What representations she has received from independent bakers on supermarkets selling bread below cost price. [40953]

I have received representations from my hon. Friend on behalf of W. H. Oddie Ltd., and from him and others on behalf of the National Association of Master Bakers, complaining about predatory pricing of bread.

On Monday this week, I was in Blackpool speaking to the annual conference of craft bakers, of whom there are about 8,000 across the country. They are very concerned that supermarkets are selling bread as a loss leader, for less than the cost for which the small craft baker can bake it. Given the importance we attach to preserving vibrant town centres and our desire to keep bakeries in our high streets, will my hon. Friend give an assurance that the Competition Bill, which we debated on Monday, will be effective in outlawing that sort of predatory pricing?

The new Competition Bill introduces tough provision against the abuse of dominance in the market, including predatory pricing. In future, selling products at below the average variable cost of production will be presumed to be predatory, without anti-competitive intent having to be proven.

It is good to hear that the hon. Member for Pendle (Mr. Prentice) has gone to Blackpool, given that the other members of his party have decided that it is not good enough for them. Has the Minister received any representations about the undersale in supermarkets of Calvin Klein and Levi jeans?

I have received representations from supermarkets asking for support for that practice. I have to inform the hon. Gentleman that our party conference is in Blackpool this year.

What assessment she has made of the impact of the present exchange rate on British manufactured exports. [40954]

The Government understand industry's concerns about the strength of sterling and appreciate the difficulties it is causing exporters and manufacturers, but we are determined not to return to the boom and bust policies of the past. We are delivering a stable macro-economic environment, which will allow business to thrive in the long term.

Is the President of the Board of Trade aware that manufacturing output has fallen for the second consecutive quarter, thus confirming that the sector is now truly mired in recession? What action will she take to offset bleak prospects for exporters as their contracts come up for renegotiation at the higher rates of exchange?

I am aware of the figures on manufacturing output and I share the concern that has been expressed, although it is still expected that manufacturing output will rise over the year—indeed it is higher than it was a year ago—and the Confederation of British Industry's latest survey shows that manufacturers expect output to rise over the next four months. As for the action we are taking to help exporters, we have restored support for trade fairs, which was cut by the previous Government; we have introduced a programme called export explorer and a programme to address sales leads on the internet; and we have increased support for trade exhibitions and seminars—all of which follows on from a report by the export forum, which the Government set up to take advice from exporters on work that would help them.

Is my right hon. Friend aware that there were increased output and exports from the engineering sector in the first quarter of this year and that the fall in sterling resulting from the clarification on the euro has been welcomed by our manufacturing sector? Most important, is she aware that between May 1990 and May 1997 the value of the pound against the deutschmark changed no fewer than 87 times; and that 20 per cent. of the rise of sterling took place in the last 12 months of the irresponsible, flippant, yo-yo currency stewardship of the Conservative Government? They are to blame for any crisis that our manufacturers now face.

My hon. Friend is entirely correct. On Monday, I was with a very successful British manufacturer and exporter who went out of his way to tell me that sterling has not yet reached the same level as it was under the previous Government. He showed me graphs to show how he had coped with it—by putting the emphasis on value and quality, which is the message of this Government, but not of the previous Government.

Far from abolishing boom and bust, the Government have pulled off the unique double of a bust in manufacturing while there is a boom in everything else. Is the President of the Board of Trade aware of the new fears, expressed in the City following the Bank of England's remarks that there will now probably be higher interest rates and a higher rate of sterling, which will do still more damage to manufacturing? What will she tell the Bank, which is blaming the Government's policy of the minimum wage and differential pay awards—and the higher pay that will result—for the threat of higher interest rates and higher sterling that will do more damage to manufacturing?

The right hon. Gentleman has clearly not paid attention to what the Bank actually said, because it did not say any of those things.

It was in the Financial Times this morning.

I am afraid that the hon. Lady is wrong. The Bank said that the level of the minimum wage is important, that it retains its responsibility and concern for inflation and that it is confident that the policy is on course to deliver lower inflation. It said that it would be necessary to reassess its position and its concerns when the level of the minimum wage is announced, but that it did not intend to reach any conclusions in advance of that announcement—thereby showing a great deal more common sense than Opposition Members.

The President owes it to business to tell it what the minimum wage will be. It is the uncertainty that she is generating in the markets that is doing the damage. If she told us now what the minimum wage would be, the markets could assess the seriousness of a threatened wage explosion and the Bank could take the necessary action. Will she do that?

