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  • Michael Heseltine – 1993 Speech on the Budget and Industry

    Michael Heseltine – 1993 Speech on the Budget and Industry

    The speech made by Michael Heseltine, the then Secretary of State for Trade and Industry, in the House of Commons on 22 March 1993.

    The Budget sets in place one more step in our strategy for industry. When coupled with the autumn statement, it must be seen as a comprehensive response to our industrial needs. First, it provides a sound economic background against which our companies can more effectively enhance their competitiveness. Secondly, it backs our drive on the export markets. Thirdly, it addreses a range of specific measures that industry has raised with us. Fourthly, it recognises the vital role that small and medium-sized firms play in economic vitality.
    No Government have done more to create a favourable climate for enterprise and wealth creation. Interest rates have been cut by 9 per cent. As a consequence, industry’s costs have been reduced by £11 billion a year. The Government’s privatisation programme is perhaps one of the most radical changes in the United Kingdom’s economic and industrial structure since 1945.

    In 1978–79, the nationalised industries received subsidies of some £2.2 billion in today’s prices. In contrast, in 1990–91, the privatised companies paid £3 billion to the Exchequer. The privatised industries are achieving striking improvements in productivity. British Airways has increased its productivity by more than 20 per cent. The number of customers per employee in respect of British Gas has increased by about 19 per cent. Productivity at British Steel, which is now considered to be one of the world’s most efficient steel producers, has increased dramatically. It now takes only 4.8 man hours to produce a tonne of liquid steel, compared with 13.2 man hours in 1979–80.

    Those improvements in productivity have been passed on to consumers as lower prices and rising standards of service. Since privatisation, gas prices have fallen by 18 per cent. for domestic customers and by 40 per cent. for large industrial customers. Those industries are, in many cases, now acting as flagships for Britain in overseas markets.

    During the Prime Minister’s visit to India last month, British Gas signed an agreement with the Gas Authority of India enabling both companies to take gas from offshore Bombay and send it through a new distribution network to more than 60,000 offices, factories and homes.

    In Argentina, British Gas has won a $300 million contract to replace the Buenos Aires distribution system. The company is working as far afield as Indonesia and Kazakhstan. It is developing the Uisker oil field in Tunisia and converting the German town of Spremberg to natural gas.

    Since privatisation, Rolls-Royce——

    Mr. David Winnick (Walsall, North)

    The Secretary of State has mentioned gas and electricity and there is much confusion in people’s minds outside this place. Will the Government fully compensate pensioners, and particularly those on very low incomes, in respect of the imposition of VAT? Is it not necessary for the Government to be quite clear, before the vote at 10 pm, precisely what is to be done, bearing in mind the tremendous hardship and misery that so many people on low incomes already face when they pay their heating bills during the winter months?

    Mr. Heseltine

    Of course that is important and that is why the Chancellor of the Exchequer made the position clear in his Budget statement and why my right hon. Friend the Prime Minister built on what the Chancellor had said when he addressed the House last Thursday. I will return to that subject when I reach that part of my speech.

    As I was saying, since Rolls-Royce was privatised in 1987, its share of the world civil engine market has risen from 10 per cent. to no less than 22 per cent. Its aero-engine order book has more than doubled and currently stands at £6.7 billion. More than 70 per cent. of its output is exported. Its industrial and marine activities are also world wide. It recently won power supply contracts worth £67 million in India and the subsidiary, NEI Parsons, secured a £100 million contract for turbines in Singapore.

    Ten years ago, British cars were hardly seen on the streets of Tokyo. In 1991, Rover exported 10,000 vehicles to Japan. The company produced 395,000 vehicles in 1991, of which about 40 per cent. went overseas, the bulk to other members of the single market.

    As I said in the House last week, British Telecom is now one of the world’s foremost telecommunications companies. Last year, it won a £350 million contract to install a network for the New South Wales Government.

    Our water companies are making formidable strides in overseas markets. Thames Water is expected to sign a contract for £450 million for a water supply scheme in Izmit in Turkey to build, operate for 15 years and then transfer the scheme to the Turkish Government.

    Mr. Andrew Mackinlay (Thurrock)

    What about the unemployed in Dock road, Tilbury? What about real people?

    Mr. Heseltine

    I heard the hon. Gentleman say, “What about real people?” Does the hon. Gentleman believe that real people do not work for those real companies? What sort of real people does the hon. Gentleman have in mind if people who export for Britain and design and manufacture for Britain are not considered by the Labour party to be real people? I suppose that, in the language of the Labour party, the real people are those who disrupt industrial relations, try to undermine Britain and talk the nation down: the real people of the left; yesterday’s real people.

    Mr. Dennis Skinner (Bolsover)

    Will the right hon. Gentleman give way?

    Mr. Heseltine

    Here is one of them. One of yesterday’s real people stands before us.

    Mr. Skinner

    As a matter of fact, I am making inquiries about today’s real people. The Secretary of State knows as well as I do that the mining industry could do with participating in the exports to which he referred. After a 15 to 20 per cent. reduction in the value of the pound, we could be exporting coal and today’s real miners could be taking part in that.

