What his assessment is of the prospects for improved trade links with Bulgaria. [111531]

A number of developments suggest that there are likely to be good prospects for improving trade links with Bulgaria. The European Union formally opened accession negotiations with Bulgaria on 15 February. That move was strongly supported by Britain. British Trade International, in co-operation with other organisations, is involved in a number of initiatives, such as the London chamber of commerce business mission in May, which will promote commercial opportunities in the market to the UK business community.

I thank my right hon. Friend for that answer. There are increasing opportunities in Bulgaria, particularly since the currency stabilisation. She will know that Bulgaria is currently off cover with the Export Credits Guarantee Department. If British businesses want to export to Bulgaria, will the Government consider cases individually until the advisory council says that Bulgaria should be on cover and we have a stronger trading relationship?

My hon. Friend has an extensive knowledge of Bulgaria and he is right to say that it has not had long-term ECGD cover since April 1990, when it declared a unilateral moratorium on debt repayment and servicing. However, the provision of ECGD cover for Bulgaria is under review. A decision should be reached within the next month.

What undertakings did we give Bulgaria during the war against Serbia and are we implementing them?

As my hon. Friend knows, that is a matter for my right hon. Friends the Foreign Secretary and the Secretary of State for Defence. When my right hon. Friend the Prime Minister visited Sofia in May last year, he said that in view of the progress that Bulgaria had made towards democracy and attempts to secure a properly operating free market, the EU should consider it as part of the next wave for accession.

What measures his Department is taking to promote enterprise in the east midlands region. [111532]

We are supporting the East Midlands development agency; we are creating a new regional venture capital fund; and my right hon. Friend the Minister for Trade will today announce a planning charter for the east midlands that will make the region's planning system the most efficient in the country.

I thank my hon. Friend for that answer. Erewash Partnership is a successful enterprise agency in my constituency that supports local businesses well and receives discretionary funding from the local training and enterprise council. Will my hon. Friend do all that she can to ensure that such organisations continue to be resourced during the transition leading to the setting up of the Small Business Service?

I know that my hon. Friend is active on the board of the Erewash Partnership, which is doing excellent work. I understand her concern and I assure her that my officials are working with other Departments to see how we can sustain essential activities after April 2001. In the meantime, the Department for Education and Employment is making up to £41 million available nationally to support discretionary activity that might otherwise be in jeopardy.

What difference exactly has the East Midlands development agency made to employment, inward investment and other enterprise in the east midlands? Most of us find it just another of the bureaucratic measures that have been heaped on the country by the Government. The hon. Lady talks about her colleagues at the Department of the Environment, Transport and the Regions and planning-friendly guidance, which we all support up to a point. Will she ensure that no further enormous swathes of countryside in the east midlands are concreted over and that the planning-friendly guidance will lead to buildings on brownfield sites in cities, not in my constituency which does not need any more building?

The business people in the east midlands whom I talk to regularly are working closely with the EMDA and welcome its support for greater activities to promote exports from and inward investment to the region. The success of the agency is illustrated by the fact that it has taken a lead in creating the new planning charter, which will allow councils to give advance information about planning applications with job-creating potential so that developers and proposed inward investors can create and implement plans much more quickly.

The business people in my constituency support the establishment of the EMDA. There are already many examples of the impact that it has made in its first few months of operation, particularly a £3.5 million investment in one site. Although the EMDA strategy is of great benefit to the majority of sectors in Leicestershire, one sector worries me, as I am sure that it worries my hon. Friend the Minister—the textiles sector. What measures can she offer, including working with the EMDA, to ensure that the textile sector has a prosperous future?

I entirely share my hon. Friend's concern about the textiles industry. I recently met Paul Gates of KFAT—the National Union of Knitwear, Footwear and Apparel Trades—for discussions and I am working closely with the new textiles and clothing strategy group which our Government established. Its draft paper on a strategy to make the industry more competitive is out for consultation. I welcome the East Midlands textiles and clothing partnership, which has brought employers and others in our region together to promote and improve training, marketing and export promotion.

We continue to receive letters from manufacturing and horticultural companies in the east midlands. What assessment has the Minister made of the impact of the climate change tax in that region? There is great concern, particularly in the clothing industry, among firms that have already invested capital to improve the efficiency of their factory systems. The Government were forced to modify the original formula for the tax. Has the Minister made an assessment of how east midlands sectors such as clothing will be affected by what is still seen to be punitive tax on their profits and viability?

We have been working closely with all sectors of industry throughout the country to develop a climate change levy that will be good for the environment and will not damage but will improve the competitiveness of industry. My right hon. Friend the Chancellor of the Exchequer will be making further announcements on the levy in due course.

What action he is taking to ensure that the UK's manufacturing sector improves its performance relative to overseas competitors in the area of information and communication technologies. [111533]

The Government's policies on new ICT are based on ensuring business success in the new knowledge-based economy. That applies to manufacturing as to other sectors of industry.

Many of the thriving small and medium enterprises in my constituency are manufacturing companies and owe their success to operating at the leading edge to information technology. What steps can my right hon. Friend take to encourage the spread of that technology into traditional manufacturing sectors?

My hon. Friend makes an important point. There is clearly a deficit in some traditional manufacturing sectors in embracing new technologies. Just before Christmas, my Department published a document that showed by example how traditional manufacturing sectors could benefit from new technologies. By best practice, benchmarking and demonstrating how manufacturing can benefit from new technologies, we will make the case and ensure that more manufacturing sectors embrace them.

What arrangements are the Government making to measure the loss of mobile IT skills through IR35—especially as their loss will immediately accrue to the advantage of the overseas competitors mentioned in the original question?

There are no indications that skilled people are leaving the United Kingdom as a result of the introduction of IR35, which was introduced to clamp down on tax evasion. I am confident that it will be successful in achieving that and that it will not have the detrimental effects to which the right hon. Gentleman referred.