Unlike the right hon. Gentleman, the business community is perfectly well aware that the Low Pay Commission will report in the near future and that the national minimum wage will be introduced in April 1999. There is no worry on the part of business: it knows perfectly well what the timetable is.

Has my right hon. Friend seen the recent KPMG survey that shows that since the value of sterling has been high there has been no increase in the number of firms calling in the receivers—which is very good news? Will she continue her campaign—which is much appreciated on Labour Benches—to make Britain's manufacturers more productive? That is part of the answer. We shall always have problems with currencies going up and down—that is the truth of the matter—but it is essential to make our companies more productive, and we should continue to campaign for that as vigorously as possible.

My hon. Friend is entirely correct, and he has campaigned on this issue very effectively for a long time. I share his view completely, and we continue to discuss and address the matter.

Given the damage that has been done to exporters by the recent high value of the pound and the continuing instability of exchange rates, does the President of the Board of Trade accept that the Government must make an urgent and clear commitment about early entry into economic and monetary union? If we do not do that, we shall not provide the confidence and stability that is needed. Will the right hon. Lady impress on the Chancellor that continuing uncertainty is holding back the essential investment that we need in industry, which is not helping to reverse the widening gap in productivity that was mentioned a moment ago?

I fully understand that that is the view of the hon. Gentleman and of his party, but it is not yet the view of business. Perhaps business will come to hold that view, but the business community—which we consult regularly about such matters—is not expressing it now. Secondly, I remind the hon. Gentleman that in a recent report the Bank of England suggested that, owing to the folly and neglect of the previous Government, it would take some years for British industry even to begin to be ready to go into the euro, should that decision be taken. Thirdly, I remind him that this Government are committed to the triple lock on that decision: Government, Parliament and the people must first decide.

Is my right hon. Friend pleased, first, that the markets are looking towards sterling's depreciation, and particularly that sterling is being sold at DM2.7 in the five years ahead market—partly due to George Soros and others, of course—and converging towards DM2.7; and, secondly, that many of the markets and investors are looking towards interest rates going down, so sentiments in the market are extremely positive for manufacturing exports?

My hon. Friend is right. The market is forecasting both lower interest rates and a lower exchange rate in the longer term, which suggests that the markets understand—as the Opposition do not wish to understand—that the Government are working for stability.

What assessment she has made regarding the impact of proposals for the increased commercialisation of postal services on rural post offices. [40955]

Both the Government and the Post Office are committed to maintaining the universal postal delivery service, the uniform tariff structure for postal services and a nationwide network of post offices. Specific proposals for greater commercial freedom for the Post Office will be assessed against those commitments and their contribution to meeting the challenges of changing domestic and international markets for postal services.

I am grateful for that reassurance, which will be appreciated by rural post offices in particular. Does the Minister share my concern that increasing commercialisation could lead to the Post Office's beginning to centralise some of its services so that it can concentrate more on the commercial aspects that may bring in increasing profits? Could not that lead to a further run-down in rural post offices? What does the Minister propose to do about that?

The hon. Gentleman's fears are unfounded. The principle of the review is to maintain and develop the network of 19,200 post offices. Let us remember that only 5 per cent. of villages in Britain have a bank, but 60 per cent. have a post office. Today we announced a new arrangement for the Post Office with British Gas, which will provide new services through sub-post offices. We are looking for business opportunities not for the centre, but for sub-post offices. The Government have given that commitment from day one and will continue to do so, because the Post Office and its services are critical to daily life in Britain.

I congratulate my hon. Friend on the progress that has been made in the review of the Post Office's functions and the Government's acceptance of the Trade and Industry Committee's recommendation that additional commercialisation in the public sector will generate the funds necessary for rural post offices to be protected, so that their services will be available to people in the more distant parts of the country.

I thank my hon. Friend. The Government have lifted the fear of privatisation that for so long hung over the postal services under the previous Government. We are moving forward to deliver a new postal service that will ensure, in rural and urban areas and internationally, new business opportunities for the Post Office in general and for sub-post offices in particular.

Despite the apparently comforting response to the hon. Member for Newbury (Mr. Rendel), are not the Government's proposals too little and too late? Everybody wants the Post Office to have greater opportunities from commercialisation. Other postal administrations are already going down that route—the Dutch post office has purchased TNT and the German post office has taken a 22.5 per cent. stake in DHL. When will the Government do a BT and set the Post Office free?