    Will the Secretary of State tell us today that the 20 million tonnes of coal imported into Britain will be massively reduced and that he will launch an export drive for coal? If we are exporting all those things to all those parts of the world, why has there been a announcement today of an increase in the balance of payments monthly deficit of £1.3 billion?

    Mr. Heseltine

    I can help the hon. Gentleman. Yes, we can export coal the day that we produce it at a price which the export market will absorb. If the hon. Gentleman had put his mind years ago to advising his constituents about the productivity gains that we are beginning to see in the mining industry, we might not have these imports of foreign coal. The price that we have paid for the views expressed by the hon. Member for Bolsover (Mr. Skinner) and his right hon. and hon. Friends and their failure to bring home the realities of a competitive marketplace to the miners of this country is now being visited on those very people.

    Thames Water, as I said, expects to sign a contract for £450 million. Anglian Water has won a stake in a winning consortium for a Buenos Aires water privatisation project. North West Water, in conjunction with an Australian engineering firm, has signed a contract for 100 million Australian dollars to improve water quality in Melbourne.

    That is a remarkable transformation. Not only are those privatised companies no longer loss making, in tax terms, but they are paying large sums of money to the Exchequer. They are now winning for Britain in a way in which, for the past 30 or 40 years, we denied them the opportunity even to try to.

    I am not sure whether the hon. Member for Dunfermline, East (Mr. Brown) is in his place at the moment.

    Mr. Rhodri Morgan (Cardiff, West)

    I am grateful to the right hon. Gentleman for giving way before he goes off on one of those manic, last deckchair attendant on the Titanic performances. Does he not realise that the reason why the water companies are able to make flash investments in places such as Turkey and New South Wales has nothing to do with the technology which they have to offer? It has everything to do with the guaranteed and ludicrously high prices which they are allowed to charge by the over-generous terms on which they were privatised by the Government in 1989. As a result of having that guaranteed income, the companies can spend overseas the capital which they have accumulated from the ordinary water and sewerage users in the United Kingdom. It is capital which we, the taxpayers, have provided. It is nothing to do with the skills of the companies.

    Mr. Heseltine

    Here we have the revisited Labour party. This is the Labour party which does not want to see real people involved in making real products. We now have a new concept: if a privatised British company goes out and wins in the marketplace of the world, somehow it is doing so because it is taking on loss-making contracts. That is what the hon. Member for Cardiff, West (Mr. Morgan) said. British companies are not winning on their merits. They are winning contracts because, somehow or other, they are being artificially supported in the domestic marketplace.

    What sort of message does the hon. Gentleman think that he is sending to countries that are considering taking British tenders? The message has come from the British Labour party that it is a giant fix—that these are not competitive tenders but have all been sorted out on the back of the domestic market by the British Government.

    I hope that all those people out there who are selling for Britain are listening to this debate and to the support that they are getting from the Labour party in the House. Labour Members of the revitalised Labour party say that they are backing Britain. They are backing Britain everywhere except when it comes to winning contracts in the overseas marketplace. If the hon. Member for Dunfermline, East (Mr. Brown) were here today——

    Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

    Get on with it!

    Mr. Heseltine

    The hon. Gentleman should not worry: I shall get on with it. The hon. Member for Dunfermline, East said: The central questions are how we invest in people for the future, how we invest in industry and how we invest in the social and economic fabric of our country to ensure that we will have not only rising production in industry but rising standards of living.”—[Official Report, 17 March 1993; Vol. 221, c. 296.] That was the great sort of interrogation to which the Chancellor and the Chief Secretary were subjected by the hon. Gentleman.

    What is happening to improve the living standards? What are the facts? As a result of the changes which I have been talking about, real spending on the national health service in England has increased by 60 per cent. since 1979. There are 19,000 more doctors and dentists and almost 38,000 more nurses and midwives, and 45 per cent. more acute in-patients and day cases are treated each year.

    Dame Elaine Kellett-Bowman (Lancaster)

    Real doctors, real nurses, real patients.

    Mr. Heseltine

    My hon. Friend is right: this is another example of real people doing real things because a Tory Government have made it possible.
    The investment programme in the privatised water industry is heading for an additional £30 billion by the end of the century. There has been record public expenditure on roads and the urban programme has been transformed. The essence of the matter is that, while Labour Members continue to talk about these problems, the Tory Government continue to do something about them. There has been much comment about the Chancellor’s commitment to extend VAT to fuel bills. That applies with a rate of 8 per cent. in the year starting 1994 and moves to the full rate in April 1995. The Chancellor made his position clear in his Budget speech. On Thursday, the Prime Minister told the House that there would be extra help for less well-off pensioners and other people on low incomes. They will get the extra help from next April before the higher fuel bills come in. That help will be additional to the future increases in pensions and other benefits which will take place automatically. Cold weather payments will also be adjusted to reflect increases in fuel costs.

    I was intrigued to read in The Observer that the Chancellor and I were engaged in a furious row on the subject. Apparently, I was furious that I had not been consulted. Perhaps I may say a word about the matter. I was consulted in an orderly way. I made no protest, for the simplest of all reasons—I shared the Chancellor’s judgment that it was necessary to raise taxes in the Budget.