How will my right hon. Friend encourage schools, universities and colleges to work with industry, so that companies such as ABB Alstom in Lincoln can meet their needs in terms of the people and skills they desperately need to improve their performance in the manufacturing sector?

There is no doubt that we need to break down the divide that all too often exists between a child's experience in school and the world of work. Many companies have exciting and attractive programmes that demonstrate what the world of work is actually like. The more we encourage such links, that will benefit not only individual children but companies and the UK economy.

I welcome the Government's recent announcement of increased competition in the telecommunications sector. It will clearly benefit both manufacturing and residential users. I have two specific follow-up questions. The Government have announced their intention of accelerating the phasing out of the British Telecom monopoly on local loop. When will that happen? Secondly, since announcements were made by the Chancellor of the Exchequer, could the Secretary of State set out the respective roles of the Chancellor and himself in determining policy in this area, as it is causing considerable confusion in the industry?

The Government have a view, shared by the Chancellor and myself, about the importance of opening up access to the internet. By July 2001, we will have established competition. The regulator at Oftel will be responsible for the discussions that take place. It is a policy that the Government agree with, and it is important that it is delivered because it will be one of the most positive ways of ensuring that the country and individuals benefit from the new technologies that are available.

What action he is taking to ensure that changes in the price structures for high bandwidth telecommunications encourage the rapid development of e-commerce. [111534]

We want fast cheap internet access to be available to everyone. That is why I welcome the recent announcements from BT and Telewest. We are promoting greater competition in fixed and mobile telephones, which will give consumers more choice and lower prices.

I thank the Minister for the progress that is being made. Does she recognise that in the past, rural areas, which in many cases could benefit most from good IT communications, compensating in part for poor physical communications on occasion, have often been the last to see improvements in IT structure? Does she acknowledge that there is a strong case for the Government to put pressure on the regulator and on the companies to ensure that rural as well as urban environments have ready access to fast internet speeds?

My hon. Friend makes an extremely important point. I believe that when we release spectrum for fixed wireless access, as we will later this year, that will be of considerable benefit to rural areas, as will the development of new satellite services. Of course I will consider whether there is further action that we can take to roll out broad band quickly in the most remote rural areas.

Can the Minister confirm that the unbundling of the local BT loop before 1 July 2001 cannot take place without the agreement of both Oftel and BT? In the light of that, can the Minister tell us whether such agreement has been forthcoming?

As my right hon. Friend the Chancellor of the Exchequer made quite clear, it is a matter for agreement between Oftel and BT. The date of July 2001 has been agreed for local loop unbundling, and the Director General of Oftel has made it clear that if the practical problems can be resolved more quickly, that date will be brought forward.

My hon. Friend referred to recent announcements by BT. In fact, BT has promised nothing. It insists on maintaining its high charges for local calls; it says that it may be prepared to reduce them at some stage in the future. What are we doing to make BT reduce its charges for millions of people in this country for internet use? It is blocking development in this area and should be stopped.

BT has made two announcements recently, the most recent of which concerns an unmetered internet access subscription for £9.99 a month, giving unmetered access for evenings and weekends.

When?

It was available from yesterday. The other announcement is about the Surftime package. I am confident that BT and Oftel will be able to agree an early date for the introduction of Surftime on both a wholesale and a retail basis.

Events this morning are unfolding which show that the Secretary of State is presiding over a Department in a complete and utter shambles. It is no wonder that word has it that he wants to leave. The first draft of the Electronic Communications Bill was the unsatisfactory product of a turf war between the Department of Trade and Industry and the Home Office. We are now seeing communications move rapidly from fixed wires to wireless technology. There is now a turf war between the DTI and the Department for Culture, Media and Sport on who will regulate high bandwidth telecommunications.

Telecommunications has been taken out of the Utilities Bill, which is collapsing in disarray. Who will oversee high bandwidth telecommunications, and why were telecommunications removed from the scope of the Government's Utilities Bill?

The hon. Gentleman is talking nonsense. If he had read the joint statement made by my right hon. Friends the Secretaries of State for Trade and Industry and for Culture, Media and Sport, he would know that the two Departments are working closely on a White Paper that will deal with future regulation of the converging industries.

What new measures he plans to introduce to assist entrepreneurs to set up new businesses. [111535]

The new small business service will offer information and advice to anyone who wants to set up a new business through an internet-based gateway. We are creating a volunteer business mentoring programme, and we will support community finance initiatives to help people start businesses in disadvantaged areas.

Will my hon. Friend meet me and others to discuss proposals for a community-based investment fund in Toxteth, Liverpool? Does she agree that every possible effort should be made to support entrepreneurship in the inner city?

I entirely agree, and I should be delighted to meet my hon. Friend and her colleagues who have taken an important initiative. I cannot make a prior commitment, but we shall establish this year a £30 million phoenix fund designed to back business start-up and community finance initiatives in disadvantaged areas.

One of the most important contributions to the start-up of new businesses is made by information technology consultants who may be employed on an occasional basis. Does the Minister share the view taken by the Secretary of State that consultants who order their affairs so that they accumulate capital in their business rather than paying out money as salary are tax dodgers and evaders, against whom, presumably, criminal sanctions should apply? Are those people not in fact exactly the sort of entrepreneurs we should encourage rather than driving them overseas?

IT contractors and others who are genuinely self-employed will continue to be treated as such. Those involved in tax avoidance will, however, be dealt with under anti-avoidance measures, and I am sorry that the hon. Gentleman does not support that.

Does my hon. Friend agree that young people are the future of businesses in Britain? What words can she offer those leaving colleges and schools in Stourbridge to encourage them to go into business and, in particular, to go into business for themselves or set up new businesses?