The hon. Gentleman is a failed Minister at the Department of Trade and Industry. It is no good his coming now, so many years later, to ask Ministers at the Dispatch Box how we are rebuilding a Post Office from the wreck left by the previous Government. From day one of this Government we have made the Post Office a priority, and we shall continue to do so.

If she will make a statement about the competitiveness of British manufacturing industry. [40956]

United Kingdom manufacturing productivity is 20 per cent. lower than that in Germany and France and 40 per cent. lower than that in the United States. It is critical that we improve. Last year, my right hon. Friend the President of the Board of Trade established six business-led working parties whose conclusions are shaping the forthcoming White Paper on competitiveness.

In shaping the future White Paper on competitiveness, what assessment has the Department of Trade and Industry made of manufacturing output, investment and employment during the period July 1989 to April 1992?

Output fell by 2 per cent. a year on average, investment fell by 7.8 per cent. and 750,000 people in manufacturing lost their jobs. Throughout those years, the right hon. Member for Wokingham (Mr. Redwood) was a Minister at the Department of Trade and Industry presiding over the decline. Under my right hon. Friend the President of the Board of Trade, the last three months' figures show that manufacturing output, exports and employment are up.

Does the Minister recall that, when the dollar was floated in 1971, there were DM8.5 to the pound compared with a little under DM3 today and 600 yen to the pound compared with a little over 200 today, yet in the 25 years that followed the Smithsonian conference in 1971 the German and Japanese economies not only prospered, but their productivity outpaced that of all other industrial countries in the world? Does not that show that a strong currency, if properly handled by industry, can be of immense benefit to an exporting industrial economy? Is that not in fact the real nature of the golden economic legacy the Government have inherited from the Conservative Government?

Far from it. If the hon. Gentleman cares to join me in talking to the CBI and manufacturers throughout Britain he will realise that they know that the previous Government's record on manufacturing and business was abysmal. It is fortunate that in the past quarter figures have improved and that the Government have taken firm steps which, had they been taken 18 years ago, would have put our business record on a much better track.

If she will make a statement about the work of the Low Pay Commission. [40957]

The Low Pay Commission has completed its comprehensive programme of consultation to obtain views of employers, employees, interested organisations and individuals on the national minimum wage and related issues. It also undertook a series of visits to seek local opinions throughout the UK, including Wales. I understand that it is on course to make its recommendations to the Government by the end of this month.

Is my hon. Friend aware that the Low Pay Commission's recommendations will be particularly welcome in Wales, where 43,000 people still earn less than £2.50 an hour and where 2,000 of my constituents are condemned to family credit by low-pay employers? Can my hon. Friend confirm that, at the end of the Tory years, the inequality in pay levels was greater than it was in Victorian times? In view of that, will he take the opportunity to ask the right hon. Member for Wokingham (Mr. Redwood) about his views on the minimum wage, given his leader's support for it?

I can confirm that the legacy of the previous Government was one of the highest ever levels of poverty and low pay in the United Kingdom. Whether in Wales, Scotland, England or Ireland, the levels of low pay were truly horrendous. The right hon. Member for Wokingham (Mr. Redwood) will have to answer for himself, but it is interesting to note that he has not yet given any support to his party leader, who has made a policy U-turn in that he is now willing to accept the introduction of a minimum wage. Perhaps the right hon. Member for Wokingham will say whether he will continue to oppose the introduction of a minimum wage following the recommendation of the Low Pay Commission.

Before the Minister disappears from the Dispatch Box, will he agree that the minimum wage can be summed up simply? If it is set at or below market levels it will be otiose; if it is set above market levels it will lead to a loss of jobs. Is not that the simple fact?

When Conservatives talk about the minimum wage, they usually use the word odious rather than otiose. I shall give the hon. Gentleman a simple explanation: the minimum wage will be good for business and good for the workers. It will be equitable and its level will be set due to economic circumstances. Millions of people in Britain are ready and waiting for its introduction.

Can my hon. Friend confirm that 80 per cent. of the electorate, including two thirds of those who still admit to being Conservative supporters, believe that a national minimum wage is a good idea and support it firmly? They understand that it is not only a way of dealing with the major social injustice left by the previous Government, but good business sense. Will he also confirm for Conservative Members who still carry around their 0-level economics textbooks that the evidence shows that a minimum wage can help to enhance productivity, efficiency and, therefore, employment?