    Of course any tax increases are likely to be difficult, but, frankly, I am not prepared to cop out of the difficult tax decisions on the most contemptible of arguments—that I agree with what the Chancellor is doing in principle, but I disagree with some specific examples of the difficult decisions which he must take. That is the sort of stuff of which Opposition arguments are made. That is the sort of argument which the Labour party relishes. Indeed, it is the sort of argument which keeps Labour Members pinned to the Opposition Benches.

    Why did not The Observer take the trouble to check the facts about this great row between me and the Chancellor? It cannot be because it did not know exactly how to get hold of me. That cannot be the case, because I received a telephone call from The Observer on Saturday wanting to take my photograph. The House will be delighted that I turned down that extremely generous offer. If the picture editor of The Observer knows how to find me, is it too much to think that the serried ranks of industrial and political correspondents somehow cannot manage the same trick—or were they frightened that, if they put to me the straight question, they would get the truth and the truth would deny them any sort of headline at all?

    I can see that this will be the revisiting of the inglorious past of the hon. Member for Livingston (Mr. Cook). This afternoon he will be in his element. If ever there was a story tailor-made for the hon. Gentleman, this is that story. There are millions of pensioners to frighten and spectres of ill-health and hardship to conjure up. The hon. Gentleman knows the arguments backwards, because, over the years, he has invented most of the arguments backwards. He is the seasoned practitioner on whom all those people out there will wish to make a judgment.

    In The Times of 14 December 1987, the hon. Gentleman described the Government’s intentions as to leave the NHS as a ghetto service for those who are too poor to afford anything better”. In The Times of 1 February 1989, he said of GP budget holders: For the first time, GPs will have an incentive to turn away patients with a high price tag, the elderly, the disabled and the chronically sick. In The Independent of 5 October 1990, he spoke of an NHS in which pensioners queue up for their operations in an end-of-season sale”. What happened? All the trusts are still in the public sector, and 1 million more patients are being treated than when the hon. Gentleman was making his statements.. The hon. Gentleman is a man with a record. He has been through it all before. He should be judged by how true it all turned out to be.

    I took a little time off last Wednesday to listen to the hon. Member for Dunfermline, East, and I am glad to welcome him to our deliberations today. Some of us had the privilege to watch him. He was at his most ferocious. Psychologically, the red flag was up—I see that it is round his neck today. Red blood was flowing all over the carpets as he ended his speech with these fighting words: There is no one left for this Government to betray; they have no credibility in this country. The electorate will never trust them again. If Britain is to have a new start, it will need a new Government—and that will be a Labour Government.”—[Official Report, 17 March 1993; Vol. 221, c. 298.] Trust a Labour Government! In September 1964, the Leader of the Opposition, Mr. Wilson, said: Over the period of a Parliament I believe that we can carry out our programme without any general increase in taxation. When that Government left office, they were collecting £2 for every £1 collected when their promise was made. In the same election campaign, the late George Brown—[Interruption.] Oh yes. Opposition Members may laugh now. I know that it is a long time ago, but it is a long time since we had a Labour Government. The reason why it is a long time is because the Labour party said these preposterous things and was found out.

    The late George Brown said: For new mortgages we have something in mind of the order of 3 per cent. By the time that Government left office, mortgage rates were 8.5 per cent. By the late 1960s we had the then Prime Minister, Lord Wilson, proclaiming on 17 April 1969: The Industrial Relations Bill is an essential Bill, essential to full employment and essential too for the Government’s continuation in office. On 18 June 1969, the Bill was withdrawn from the legislative programme.

    For those who are interested in the flights of fancy of the hon. Member for Dunfermline, East about trusting a Labour Government, what about all the bravura claim in October 1964: Labour will abolish poverty in Britain”? Six years later, the Child Poverty Action Group had sadly to conclude: in many ways the plight of poor families is now worse than when the Labour Government took office. Worse it was, worse and always it will be. Trusting the Labour party is not a matter of investing in risk. It is a matter of investing in certainty. All out. All up. All over.

    The hon. Member for Bolsover asked a question about coal. I recognise, as will the House, that there has been much speculation in recent days about the coal contracts. Some progress has been made in respect of the base contracts. Work has continued now through several weekends. I hope that I am about to be able to report on the position. I hope that I may be able to do that in the not-too-distant future. However, as I have said many times, I have no powers to make people sign contracts. In the meantime, I have agreed that British Coal can extend the redundancy terms until the end of December this year.

    Increases in productivity are often accompanied by falls in employment. We have had to face that problem in the coal industry over many years. But we are familiar with the general trend throughout manufacturing industry. Indeed, manufacturing employment peaked as far back as 1966. That phenomenon is not confined to the United Kingdom. Some decline in employment in manufacturing is evident in most industrial countries.

    Increased competition and continuing technical progress mean that many firms will reduce employment to stay competitive. That does not mean that those firms are in difficulties. Far from it. The vehicle industry in the United Kingdom is producing 300,000 more vehicles a year than 10 years ago, but it employs 100,000 fewer people. The paper, printing and publishing industries increased their output by more than a quarter between 1980 and 1991, but employment fell by 12 per cent.