My hon. Friend makes an important point. The new national enterprise campaign, which will be launched by the Confederation of British Industry and British Chambers of Commerce, will, I hope, attract many young people leaving college or university into self-employment and business start-up by showing them shining examples of entrepreneurs who have done just that?

What extra costs does the Minister believe that highly regulatory and interventionist measures such as the Utilities Bill will impose on entrepreneurs, particularly in the IT and telecoms sector? The Government have today announced the embarrassing withdrawal of all the telecomms sections of the Utilities Bill; would they also consider withdrawing the plethora of regulations that are costing business £5 billion a year and stealth taxes on business costing £25 billion?

No. Let me remind the hon. Gentleman of what the shadow Secretary of State, the hon. Member for Tiverton and Honiton (Mrs. Browning), said recently. She said on regulation that:

as a Minister under the previous Government … We would be the first to say that we did not do very well.—[Official Report, 19 November 1999; Vol. 339, c. 250]

The fact is that the Organisation for Economic Co-operation and Development concluded in its report last December that after two and a half years of Labour Government, the United Kingdom had less economic and administrative regulation than any other OECD country, including the United States of America. We are continuing to improve the regulatory environment and to simplify conditions for businesses.

When he will announce his decision on Government aid for the new Airbus project. [111536]

Discussions with BAe Systems on launch investment to secure UK participation in the Airbus A3XX project are well advanced.

The Minister will be aware that the project is of importance not only to British Aerospace, but to the aerospace industry in my Lancashire constituency and, indeed, throughout the whole country. It is important that the project should go ahead; the industry is waiting for a decision on that and on two major military projects, which are essential for its future success.

My hon. Friend is right. I have met representatives from BAe Systems and from the work force and am well aware of the ramifications, and of the fact that 20,000 jobs depend on the success of Airbus. Incidentally, last year the company secured more than 55 per cent. of the market for large, civil aircraft. We hope to make an announcement soon. We are well aware of the valid points made by my hon. Friend.

Will the Minister join me in paying tribute to Airbus and its contribution to employment and to the aviation industry? Will he please make an early decision on support for the new Airbus project? Will he also condemn practices pursued in other countries—notably the US, where the fly American policy means that all American personnel have to fly on American carriers?

I agree with the points made about the value of BAE Systems and the success of Airbus. Last October, we announced DTI funding of £2.45 million for an important competitive initiative of which Airbus is an important part. There should be fair competition rules and we hope to make an announcement on the Airbus project soon. We realise that A3XX is crucial to the future of Airbus and to BAe Systems.

Questions 8 and 11 are deferred until 12.30.

What assessment he has made of the impact of industries set up in the north-west with the help of his Department on similar enterprises in the same area. [111538]

A key element in determining regional selective assistance is an assessment of the impact of the investment on national and regional economies and on relevant industrial and commercial sectors.

Is my right hon. Friend aware of the case of Europanel in Skelmersdale? It was a thriving manufacturing concern until a foreign firm opened up in a neighbouring town with the help of the DTI and of DTI grants. Does she agree that we must be much more thorough in assessing the impact on neighbouring firms when we put public money into supporting much needed inward investment in the north-west? Does she further agree that it is unacceptable that the taxpayers of Skelmersdale should, ironically, contribute to the removal of jobs from the town?

I agree with my hon. Friend that it is important to ensure that no displacement occurs as a consequence of regional selective assistance. I am aware of the case to which he refers. I understand that my right hon. Friend the Minister for Trade met the company in October last year. Should the company want to consult the Government office of the north-west about the possibility of further assistance, officials are ready to hold discussions and will do everything that they can to help the company.

Does the Minister agree that the Government too can take important decisions? Does she agree that the Synchrotron project in Daresbury has given a massive boost both to business and to the academic community in the area? Does she understand the importance of allocating the Diamond project to Daresbury and that it should not go to Oxfordshire? People throughout the north-west—of all parties—want to see that. When shall we have a decision?

When I visited Runcorn a few weeks ago, the point about Daresbury was powerfully made to me. I realise the strength of local opinion—not least on the part of my hon. Friends who have fought well for the Synchrotron project. A decision has not yet been made, but it should be made shortly.

If he will make a statement on his Department's policy for giving grant aid to areas of England outside those with assisted area status. [111540]

Under European Commission law, regional state aid can be paid only in assisted areas approved under article 87. It is also possible to grant aid under other provisions. For example, the new enterprise grant areas have been proposed under the small firms guidelines, and SMART—the small firms merit award for research and technology—operates under the research and development guidelines.

I thank my hon. Friend for that answer. The Department closed the partnership investment programme at the end of the year. I was told that the reason was that the EC had decided that gap funding to private sector developers, outside assisted areas and above aid intensity limits, was in breach of state aid rules. That raises the alarming spectre that no state aid, however much it is justified, can be paid outside assisted areas. Can my hon. Friend assure me that schemes such as those he described can be funded throughout the country when the circumstances are justified?

I can certainly confirm that the Government have a comprehensive package of measures to tackle need in the regions effectively. The proposals for new assisted areas are part of that package. The single regeneration budget, in particular, supports a wide range of regeneration schemes run by local partnerships in England to target pockets of deprivation in urban and other areas. I note that Partnership in Staffordshire was awarded substantial funding to promote the regeneration of rural communities. In addition, third tier is a flexible measure to aid regional development and to respond to local economic crises. That will be reviewed after an initial period of 12 months in conjunction with regional partners.

I understand that the Secretary of State for Trade and Industry recently met the Commissioner in charge of assisted area status. Can the Minister possibly give us some idea of the representations that the Secretary of State made and what steps the Department of Trade and Industry will take to make sure that any distribution that comes from the European Union or the Government will be made fairly and equitably and—I look the Minister straight in the eye—on the basis solely of need?

