To ask the President of the Board of Trade when he last met the Director General of Electricity Supply to discuss the regulation of electricity generation.

My right hon. Friend the President of the Board of Trade and I meet the Director General of Electricity Supply from time to time and discuss a wide range of electricity issues.

As electricity prices have risen by 9 per cent. in the past month, while British Coal prices have fallen by 19 per cent., does the Minister agree that the generators are failing abysmally to pass those benefits on to the consumer? Does he also agree that the cost of coal-fired electricity is considerably lower than gas-fired generation? If he does agree, why does he continue to shut pits, while promoting the building of new gas power stations?

I refer the hon. Gentleman to the coal review White Paper, which I am sure he has read, which examines all those arguments in detail, as they were examined by the Select Committee on Trade and Industry. The hon. Gentleman should have set the record straight and pointed out that electricity prices to the domestic consumer have fallen in nominal terms and have certainly fallen in real terms in almost every area.

Given that the forecast of the National Grid is that there will be 57 per cent. over-capacity by 1997–98, do the Government make it clear to the electricity supply industry that its priority should be conservation rather than production, and if not, why not?

The hon. Gentleman should study the National Grid statement in rather more detail. It sets out a number of scenarios making different assumptions on a seven-year horizon. The Government are, of course, concerned to promote energy conservation. That is why the budget of my right hon. and learned Friend the Secretary of State for the Environment in this area has almost doubled.

Does the Minister recall that, in March, the House was told that the Government had saved 12 pits by coming up with a subsidy to enable the generators to burn more coal? Is he aware that, in the two months since then, far from burning more coal. the generators have been burning even less than they had planned? Will he meet the generators and ask them when they intend to place a contract for a single extra bag of coal? If he does not get that contract, does he appreciate that those 12 pits will go the way of the rest? If that happens, his subsidy will look like a sham which solved a political crisis for the Conservative party but has not solved the jobs crisis in the coal industry.

That is absolutely typical of the hon. Gentleman: when he identifies a problem, he wants the Government to get in and sort it out. He believes in state direction. He has no belief whatever in the private sector and wants to spend taxpayers' money regardless of the value to the economy as a whole. The Government have made it absolutely clear that we will make a subsidy available, but that it is a matter for negotiation between British Coal and the private sector generators to see whether additional coal sales can be identified.

To ask the President of the Board of Trade what steps his Department has taken to increase the competitiveness of British exporters.

The Government give a high priority to helping British exporters. United Kingdom companies are now in a better position than ever to win business overseas.

Does my hon. Friend agree that the competitiveness of our exchange rate has helped to constrain inflation and that we need to keep bearing down on domestic costs to keep inflation under control? Those economic measures introduced by our Government are more effective than the, gloom and carping by the Opposition about the performance of our manufacturing industry and exports.

Rubbish.

Despite Opposition Members' cries of "Rubbish" from a sedentary position, since 1981 the volume of British manufactured exports has grown faster than that of France, Germany, Italy, the United States or Japan. During the past three years, manufactured exports have risen by four times as much as imports, and since 1989 our exports of manufactures are up 16 per cent. Instead of doom, doom, gloom and gloom, which is all that we get from Opposition Members, that is the real history behind British manufacturing exports.

In view of the enormous role that the steel industry plays in United Kingdom exports, is the Secretary of State aware of the serious potential threat posed to the British steel industry by the closure of Ucar Carbon, the only plant in Britain that manufactures graphite electrodes, which are part of the electric arc smelting process in special steel manufacture? It is the only United Kingdom plant, and it is scheduled for closure. What can the Secretary of State and his Ministers do, along with Opposition Members, to prevent that closure?

As the hon. Lady knows, that is a matter for my right hon. Friend. I believe that she is in discussion with him on that issue, and I am sure that he will work as hard as he can with her to ensure that whatever action might be taken will be taken. However, with regard to trade generally, as the hon. Lady says, British Steel's performance is unrivalled, and it is unrivalled and competing in markets all over the world because it has been privatised.

Does my hon. Friend agree that, when it comes to manufactured exports, what distinguishes manufacturers from the service sector is that manufacturing is more capital intensive? Does he further agree that there may be a danger that our progress in recovering from recession may be affected by a shortfall of capital in the small firms manufacturing sector? Will he, therefore, as the champion on this cause with the Treasury, urge the Chancellor of the Exchequer to consider, within the lifetime of this Parliament, the abolition of capital taxation, which will work wonders for inward investment and give us a clear competive edge within Europe and in the broader world market?

