To ask the President of the Board of Trade what proposals she has to encourage inward investment. [655]

To ask the President of the Board of Trade what plans she has to encourage inward investment into the United Kingdom. [668]

Inward investment is important not only for the jobs that it brings to Britain, but for the benefit that it brings to local economies.

I warmly welcome the hon. Lady to her new responsibilities at the Dispatch Box. Did she see the report of The Economist intelligence unit a few days ago which concluded that Britain had the second most favourable business environment in the world, second only to Hong Kong? Does she consider that our chances of reaching the No. 1 slot in that league table will be enhanced by having the national minimum wage, the windfall tax and signing the social chapter?

I thank the hon. Gentleman for his kind and courteous words. We want to promote Britain as the investment centre of the world. To do that, we need a highly skilled and highly motivated work force. All the measures that the hon. Gentleman has mentioned will give us just that.

I, too, welcome the hon. Lady to the Dispatch Box. As she will be aware, about 18 per cent. of manufacturing arises from inward investment in this country. What is her view of the recent Treasury projection—

The Tories are bunching up for the camera to try to make it look as though there are more of them.

Order.

Thank you, Madam Speaker.

I thank the hon. Gentleman for his kind words.

I congratulate my hon. Friend on her place on the Front Bench—indeed, I congratulate the whole team. We have a high-quality team answering trade and industry questions.

I thank my hon. Friend, and I agree with him. One reason why we attract inward investment to this country is our membership of the European Union and the influence that we can bring to bear. The divisions in the last Administration, who put party before country, were extremely unhelpful to our inward investment. The new Government's first commitment will be to the country, not the party.

May I point out to my hon. Friend that there is a long history of inward investment in my constituency? It was the late Hector McNeil, Labour Member for Greenock, who persuaded IBM to come to Spango valley more than 40 years ago. Will my hon. Friend ensure that, whenever possible, those from abroad who are seeking to invest in our constituencies set up research and development centres, which are so important? We do not want just assembly units.

I absolutely agree. Inward investment is important and needs to be taken seriously because of its benefits to local industries and economies. That is why this Government will actively encourage supply chains, working with local authorities and others to get the very best for our home-grown industries from the inward investment that we hope to attract.

To ask the President of the Board of Trade if she will make a statement on the guiding principles that the Government will follow in superintending monopolies and mergers policy. [656]

The Government are committed to effective and fair competition. In exercising my statutory responsibilities, I shall consider each case on its merits. My policy will be to make merger references primarily on competition grounds.

I congratulate the President of the Board of Trade on her appointment. May I ask her to explain why the Government have already done two U-turns—one on the proposal to merge the Office of Fair Trading with the Monopolies and Mergers Commission, the other on the burden of proof in takeover cases? She has been quoted as saying—she has said it again today—that competition grounds will be at the heart of her policy. Will she confirm that, and remark its fidelity to the proposals first set out by Lord Tebbit?

I thank the hon. Gentleman for his kind remarks. If I recall correctly, it has been the practice of successive Governments of all political shades for 40 years or so to have competition policy handled in the way that I have described.

I welcome my right hon. Friend most warmly to her new position. I know that she would not want to comment on individual cases, but is she aware of the proposed merger between Grampian Television and Scottish Television—a proposal that is opposed by most sections of opinion in the north of Scotland? When considering new legislation, can she assure me that current grounds for referral to the MMC will not be weakened in any way?

I thank my hon. Friend for his kind remarks. He is right to say that I cannot comment on individual cases. I hope, however, that it will already be apparent—certainly from what we have said about the new legislation that we intend to produce—that, far from weakening the approach to competition issues, we intend substantially to strengthen the position adopted by the previous Government.

I, too, congratulate the right hon. Lady on her appointment, and I welcome the flexibility that she is displaying on this matter. If competition is to remain the central consideration, however, does she intend to offer further guidance on any other factors to which she will attach priority as she considers each and every case on its merits? Does she not see a danger of merger mania taking off again as companies try her on to find out what is guiding her in these deliberations?

I see no evidence that that will happen, although I understand the hon. Gentleman's concern. I have sought to head off any attempts to discern policy by testing me out by making the simple, clear statement to a business audience yesterday that, on competition policy as on other things, there is no need for people to waste their time on close textual analysis: I say what I mean and I mean what I say.