I welcome the hon. Gentleman to his new post; it is always good to see him. My right hon. Friend the Secretary of State for Trade and Industry will meet Commissioner Monti this afternoon and will, no doubt, discuss these very matters.

May I ask my hon. Friend to ask my right hon. Friend the Secretary of State to impress on Commissioner Monti the fact that the issue of state aid to Rover-BMW at Longbridge has been with the Commission for several months? That state aid is of vital importance to retaining strategic production inside the European Union and it is not unreasonable to expect the Commission to come up with a positive decision on that aid by the spring, as has been indicated before.

I am absolutely sure that my right hon. Friend the Secretary of State heard those words and that that will be a subject for discussion with Commissioner Monti this afternoon.

Does the Minister recognise that, between the over-hyped and overheated regional shopping centres and the assisted areas, which are quite rightly receiving support, there are small market towns throughout the country that are dying on their feet? Will he target support at that sector? In particular, will he talk to the Department of the Environment, Transport and the Regions about the iniquitous uniform business rate and its effect on small businesses in market towns?

I am sure that the hon. Gentleman will himself want to make those points to Ministers in the Department of the Environment, Transport and the Regions. We recognise very much the difficulties of isolated pockets of deprivation and need throughout the country and we are addressing them in all the proposals that we have for regional regeneration.

What assessment he has made of the impact of the strength of sterling on the United Kingdom steel industry. [111543]

The Government are well aware of the concerns of the steel industry in relation to the strength of sterling. However, the steel industry itself has worked hard to improve its competitiveness. Although exports fell in 1999, the prospects for increasing exports in 2000 are much improved, especially in the light of recovery of the south-east Asian market.

I am grateful for that answer, but my right hon. Friend will know the very great fear in the steel communities of the United Kingdom about the loss of jobs as a result of the over-valued pound, which was inherited from the previous Government. Will she—and my right hon. Friend the Secretary of State if he is available—agree to meet a delegation from the steel communities to discuss this very great concern?

I am very happy to agree to meet representatives of the steel industry. I represent a steel constituency, so I am well aware of the issues. The Government's priority remains to put economic management on a stable, long-term footing by reform of both monetary and fiscal policy. The worst thing that could happen for the steel industry would be to return to the short-term fixes of the previous Government, bringing the boom and bust that so unsettled the industry over the past 20 years.

Does the Minister not accept that in steel plants, such as Llanwern and Ebbw Vale, there is great concern that the high value of the pound will undermine their on-going viability? Will she give a categoric assurance that her Department will take up with the Chancellor of the Exchequer, in the context of the forthcoming Budget, the question of getting a fair parity for the pound that will give some chance for the plants that I mentioned? Their closure would be an absolute disaster for those areas.

Hon. Friends who represent those constituencies have made representations about the steel industry in that area. Approaches to Corus have revealed that speculation about Llanwern is based on press speculation. It would be unfortunate—and I am sure the right hon. Gentleman would not seek to do it—to spread fear in those communities about the possibility of further unemployment.

My right hon. Friend the Chancellor is well aware of the need to ensure a stable economy in the United Kingdom. We now have one of the strongest economies in the world. What we must seek to do is to ensure that all our industries benefit from the competitive advantage that can be brought about by increases in productivity and increases in output across the board for those industries. My right hon. Friend's main priority will be to ensure a stable economy and a stable exchange rate in the medium and long term.

The pound is strong against the undervalued euro, but we do not see such discrepancies so much in terms of the pound's valuation against the American dollar. Given that the right hon. Lady and her friends are proponents of scrapping the pound and taking us into the euro, what in her view is the optimum exchange rate between the pound and the euro?

I am sure the hon. Lady knows rather more about how exchange rates work than her question appears to suggest. The Government believe that the decision about the single currency and sterling should be based on the best economic performance of this country, not on some arbitrary date that seems to have been dreamt up by the hon. Lady and her friends to try to heal divisions within the Conservative party. The main priority on the Government Benches is to have a sound economy whereby competitive businesses can ensure further growth, not just in Europe, but in competing against other economies such as the United States and Japan.

What measures he is taking to encourage greater use of the internet. [111544]

We are driving through competition, to get internet access prices down; we are helping small businesses get the advice and training they need; and we are connecting schools, libraries and community centres to the internet.

I am surprised that the Minister for Small Business and E-Commerce does not know that the Government are not responsible for any of those things. What the Government do know is that they are responsible for the Electronic Communications Bill, and I have congratulated the Department of Trade and Industry on taking out the worst parts of that Bill. Is the hon. Lady aware that her colleagues in the Home Office are busily reinforcing in spades those very developments which will help close down our internet access? Is she also aware that her colleagues in the Committee considering the Utilities Bill said this morning that they are taking out all its telecommunications regulation, and that in this Parliament we shall not end up with any revision of such regulation, which is probably going over to the Department for Culture, Media and Sport? No doubt water is going to the Department of the Environment, Transport—

Order. I ask the hon. Gentleman to put his question.

Is not the Minister going to resign, because she has nothing left to do?

No.

Is my hon. Friend aware that to date the United Kingdom has been a very positive environment for e-commerce, but will she look at consumer issues related to e-commerce and proper protection of consumers against concealed information being taken from their computers when they are using the net and buying things over it?

I recently launched Trust UK, a system of hallmarks for accredited codes of practice, which will enable consumers buying from accredited British websites to know that they are dealing with reputable organisations and that they can deal confidently. I am hopeful that we can get a similar set-up at the European level in order to give consumers the trust and confidence they need in electronic commerce.

What discussions he has had with other departments on the review of the remit of the Export Credits Guarantee Department. [111545]

I asked Cabinet colleagues to advise me of issues that they wished to see covered by the review of ECGD's mission and status, and this was reflected in the terms of reference for the review.

In addition, I shall discuss the recommendations of the review team with colleagues.