    In many industries, successful firms are cutting jobs as they invest for the future to stay ahead of the competition. New firms and new businesses were the key to employment growth in the 1980s and they are undoubtedly the area of the economy to which we must look for new jobs in the future. We have been more successful in job creation than other European Community countries. The work force in employment grew by almost 1.5 million over the last economic cycle, between 1979 and 1990, so it is of critical importance that we recognise that every degree of support that we can give to new companies is most relevant to creating new jobs and new opportunities in our economy.

    The next matter of dramatic importance in what we seek to achieve and must achieve is support for our export companies. Our companies know that there is no such thing as a secure market. Overseas firms face the same pressure to win as we do. We are pushing forward with fresh initiatives to help exporters.

    Last November the Minister for Trade announced an export strategy to maximise our strengths and minimise our weaknesses. I have invited British companies to second to my Department 100 men and women to help us in the promotion of our exports. I am extremely gratified by the response that I am achieving. I believe that we shall have 100 such people by the summer of this year. That will give us experts with first-hand knowledge of overseas markets who will aim to identify and promote opportunities to help our companies to fulfil their potential.

    Mr. John Townend (Bridlington)

    I am sure that my right hon. Friend agrees that our exporters are doing a fantastic job, but is not the United Kingdom’s problem the fact that we import too much? Do we not have a cultural problem? A large part of the British buying public still believes that it is smarter or better to buy foreign, even when British goods are competitive and of the right quality.

    I give my right hon. Friend an example from my constituency. I represent more pigs than people. We produce the finest pigmeat in the world. British charter bacon is of top quality and is internationally competitive. Yet 50 per cent. of the bacon bought by housewives is from Holland or Denmark. Is not that a national disgrace?

    Mr. Heseltine

    I understand my hon. Friend’s anxiety. That is why I was delighted to notice the seminar which my right hon. Friends the Prime Minister and the Minister of Agriculture, Fisheries and Food, with leaders in both the retail and producing sectors of the food industry, held recently to address some of those difficult issues. As my hon. Friend says, that part of our economy is particularly important because it represents one of the largest deficits in our balance of trade.

    The Budget of my right hon. Friend the Chancellor of the Exchequer will help business build on the achievements of the 1980s. It will promote the economic recovery by providing concrete benefits for business and a stable framework for business decisions. His Budget has successfully combined three aims, at least two of which were widely said to be incompatible before he rose last Tuesday and showed how it could be done. His Budget has avoided damaging the inevitably fragile early stages of recovery; it has achieved a substantial improvement in the public finances into the medium term; and it has done all this while keeping inflation within clearly defined limits. All three aims, and especially the continued control of inflation, are of vital importance to business.

    We now hear less than we did two or three years ago about short-termism as a feature of our industrial and commercial life. To a large extent, this is because we have got inflation down, yet I do not doubt for one moment that deep-seated short-term attitudes are prevalent in our affairs; or that this is one important strand in understanding why we as a nation have performed less well than many of our competitors.

    Such attitudes have led us to invest less than we might in technology and advanced means of production. They have encouraged growth in companies by acquisition and financial engineering, rather than through organic development and building on products and markets. They have led us to place far too great an emphasis on comparisons of near-term financial results in judging our companies, instead of considering the strength of management and its underlying strategy.

    Those attitudes are all of a piece. They reflect much that is cultural, and they can be changed only slowly. But they have one great mechanism of reinforcement—inflation. Inflation is an evil which narrows the focus of attention into the short term. Inflation must be kept low in the years to come if our performance is to be improved. The Budget measures will reduce burdens on business by £1 billion in the year ahead. They will assist small and medium enterprises to do what they do best—create the wealth on which the rest of the country depends.

    Ms Liz Lynne (Rochdale)

    On that specific point, can the President of the Board of Trade say why the Chancellor did not introduce a statutory requirement to pay interest on late payment of debt? That would have helped small businesses considerably.

    Mr. Heseltine

    We have no doctrinal view on that measure, but there are many doubts about whether it would have the effect that the hon. Lady suggests. We have discussed the matter. My noble Friend Lady Denton has exercised significant influence on late payment of debts. There has been a substantial improvement in the rate of payment. Not the least reason for that is that the Government have paid their bills in a timely way and encouraged large companies to do the same. My noble Friend has made it clear that she will take up specific cases if they are drawn to her attention.

    Mr. Robert Sheldon (Ashton-under-Lyne)

    I wish it were true that Government Departments had been settling their bills promptly. The Public Accounts Committee took evidence from the Property Services Agency, which was only paying when it received payment, and I shall shortly be criticising that strongly.

    Mr. Heseltine

    I fully acknowledge the high position of responsibility that the right hon. Gentleman has in our affairs. If he has examples that my Department should explore, I assure him that we shall do so, as that is an important matter. We have tried to do what we can to speed up payments, but we are aware that a statutory process might not improve matters in the way that people think, and have therefore hesitated to move in that direction.

    For the second year running, no business will face a real increase in its rates bill. The package of value added tax measures introduced by the Chancellor will also be welcomed by every small firm. Finance for small businesses—a subject of great concern—will also be given a boost by the changes in premiums and loan size limits, under the small firms loan guarantee scheme. I have no doubt that my right hon. Friend the Chancellor has thrown a challenge to the banks. The Government have taken an initiative and it is now up to the banks to judge business plans and to make their loans in a way that will help businesses to grow.

    The changes to capital gains tax will encourage reinvestment by not penalising those who use their profits to start another business.