I shall pass on my hon. Friend's views to my right hon. Friend the Chancellor. As he knows, the Budget contained major measures, such as the loan guarantee scheme, for assisting small companies, and the Government are determined to do all they can to help small companies, not least in exports.

As the Minister has been so free in lecturing the Opposition for talking doom and gloom, will he take the opportunity to rebuke the Chancellor of the Exchequer, who, in his Budget statement, forecast that the manufacturing deficit will double this year? Did he get it wrong, or is he also peddling doom and gloom? Will the Minister confirm that, in every year until 1982, we had a surplus in manufactured trade, and that in every year since 1982, we have had a deficit in manufactured trade? If, after 14 years, the hon. Gentleman really believes that the Government now have the right policies for industry, can he say in which year we shall return to the manufactured trade surplus that we used to have in every year until the Conservative party was elected?

The hon. Gentleman knows perfectly well that such forecasts from anybody are totally meaningless, and he would never make such a forecast himself. The figures I gave for manufacturing exports are true. They are not figures that he has ever used and he would never use them because, as far as he is concerned, they do not paint the true picture of British manufacturing —which is one of tremendous success. The Government do hare a policy on exports and manufacturing exports. We have a policy to do everything that we can, with manufacturers and business, to promote our exports. That is very different from the hon. Gentleman's policy, which is to join the social chapter and to push up costs and push up the incentives for people to leave this country.

To ask the President of the Board of Trade what proposals his Department has to change the law to prevent the fraudulent re-chipping of mobile phones.

I am not persuaded that a change in the law is necessary.

I declare an interest as an adviser to the Telecommunication Manufacturers Association and as an owner of one of those terrible machines that are likely to be stolen. I am sure that my hon. Friend knows of the growing prevalence of telephones being stolen and adapted for fraudulent use, which has come to the attention of not only the industry and users but even the House authorities, because a large number of telephones have been stolen from this place. Will my hon. Friend meet a delegation from the industry and of others concerned, and think again about improving the law to stop the fraudulent changing of mobile phones?

My hon. Friend speaks with great knowledge of that subject, and I should be happy to meet a delegation led by him. Our legal advice is that there are adequate powers available under the Theft Act 1978 to prosecute, and further powers available under section 42 of the Telecommunications Act 1987. We are not convinced that further legislation is necessary in this instance.

To ask the President of the Board of Trade what further steps he is taking to ensure that travel agents and tour operators have sufficient funds to protect holidaymakers in the event of financial collapse; and if he will make a statement.

Tour operators and travel agents who sell packages are required under the Package Travel Regulations 1992 to have security for the refund of customers' prepayments and for repatriation in the event of insolvency. It is their responsibility to ensure that they have sufficient funds to provide that security.

Is it not the case, if we can hear the truth, that the Minister has implemented an Arthur Daley-type charter for unscrupulous tour operators? What will he do this summer, when the first unbonded tour operator collapses, to repatriate stranded holidaymakers abroad who have no financial protection? Should we not all be urging our constituents to stick to dealing with firms in membership of the Association of British Travel Agents?

For the first time under the directive, holidaymakers who deal with a package tour operator will have the reassurance that their deposit will be protected under an insurance, bonding or trust scheme. The Opposition proposed that we should institute an immensely bureaucratic licensing system, which would add enormously to consumer costs and to business regulation. That is why we rejected that licensing system, and we consider that our proposal gives sufficient consumer protection.

I support my hon. Friend's remark that bonding and insurance will give greater protection to holidaymakers than ever before, reinforced by criminal sanctions if bonding and insurance do not take place. Does my hon. Friend accept that efforts by the five trade bodies to form an umbrella organisation, the Travel Protection Association, will give even more protection to holidaymakers wishing to travel under the auspices of those five organisations?

I have heard of that scheme, which is much in the spirit of the directive. It is based on a flexible approach, the industry regulating itself, and ensuring customer protection without enormous costs and bureaucratic burdens being placed on the industry. That is precisely the approach that the Department favours.

The Minister says that a licensing scheme would be excessively burdensome and bureaucratic. Why is it that, before the last election, he issued a press statement saying that he would introduce licensing? Does the Minister realise that his regulations fail to implement fully article 7 of the package travel directive? What will he do to ensure that holidaymakers stranded abroad by travel companies that collapse are brought home at no extra cost?

When we launched a consultation exercise, we found that if we were to introduce a licensing system, literally tens of thousands of operators would be covered by it. We would be tying them up in a tangle of red tape. One cannot legislate against fraud. We would only have ensured that business would be over-regulated and that the consumer would have to pay a lot more for his holiday. We have ensured that, when a deposit is paid to a travel package company, that deposit is protected by bonding, insurance or a trust scheme. That is a flexible approach, behind which the whole House can unite.