My hon. Friend is absolutely right. The only people in Britain who oppose the introduction of a minimum wage are the Rag, Tag and Bobtail outfit in front of us—the shadow Department of Trade and Industry team. A majority of businesses and, overwhelmingly, the people of Britain want a national minimum wage to be introduced. International and national comparisons—I include the United States in that—show that a sensibly introduced minimum wage helps to create jobs, not to destroy them.

At least we now know from the Minister that the figure will be published in a fortnight. We can then start the fully informed debate on the subject.

Why should there be surprise that the Bank of England seeks to have a view on any report published by the Low Pay Commission? The Government made it clear from the outset, when we established the LPC, that it would have to make recommendations based on economic circumstances, which include issues surrounding the economy, including inflation. There is nothing new in that.

In the context of the minimum wage and the fairness at work package, has my hon. Friend had discussions with United Kingdom-based multinationals such as Rio Tinto about the need to promote human rights and to protect the environment in areas of the world where they practise?

I thank my hon. Friend for asking such a good question. Through trade arrangements and arrangements in Europe, the Government regularly work nationally and internationally to ensure that agreements in trade organisations include human rights and employment and environment rights. We have been negotiating in the World Trade Organisation, in the multilateral agreement on investment and in other international agreements to ensure fair standards throughout the world, including in multinational companies working in third-world countries. The Government are clear about that commitment. We meet business all the time. Inward investors come to Britain for our skills and knowledge and, in the main, provide good business practice, which I welcome.

What assessment she has made of the effect the introduction of EMU in other EU states will have on the competitiveness of British firms. [40958]

Economic and monetary union will create both opportunities and competitive challenges: opportunities for British companies that are prepared to expand into new markets as trade becomes more open in the euro-zone, but challenges for the unprepared.

The assistance given by the DTI team to help Back Benchers with their questions is legendary. I should like to thank the Secretary of State's parliamentary private secretary for her assistance with this question. It is a great shame that, although the questions are inspired, the answers never are. When will the Government take responsibility for the fact that their policies have led to the strength of the pound? The Government's acceptance of the fudged criteria has allowed 11 other countries to go ahead with the single currency. If they want British companies to be competitive in Europe and in the rest of the world, they should listen to Jacques Delors, who said that deregulation and competitiveness had enabled Britain to become a magnet for inward investment. The Government's adoption of the social chapter and the minimum wage will make British companies uncompetitive with the rest of Europe.

The hon. Gentleman is clearly unaware that two thirds of the increase in sterling took place before the election. Consequently, it is hard to see how the Government's policies can be held responsible for the strength of the pound. Perhaps he was not present earlier when I pointed out to the right hon. Member for Wokingham (Mr. Redwood) that it is no good Conservative Members complaining about the level of sterling being too high, when by trying to damage confidence in the euro they are talking it up.

Will the Secretary of State acknowledge the good work of companies such as Siemens that intend to trade in the euro internally in Britain and to offer advice and guidance to their suppliers and to those to whom they sell about how they, too, can trade in the euro so as to obtain the advantage of currency stability and gain practice for selling to European markets? Does she welcome that? Will she give an undertaking that the DTI will follow through that example and offer assistance to smaller businesses?

It has often occurred to me that one of the greatest failures of the Conservatives in government was not preparing themselves for the advent of the euro and giving British business, especially small and medium enterprises, which will be the most vulnerable, the impression that the only thing that mattered was whether Britain went in. They failed to point out to businesses that they will be affected by the launch of economic and monetary union whatever decision Britain makes. My hon. Friend is right about the need to give advice and support to businesses. We are doing that in a variety of ways, including a series of regional seminars.

What evidence did the President of the Board of Trade rely on in her main answer to my hon. Friend the Member for Ribble Valley (Mr. Evans)?

I am not quite sure what the hon. and learned Gentleman means. I told the hon. Member for Ribble Valley (Mr. Evans) that there will be both opportunities and challenges. We have consulted extensively with British business, and that is very much its view. The challenges are obvious: I was just referring to them. People who are unprepared will face difficulties. As to the opportunities, British businesses that are genuinely competitive may find that, in the euro-zone market, price transparency will give them a potential competitive advantage. It is therefore all the more essential that businesses that could prosper in that environment take advantage of that opportunity.