I hope that the Secretary of State will acknowledge the extremely important part played in British industry by defence exports. Britain is the second largest exporter of military goods in the world, and this enables us not only to help our friends, but to ensure that we have economies of scale in the production of defence equipment for our own forces.

Can the Minister assure me that ECGD support will continue to be available to major British companies such as BAe Systems, and that there will be no plans for the Government to curtail exports as the Chancellor of the Exchequer has sought to in respect of 63 countries, only one of which has been a beneficiary of ECGD support for defence exports in the past 12 years?

The ECGD's role is very important to many major exporters in the United Kingdom, including the defence industry. I think the hon. Gentleman will find when we announce the outcomes of the review that the defence industry will, where appropriate, continue to receive export credits as it does now.

It is always a question of striking the right balance. I believe that when we present our proposals in the light of the review, the right balance will be struck—a balance that recognises the importance of the export licensing regime, which is entirely different from the export credits guarantee regime. The two should not be married. In my view, export credits have a distinct role to play, and they will continue to do so.

We need to change the system to reflect the needs of particular sectors. I do not think that the small and medium-sized enterprise sector uses export credits as much as it might, but I do not believe that any issues arising from the review will cause concern to those of us who feel that export credits have an important role to play in supporting British exporters generally—and that includes the defence sector.

Will my right hon. Friend confirm that most export credits are non-defence credits? On a wider issue, will he confirm that we are taking on a new role in relation to debt relief for emerging markets and third-world countries, while also lowering tariffs to facilitate market access? In that context, do not export credit guarantees hold the key to enabling countries that have suffered severe poverty to catch up with the western world in terms of economic growth?

My hon. Friend makes an important point about the positive role that export credits can play in helping countries to develop their own economies. The Government certainly intend to do that, which is why we have concentrated on productive expenditure, especially in the case of the least-well-developed countries. Such countries need to commit their finance to projects that will make economic growth possible. That will form a crucial part of the ECGD's role in the future, and can, I think, be compatible not just with supporting British business, but with our development objectives.

I hope that, when we announce the outcome of the review in a few months' time, the House will see that we have struck the right balance between our two aims. They are not in competition with each other: we want to unite the interests of British business with countries' development needs.

What discussions he has held with his international counterparts on future progress with WTO negotiations. [111546]

Since Seattle, I have been in contact with a number of my international counterparts from both the European Union and the rest of the world to discuss reform of the World Trade Organisation and the launch of a new round. Most agree on the need to launch a new round as soon as possible, and the need for reform of the WTO.

Does the Secretary of State agree that almost nothing is more important than for Britain to fight for global free trade, and to lower European Union tariff barriers? Is he aware that the Secretary of State for International Development has said that his Department will take a strong lead in trying to reform the WTO' s procedures following Seattle? Can he report any progress at all? He has told us that he has had meetings, but has any progress been made? This is a very important issue for Britain and British trade.

I agree that it is an important issue, and progress is being made.

What progress?

If the hon. Gentleman can wait, I will tell him.

The reform programme will now have two parts. There will be some specific and rather technical changes, which are being discussed in Geneva; we hope to conclude those discussions by the end of this month. We also see a need for more fundamental WTO reform, which will take longer, because the WTO operates on the basis of consensus: an individual member can block progress. The more radical reforms will take time, but I think that engaging in a dialogue—which is what we are doing—will give real opportunities for substantial reform, hopefully within a year or 18 months.

Is the Secretary of State aware that only a small percentage of the money that changes hands internationally from day to day is for trade in goods and services, and that the great bulk is concerned with capital speculation? Is that problem discussed with equivalent Ministers at meetings of the World Trade Organisation? We should begin to propound the idea of an international tax on capital speculation; then we would be able to tackle some of the problems faced by third-world nations.

My hon. Friend has always had interesting ideas. The WTO has been considering the question of investment in the context of its rules. Issues of international capital exchanges are more correctly the remit of the International Monetary Fund, and my hon. Friend will be aware that the IMF has adopted procedures to try to restrict sudden flows of capital in and out of particular countries. That has been successful over the past 12 or 18 months, and that is probably a more appropriate path than the one suggested by my hon. Friend, which I would not want to follow.

What progress has been made in completing funding negotiations for EU objective 1 regions; and if he will make a statement. [111547]

The UK's objective 1 programmes were submitted to the Commission last year, and the Commission has now formally responded to some of them. Discussions are continuing and I hope that the programmes will be agreed to.

I am grateful to the Minister for that reply, but is he aware that even the enterprise grant fund referred to in an earlier reply will deliver only £75,000 per annum to the objective 1 region of Cornwall? Does he accept that rather than encouraging unemployed people to apply for non-existent jobs in objective 1 areas, as the Chancellor of the Exchequer is to do, it would be far better to invest public money to ensure that we can draw down the available funds in objective 1 regions to generate jobs and regenerate those economies?

The Government are concerned to ensure that productive employment is retained in areas such as the one that the hon. Gentleman represents. I understand that the Government are working with all objective 1 areas to help them to identify match funding. My right hon. Friend the Chief Secretary to the Treasury said on 3 February:

All departments and Government offices will work closely with the areas to benefit, to ensure that they get the match funding that they need.—[Official Report, 3 February 2000; Vol. 343, c. 1191.]

Although I accept that the Chancellor cannot make a final announcement about match funding until he has the results of the comprehensive spending review, will the Minister's Department put maximum pressure on the Treasury to make sure that match funding exists, and ask whether the Treasury can give any early indication on it? Most importantly, does the Minister agree that, in objective 1 areas, the emphasis must shift to devising schemes for infrastructure, skills training and improved opportunities for the work force, so that when the objective 1 funds are available, we can take maximum advantage of them?