To ask the President of the Board of Trade what discussions he held on his last visit to Teesside in relation to measures to be taken to encourage manufacturing industry and exports.

I last went to Teesside on 29 April. I visited the Greentyre company, held discussions with local business men and gave the toast to commerce and industry at the Teesside chamber's annual dinner.

I am grateful to my right hon. Friend for his answer. If he has had an opportunity to read the latest "Business Survey North", which is a survey of 1,000 businesses carried out by the Northern Development Company and the chambers of commerce, he will have noted that it clearly points out that 61 per cent. of manufacturing firms on Teesside have experienced an increase in export orders in the past three months and that it goes on to conclude that export orders on Teesside in manufacturing industry are now at a record level. Does my right hon. Friend agree that these facts are a clear vindication of this Government's economic and industrial policies and an equally clear demonstration of the dynamism of manufacturing industry on Teesside'

By one of those curious coincidences, I have seen the figures to which my hon. Friend draws my attention. They give grounds for precisely the optimism to which he refers. In the fourth quarter of 1992, manufactured exports, excluding erratics, were at a record level. Output in the three months to March was 2 per cent. higher than it was a year ago, and a quarter higher than in 1981.

At the same time as the right hon. Gentleman was holding his welcome discussions on Teesside, was he aware that his Department was preparing to desert the interests of a key manufacturing company, Steetley Magnesia Products Ltd. of Hartlepool? Is the right hon. Gentleman aware that, at a meeting today in Brussels, his Department is, I am told, withholding its support from vital anti-dumping measures that are needed to cope with unfair competition from China? Will he undertake today to reconsider the Government's position on this issue before Steetley Magnesia Products Ltd. and the future of this vital industry are placed in serious jeopardy?

The hon. Gentleman raises an important question. I can assure him that we are looking at this case, as we look at all allegations of dumping, extremely clearly and carefully, but the House must realise that there are just too many examples of companies that lose orders and immediately suggest that they did so for unfair reasons. Our overall national interest is to preserve openness of trade and not to become involved in recriminations. However, I shall certainly look at the hon. Gentleman's case.

The Government have said repeatedly that they are seeking to help British industry by negotiating with our European partners to bring to an end the Arab boycott. Will my right hon. Friend confirm that that remains the Government's intention, and can he say whether—

Order. The question refers to Teesside. I hope that the hon. Gentleman will relate his question to Teesside.

My right hon. Friend will be aware that industry in Teesside is seriously affected by the impact of the Arab boycott on Israel. Can he say whether any progress was made over raising that boycott in the recent negotiations between European Community Ministers and the Gulf Co-operation Council?

To the best of my knowledge, this matter was not raised at the recent meeting, but my hon. Friend has our sympathy. He will be aware, though, that there is not a mind to introduce legislation to deal with these matters. I think that that has the overwhelming support of the people who have an interest in those matters.

To ask the President of the Board of Trade how many applications have been received by his Department for use of the European Community Retex funds for development of textile regions; and when the result of these applications will be announced.

Sixty-seven applications have been received. The projects will be selected by the Retex programme monitoring committee after the programme has finally been approved by the Commission. The results will be announced shortly thereafter.

I thank the Minister for his reply, but can he tell the House why the British Government insist on the submission of 12-month schemes, whereas elsewhere in Europe five-year rolling schemes are the order of the day? Can he assure the House that there will be no foot-dragging by the Department of Trade and Industry, which would imperil the bids from my own area, submitted by Lancashire Enterprises on behalf of the six north-east Lancashire district councils, which come to £750,000 and which would help 200 struggling firms in this area?

The hon. Gentleman will be aware that, at the Edinburgh Council, the United Kingdom was not alone in expressing serious reservations about the benefits of these Commission schemes, which merely draw funds away from the general structural programmes. We do not know at this stage whether there will be another Retex scheme. The Edinburgh Council suggested that these schemes should concentrate on cross-border activities, but I do not think that Retex would naturally feature as such an activity. There is no foot-dragging by my Department. If there is a delay, it is because of the great length of time taken by the Commission—it took more than four months to respond to our proposals.

Has my right hon. Friend stressed to the Commission the importance of Retex money for the regeneration of textile areas and the importance of an early decision? When does he expect the decision? Let us have no beating about the bush—are we talking about July, August or September? People need to know because it is a matter of job creation.

