it has operated. If we were to return to the policies that are always advocated by the Labour party, we should have again the inflation levels—more than 15 per cent., on average—that characterised that party's last period in government.

To ask the Secretary of State for Trade and Industry when he will next meet the director general of the National Economic Development Council to discuss the future of British Industry.

My Department has frequent contacts with National Economic Development Organisation officials on a wide range of business matters. I will be chairing the council meeting on 20 May 1991, and I also expect to meet the director general a few days before then.

Is the Minister aware that, in the last six months, 100,000 manufacturing jobs have been lost as a result of the policies pursued by his Government, and that since 1979 about 2·2 million manufacturing jobs have been lost, again as a result of the policies of his Government? Has he read a recent press report that indicates the depths of the recession that this country is in? When will the Government take the action that is urgently necessary to bring Britain in from the cold, away from recession, and back to a level economy?

Manufacturing output fell under the Labour Government, and it has increased under this Administration. Manufacturing exports are 60 per cent. up in volume terms and our share of world trade has been maintained over the past 10 years, a period in which France, Germany, the United States and Japan have all lost some share of world trade to the newly industrialised countries of the far east.

Will my right hon. Friend confirm that, last year, manufacturing investment and exports reached an all-time record high, and that a survey undertaken by the West Midlands chamber of commerce showed that no fewer than seven out of 10 firms intend either to maintain or increase investment in training next year? Will he reiterate that it is part of the hypocrisy of the Labour party's attitude towards manufacturing industry that, when it was last in power, manufacturing output fell and profitability sank to an all-time 20-year low?

I entirely agree with my hon. Friend. The latest CBI survey shows the welcome fact that industry expects to maintain spending on research and innovation and to increase spending on training during the recession. These are things that never happened under the Labour Government.

To ask the Secretary of State for Trade and Industry what response he will make when he next meets the CBI to its recent report on the state of the economy.

Mr. Douglas.

No. 14, and in Scotland we measure people from the neck up.

I welcome the CBI's business agenda for the 1990s, "Competing in the New Europe". The CBI is right to set winning the battle against inflation at the top of its agenda.

The Minister will be aware that the CBI is extremely concerned about the fall in the level of investment. That being so, why are the Government allowing the European Commissioner, Bruce Milian, to withhold £100 million which is due to coalfield areas, including my constituency, which have been deprived of funds? How does the Secretary of State hope to change the Commissioner's mind and ensure that the £10 million that is due to the east of Scotland goes to that area, that the matter is settled and that there is a satisfactory interface between the Department and the Treasury? When will he ensure that the coalfield areas get their dues?

I had a useful meeting recently with Commissioner Millan to discuss this issue. Many misunderstandings were clarified. I hope that, before long, the money will be released. I am glad to have the powerful support of the hon. Gentleman.

Will my right hon. Friend discuss with the CBI the new uncertainty that is facing industry as a result of United Kingdom laws being suspended or amended because of appeals that these laws conflict with Euro-laws on everything from lotteries to Sunday trading? As the guardian of industry and commerce, will my right hon. Friend take steps today to advise shopkeepers and the owners of supermarkets on whether they are entitled in the Government's views to open their premises on Sundays? Will he take steps also to advise local authorities whether it is the Government's view that they have powers to implement the Sunday trading legislation that has been approved by Parliament?

I understand that yesterday's decision related only to whether local authorities should give undertakings to the court when seeking injunctions to prohibit Sunday trading. If that is right, the decision would not appear to cast doubt upon Mr. Justice Hoffmann's decision last year that the Shops Act 1950 was not incompatible with the treaty of Rome. The decision represents no change in the underlying law.

When the Secretary of State next meets the CBI will he tell its representatives that they are right to be gloomy about the state of the economy, given that all the factors that produced the Lawson revival in the 1980s from the credit bubble to the effect of oil on the balance of payments and the devaluation of 1986—were one-offs that cannot recur? Will he tell them also that the future of the economy under this Government is permafrost unless we get a competitive exchange rate and low interest rates? The Government cannot expand the economy without regenerating inflation and widening the balance of payments gap. That will be the position until we have a change of Government.

The hon. Gentleman's views are certainly not those of the CBI. I advise him and other Opposition Members to read the CBI's "Business Agenda for the 1990s", which says:

"It will certainly be important that the United Kingdom does not retrace the steps that have been taken to advantage over the past decade."

"to remind the 25 per cent. of the Electorate at the next General Election who were under 18 in 1974 how much has been achieved in the last decade. For it is all too easy to forget what the situation was like in the late 1970s, industrial disputes, apparently regarded as inevitable".