My hon. Friend makes an important point. I am very much in favour of the projects to which he has referred. I am confident that the funding will be found, and that we will proceed with that important aid. However, I am interested in the quality of the projects, and it is no use propping up projects or ideas that are not of sufficient quality to be sustainable or to make a difference to the areas that they seek to help.

Can the Minister assure the House that in meeting the match funding for Cornwall's objective 1 status, other counties in the south-west will not suffer?

We cannot move the assisted areas map east to Dorset, as I am sure the hon. Gentleman would like. He will know that certain criteria have to be met; we will stick strictly with those criteria and ensure that, within them, assisted areas are helped properly.

What steps his Department is taking to encourage use of recycled materials. [111548]

On 31 January, we made a call for proposals under the DTI's recycling programme. The programme can provide funds to support research, development and demonstration projects that have the potential to create substantial new demand for recycled materials.

I thank my hon. Friend for that answer. Does she consider that at just over £1 million, the DTI recycling programme will have great impact? Does she agree that a greater impact could be achieved by a programme of deposits at the point of sale of consumer goods, which could be redeemed on presentation of the goods for recycling or disposal?

I am indeed confident that £1 million worth of pump-priming money will have a helpful impact. I am aware of my hon. Friend's support for a deposit system for white goods. We will consider that when we see the draft European directive on electrical and electronic waste, which is likely to propose a collection and recycling target.

Is the Department considering whether it is technically possible to recycle orimulsion?

I am sure we are.

On a different subject from orimulsion, will my hon. Friend consider encouraging drinks manufacturers also to operate a deposit and return schemes? Not only would that help to encourage recycling and reduce landfill, but it would help to clean up the streets.

I well remember as a child collecting bottles with the intention of getting the deposit back on them, and very popular that was, too, so of course I will look into that.

What assessment he has made of the trend in the number of business failures in the current financial year; and if he will make a statement. [111549]

Business failures in October to December 1999, the third quarter of this financial year, were lower than in either of the two previous quarters. The figures are well below those seen as a result of the 1991 recession.

I am grateful to the hon. Gentleman for his answer, which is reassuring as far as it goes, to the end of the last calendar year. Can he assure the House that the disparity in the economy between the potentially overheating south-east and the rather more depressed midlands and north will not get worse? Will he, with the Treasury, ensure that the Government do not rely on interest rates set by the Bank of England alone to keep the economy in balance, and that the interests of small and medium-sized enterprises will be borne in mind, as they have a great burden of regulation and form-filling to cope with?

It is good of the hon. Gentleman to join us. I can give him an assurance that the trend is good. In the same period, 26,000 more small businesses started than were made insolvent, which is one of the best records that we have seen. Because of the economic cycle, the trend for insolvency does not feed through for a while, so the upturn in the last quarter will be reflected more fully in the economic position in the year to come.

Are not more businesses likely to fail if 30,000 skilled IT workers are driven abroad by IR35?

No.

What recent assessment he has made of the performance of manufacturing industry in the east midlands region. [111551]

Some traditional sectors of manufacturing in the east midlands have continued to suffer, particularly in the clothing and textile sectors. Many other sectors of manufacturing, including those in higher technology and higher value added areas, are faring much better. Overall, the regional economy is improving, with business confidence and profitability growing.

I thank my hon. Friend. Contrary to earlier remarks, may I say that the East Midlands development agency is doing a first-class job in trying to stimulate the economy in the region? There is a mixed picture, with some parts doing very well. I urge my hon. Friend to take particular note of the problems experienced by the clothing and textile sector. Will he meet representatives of that sector and do what he can to stimulate those industries?

We are aware of the problems in the textile sector. We are meeting representatives of the textile industry on a continuing basis. We are consulting about setting up manufacturing centres of excellence around the country. That will help all manufacturing industries, especially the textile industry.

I call Mr. Michael Connarty.

Where is he?

I call Mr. Mark Todd.

Where is he?

What part his domestic energy policy plays in eliminating social exclusion. [111555]

Fuel poverty affects about 5 million households in the United Kingdom. It leads to thousands of extra winter deaths annually and is a significant cause of ill health among some of the most vulnerable people in society. It therefore represents an important facet of social exclusion. The Government's energy policy tackles the problem in several ways. Promoting competition in energy markets leads to reduced prices; the energy regulator's social action plan will help poorer consumers; and the problem of poor housing is being tackled through the improved home energy efficiency scheme and the home investment programme. I have also set up a ministerial group to ensure better co-ordination of issues that relate to fuel poverty across Government.

Does my right hon. Friend agree that one of the most difficult challenges in tackling fuel poverty relates to the private rented sector? Will she congratulate companies such as PowerGen, Transco, TXU and Eastern Energy on some of the imaginative projects that they have introduced recently? In her discussions with those companies, will she urge them to do as much as they can to tackle the problem?

I am happy to join my hon. Friend in congratulating companies that have taken action on affordable warmth. They serve as leaders to the industry. I have asked the Electricity Association services task force to act to ensure that the highest possible standards are met, not only for those in the private rented sector, but for all those who are affected by fuel poverty, especially those who pay for their fuel through pre-payment meters.

I call Mrs. Margaret Moran.

Where is she?

:I call Mrs. Helen Jackson.

Where is she?

I call Mrs. Maria Fyfe.

Where is she?

I call Mr. Gordon Prentice.

Where is he?

I call Mr. Anthony Steen.

Where is he?

If he will make a statement on the activities of Infotech 2000 Ltd. in relation to the promotion of Islamic fundamentalist causes overseas. [111563]

It is not the Department's policy to comment on the affairs of particular companies. If my hon. Friend has any information that he believes should be brought to the Department's attention, he should do that as soon as possible.

My hon. Friend knows that the activities of Infotech 2000 have caused some concern. It probably exploits company law to raise funds for fundamentalist, extremist and terrorist causes overseas, and to recruit volunteers to fight in those causes. Will the Department examine company law to ascertain whether the abuses in which the company has been involved can be reviewed? I refer specifically to the laws on fundraising for political purposes, especially overseas.