To ask the President of the Board of Trade what measures Her Majesty's Government intend to take to improve (a) the competitiveness and (b) the trading position of British companies within the European Union. [657]

The Government will work in partnership with business to improve the country's competitiveness and trading position. For instance, during our presidency of the European Union next year we intend to complete the single market. That will be particularly important in areas such as telecommunications, air travel and financial services, where there are great opportunities for British business which will stimulate competition and give the customer a better deal. We will also take steps to improve the effectiveness of Government support for exporters.

I congratulate my right hon. Friend on her appointment. Does she accept that the increase in the value of the pound—16.5 per cent. since last August, taking us back almost to pre-black-Wednesday levels—poses a threat to our competitiveness?

As my hon. Friend knows, concern has been expressed about some of those issues, but he also knows that the root of competitiveness and long-term prosperity for Britain is the cultivation of economic stability. Lack of economic stability was a sharp feature of the previous Government's record. We believe that actions taken recently by my right hon. Friend the Chancellor of the Exchequer will contribute to stability, which in turn will contribute to an overall competitive position—and that includes exchange rate issues.

In greeting the right hon. Lady in her new position at the Dispatch Box, may I ask her how the adoption of the social chapter, the imposition on British companies of the provisions of an employment chapter from Brussels, and the idea that Brussels should have the power to impose sanctions on British companies which do not obey the diktats of Brussels, can possibly improve the competitiveness of British companies in the European Union and world markets and improve employment possibilities in British firms?

As I am sure that the hon. Gentleman is well aware, we very much take the view that future competitiveness and future success for Britain lie in encouraging quality. The Government's view is that the attitude that we adopt to issues such as the social chapter and to any proposals for an employment chapter will be governed by what we believe to be in the interests of Britain's competitiveness. We believe that quality and skills are very much at the heart of that.

To ask the President of the Board ofTrade what measures she has for creating jobs in ex-coalfield areas with excessively high unemployment; and if she will make a statement. [658]

The legacy of pit closures has scarred whole communities and much work still needs to be done because unemployment is still unacceptably high in those communities. That should not be forgotten as we pull together programmes and policies to assist.

I welcome my hon. Friend to his new job. When he tours the coalfields—Bolsover and many others—as I expect he will, he will not only see the legacy of 18 years of Tory industrial policy: he will see the social fabric of once-proud mining communities almost broken down. Does he agree that the slap-happy policies of market forces will not solve those problems and find work for those communities? Intervention and planning are needed, not only by the Department of Trade and Industry but by others in the Government, to provide much-needed work for those communities. Market forces have not worked for 18 years, and they never will: we want a fresh start.

I thank my hon. Friend for his questions. I shall be glad to visit his constituency and others where communities have been badly scarred by Conservative Government policies. I absolutely agree with my hon. Friend. There is need for co-ordination—for joined-up thinking between Departments—to ensure that the range of regeneration measures are targeted on those communities which need them most. I hope that the Department of Trade and Industry may act as catalysts in this matter to ensure that those communities which are most in need get that help.

What will the Minister say to unemployed people in Bolsover and in other ex-coalfield areas about the slap-happy dogma that the Labour party intend to introduce, with such things as the social chapter, the minimum wage and the introduction of a 48-hour directive? Does he really believe that the increased unemployment in those areas that will result from the introduction of those policies is a price worth paying?

I am surprised by the hon. Gentleman's slap-happy language. From 1984, the Conservative Government presided over the loss of 50,000 jobs in the coal industry, and more than 40 mines were closed in the area represented in part by my hon. Friend the Member for Bolsover (Mr. Skinner). Perhaps the former President of the Board of Trade—the right hon. Member for Henley (Mr. Heseltine), who shut the pits without proper economic restructuring packages—should be answering these questions, although I am glad, and I believe that most of the country is glad, that he is no longer in a position to do so.

I, too, congratulate my hon. Friend on his elevation to the Government Front Bench. Will he give me and other Members who represent coal mining areas a guarantee that the Government will pursue in Europe the Rechar money that is still available? Will he ensure that that money, along with the rest of Government subsidies, goes in the direction that my hon. Friend the Member for Bolsover (Mr. Skinner) has spoken about?