Following his welcome attempt yesterday to redefine the role of his Department, will the Secretary of State say in more detail what he meant by "encouragement to innovation"? In so far as that might have to follow the increase in Government-sponsored research and development, will he tell the House whether the appropriate funds are available for that purpose?

Commercial research and development undertaken by companies is best encouraged by a competitive environment. We shall encourage that. However, research and investment at a pure, pre-competitive level need and receive Government support. We spend some £3 billion on civil research and development. That is more than the Japanese Government spend proportionately for the size of our economy. We are introducing encouragements for industry to exploit the potential that that gives, to encourage small and medium firms to get more involved in research and development, particularly with the science base in universities, and to change the climate in the City and industry to encourage innovation.

Will the right hon. Gentleman answer the central question and face the consequences of the recession in terms of lost jobs and lost capacity, when 10,000 jobs are going every week and 2,500 companies are going bankrupt every month? Does he agree with the central finding of the CBI survey that was issued yesterday? Unless something is done, 50 per cent. of companies expect to cut investment in the next four months and 45 per cent. of companies—nearly one half—expect to lay off workers. How many more months of redundancies and closures will it take before the "do nothing" Department of Trade and Industry begins to act, or has the Conservative party become, as it was in the 1920s and 1930s, the party of recession and unemployment?

The key finding in the CBI's report was that the balance of companies expecting further decline was down sharply, from 51 to 17 per cent. As for investment spending, the key fact is that industry is maintaining spending on innovation and new products and processes and increasing it on training. I should have thought that the hon. Gentleman would welcome that. My speech looked forward to the future in the 1990s, building on the success of the 1980s. The hon. Gentleman wants to take us back to the 1960s and 1970s. The trouble is that Opposition Front-Bench Members all belong to the "Let's turn back" group.

To ask the Secretary of State for Trade and Industry if he will make a statement on progress on the creation of the single European market.

Good progress has been made towards the creation of the single market. Of the 282 measures set out in the 1985 Commission White Paper, "Completing the Internal Market", 197 measures have now been agreed by the Council of Ministers.

Can my hon. Friend confirm that the Conservative party, which originally took this country into the European Economic Community, to its great benefit, and despite the sullen and unhelpful attitude of the Labour party of the time—and some peripheral sniping—is now on target to complete requisite legislation for the single European market by December 1992?

I am happy to do so. The Government have consistently been in the lead in implementing directives in domestic law. Occasionally—perhaps even at this moment—the Danes have been slightly ahead of us, but we have an excellent record and are well on target to creating the single market. which will be of great benefit to British industry.

To ask the Secretary of State for Trade and Industry when he next plans to meet representatives of Trade Indemnity to discuss the number of business bankruptcies.

Neither I nor my right hon. Friend has any plans to hold such a meeting.

Has the Minister read the recent Trade Indemnity report, which showed that business failures rose by 90 per cent. in the third quarter of 1990 and predicted that those figures will remain the same through much of next year? Is he aware that 24,442 firms failed in 1990? How does he propose to deal with that catastrophic failure in businesses?

I draw the hon. Member's attention to the fact that the figures from Trade Indemnity are not comprehensive, as they relate only to the businesses where Trade Indemnity has a liability. I also draw his attention to the fact that, although insolvencies are always a matter of regret, the percentage of the total stock of businesses that encountered insolvency in 1990 was in no way out of line with the experience of the 1980s. A dynamic economy will always feature a high turnover of firms.

Does my hon. Friend agree that, if there has been a record number of new company start-ups over a long time, there is bound, in a recession, to be a record number of bankruptcies? What matters is that British industry is able to compete effectively in the increasingly competitive environment that will exist in Europe post-1992 and to sell its goods on quality, not just on price.

My hon. Friend is entirely right. In 1990 there were one third more businesses and, therefore, in a dynamic economy, there will inevitably be more bankruptcies. What is necessary for success is a high degree of productivity and innovation. That is what the Government's policies are encouraging.

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.

All to our loss in Kilmarnock. Is the Minister not aware that, since 1979, there has been a massive one third increase in import penetration? The import penetration on office equipment and processing data is colossal at 95 per cent. The import penetration on machine tools is huge at 52 per cent. and that for clothing, textiles and footware is 40 per cent. The Minister must tell me what to tell my constituents of Kilmarnock. How can they have some hope for the future when their economy is based on industry?

I am glad to note that the latest figures show export volume up 3 per cent. and import volume down 2 per cent. on the equivalent quarter last year.