What action she has taken to promote the competitiveness of the automotive industry. [40959]

The Department is taking a number of measures to encourage all parts of the automotive industry to maximise their international competitiveness and to strengthen the United Kingdom's advantages as a location for investment.

I thank my hon. Friend for that reply and congratulate him and his Department on their efforts to foster research between universities and industries. Combined with the foresight initiative, that will do a great deal more to ensure the future competitiveness of the British automotive industry than was ever done by the Rag, Tag and Bobtail—and otiose—outfit opposite.

My hon. Friend refers to the foresight programme. In particular, the work of the cleaner vehicles task force looks to the future of the automotive industry, and to new technologies that will provide new jobs and go some way to tackle environmental problems. I would add only that, in order for the industry to be competitive, we must strengthen back-up companies, and ensure that the sector is strong as we move into a new century.

What rationale can the Minister offer for the Government's policy of, on the one hand, encouraging people to abandon their cars and use public transport, and, on the other hand, handing out large subsidies to car manufacturers in an attempt to boost their competitiveness? Can the hon. Gentleman get his mind around that paradox, and explain it for the benefit of the House?

I had not previously heard the Conservatives campaigning for the abolition of the car; now, it seems, they are. The scheme to which my hon. Friend the Member for Stevenage (Barbara Follett) referred is a middle way towards achieving cleaner vehicles. One option would be to ensure that vehicles burned more environmentally friendly fuel. I do not think that improving the environment ought to be set at odds with vehicle use. The two are not, and will not be, at odds under this Government.

My hon. Friend will be aware of the importance to the west midlands of the motor industry, including, in particular, the major Rover Group plant at Longbridge in my constituency. Will he take this opportunity to congratulate Rover on exports worth £3.7 billion last year, which is the company's highest ever figure? Is that not a tribute to Rover and its work force, and to the stable environment that the Government have generated for the motor industry?

I am happy to endorse what my hon. Friend says. According to the latest figures, United Kingdom car production is at its highest for 24 years, and represents 10 per cent. of UK exports. It is a successful sector, and will continue to be so under the Government.

What discussions she has had with the Post Office regarding minority share sales. [40960]

I have discussed with the Post Office our wish to give it the commercial freedom that it needs to meet changes in domestic and international markets. The Government have commissioned a review of possible options for achieving that, and the Post Office is closely involved in the work. A minority share sale is just one of the options for consideration.

The Minister is aware that the public are against privatisation of the Post Office, but is he aware that they will also be deeply sceptical about any move to sell shares in the Post Office? Is he prepared to put an upper limit on the percentage of shares to be sold, or—even better—will he rule out the option altogether?

The terms of reference are unequivocal. The Post Office will remain in the public sector, and will continue to provide a universal postal service under a uniform structure with a nationwide network of post offices. Privatisation is off the agenda: it is not part of the Government's policy. We have made it absolutely clear that we are seeking to create joint ventures involving the public and private sectors, and the creation of a public sector trust and an independent public corporation. A range of issues is being considered, and, when the issues have been considered, we will bring proposals before the House—probably in the autumn—to take the Post Office into the next century.

Is the Minister aware of the level of public disquiet already caused by competitive pressures, which has led to the extraordinary phenomenon of two public demonstrations in New Milton regarding closure of Ashley Stores post office? Will he meet a delegation of my constituents to hear their concerns?

I understand the hon. Gentleman's feelings. Thank goodness he has a Labour Government, who will save the Post Office from the damage caused by the last Government. If the hon. Gentleman will write to me about his case, I will be prepared to see him to discuss it, because I have an open-door policy. Let me make it absolutely clear that the Government are safeguarding the rural and urban network that the last Government wanted to privatise.

How many licences have been granted for the export of arms to Indonesia in the current year to date. [40961]

Between 1 January and 3 April 1998, 28 individual licences were issued covering the export to Indonesia of goods that are listed in part III of schedule 1 to the Export of Goods (Control) Order 1994. The list is much broader in scope than just arms, and includes a wide range of equipment. All the applications for the 28 licences were circulated for advice to the Foreign and Commonwealth Office and to the Ministry of Defence, and considered under the criteria that were announced last July by my right hon. Friend the Foreign Secretary.

Why are we in the business of selling arms to a regime that is bankrupt both politically and economically? Is the Minister not concerned when she sees democratic demonstrations in Jakarta being put down by British-made water cannon firing British-supplied nerve gas? What price an ethical foreign policy?