I am happy to say that, if anyone is beating about the bush, it is up to us to try to get answers from the Commission. So far, the Commission has not approved proposals from any Community country. It took four months to respond to our proposals, and we are still negotiating a final agreement. As soon as we have that agreement, a programme committee can be constituted. There will be no delay from my Department.

It is no use the Minister claiming that he is not dragging his feet. Is he aware that 1,000 redundancies were declared every month in the textile industry last year? That is a tragedy for British industry. The Minister seems to be bobbing when he should be getting weaving.

I note the web and the weft of the hon. Gentleman's question. I draw his attention to one of the serious drawbacks of the Retex scheme, which is one of the reasons why the United Kingdom, in common with a majority of European Community states, voted against it. Only European Commission areas in objective 2 and 5b are eligible for help under the Retex scheme. Many of the parts of Britain that have the largest concentration of textile employees are outside those areas. The scheme is meant to help textiles, but can do so only in certain areas, and perhaps not the most important.

Now that so many companies in Hinckley in my constituency have taken steps to improve their competitiveness, has my right hon. Friend any initiatives, that in addition to the Retex scheme, could further assist the reconstruction of the industry? Can he say anything about the potential for the hosiery and knitwear industry of a successful GATT round?

My hon. Friend is right to draw the House's attention to the great strides that the textile industry has made in improving its productivity, which is vital if it is to retain its competitiveness in a very competitive market and if it is to build on its achievements in exporting about £5 billion-worth of textiles last year.

Does not the Minister understand the importance and relevance of the Retex scheme to an industry that has lost 400,000 jobs in the past 10 years? Has he not let the cat out of the bag by making it abundantly clear in previous answers that the Government are opposed to the Retex scheme and to helping those in the textile industry who have lost their jobs? Is he not asking the House to believe in a myth when he says that he as Minister will go to Brussels to rattle the cage of the European Commission? Are not we in fact dealing with an insensitive, indifferent and inefficient Minister, who will not be able to apply pressure in Brussels?

I do not know how the hon. Gentleman thinks that he is furthering the cause of the textile industry by what he says, but perhaps he should be reminded of what I just said to the hon. Member for Wolverhampton, North-East (Mr. Purchase). The Retex scheme can help the textile industry only in areas that fall within the objective 2 and 5b map, which excludes many areas in Britain with a high concentration of textile employees. The funds for the Retex scheme are drawn from the general structural funds of the Community; they are not under the control of the Council of Ministers. It is a bureaucratic scheme, under the control of the Commission, it is costly and I do not think that it is very effective. That is the view of most EC countries.

To ask the President of the Board of Trade what representations he has received about the implementation of the EC insurance accounts directive; and if he will make a statement.

I have received a number of comments from a range of interested parties in response to a consultative document that I issued in June 1992. My officials have been in informal contact with a number of such parties. I expect to publish draft regulations for comment next month.

Does my hon. Friend agree that although the directive is, broadly, a step in the right direction in terms of establishing proper comparability between insurance company accounts in this country and those in other European countries, it will work only if carried out on a consistent basis? Will he, therefore, explain why the Government seem inclined to go beyond the directive on the disclosure of distributable profits, when the only certain consequence of that would be that British insurance companies could be put at a disadvantage in takeovers?

It is not our intention to go further than European directives require of us unless we can justify such extensions. The consultation has hardly started yet, so my hon. Friend is a little premature in assuming that we have come to any final conclusions. I shall certainly bear what he says strongly in mind.

Does the Minister accept that for British insurers to reap the full benefits of the single market which flow from the proposals that he has put forward for consultation, we need to resolve the problem of the long shadow of Maxwell, which affects the credibility of British insurers in the European single market? What steps will he take to ensure that that matter is finally resolved before his regulations are in place?

As the hon. Gentleman knows, that has little relevance to the question asked by my hon. Friend the Member for Gloucester (Mr. French). Of course, we do not countenance fraud in any way, but we have to be realistic. As my hon. Friend the Parliamentary Under-Secretary of State for Technology said in answer to the question about travel companies, we cannot pass laws that will make fraud impossible; we can only make fraud more difficult. As the hon. Gentleman knows, that is a policy of the highest importance, to which the Government are firmly committed.

To ask the President of the Board of Trade how many cars are currently being exported each month from the United Kingdom; and what is the total value of the automotive industry to the United Kingdom economy.

The automotive industry is an important part of the United Kingdom's manufacturing industry. So far this year, production for export is up by 7.31 per cent. on the same period last year.

Does my right hon. Friend agree that that success has been brought about by record inward investment, encouraged by low taxation, low interest rates and low inflation? Is he aware that because of unprecedented economic success under successive Governments, it is now impossible to park one's car in the House of Commons car park, as the lot opposite, w ho used to come here on bikes, now come here in cars?