    I have referred to the need to help exporters. We are making available an additional £1.3 billion of cover for key markets. Together with the changes in the autumn statement that will mean that annual cover for United Kingdom exporters in priority markets will have increased by more than 75 per cent. in just four years. Premium rates have also been cut and are now more than 25 per cent. lower than in 1991–92. Those reductions will bring the average level of premiums charged in the United Kingdom down to around the average charged by the United Kingdom’s competitors.

    The Chancellor announced a special scheme in the Budget to help persuade foreign-owned companies to choose the United Kingdom as a location for international headquarters companies. The present advance corporation tax rules are an obstacle to their doing so. The new rules, which will be implemented next year, will remove that obstacle, which should attract new business to the United Kingdom, and bolster London’s role as Europe’s premier financial centre.

    I know that oil companies have always recognised the responsiveness and stability that our North sea tax regime offers. However, the petroleum revenue tax regime was introduced in 1975, with the last substantial amendment in 1983. In keeping the tax system under review, it was important to keep in mind the fact that the North sea was maturing as an oil province—new fields tend to be smaller, and older fields are gradually declining. The Chancellor has now reduced petroleum revenue tax from 75 to 50 per cent. for existing fields from 1 July 1993, and abolished the tax for future fields given development consent on or after 16 March. The Chancellor’s proposals move the North sea from a high-tax to a low-tax regime.

    Conditions for recovery are in place. The United Kingdom has the lowest inflation rate for 25 years; the lowest interest rates since 1977; and the lowest base rates in the European Community. Interest rates have fallen by nine percentage points since autumn 1990, knocking £11 billion a year off industry’s costs.

    We have a fiercely competitive exchange rate; a set of Budget measures to boost confidence and stimulate growth; and confidence is rising. The Confederation of British Industry, the chambers of commerce and the Institute of Directors show rising confidence in their surveys. Retail sales are at record levels; car sales are up sharply; manufacturing investment in the fourth quarter of 1992 was up by 5.5 per cent. on the start of the year; the increase in average earnings is the lowest for 25 years and we expect a further decline in the coming months.

    Rapid productivity growth means that United Kingdom manufacturing unit wage costs are lower than those in Germany or Japan, on recent OECD estimates, and they have fallen during the past 12 months. However, further pay restraint is vital to maximise the competitive advantages of sterling depreciation. This month’s fall in unemployment is welcome, but too much should not be read into one month’s figures, as the fall might not be immediately sustained and it may be some time before the underlying trend takes a downward turn. Unemployment is likely to be one of the last indicators to respond to any recovery in the economy.

    Exports and productivity are at record levels and Britain is moving ahead. British business now has clear advantages in competing in the rest of the world.

    Mr. Anthony Steen (South Hams)

    While I agree with all that my right hon. Friend is saying, does he agree that the rules and regulations affecting small firms prevent them from competing with other countries on that famous level playing field? Something needs to be done to reduce the number of rules and regulations affecting small firms. Can he tell the House what the deregulation unit is doing about future and existing regulations, which are preventing the recovery that small firms so badly need?

    Mr. Heseltine

    As my hon. Friend knows, we have started to review proposed regulations and those already on the statute book and are applying the review to domestic and European Community regulations. We have been fortunate in securing the services of Lord Sainsbury and those of various other chairmen and significant figures from the private sector, who have helped us to establish seven task forces, to consider the 7,000 existing regulations, which obviously create the climate in which industry has to operate. I shall report to the House as progress takes place.

    Mr. Peter Hain (Neath) rose——

    Mr. Heseltine

    I shall not give way.

    I assure the House that in all those ways the Government will play their full part to help the private sector in difficult circumstances.

    As I told the House in a recent debate, we live in a competitive world. As we export such a high proportion of our output, it is impossible to believe that we can operate as an island economy. We are broadly comparable with many economies in the world. During the past year industrial production has fallen by 2 per cent. in Italy, by 2.5 per cent. in France, by 6.5 per cent. in Germany and by 7 per cent. in Japan, but in this country industrial production has risen in that period.

    Japanese gross domestic product fell by 0.75 per cent. in the second half of 1992, output fell in France and Italy and there were three successive quarters of decline in Germany. Since 1981—the trough of the last recession—United Kingdom manufacturing output has risen by more than a fifth, manufacturing investment is up by nearly two fifths and manufacturing productivity by two thirds. Our export volumes are at an all-time high and by the end of 1990 there were about 400,000 more businesses operating in this country than in 1979.

    The underlying strength of our manufacturing base can also be seen from our ability to attract inward investment. In 1991, we attracted one third of all inward investment into the European Community.

    So, as we have said many times, despite the severity and length of the recession, Britain is in a strong position to take advantage of prevailing domestic and world economic circumstances. That can be done only by making this country’s economy competitive, which can be achieved only by the relentless grind on costs and the pursuit of improved quality.

    The Opposition are incapable of understanding those arguments, and view the British economy as an island apart from international pressures and the international marketplace. They keep peddling their view of an industrial strategy, which is simple and based on clear but irrelevant ideas: higher taxes to finance higher public expenditure; bigger training budgets; pushing up education standards; helping workers with statutory rights; and embracing the social chapter. They have pursued all those ideas in France, where their income taxes are higher and their education system renowned. They have extensive public ownership and have turned the social chapter into a Domesday book. What has happened under one of Europe’s most substantial socialist Governments? The people living under it are sick to death of what is happening.