The Government are extremely concerned by the current situation and are monitoring it very closely. The hon. Gentleman will also want to know that, since coming to power, we have refused licence applications for Indonesia covering sniper rifles and other firearms, spare parts for firearms, military vehicles and a military simulator. As I have said, we are monitoring the situation very carefully and we are looking at reports that water cannon, supplied from the UK under licences that were issued by the previous Government, have been used.

Will my hon. Friend confirm that Indonesia is covered by export credit guarantees of more than £1 billion and that £800 million of that is for military exports? Would it not be better if we had a debate in Parliament about whether arms should be exported to sensitive countries, as happens in the United States Congress? In the circumstances, will she urge her right hon. Friends to freeze all arms sales to Indonesia as from now?

No, I certainly cannot give my hon. Friend that assurance. She knows that we continue to monitor the situation very carefully. It was this Government who, unlike the previous Government, introduced the criteria by which every application is measured. We already give information on those other matters. Of course, it is for the business managers to decide when debates can take place, but my hon. Friend might wish to pursue other actions open to her to secure a debate on the Floor of the House.

What does "ethical policy" mean when we see farces day by day, over Sierra Leone and now Indonesia? Did the Foreign Office receive the documents? Did it read them? Why did DTI Ministers not themselves see that there would be an unfortunate circumstance if the Indonesian regime used any of the materials—these armaments and anti-riot goods—against its own population, as we see it doing on television now? Why did not the Minister, and particularly the President of the Board of Trade, understand the sensitivity of the matter? Was the Foreign Office asleep on duty again? How can the Minister explain the 56 export licences under her Government?

The right hon. Gentleman is speaking absolute nonsense. This party—the Government—will take no lectures from him or from the Conservative party. They had no criteria. It was my right hon. Friend the Foreign Secretary who introduced the criteria and who has fully answered all the questions on this matter. I have clearly said that there have been refusals because we are concerned about the situation and we are monitoring it on the ground. We will not take any lectures from the right hon. Gentleman, thank you very much.

When she expects the Low Pay Commission to report its recommendations for a national minimum wage to her Department. [40962]

I expect the Low Pay Commission to make its recommendations to the Government by the end of this month on the level at which the national minimum wage might be introduced.

I welcome that response and the earlier response to my hon. Friend the Member for Delyn (Mr. Hanson), as will the 1,000 families in Harrow in north-west London who still rely on family credit. I know that this is tedious for my hon. Friend, but will he try again to elicit the views of the right hon. Member for Wokingham (Mr. Redwood) on this issue? We know that the right hon. Gentleman can be forthright because we have read his views about the Leader of the Opposition. Will my hon. Friend try to ascertain, in the interests of consensus—

Order. I have told Back Benchers before that it is for the Government to account for their policies and actions, not those of the Opposition.

That was a good try by my hon. Friend.

No, it was not.

You, Madam Speaker, say that it was not a good try, and I will not challenge your wisdom.

Does the Minister have a message for my constituents, particularly those in the hotel, catering and restaurant business, who fear that their jobs may be lost owing to the introduction of a minimum wage?

I know that industry very well because I am a former chef who was sacked for having the audacity to ask for a £1 a week wage increase because of the birth of a child. I take no lessons about the poverty of those who work in that industry from the hon. Lady. It is interesting that the industry supports the national minimum wage. It is sick and tired of being smeared as a low-pay, low-activity industry and wants to change its image, which is why it is now working with the Government towards the successful introduction of the minimum wage.

What plans she has to change the regulatory framework for the utilities to give increased priority to consumers' interests. [40963]

It is the Government's intention that consumers' interests should be put at the heart of the regulatory system. We said that we would change that system, and we are working towards that. That is why my right hon. Friend the President of the Board of Trade published on 25 March a Green Paper on utility regulation—"A Fair Deal for Consumers: Modernising the Framework for Utility Regulation".

Will my hon. Friend give me a categorical assurance that the new regulations will be strong enough to deal with the casualties of Tory utilities privatisation? Will they be able to deal with the legacy of fuel poverty, whereby poorer people get the worst deal? Will they be able to deal with the outrageous situation whereby the privatised water companies have increased bills to domestic consumers by an average of more than 95 per cent. since privatisation?