How welcome it is to hear praise for the achievements of any part of British industry and what a contrast it is with what we hear from the moaning minnies in the Opposition. How graphically my hon. Friend illustrated the success of the Government's economic policies; I congratulate him on that.

Would not it be timely if the Minister were to congratulate some of the engineers who made those successful export figures possible? Is not it worth reminding him that Japanese investment in Britain has shown that Japanese management can manage the automobile industry far better than traditional British management and that the Japanese have invested in the industry, which traditional British management never did?

I hope that, these days, when anyone on either side of the House congratulates British industry on an achievement—the automotive industry certainly deserves congratulation on the transformation that it has achieved—we are congratulating not the work force or the management as separate entities, but the whole of British industry working together, as the hon. Gentleman would know if he visited the car factories of today.

Will my right hon. Friend join me in congratulating the Ford Motor Company on its outstanding success in recently being awarded the Queen's award for export?

I am happy to join my hon. Friend in congratulating the Ford Motor Company. I would only add my congratulations to all sections of the automotive industry, including—let us not forget—the many component companies which are steadily increasing their exports to Europe.

The whole House will want to congratulate the teams of car manufacturers and car manufacturing work forces, including that coming on stream in the great county of Derbyshire, which we still have with us. Does the Minister recognise that our car exporters have now fought their way back to their position of two years ago? Our balance of payment deficit on cars was more than £2 billion last year. Does the Minister expect the balance of payments deficit to be £2 billion or less this year?

I hope that we will all look forward to a steady increase in the proportion of cars sold in Britain that are produced in Britain, whether they are produced by Japanese-owned companies, American-owned companies, French-owned companies or British-owned companies. The export success is put in perspective if one bears in mind the fact that the first-quarter exports this year were nearly three times the level of the first-quarter exports of five years ago.

I pay tribute to the role of the motor industry in our economy, as my right hon. Friend has done, but can he say when we will reduce our growing deficit in manufactured goods?

One way of reducing that deficit to which I draw the attention of my hon. Friend is by encouraging inward investors to come here and produce manufactured goods, as the Japanese car companies are doing effectively. Of course, if we are to retain our attraction as a location for inward investors, we must be seen to remain a central part of the European Community and must also avoid saddling our manufacturers with the social chapter.

To ask the President of the Board of Trade if he will make a statement on the development of energy projects in Liverpool bay and the River Mersey.

Progress is a matter for the private sector, but we shall keep in close touch with developments on these projects.

Does the Minister accept that the development of the oil and gas fields in Liverpool bay could mark a crucial and significant turn in the economies of both Merseyside and Deeside? When is his Department likely to give final approval for the development of the gas fields and what active role is it playing to try to ensure that the construction of the rigs necessary for the exploration and exploitation of the field is carried out at the Cammell Laird yard on Merseyside, where there is a desperate need for employment opportunities? Where would be a more fitting place than Merseyside for the construction of those facilities?

The hon. Gentleman will be aware that during the coal review my right hon. Friend the President of the Board of Trade gave permission under section 36 for Connah's Quay to proceed. That in turn will have a significant impact on the economic viability of the find in Liverpool bay. It was quite remarkable that, although certain sections of the Liberal party gave their support, not a single voice was raised by the Liverpool Labour party in favour of proceeding with that project during the whole consultation process leading up to the coal review White Paper. It is recognised that the project would have led to at least 5,000 construction jobs. The Labour party should balance the energy demands of this country.

Will my hon. Friend confirm that it is only because of the Government's energy policy that Liverpool bay will be developed and that, if the Labour party had had its way, we would still be producing coal that no one wants?

I agree with my hon. Friend and I pay tribute to the Welsh TUC which, at the last minute, made its position absolutely clear: it wanted the Liverpool bay development to go ahead.

In the light of his previous answer, will the Minister confirm that I wrote a letter to his right hon. Friend which bore the signature of every Labour Member on Merseyside and also the signatures of Liberal and Conservative Members urging him to go ahead precisely along the lines that he did during the period of the coal review? Will the Minister now apologise for this earlier statement? While he is on the subject, will he pull together Hamilton Oil, the Department and Cammell Laird and work out precisely what can be done to bring the orders for the oil drilling platforms to Cammell Laird—or is he prepared to see another Swan Hunter on Merseyside?

rose—

Withdraw!

I should certainly be willing to apologise to the hon. Gentleman if the letter makes it quite clear that those hon. Members were willing to see the closure of mines as a result—[HON. MEMBERS: "Ah!"] Yes, but that is just the point. Opposition Members are not prepared to make hard and difficult choices. That is why they are in opposition and why they will remain in opposition.