The answer to my hon. Friend is yes. It is part of that co-ordination to ensure that policies are put together, and that includes calling on European programmes. I am happy to say that I shall take forward that approach.

To ask the President of the Board of Trade what plans she has to introduce new rights of statutory recognition for trade unions. [659]

Mr. McCartney.

I am sorry, Madam Speaker. I still do not quite believe that we—Labour—are on the Government Benches. I am here, however, and I am enjoying it.

We can hardly believe that the hon. Gentleman is on the Government Front Bench, either. Nevertheless, I congratulate him on his appointment.

First, I congratulate the hon. Gentleman on returning to this place. My constituents did not feel short-changed in booting him out. I welcome him back.

I, too, welcome my hon. Friend to his new position. I am sure that he will undertake his responsibilities extremely well.

I thank my hon. Friend for her supplementary question, which illustrates clearly why it is important to provide a right for individuals to join a union and for that organisation to represent their interests. That is why 88 per cent. of the most successful companies in Britain recognise unions and provide opportunities for their employees to be represented by them. As for those companies which do not adopt that approach and which act unfairly, the legislation that we shall introduce will ensure fairness across the board. It will ensure that, when employees want recognition rights and vote for them, they will get them.

I join in welcoming the new Front-Bench team to their new posts, especially the Minister of State, Department of Trade and Industry, the hon. Member for Makerfield (Mr. McCartney). When the hon. Gentleman gets used to standing at the Dispatch Box and facing questions, he may discover that he is there to answer them—unlike the response that he gave to my hon. Friend the Member for Sevenoaks (Mr. Fallon).

"Let us trust in the years ahead every time a Labour MP walks through the chamber of the House of Commons they remember the help they received from the GMB and so many other trade unions."

First, when I stand at the Dispatch Box and answer for my Government, I know—unlike the right hon. and learned Gentleman—that the rest of the Government support me. Secondly, this Government are not looking to the past—unlike the right hon. and learned Gentleman, who is locked in the past. The Government are looking to the future. What can be wrong with the principle that someone joins a union and, in a secret ballot, seeks recognition? That is granted as part of a partnership in which we motivate the work force through skills and investment in training so as to ensure that Britain becomes the number one economic driving force in Europe, whereas the right hon. and learned Gentleman tried to make it the sweatshop of Europe.

To ask the President of the Board of Trade if she will make a statement on her Department's review of firework safety regulations. [660]

I plan to introduce a number of new controls on fireworks. Draft regulations will be issued later this month. The proposals include statutory measures and I am confident that many of them will enjoy the support of safety bodies and of the Royal Society for the Prevention of Cruelty to Animals.

I welcome my hon. Friend to his new role and pay tribute to the work on firework safety that he did in opposition. We welcome a Government who put public safety first in these matters. Will my hon. Friend address the issue of enforcement as there is evidence that some firms, albeit a minority, may be seeking to get round the existing regulations?

My hon. Friend fought tirelessly for a ban on aerial shells and other dangerous fireworks, and we plan to ensure that those are kept out of the hands of the public. Anyone seeking to get round the prohibition by using bogus legal arguments will be the subject of swift action by trading standards officers.

What was the value of fireworks imported from China last year?

I do not have the figures, but I will happily let the hon. Gentleman have them. The history of the Conservative Government in limiting dangerous fireworks coming into this country was woeful. Through the measures that I have outlined, which will go out for consultation shortly, we intend to tackle as effectively as we can the terrible problems that fireworks have caused, and which have resulted in a 50 per cent. increase in the number of injuries over the past five or six years.

Will my hon. Friend keep in mind the tragic death of 10-year-old Dale Mitchell in my constituency, and remember that the age at which people can buy fireworks should be reconsidered, which is one of the things that the Mitchell family wants?

I can assure my hon. Friend that we shall consider that. I well remember joining him to present a 17,000-name petition to protest about the weak fireworks regulations. The efforts that he put into the fireworks safety campaign will bear fruit on bonfire night this year, and I pay tribute to him.