I can give my hon. Friend that absolute assurance. The Green Paper includes a substantial programme of action inviting the regulators and the industry to develop a clear action plan to ensure that poorer consumers enjoy more of the benefits of the privatisation programme. As she rightly said, we inherited a legacy of fuel poverty and there is a horrendous difference between those who can use direct debit schemes and those who are in the trap of having self-disconnecting meters. We have not just been waiting for the White Paper; our response to fuel poverty included reducing VAT on fuel. Proposals for consultation of consumers are also included in the Green Paper.

Is the Minister aware of a serious anomaly in the regulation of the utilities that has arisen this morning because a consortium of local authorities representing the three major parties has been obliged to pull out of the terminal 5 inquiry because of a lack of funding, whereas a regulated monopoly—BAA—is continuing with the support of taxpayers' money because it has been able to offset its costs against tax? Will he undertake to speak to the Chancellor and the Secretary of State for the Environment, Transport and the Regions to ensure that that undemocratic anomaly is addressed as soon as possible?

I shall certainly speak to my colleagues in other Departments. If the hon. Gentleman has not had an opportunity to see the Green Paper, I should tell him that it is confined to gas, water, electricity and telecoms. I shall take the matter further with colleagues at the Department of the Environment, Transport and the Regions.

Before the Minister gets too impressed by his Back Benchers' rhetoric and crocodile tears over increases in some utility prices, will he take into account the impact of the huge council tax increases levied by Labour-controlled local authorities, and set them against the lousy level of services that most of those authorities deliver?

I would be delighted to get carried away with the record of Labour councils, which have done a brilliant job over the years, under incredible pressure from a Conservative Government. They delivered services as the Conservative Government reduced their budgets year on year. Indeed, those councils were usually the ones picking up the pieces following Tory legislation.

In my area, we have had the road dug up for the past two months, thanks to Severn Trent Water, the telephones were off on Monday, thanks to BT, and it is guaranteed that any train run by Great Western Trains will be late into Paddington. Does my hon. Friend agree that we cannot wait a moment longer for greater powers for the regulator?

As my hon. Friend suggests, the Green Paper proposes to improve the accountability, consistency and transparency of the regulatory process. We believed that it needed reforming; we stated in opposition that we would set about that task. The Green Paper is out for consultation, which closes on 31 May. We will then act on that consultation. Consumer groups and the utilities alike have responded very positively to the Green Paper.

What proposals her Department has to promote electronic commerce. [40964]

Electronic commerce is extremely important and the Government are committed to ensuring that all United Kingdom citizens and businesses have the opportunity to share in its benefits. The Government's programme of linked initiatives in the area is outlined in the policy statement "Our Information Age: the Government's Vision", which was launched by my right hon. Friend the President of the Board of Trade last month.

I thank the hon. Lady for her reply. Does she agree that the best way in which the Government can help to promote electronic commerce is to use it themselves and ensure that, as a major buyer of IT, they are fully compliant and have everything working well, rather than considering subsidies or special schemes? Will she have a word with Ministers in all Departments so that at least they are on board and we Members of Parliament can write to them via e-mail? Still, hardly any Ministers publish e-mail addresses.

I understand the hon. Gentleman's point. He takes a close interest in these issues. It is absolutely right that the Government should lead by example, which is exactly what we are doing. It is important that everybody embraces the benefits that electronic commerce can bring, which is why the Government are doing all that they can in forums such as IT For All and our programme for business. I shall certainly take his points on board. I am sure that he will be pleased with the progress that we have been making.

I particularly welcome the publication of "Our Information Age: the Government's Vision", which is an excellent and very impressive statement of the Government's vision in the area. Is not the great disappointment that, in the framework of telecommunications that the previous Government put in place, we have not secured the widespread access to innovative and advanced telecommunication services that we were promised at the time? Is not that the missing jewel, and what we need if we are to be successful, as we all hope, in the implementation of electronic commerce?

My hon. Friend, who is also an expert in these matters, puts his finger on it. We need to do two things. First, we need to ensure that the single market in telecoms in Europe is implemented and a true reality. The Government are absolutely committed to that. All the new services that will flow from that must be provided on the basis that new entrants can tap that newly liberalised market. Secondly, we need to ensure that all our citizens feel comfortable with new technology; that manufacturers ensure that it is as easy to use as possible; and that all businesses, including small and medium-sized businesses use it, too.

In her enthusiasm for electronic commerce, the Minister will appreciate that businesses are interdependent electronically on an international basis. Has she therefore considered the effect of the millennium bomb on businesses in other countries and the consequences for United Kingdom business of supply-chain failures?