A comprehensive review of company law is currently under way. The Department has an efficient and active companies investigation section. I am sure that its staff will have listened to my hon. Friend's words.

What recent representations he has received on the future structure of Milk Marque. [111564]

I congratulate the hon. Gentleman on being here. [HON. MEMBERS: "Unlike your lot."] It is a close-run thing.

Since 4 November 1999, when the members of Milk Marque voted in favour of the board's proposals for the voluntary break-up of Milk Marque, the Department has received nine letters from hon. Members and members of the public on anxieties about the dairy industry. Two parliamentary questions have also been asked.

I welcome Milk Marque's decision, which gives the industry the opportunity to form new, closer and beneficial relationships between milk producers and other industries.

How can breaking up Milk Marque help to establish efficient producers of dairy products when continental competitors such as MD and Arla are already twice as efficient as our own dairy producers?

As the hon. Gentleman knows, I shared the concern about the compulsory break-up of Milk Marque, which was the recommendation from the Competition Commission. For that reason, I did not agree with that recommendation, but the members of Milk Marque themselves decided that, on a voluntary basis, they would agree to breaking Milk Marque up into three successor organisations. That was a decision for the members of Milk Marque and that is wholly appropriate in the circumstances.

We now return to Questions 8 and 11.

What plans he has to reduce the burden of regulation on business. [111537]

What steps he is taking to reduce the regulatory burden on business. [111541]

We keep under review all measures that may increase the burden of regulation on business. As a result, we have been considering the views expressed by the telecoms operators in relation to the provisions in the Utilities Bill. We intend to publish a communications White Paper later this year. I believe that there is a powerful argument for dealing with the reforms needed in one measure. I have therefore decided to remove the telecoms provisions from the Bill. In addition, we shall remove the provisions relating to water, and the Department of the Environment, Transport and the Regions will instead introduce measures covering those matters in a draft water Bill, which it intends to publish later this year. That will enable Parliament to consider proposed changes to the water regime alongside other proposals resulting from the review of competition in that sector.

I am staggered that the Secretary of State sees fit to hang his important statement to the House on my equally important but somewhat unrelated question. Is not the truth that he has just butchered a flagship Bill because it is ill thought out? Returning to my question, what has his announcement done to reduce the 2,700 regulations introduced under his Administration, 17 of which alone, it is estimated, will cost British industry £10 billion in the lifetime of this Parliament?

The Conservative party's problem is that it is unable to distinguish between red tape and the need to provide decent standards for people in the workplace. Conservative Members regard the working time directive, paid holidays and the national minimum wage as red tape, but Labour Members know that they represent decent conditions for working people. Conservative Members oppose those measures, although we heard recently that their party now supports the national minimum wage. It would be interesting to hear the views of Opposition Front Benchers on that matter. We have in Committee a Bill that will cut the cost of electricity by 10 per cent. That is an important measure and we shall introduce the other proposals elsewhere in a more appropriate way.

I can see why the statement has been linked to my question: the Secretary of State recognises that the Utilities Bill is indeed a burden on business. He has now decided to scrap about half of it, despite the fact that BT made the recommendations over a year ago. The Bill was 170 pages long. Precisely how much has it cost the taxpayer to prepare it? How much has it cost the taxpayer to have civil servants sitting in during consideration of it? Why does not he accept that it is a burden on business and dump the whole lot?

I must warn the hon. Gentleman that a London telephone directory is about to be brought into the Chamber and we shall be interested to see whether he can tear that in half as well.

There is an important issue here. The Government received strong representations from the telecoms operators after announcing on 3 February that there would be a communications White Paper. That announcement came after the debate on Second Reading of the Bill. Therefore, we listened to industry and its genuine concerns. We make no apology for saying, following its representations, that we believe—[Interruption.]

Order.

The proposals that were in the Bill received representations from the telecoms operators. We have listened to those. We feel that it is more appropriate to deal with the matter in the communications White Paper, which we have announced since Second Reading of the Utilities Bill. We will introduce it in the autumn. In the light of that, we feel that it is wholly appropriate to deal with the matter in that way. By doing so, we will reduce the regulation on the telecoms industry because it will not have two sets of regulations.

On the general question of regulation, does my right hon. Friend agree that it is a question of quality as well as quantity? No one is arguing for increased bureaucracy, but does he agree that, in certain circumstances, quality is at the heart of the issue? For example, in view of the recent report by the nuclear installations inspectorate on the safety record of British Nuclear Fuels, does he not agree that there is an overwhelming argument for improving the quality of regulation in many industries?

My hon. Friend makes an important point. Where regulation is necessary—there will be circumstances where it is—it must be clear and precise and, wherever possible, produce the least burdens on business. There are clear issues to do with regulation of sensitive industries. I agree with him. Often, a combination of appropriate regulation and good, effective management is needed. In some cases, the two have not come together very often.

Does my right hon. Friend agree that the synthetic anger of the hon. Member for Lichfield (Mr. Fabricant) illustrates in its entirety the attitude of the previous Government: if we listen, we are damned, if we do not, we are damned, so why listen—and the previous Government did not listen? In not only listening but acting, will my right hon. Friend ensure that we carry forward the parts of the Bill that will help to reduce prices for all consumers, to tackle fuel poverty and to achieve regulatory certainty? In particular, will he listen to the opinions of PowerGen, which, in a briefing to members of the Utilities Bill Standing Committee, said:

PowerGen supports many aspects of the Bill, including the objectives of improving the consistency, predictability and transparency of regulation, and bringing the regulatory framework up to date with the competitive markets that have developed since privatisation?