    The French election result, if replicated in this country, would take a scythe to the parliamentary Labour party. It would be down to a rump of about 10 people; the impregnable Labour strongholds might be all that would be left if we had a Labour socialist Government. What would that Government look like? Perhaps the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) would be Foreign Secretary; the hon. Member for Rhondda (Mr. Rogers) would be Chancellor of the Exchequer; the hon. Member for Liverpool, Riverside (Mr. Parry) would be Home Secretary; and presumably there would be an early return to the Front Bench for the right hon. Member for Islwyn (Mr. Kinnock) as Secretary of State for Wales. We could count on the fact that the hon. Member for Bolsover would be there clambering on to any convenient barricade, searching for a starring role in “Les Miserables”. What a brilliant piece of casting that would be, but it would be casting in the world of make-believe. The Budget contains real policies for the real world; I commend it to the House.

  • Michael Heseltine – 1993 Speech on Manufacturing Industry and Unemployment

    Michael Heseltine – 1993 Speech on Manufacturing Industry and Unemployment

    The speech made by Michael Heseltine, the then Secretary of State for Trade and Industry, in the House of Commons on 9 March 1993.

    I beg to move, to leave out from ‘House’ to the end of the Question and to add instead thereof: ‘recognises the importance of the manufacturing base to the wealth creation process in this country; congratulates Her Majesty’s Government on setting in place the basic framework for economic recovery—low inflation, low interest rates, good industrial relations and a low tax regime—supported by measures in the Autumn Statement; applauds Her Majesty’s Government on its success in attracting more inward investment than any of the United Kingdom’s Community partners; acknowledges the widely reported signs of recovery in business confidence; recognises the unparalleled opportunities to help individuals to get back to work; and looks forward with confidence to the prospect of a return to sustained growth.’. It is not possible to overstate the trivialisation of the critical issues that the House is debating to which the hon. Member for Livingston (Mr. Cook) returns time and again. Everybody knows that the trading world—our major customers—has been experiencing a significant and prolonged recession. The political complexion of the Government of our trading partners makes no difference—whether it be America, which has gone through a very difficult period but is now recovering; Germany, which is now heading down; right-wing Governments; or France and Spain, which have considerable economic difficulties. No nation broadly the equivalent of our own has been able to stand apart from that recession process.

    As the House knows full well, with a nation such as ours, which has such a high proportion of its gross domestic product exported, it is utterly naive and totally irresponsible to try to give the impression that somehow this country’s economy can stand apart from the impact of that recession across the world.

    It is characteristic of the systematic policy of the hon. Member for Livingston of undermining this country that he seeks to parade our problems as uniquely British and uniquely related to the late 1980s. The hon. Gentleman has become one of industry’s greatest salesmen. The problem is that it is the industrial interests of France, Germany, America and Japan that he is selling—and selling at the expense of British industry, British investment, and British jobs.

    In the emotional end to his speech, the hon. Gentleman drew our attention to the problems of Leyland DAF. I will apologise to no one for the concern that we share for the problems of Leyland DAF. The hon. Gentleman totally fails to understand that the Dutch and Belgian Governments had to act so quickly because under the rules of receivership in those countries, it is not possible for the receiver to use money that is the product of the business. Instead, the receiver must look for outside funds. In this country, the receiver can use the funds of the business to keep it in existence.

    A British bank provided the money that enabled the receiver to continue the activities of those businesses, whereas the hon. Gentleman’s contribution to the position taken by the British banks was to suggest that they had pulled the rug from under Leyland DAF. There he was again, undermining the British banks—just as he undermines British industry.

    The most dispiriting aspect of today’s debate is the wording of the Opposition motion. It contains not a word of praise for British companies, and no recognition of a single person out there who is selling, manufacturing, marketing or exporting to help Britain to win. Nothing at all—except the carping, whingeing criticism of the hon. Member for Livingston, whose closest experience of the entrepreneurial society was his role as campaign co-ordinator in 1985, when he tried to sell the Labour party to the British people—and laid the foundations for the second worst defeat in the party’s history. The hon. Gentleman’s capacity to exploit the electorate’s fears in the search of profit for the Labour party is utterly staggering.

    There are no credible policies left for the left. I reject absolutely the gross distortion of the 1980s that the Opposition motion parades before the House, because it is not true. It is not true to say that our manufacturing industry is collapsing. Despite the recession, output remains more than one fifth higher than at the bottom of the last recession in 1981. [HON. MEMBERS: “Oh!”] The only fair comparison is to take the bottom of a recession with the bottom of a recession, the top of the peak with the top of the peak.

    Investment is more than one third higher, productivity is two thirds higher, and exports are four fifths higher.