Does the Minister agree that the Labour party in Merseyside has supported both proposals because it considers it necessary to have a balanced energy policy? That is why we also believe that the petroleum revenue tax changes may prejudice the prospect of any other inshore projects of the kind envisaged in the question. The Minister is misleading the House and the country when he suggests that this narrow and blinkered view of energy policy, if that is what it amounts to, can produce anything like the share that the country requires between oil, gas and coal—resources which the country already owns.

The hon. Gentleman is now on record as being against any restriction on the production of coal, being in favour of nuclear production and being in favour of the expansion of gas-fired electricity production. That is highly responsible from the Opposition Front Bench that seeks to form the Government of this country. I suggest that he makes those on the Benches behind him aware that it is necessary to make difficult choices. It is no good his coming to the Dispatch Box to ask for every single thing to proceed in order to persuade and make happy different sectors of his own party.

To ask the President of the Board of Trade when he will next visit the east midlands to discuss job losses in manufacturing industry.

I hope to visit the east midlands shortly. I expect to discuss a range of issues with manufacturing and other businesses in the region.

The Secretary of State certainly needs to talk to a great number of people in the east midlands. In the shire county elections in the east midlands, Labour took 211 seats to the Conservatives' 134. We need investment in manufacturing industry in the east midlands, where investment is still below the 1979 level. Will the Secretary of State ensure that he has good talks with a host of people who might have ideas about what he should do?

I can give the hon. Gentleman an unqualified assurance. I will talk to Toyota at Burnaston which is creating 3,000 new jobs, to Toray Textiles at Mansfield which has created 400 new jobs, to Walkers and Sons in Leicester which has created 250 new jobs, to Land's End at Oakham which has created 100 new jobs, to Airwair of Woolaston in Northamptonshire which has created 70 new jobs and to Fisher Controls in Braunstone in Leicestershire which has created 66 new jobs. I can only say to the hon. Gentleman, who says that Labour has won all those seats, enjoy it while it lasts, because it will not be long.

Has my right hon. Friend seen the Price Waterhouse survey of Derbyshire firms, which was published last week, in which 80 per cent. of companies said that they were coming out of recession and that profits were improving and in which one third were proposing to increase their work forces? Does my right hon. Friend agree that we should congratulate those companies and that the way forward is through a closer partnership between the Government and manufacturing industry to help companies invest and so create the jobs that are needed in that area and elsewhere in the country?

My hon. Friend is right, but why is it that one only ever sees support for the things that are going right in Derbyshire from hon. Members on the Government side of the House?

To ask the President of the Board of Trade what assessment he has made of the effect on businesses, consumers and trade of the recent changes in the price of commodities.

The impact of movements in commodity prices varies between businesses.

Following the exchange rate mechanism debacle eight months ago, which cost Britain about £2 billion, are not higher prices now in the pipeline? Is not that reflected by commodity price rises? Timber is up 126 per cent., sugar 46 per cent., coffee 38 per cent., beef—[HON. MEMBERS: "Reading."] Yes, reading. They are very high figures, are they not? Beef is up 35 per cent. and cotton 25 per cent. Will not that harm businesses and the standard of living of people on tight incomes and make the nation's economic recession worse? Are not the Government caught in a new web of recession of their own making?

I hope that the hon. Gentleman will share the Government's view that the control of inflation is an extremely important objective and is very important to help manufacturing industry, particularly in export markets. I hope that he is also aware that food price inflation has been running at a very low level. It was only 1·5 per cent., which was lower than the general level of inflation in the year to March 1993.

Will my right hon. Friend confirm that a devaluation affects only some prices, not all prices, and that inflation can be caused only by an increase in the money supply?

I am happy to agree with the first part of my hon. Friend's question. As he knows, were we to embark upon a discussion of the second part of his question, it is possible that we would not find ourselves entirely in agreement and we would certainly take up much of the House's time.

Does the Minister recognise that the price of commodities to manufacturers is now tip more than 8 per cent., that that is a direct result of what happened in September and that we are in grave danger of going around the cycle again? When will the Government bring forward a policy for the long-term development and protection of our trade and manufacturing industry? That will be the only way out of the stop-go cycle.

It sounds as though the hon. Gentleman is calling for not only regulation of trade but protection, or higher tariffs, against imports into this country, which of course would be an invitation to a trade war—just the thing in 1929 to 1931 reduced world trade by 40 per cent. and, as a consequence, reduced world output of manufactured goods by 30 per cent. That seems to be a more than usually stupid policy to be proposed, even by the Opposition.