It is interesting that the Conservative Opposition have gone on record as being against the electricity and gas provisions in the Utilities Bill, measures that will reduce the wholesale price of electricity by at least 10 per cent. and address the whole question of fuel poverty—a point that was raised on the Opposition Benches. Those measures will remain in place.

I make no apology for listening to the concerns of business and industry. The Bill will be a better Bill because we have listened to the views of telecommunications operators. We will introduce measures in the communications White Paper. We are a listening Government, putting the interest of business first.

If I hear the Secretary of State say once more that he makes no apology, I think I shall puke. It is an outrage to the important global businesses involved in the four important sectors that are covered by the Bill, and an affront to the democratic process of the House that he did not have the guts to stand at the Dispatch Box and give a proper statement, with proper scrutiny by the House.

The Secretary of State talks about consultation. I refer him to his own words, 31 days ago at that Dispatch Box on Second Reading:

Our first action was not to rush into legislating, but to consult widely on the structures that would fulfil the needs of consumers, be good for business and provide a stable framework for utility companies.—[Official Report, 31 January 2000; Vol. 343, c. 788.]

He may have consulted, but listen he did not.

We warned the Secretary of State on Second Reading and we have warned him consistently in Committee that the Bill was flawed from the start. We warned him when the so-called flagship Bill from the Queen's Speech was put before the House, and I warn him again today, that he will come back to the Dispatch Box to answer questions on the issues because we will no longer put up with lectures from him about the utilities industries that have benefited from the way in which the Conservative Government privatised them.

It is incredible that the Secretary of State and his colleagues did not make the connection between telecommunications and broadcasting before they brought the Bill to the House. It is incredible that, apparently, he had no discussions with the Deputy Prime Minister about the future of the water industry. Goodness knows what will happen in the mélée that will now ensue.

This morning, I listened to proceedings on the Bill in Committee. Clearly, there is no timetable yet for the part of the Bill that deals with the water industry. We are now told that we have a White Paper, but that will not help the telecommunications industry. The Government must have known about the White Paper before they drafted the Bill. What will happen to part IV, which deals with the Competition Commission and all four utilities sectors?

Why can the Secretary of State not do the decent thing and come to the House to answer detailed questions that are important to businesses not only in this country, but globally, which have now been thrown into disarray because of the shambles of the way in which he runs the Department and the pseudo way in which the Department and the Labour party are supposed to consult? It is about time that he started listening to people who know about these issues. He would not have done badly to listen to my hon. Friends in Committee—it was good advice, freely given—but he did not. Instead, he gave us arrogance and no apology. I warn him that his reputation and that of his Department is that they are unbusinesslike and do not know what they are doing. The Bill is a shambles. He should withdraw it and bring it back a second time.

It was interesting that the hon. Lady referred to advice from Conservative Members that was "freely given". I have to say that that is a rare occurrence. I make no apology for the way in which the Bill has been amended to reflect the interests of business. Let me take Opposition Members through the sequence of events since it was considered on Second Reading. On 3 February—[Interruption.]

Order. I will not have questions put from a sedentary position.

On 3 February, we announced that there would be a White Paper on communications policy. As a result of our announcement, of which the telecommunications operators were unaware until it was made, there were further representations to the Government from the industry in the light of the fact that there was to be a White Paper. There had been consultation before, but at that stage the telecommunications operators were unaware that there was to be a White Paper on communications. Further representations were made by the sector and, in the light of those representations, we decided to remove telecommunications from the Bill. As for the water industry, there is to be a water Bill to deal with provisions affecting that industry.

We still have a measure that will radically change electricity and gas trading. It will benefit millions of people and businesses. Therefore we make no apology for introducing a Utilities Bill that will benefit business and individuals. We make no apology for listening to the interests of business. We will put practical policies before political dogma, unlike the Conservative party.

I am delighted that my right hon. Friend is paying so much attention to business, but he will be aware that both those major industries are not ones that enjoy the unequivocal support of all consumers. Could he, therefore, tell us why it would not have been easier to have left them both in the existing Utilities Bill, and, subsequently, to table amendments on them in the interests of consumers—who, after all, may not have the same view of privatisation as Opposition Front Benchers?

In relation to the four areas that were considered in the Utilities Bill, and certainly in cases that are being considered, we shall have to ensure that the interests of consumers are effectively represented. I am confident that, when the measures on water and telecommunications are introduced, a strong voice will have to be given to consumers' interests. There will be such a voice on gas and electricity in the Utilities Bill.

Is not this a case of joined-up chaos, rather than joined-up Government? The Secretary of State talks about the communications White Paper, but has he only just found out about it? The Government have been talking about it for months. Liberal Democrat Members warned him that it was sensible to deal with telecommunications in a telecommunications Bill, but he included provisions on telecommunications in the Utilities Bill. He has now discovered that they will have to be withdrawn.

Is there not a pitched battle between the Department of Trade and Industry and the Department of the Environment, Transport and the Regions on how to regulate water—with the DTI favouring a light touch and the DETR favouring a heavy one? Is not the truth that the Deputy Prime Minister has taken his ball home because he has not been able to get his way on water regulation in the Bill?

The Utilities Bill is a shambles, and the Secretary of State will have to answer the question whether its remaining threads hang together at all.

We have a Bill dealing with gas and electricity that will make a very real difference to many thousands of people in the hon. Gentleman's constituency. He needs to be aware of that. If he is saying that the Bill should be withdrawn, he is saying that those benefits should be denied to his constituents. It is interesting—it is on the record—that that is his approach. I think that he will be condemned on that particular issue.

There is no disagreement between the Deputy Prime Minister and me on the need to deal with water within a water Bill: it is a sensible place to deal with it. As I said, on 3 February we announced that there will be a telecommunications White Paper. In the light of that, the operators themselves have made further representations. Our view is that we should take account of those representations, reflect on the issues and include them in a White Paper later this year.