The Government have come in with a bang and I welcome Ministers to the Front Bench. Despite the Minister's assurance that he will tighten up on regulations, is he satisfied—given the role of Chinese crackers and other fireworks—that the regulations are being properly enforced?

The hon. Gentleman knows exactly what he is talking about. It is important that the fireworks that he mentions should be rigorously controlled. I am confident that the consultation document will specifically consider those fireworks. Trading standards and other enforcement officers in tandem must ensure that the law is upheld and that the future tougher regulations bring the real benefits that all hon. Members seek.

To ask the President of the Board of Trade what representations she has received from businesses concerning the future of business rates. [661]

To date, my departmental colleagues and I have not received any formal representations from businesses on the future of business rates. However, we have given a manifesto commitment to return to locally set business rates and will be consulting widely on how that might be implemented.

Does the hon. Lady agree that small businesses already pay too much in business rates?

I certainly agree that the unified business rate introduced by the previous Government, of which the hon. Gentleman was a supporter, is widely loathed and is an unfair tax, according to the "Your Business Matters" conference, as reported by the Institute of Directors. We need a system that is fair to business and does not place an undue burden on small businesses.

When considering the future of the uniform business rate, will the Minister have a word with her colleagues about those businesses which have their rates assessed on turnover rather than profit? They are at a disadvantage because the margin is so low that in many areas they face tremendous problems in sustaining their business. In many instances, it is a question of valuation. I appeal to my hon. Friend to have a word with her colleagues at the Department of the Environment about business rates and the assessments that take place from time to time which are unfair to many small businesses.

My hon. Friend raises some important points and I can assure him that they will all be taken into consideration as part of the consultation exercise.

Does it not follow from what the hon. Lady said to my hon. Friend the Member for North Essex (Mr. Jenkin) that she will be minded to pick up a proposal made in the Conservative party manifesto that the burden of rates should be shifted so that smaller business pays less and greater business pays more, or is it simply that the hon. Lady's apparent conservatism goes no further than rhetoric?

I am astonished at what the hon. Gentleman says. He supported a Government who introduced the uniform business rate, which has been widely criticised by business. It was his hon. Friend the Member for North Essex (Mr. Jenkin) who produced a document called "Fairer Business Rates", and his right hon. Friend the Member for Huntingdon (Mr. Major), the former Prime Minister, who described the uniform business rate as an unfair burden. The present Government are determined to do something to help our business community and I am sure that we shall have the hon. Gentleman's support as a result.

To ask the President of the Board of Trade what proposals she has to meet representatives of companies affected by the coal mines closure programme. [662]

I am happy to meet and listen to representatives from the coal industry—as I have done in the past and since the election—and more contacts are planned.

I warmly welcome my hon. Friend to his new position and wish him well in the work that he is doing. I draw his attention to the impact of the coal closure programme on companies such as British Jeffrey Diamond in the mining engineering sector in Wakefield. When my hon. Friend meets UK coal producers, will he remind them of the importance of purchasing British engineering products for British pits, particularly in areas such as Wakefield? To pick up the Secretary of State's earlier point on exports, will my hon. Friend actively press his Department to do far more to support the export efforts of companies such as British Jeffrey Diamond?

I am grateful to my hon. Friend for his information about British Jeffrey Diamond. Mining engineering technology developed in Britain is second to none and has a long history of manufacturing and engineering expertise. I am tempted to say that it was neglected in previous times, but I hope that it will be fully supported now. We have export drives and promotion campaigns; there is one for mining in Poland. The aim of that campaign is to help UK exporters. We also want to improve markets here. If my hon. Friend will let me have details, I will ensure that companies are put in touch with the relevant officials and we may be able to make progress.

To ask the President of the Board of Trade if she will make a statement on the Government's policy towards small businesses. [663]

Small businesses are a vital part of the Government's programme because of their importance to the economy in the jobs they provide, the wealth they create and the new ideas and technology many of them develop.

May I congratulate my hon. Friend on her appointment? Does she agree that the statutory right to interest on late payments will help many businesses in my constituency and others that are plagued by enormous cash flow problems?

I thank my hon. Friend for his kind words. He is right to draw attention to the enormous problems that late payment of commercial debt causes our small businesses. I am delighted that it was announced in the Gracious Speech that the Government will introduce a fair payment of commercial debts Bill.