I think that the hon. Lady was referring to the millennium bug rather than the millennium bomb. That aside, she will know that in the short period in which the Government have been in office we have put in place proposals to spend 17 times more resources than the Government of which she was a member spent in the past 18 years. None the less, the hon. Lady made an important point—[Interruption.] Perhaps the hon. Lady will stop talking and allow me to finish. She made an important point about what needs to be done internationally. I am pleased to say that last Friday the United Kingdom hosted an important international event for our EU partners, which I addressed. There is a serious problem, and that is why the Government are putting in so much time and effort.

If she will make a statement about the progress of her Competitiveness UK initiative. [40966]

I set up six business-led working parties last year to look specifically at the weaknesses in United Kingdom companies' performance identified in "A Benchmark for Business", which I published in November 1997. The working parties are examining underinvestment, failure to innovate and to adopt best practice, shortage of skills in the work force, and failure to capitalise fully on the opportunities provided by the information age and by our membership of the European Union. Their work will contribute to a White Paper on competitiveness, to be published in the autumn. In parallel, my right hon. Friend the Chancellor of the Exchequer and I met senior business people this morning in the first of a series of seminars to discuss how to bring about improvements in UK productivity.

Does the President agree that, under the Tories, too many companies came to believe that, to achieve competitiveness, all they had to do was to cut staff and wait for a devaluation? How does my right hon. Friend plan to convince companies that the only way to achieve competitiveness is to invest in their staff, in new equipment and in research and innovation? In doing that, will she use as an example Pfizer, a company in my constituency—my former employers, in fact—whose huge investment in research has created the world's greatest drug discovery team—

Order. I could give the hon. Gentleman an Adjournment debate if he wishes—but now I want to move on through the Order Paper. Come along.

Will my right hon. Friend use as an example of good practice the innovations of Pfizer, whose great team has discovered Viagra, which has been much publicised and is, I suspect, eagerly awaited in all parts of the House?

My hon. Friend is entirely right about the importance of the factors to which he drew attention in terms of investment in skills as well as in a variety of other ways. One of the issues that we discussed this morning with business—and will continue to discuss with the business community—is how to get those messages across throughout English business, including small and medium-sized businesses. There seems to be general agreement that a combination of best practice, mentoring and, in particular, business people themselves spreading the word down the supply chain, seems likely to produce the most effect. We are continuing to discuss the issues. I am aware of the tremendous reputation of Pfizer, which has substantially increased its inward investment in this country since the Government came to power.

Does the right hon. Lady believe that the compulsory recognition of trade unions will improve the competitiveness of British industry?

The hon. Gentleman is labouring under a misapprehension. The Government will introduce a framework of legislation to bring about the recognition of trade unions should a majority of the work force wish. That is a simple human right, and I am surprised that the hon. Gentleman opposes it.

If she will make a statement on United Kingdom trade relations with Kyrgyzstan. [40967]

Trade relations with Kyrgyzstan are the warmest they have been since the country achieved independence. The country is preparing for clear and rapid integration into the global economy and we fully support its efforts to join the World Trade Organisation on the right terms.

I am delighted that the Minister is meeting the Prime Minister of Kyrgyzstan today. I know that that Prime Minister and his colleagues in the Kyrgyz Parliament and Government are grateful for the support they have received from this Government and the previous Government as the country comes out of its past in the Soviet Union. Will the Minister confirm whether export credit guarantees now cover Kyrgyzstan, and whether the know-how fund can be used to greater effect there?

I should be interested in any representations that the hon. Gentleman might care to make to my ministerial colleagues and me about the use of the know-how fund. As regards export cover, officials from the Export Credits Guarantee Department visited the country last month to review the position. The review will take some months and it would be unwise to predict the outcome.

Given the importance of Kyrgyzstan—especially in light of this morning's conference, attended by many in British industry—and that country's commitment to democracy, and given the fact that the Kazakh capital is moving from Almaty, will the Government reflect on whether it would be wise to have an embassy with trade officials in Bishkek as separate from the embassy now covering both Kazakhstan and Kyrgyzstan?

I am glad that my hon. Friend found the conference so useful. From what we understand, it was a great success. On the specific question he asked, we have no plans at present to move diplomatic representation from Almaty, so cover for the country will continue as it is. In the longer term, we will take into account my hon. Friend's representations.