To ask the President of the Board of Trade what plans he has to meet his counterparts in the Government of the Russian Federation to discuss bilateral trade.

Deputy Prime Minister Shokhin, with whom I established contact at the first meeting of the British-Russian steering committee on trade and investment in Moscow last September, and I attended a second meeting of that committee this morning. We plan to continue our talks tomorrow.

Does my right hon. Friend agree that business with the Soviet Union, or Russia as it is today, is well worth pursuing in the long term due to its huge resources in gold and oil? Regarding of the short term, my right hon. Friend's meeting this morning with Aleksandr Nicolaivitch Shokhin, what does he think will be the short-term benefits that will accrue?

I must crave the indulgence of the House, Madam Speaker. I was so carried away by the full explanation of where I have been today that I missed the important part of the question.

In that case we will have a question from Dr. Howells.

rose—

Very well, but very quickly.

Thank you, Madam Speaker. Does my right hon. Friend agree that it is worth pursuing long-term prospects with Russia given its huge reserves of gold and oil? Given his meeting this morning with Aleksandr Nicolaivitch Shokhin, what short-term benefits does he believe will accrue?

I think that my hon. Friend, who has a considerable knowledge of these matters and a facility for articulating them, is right to ask the House this question. The conclusion that I draw is that we have much to gain in both the long and the short term.

It was worth a repeat performance.

Does the President of the Board of Trade agree that one of the greatest success stories of British exports to the former Soviet Union—to Kazakhstan and Russia—is that of British Gas? British Gas is deeply concerned that if it is broken up, as some propose it should be, it will no longer be large enough to be a world player and to take British exports to those countries.

The hon. Gentleman will realise that these matters are currently before the Monopolies and Mergers Commission. It would therefore not be appropriate for me to comment at this stage.

To ask the President of the Board of Trade how many people the Overseas Trade Services employs; and if he will make a statement.

At present, there are some 2,000 staff engaged in export promotion work within Overseas Trade Services, including those employed in the commercial sections of Foreign and Commonwealth Office posts overseas.

While Britain currently enjoys record export levels, is my hon. Friend satisfied that we are doing everything possible to ensure that there is a proper range of services to help British business men win the orders that they rightly deserve?

One can never be satisfied. My right hon. Friend the President of the Board of Trade recently announced a new structure within the DTI which I think will go a long way towards meeting the needs mentioned by my hon. Friend. We have restructured the Overseas Project Board—and are in the process of doing so with the British Overseas Trade Board—to reflect business needs more closely. We have announced the taking on of 100 export promoters, of whom 33 are in place. We are strengthening the relationship between the Foreign Office and the DTI through the joint directorate and linking export promoters with DTI regional offices and, thereafter, this country as a whole. I am sure that, in a short time, we will be giving a package of support to our exporters which will be without equal anywhere in the world.

Will the Minister acknowledge the competitiveness of the British aerospace industry, which exported £5·5 billion worth of its products last year? May I tell the Minister of a great little export earner in my constituency, the 125 executive jet made at the Broughton works? May I further tell him of the concern of the work force there—not just worry at the loss of 269 jobs from the production line, but fear that that efficient unit may soon be bought, lock, stock and barrel by an American company? What can the Minister do to assuage the fears of the work force? Is he prepared to visit the factory and to meet management and labour?

My right hon. Friend has already visited the plant. Obviously it will be a commercial decision for British Aerospace. The hon. Gentleman is absolutely right to congratulate the British Aerospace company and its subsidiaries—and all other companies in aerospace—on the success of their exports, which I am sure will continue.

Can my hon. Friend assure us that there will be adequate staffing to ensure the proper packaging of exports of British goods and services, as was carried out in the Kuwait reconstruction and the recent Proyecto Venezuela? It is a very effective way of putting across opportunities for Britain in these markets.

My right hon. Friend recently announced an additional 60 posts to deal with the 80 top markets for British exports. As I have said, we are in the process of putting in place an export promotion assistance package that no other country in the world can better.

To ask the President of the Board of Trade if he will make a statement on the staffing levels in the Export Credits Guarantee Department.

ECGD's staffing levels are periodically reviewed and determined as part of the annual public expenditure survey and the Minis scrutiny.

I think that it is unfortunate that the right hon. Gentleman could not be more forthcoming on the figures. One suspects that that gives substance to the concerns expressed by the staff of ECGD on this matter. Although an increase in the amounts available is welcome, would not it be a good idea to give an assurance to the staff that their jobs will be secure and that we will therefore have the necessary back-up to progress what will, one hopes, be an increase in exports?