I am gratified to learn that the Minister has read the pamphlet by my hon. Friend the Member for North Essex (Mr. Jenkin). I hope that she found it enlightening. Will she tell the House what the Government will do to help reduce the burden of business rates on small businesses?

We have a manifesto commitment, and we have stated that we will have a consultative programme, which is more than the previous Government had in 18 years in imposing that burden. We will localise the business rate and enable proper consultation between local firms and local authorities, because that is vital. The hon. Gentleman might care to consult the right hon. Member for Horsham (Mr. Maude), who was a member of the previous Administration's deregulation task force, which fully supported our proposals.

Does my hon. Friend agree that one of the reasons the Tories lost the election was that they failed to support small businesses, especially through the business rate? Is she also aware that, in my constituency, council tax has not increased for two years, but business rates have gone up by no less than 30 per cent? That happened under the Conservatives, who are the enemy of small businesses.

I am grateful to my hon. Friend. He is absolutely right. It is clear from speaking to small business people throughout the country that concern about the business rate is at the top of their minds.

What is the Minister going to do?

It is no use the Tories protesting. The previous Government organised the "Your Business Matters" conference, at which the UBR and the business rate were at the top of the agenda for concern. Who introduced the UBR? The Tories.

May I congratulate the hon. Lady on being appointed the Minister with responsibility for small businesses? I wish her every success, with my hands out straight and no fingers crossed. As the Government are getting used to U-turns, may I ask for one more—on the social chapter? If that is not possible, will the Minister lobby furiously for an opt-out or derogation for small firms? Small firms will create employment, but they will be hit hard by the minimum wage. Let them not be hit hard by the social chapter. I do not mean the social chapter of today, but the one that will follow as soon as we are foolish enough to sign the agreement.

I thank the hon. Gentleman for his kind words and for his great courtesy to me when I was his shadow. It was much appreciated. He should consider the wording of the social chapter. I know that the former Chancellor did not read the Maastricht treaty, but there is no excuse for not reading the social chapter, which expressly mentions small firms and says that nothing will be done under the chapter mechanism that places an undue administrative burden on them. We made it very clear that we would use the mechanism to promote employability and competitiveness, and that is what we will do.

To ask the President of the Board of Trade what discussions her Department has held with the United Kingdom aerospace industry on the impact of the merger of Boeing and McDonnell Douglas. [664]

The Department is in constant dialogue with the United Kingdom aerospace industry on a range of issues, including future competitive challenges. It is important that the sector should be in a strong position to meet those challenges over the coming months and years.

I congratulate my hon. Friend on his new appointment, and wish him and his team well for the years ahead.

Yes. The UK aerospace industry is the third largest in the western world, employing more than 110,000 people. Exports alone are worth about £7 billion. The industry is the second largest source of research and development, and there are spin-offs into other industries.

Will the Minister implore the President of the Board of Trade to pay particular attention to Britain's role in the space industry? We shall be able to have a great deal of new business if that is done properly. Will the Minister ensure that our commitment to the European Space Agency is properly fulfilled?

Again, the answer is yes. We intend to do even better than the last Government in that respect.

To ask the President of the Board of Trade if she will make it her policy that prior to companies making political donations a ballot of shareholders must be held. [665]

There is great public concern about the source of certain party-political funds. I know that my hon. Friend will warmly welcome the Government's commitment in the Queen's Speech to reforming the regulation and funding of political parties.

Indeed I do.

As my hon. Friend has rightly pointed out, there is an inconsistency. The Government will make an announcement shortly about how they propose to take forward reform of the funding of political parties.

How many companies that contributed to the Labour party's funds in the run-up to the general election would be affected by the proposal?

I suspect that, if more companies are involved now than were under the Conservatives, it is a reflection of the terrible service that the Conservative Government gave businesses large and small. Perhaps that is why the hon. Gentleman finds himself in his present sad seat.

To ask the President of the Board of Trade what proposals she has to increase total manufacturing investment in the United Kingdom. [666]

Increased investment will come only with economic stability and the right framework for business competitiveness. My right hon. Friend the Chancellor has laid the foundations for the first. Yesterday, I announced an agenda for the second, which includes working with business to promote long-term investment.