    Mr. Michael Brown (Brigg and Cleethorpes)

    Does my right hon. Friend recall that, in the early 1980s, south Humberside suffered massive structural unemployment from the decline in the fishing and steel industries? Will my right hon. Friend share with the House and with the hon. Member for Livingston (Mr. Cook) his visit to my constituency just 10 days ago, when he performed the topping-out ceremony for the new Kimberly-Clark factory, which has £12 million of DTI finance, and at which 700 people will be newly employed with effect from next year, rising to 2,500? Is it not the case that unemployment in my constituency has fallen from about 6,000 in 1987 to 4,500 and that it is now below the national average? Is not that an example of the achievements of the regeneration of British industry?

    Mr. Heseltine

    That is what I call speaking for England. [Interruption.] I am certainly not prepared to share my experience of visiting my hon. Friend’s constituency with the hon. Member for Livingston, who would be embarrassed to hear of the success that we saw there.
    Much more important, the motion reveals how little the Labour party understands the achievements of the past decade—how little it understands the realities of world competition, or the degree of change that the 1990s will continue to demand. Let us remember—although it is a sickening prospect—the end of the 1970s. Then, this country had a reputation as the sick man of Europe. We had been losing our share of world trade in manufactured goods for 30 years, and probably longer; we were overtaxed, and we were over-nationalised. We had failed to regenerate our small industrial and commercial companies, we had inadequate training, we were under-educating our children and we were gripped in an inflationary spiral.

    To make matters worse, we had an appalling industrial relations record. Our managers could not manage: they faced strikes in their own factories, in the factories of their suppliers and in the public services. In the starkest terms, British industry was uncompetitive. That was the inheritance that our party came to deal with in 1979.

    Today, all that the hon. Member for Livingston can say, half apologetically, is, “I had my doubts about the record of the last Labour Government.” At least I said what my doubts were when I was on the Back Benches; it took the hon. Gentleman a long time to work out what his were.

    Dr. Keith Hampson (Leeds, North-West)

    Does my right hon. Friend recall that, at the very end of the 1960s —after a long period of Labour government—Michael Shanks, the guru of the Labour party, published a Penguin book called “The Stagnant Society”? That book bore true testimony to Labour’s period of office.

    As my right hon. Friend may have noticed, the hon. Member for Livingston (Mr. Cook) completely ignored the underlying legacy with which British industry was faced: the appalling reforms forced on our school system during that period of Labour Government and the fact that the proportion of 18-year-olds in higher education had fallen under Labour—the only time since the war when it had done so.

    Mr. Heseltine

    My hon. Friend is absolutely right to point out Labour’s critical failure to improve our education standards.

    In 1979, the problems that we faced were deep seated and long term. In large measure, they were a deliberate consequence of the Labour party’s policies. We always made it clear that the Labour party, its policies, its manifestos and its dogma were a disaster; now, even Labour itself has come to recognise that those policies are a disaster. The party leader himself has realised that change must come, simply because his party’s policies have proved to be a disaster. The problem for him is that his party now thinks that he is a disaster as well.

    Mr. Malcolm Chisholm (Edinburgh, Leith)

    Will the Secretary of State give way?

    Mr. Heseltine

    No.

    How can the hon. Member for Livingston possibly have the nerve to come to the House and lecture us on industrial policy, when the whole House knows that the closest thing to an industrial policy in the Labour party is an apology for the past and a promise that it will not do the same all over again?

    Let me set the 1980s in context. I shall begin wall industrial relations. Labour resisted every step of reform as it fought to preserve the privileges of the trade unions which provided its funds. What is the result? The result is that this country has the best industrial relations for 100 years.

    Then there is privatisation. There was never a policy more calculated to destroy the motivation and resilience of an industry than the policy of transferring that industry’s ownership to the state. In state hands, industries are subsidised by taxpayers, suffocated by political and bureaucratic control and denied the chance to compete overseas. Their investment programmes are curtailed to meet the public expenditure constraints of the national Government. That was our inheritance—and the greatest single justification for all the criticisms that we have made over the years is the fact that Labour now has not the nerve to say that it will ever introduce nationalisation again.

    So unaware is the hon. Member for Livingston of the damage that nationalisation did to this country that he points to my Department’s budget which has been cut. Why has it been cut? Because the losses of the nationalised industries have been turned into the profits of the privatised industries. What are those industries doing? I will tell the House what they are doing.

    Mr. Chisholm

    Will the Secretary of State give way?

    Mr. Heseltine

    In 1979—

    Hon. Members

    Give way.

    Mrs. Alice Mahon (Halifax)

    On a point of order, Mr. Deputy Speaker. Is it not customary, and polite, for Ministers to give way to Back Benchers?

    Mr. Deputy Speaker

    It is entirely up to the Member who has the Floor to decide who to give way to.

    Mr. Heseltine

    I am, as a matter of custom, always polite. I will give way to the hon. Member for Halifax (Mrs. Mahon).

    Mrs. Mahon

    I thank the right hon. Gentleman. He will remember Mr. Catton, from Eliot Machine Tools in Halifax, who wrote asking whether he could intervene when Customs and Excise—quite wrongly—fined the firm. It is struggling in the present climate.

    That happened just after the right hon. Gentleman made his speech about intervening before breakfast, dinner, tea and so forth. Will he now tell us why he wrote back to Mr. Catton saying that he could not possibly intervene? The company has now had to be taken over.