I cannot answer that question in the way in which the hon. Gentleman wants. I have looked in great detail at the number of people employed in providing this service. I was extremely concerned at the overheads involved in providing support to the front-line services and, therefore, I have asked for some urgent reviews to take place, which it is my proper responsibility to do.

To ask the President of the Board of Trade what was the total value of (a) imports and (b) exports between the United Kingdom and northern Cyprus in the last three years for which records are kept.

The Government do not recognise the northern Cyprus regime. Therefore, northern Cyprus is not separately identified by Customs and Excise in the United Kingdom trade statistics.

Is not it the case, as the recent exploits of Asil Nadir brought to public attention, that a considerable amount of trade goes on between the United Kingdom and northern Cyprus? Should not the Government now take a closer interest in the terms under which such trade is conducted? In particular, how many of the business assets through which that trade is conducted belong legally to refugees who were dispossessed in 1974? is not it an insult to those refugees that in the last honours list an OBE was awarded to a northern Cyprus business man for his services to trade with the United Kingdom? Should not the Government now review their policy of accepting export credit certificates from a regime which the United Kingdom does not recognise and which evidently does not recognise any obligations to the United Kingdom?

The hon. Gentleman is fully aware that the trade that takes place between the island of Cyprus and the United Kingdom is regulated through the association agreement with the Community and, therefore, is a Community matter. We recognise the island of Cyprus as a whole and it would be unthinkable to the people on the rest of the island if we differentiated between one part and another.

To ask the President of the Board of Trade what assessment he has made of the parts of manufacturing industry which show the greatest potential for growth; and if he will make a statement.

The Department's objective is to encourage and assist all sectors of the United Kingdom's manufacturing industry to become more competitive both at home and abroad.

Can my right hon. Friend confirm that between 1 million and 1·5 million more people are in work now than were in work in 1983? That means that more than 25 million people are in jobs in the United Kingdom. Are not a substantial number of those in the manufacturing industries? Will my right hon. Friend encourage small business—while not neglecting large business—to provide jobs, because that is where a large potential for increase in manufacturing jobs lies?

I very much agree that smaller businesses have a valuable role not only in manufacturing industry but in the provision of employment opportunities. Indeed, that is why the Government have a comprehensive range of services to assist small firms, including the small firms loan guarantee scheme, which was enhanced by my right hon. Friend the Chancellor in the Budget; consultancies under the enterprise initiative; one-stop shops, which will give a better service to small firms; and the partnership sourcing initiative.

Why should not regional policy be framed in such a way as to back growth sectors of the economy? On the whole question of regional policy, when will we have a statement from the Government on the redrawing of the assisted areas map? It is causing deep concern in my county of Cumbria.

I can understand why the hon. Gentleman is concerned to have an announcement—we will certainly make one as soon as we can. He is aware that the proposals for the new map for assisted areas are subject to the approval of the Commission. We can never be sure how long the Commission will take to give us that approval, as I drew to the attention of the House in answer to an earlier question.

To ask the President of the Board of Trade what representations he has received about the implications of the Arab boycott on British exports.

I receive representations about the Arab boycott from time to time, but we cannot measure its effect on United Kingdom exports.

Does my hon. Friend accept that such an iniquitous boycott must affect the level of United Kingdom exports? As the German and American Governments are willing to legislate against the boycott, will he explain why the British Government will not? May we have an assurance that the matter will he discussed at the forthcoming G7 conference?

I cannot give such an assurance to my hon. Friend, but I will make sure that his comments are passed on. We have not followed the line taken by the Governments of the United States or Germany because in this matter we take the views of British companies and exporters carefully into account. Those companies do not believe that the introduction of such legislation in this country would be effective, because it would be unenforceable.

To ask the President of the Board of Trade if he will make a further statement about the work of the deregulation unit.

Departments are conducting a comprehensive review of all their regulations. Seven business task forces are also undertaking a comprehensive review of all the regulations that affect those industrial sectors. We are also urging the European Community to consult business and consider the burden that its proposals might impose on it. At the local level, there are nine partnerships between local authorities and business in local areas. Local authorities and business are trying to learn from their experience of working with one another.

Will my hon. Friend encourage the civil service unions to be less defensive about the proposals and remind them that public service efficiency will be enhanced by the work of the unit?

I agree with my hon. Friend. There will ultimately be gains for the Government, and hence for the taxpayer, from the deregulation initiative. It can be in nobody's interest to have red tape entangling them. Nor is it in anyone's interest to have taxpayers' money wasted on unnecessary rules and regulations.