I am grateful for that answer, and I congratulate my right hon. Friend on her appointment. I am sure that she will make a grand success of the job compared with the Tories. May I draw her attention to the fact that, in 1978 under the previous Labour Government, the manufacturing sector in Teesside employed 94,000 people, but by 1995 that figure had fallen to 47,000, which is a decrease of 50 per cent. May I urge her and the Government to set new standards? Our manufacturing economic base should be our first priority, and I urge her to lead from the front on that issue.

I thank my hon. Friend for his kind remarks. We are pleased to see him back in the House in his rightful place. I am particularly pleased because he is a native of my constituency. I share his view about the huge importance of manufacturing and the need for new opportunities in manufacturing. I have long held the view that one of the worst features—there were many to choose from—of the previous Government's record during the 1980s was their neglect of, and even attacks on, manufacturing. That attitude needs to be reversed, and the Government will reverse it.

In the past year, the right hon. Lady and I have spoken on the same platform about the importance of our manufacturing industry, and she knows my commitment to it. I believe that it is vital to a sound and progressive economy. Does she think that the Chancellor of the Exchequer will consider sympathetically the reintroduction of properly targeted and properly directed capital allowances? I believe that they are an effective way of encouraging positive investment in manufacturing industry.

I do not want to harm the hon. Gentleman's political career, but not only have we spoken about manufacturing on the same platform: sometimes we have said the same things about the importance of manufacturing and how it could be promoted. I share his view that it is very important. Like him, we have explored the importance of techniques such as he identified, especially at certain stages in the business cycle. I hope that the advisory group on competitiveness that I shall establish will, at an early stage, report on the most effective way to stimulate and promote investment, particularly in manufacturing, in the present climate.

I welcome my right hon. Friend and her team to their jobs, because for the first time in 20 years we have Ministers who are from the manufacturing centres. May I invite her to consider the problem of the current strength of sterling, which is in the red zone? It is now less attractive to invest in the United Kingdom, and very attractive to buy overseas. Will she perhaps have a quiet word with the Chancellor of the Exchequer and ask him to consider what could be done to put sterling trade at a more competitive level for our exports of manufactured goods?

My hon. Friend also has a long record of concern for and advocacy of manufacturing industry. It is extremely important to have stability in the handling of economic affairs. In the long term, it contributes to lower inflation, higher investment and an improvement in general economic indicators, so that British industry becomes more competitive. The efforts of the Government and this team will be directed towards the competitiveness of British industry in the long term.

The right hon. Lady has the most stimulating job in government, and I am sure that she will find it exciting. She should obviously bear it in mind that she has inherited from the previous Government a strong record on manufacturing investment. It was up 9 per cent. in the last quarter over the previous quarter, and manufacturing productivity was up 80 per cent. in the period 1979 to 1997. Will she commit herself to ensuring that science, technology and research play a big role in trying to stimulate manufacturing investment? As the President of the Board of Trade and the champion of industry, will she take on, with the Chancellor of the Exchequer, the concerns of industry about their investment plans, especially those that may be affected by the windfall tax?

I shall begin by answering the second part of the hon. Gentleman's question. As the windfall tax is by definition a tax that is to be levied on the excess profits of the privatised utilities, there will be no reason whatever for it to influence investment. Secondly, the hon. Gentleman asks about the role of science. I share his view about the importance of science and science policy, which is why I have asked my hon. Friend the Minister of State, the Member for Leeds, West (Mr. Battle), to take responsibility for it, and why I have taken specific responsibility for oversight of it.

To ask the President of the Board of Trade if she will make a statement on her proposals to create a low pay commission. [667]

We have appointed Professor George Bain as chairman of the independent low pay commission. The other commission members, who will include representatives of employers, including small business, and employees, will be appointed as soon as practicable. The commission will undertake wide-ranging consultation and take account of the economic circumstances prevailing at the time before making its recommendation to Government on the level at which the national minimum wage might be introduced.

I offer my compliments to my hon. Friend on his appointment. I had a wee bet with his sister Irene that he would become a Minister in a Labour Government. Unfortunately she has not yet paid up. Perhaps he could speak to her.

I thank my hon. Friend for his kind remarks about my sister. Perhaps her tardiness makes her a candidate for a seat on the low pay commission.

Does the Minister agree with Professor George Bain, the new chairman of the low pay commission, who is reported to have said two days ago of the minimum wage:

"I would be surprised if there were not some job losses."

The right hon. and learned Gentleman has entirely misquoted Professor George Bain. Professor Bain said that, if the minimum wage were set at an inappropriate level and did not take economic circumstances into account, there could be job losses. There is no evidence whatever that a minimum wage set at a sensible level in terms of economic circumstances would cause job losses. It will assist in the creation of jobs. Under the previous Administration, more than 200,000 jobs a month lay vacant on Employment Service records because people could not afford to take them. We need a minimum wage that is set in such a way that it makes jobs affordable, as part of welfare to work, to move people off benefit into work, giving them an opportunity to earn.

To ask the President of the Board of Trade if she will make a statement on the future of the Post Office. [669]

We have initiated a review of options for implementing our election manifesto pledge to grant the Post Office greater commercial freedom to take advantage of new challenges and opportunities, both domestically and internationally. The review will enable us to develop a coherent and comprehensive policy programme for the Post Office, something which the previous Government so signally failed to do.

May I welcome my right hon. Friend in three ways: first, to her appointment; secondly, for her statement about the future of the Post Office; and, thirdly, on behalf of my constituents, for the action that she and my hon. Friend the Minister of State, the Member for Makerfield (Mr. McCartney), took to reprieve Ilford Crown post office, which has been a fantastically popular decision? I thank the Government on behalf of my constituents.

I am extremely grateful to my hon. Friend for his kind remarks and his welcome. I am very familiar with the valiant campaign that he and so many of my hon. Friends fought on that issue in the interests of their constituents. I know that his remarks will find an echo with many of them.

In view of the unsatisfactory level of service that many of my constituents and people in other parts of the country receive from the Royal Mail, and the extraordinary success in raising standards of service in industries that have been privatised, will full-scale privatisation be among the options considered in the right hon. Lady's review?

No, it will not. The Post Office, even under the previous Government, who did nothing but undermine and interfere with it, is one of the most commercially and professionally successful post offices in the world. I am appalled as well as surprised that the hon. Gentleman should be so critical. The Post Office hopes, believes and will show in its future plans that, given the commercial freedom denied on dogmatic grounds by the previous Government, it will be able substantially to improve service. What the hon. Gentleman hates is that it will do so in public ownership.

To ask the President of the Board of Trade what assessment she has made about the impact of low wages on the competitiveness of British industry. [670]

The introduction of the national minimum wage will encourage industry to compete on the quality of the goods and services they provide rather than by a downward spiral of low pay. By raising morale, it will lead to greater employee commitment and reduced absenteeism, staff turnover and recurring training costs.

Does my hon. Friend share my concern for a constituent who is faced with the sack because he would not work two weekends of overtime? Due to his low pay, had he worked those two weekends, he would have lost his entitlement to family credit, housing benefit and council tax benefit. Is not that appalling? Would not it be far better to force employers to pay a decent wage so that people could be floated off such benefits?

My hon. Friend describes exactly why the in-work benefit system has become a grotesque subsidy to employers instead of assistance to low-paid workers and their employment opportunities. For my hon. Friend's constituent, the subsidy means that the employer does not pay to a level on the sure-or-not basis of knowing that the state will pick up his or her labour costs. I reassure my hon. Friend that, from day one of employment, wherever his constituents work, they will be entitled to a national minimum wage.

I genuinely understand the concerns about low pay, but is not the Minister aware that in the west country especially there are many small businesses, particularly hotels and guest houses, where the owners make a very modest profit and could not afford the hourly rates of pay that the low pay commission is talking about? What will the Minister say to the thousands of young people in the west country who lose their jobs when the Labour Government introduce a minimum wage?

The low pay commission is not discussing any rates, and it has not yet met or even been established—but watch this space. Increasingly, small business organisations support in principle the concept of a minimum wage. Many companies in the catering industry, such as Whitbread, now publicly support the concept of a national minimum wage in principle. Across all sectors of the economy, survey after survey shows support from employers for the minimum wage. The only people who oppose the minimum wage are Tory Members and their fat cat supporters.