    Mr. Heseltine

    As I am sure the hon. Lady knows, if Customs and Excise pursue outstanding bills, that must be a matter for them. It would be utterly wrong for Ministers to interfere with the course of their legal processes. [Interruption.] This is a novel development. The Labour party clearly believes that it is right for Ministers to intervene in the course of justice. That is a chill warning of what we might expect if it ever returned to power.

    I was speaking of the transformation of the loss-making nationalised industries. In 1979, those industries cost the Exchequer £3 billion, some 1.5 per cent. of gross domestic product. Last year, the privatised industries paid £2 billion in taxes. That is why my Department’s budget has changed so dramatically.

    Moreover, those companies—now in the private sector—are out in the world trading place, winning contracts for Britain. In 1982, the United Kingdom produced 14 million tonnes of crude steel and exported 3 million tonnes of finished steel. Last year, we produced 16 million tonnes of crude steel and exported 8 million tonnes of finished steel. We now have a trade surplus of about 3 million tonnes, compared with a deficit in 1982. Not the least reason for that is the fact that British Steel now produces a tonne of steel in under five man hours, compared with over 13 in 1979.

    Many of the privatised industries tell a similar success story. We do not hear about that from Labour.

    Mr. Chisholm

    Will the right hon. Gentleman give way?

    Mr. Heseltine

    No, I am not going to give way. I am going to tell the House how well the privatised industries are doing. British Gas, in partnership with Agip—[Interruption.]

    Mr. Deputy Speaker

    Order. The hon. Member for Blyth Valley (Mr. Campbell) must not half get up and shout across the Chamber. [Interruption.] Order. The hon. Gentleman has been in the House a long time.

    Mr. Heseltine

    That is characteristic of Opposition Members. All that I want to do is to parade before the House the success of British companies. All that the Opposition want to do is to make sure that nobody listens.

    Mr. Chisholm

    Will the right hon. Gentleman give way?

    Mr. Heseltine

    No, I am not going to give way. I am going to explain to the House the success of British companies. I do not mind how much the Opposition like or dislike it—I am going to do it.

    British Gas, in partnership with Agip, is investing over £4 billion in the next 10 years on the exploration and development of a huge new gas field in Kazakhstan. British Telecom is now one of the world’s foremost telecommunication companies. Last year, it won a contract worth £350 million to run a telecoms network for the New South Wales Government.

    Mr. Chisholm

    On a point of order, Mr. Speaker. I have been in the House for about a year, and I seek your guidance. When I was elected to this place I thought that I was coming to a debating Chamber. Can you please tell me how I can turn this House into a debating Chamber? I have never seen anything like this throughout the past year.

    Mr. Deputy Speaker

    The House is in order. We are having a fulsome debate.

    Mr. Heseltine

    The problem, Mr. Deputy Speaker, is that there have to be two sides to a debate, but the Opposition have no case to make.
    Thames Water, as part of a consortium, has won a £448 million Turkish water plant construction contract. Instead of monopolistic Government ownership, in addition to the profits and the contracts, there are now some 9 million individual shareholders—three times the number there were in 1979. The privatisation programme was the second major change that was brought about in the 1980s, to the immense benefit of the national economy.

    My responsibilities include one of the last of the nationalised industries. The hon. Member for Livingston referred to the coal review. I have always made it clear to the House that there are no easy solutions to this intractable set of problems.

    At the end of January, the Trade and Industry Select Committee produced its report on British energy policy and the market for coal. I pay tribute to the amount of detailed work that the Committee put into its report. The Government will publish their detailed response shortly. [HON. MEMBERS: “When?”] The Select Committee has recognised that the central issue is the market for coal. It makes no sense for British Coal to continue to produce coal that no one wants to buy.

    The stark facts are these. Over 30 million tonnes of coal are stocked at the generators. Over 10 million tonnes are stocked at the pithead. There is enough coal for the rest of this year without another tonne being mined. Well over £1 billion of coal is stocked in mountains that get bigger with every shift that is worked.

    The Select Committee’s central conclusion is that it should be possible to find a market for an additional 16 million tonnes of deep-mined coal in each of the next five years. It suggests that the Government should require the generators to contract for an additional 5 million tonnes on top of that.

    The Select Committee is right to see the size of the market as the central issue. It estimated total electricity demand in England and Wales over the next five years as equivalent to 586 million tonnes of coal. Caminus, the consultants who advised my Department and whose report I have published, puts the figure at only 565 million tonnes. British Coal puts it lower still—at 563 million tonnes. These differences may seem small, but they remove one quarter of the additional market of 80 million tonnes which the Select Committee believes that it has identified.

    No one can predict with accuracy the precise scale of a market five years ahead. The Select Committee’s figures are at the very top of the range. The critical question that we face, therefore, is the extent to which private sector companies will contract for coal. Those companies will form their own judgment about the size of the market.

    The fuel mix is equally important. I note that the Select Committee had considered carefully the extent to which the market for coal could be increased by interfering with gas or nuclear. I have noted with interest that the Select Committee has come out against that. This has no doubt been greeted with relief by many hon. Members’ constituents whose jobs would be put at risk. I have said it before and I shall say it again: we cannot interfere to protect jobs in one part of the economy without losing jobs and investment elsewhere.

    One of the most attractive of the Select Committee proposals to many hon. Members is to restrict electricity supplied from France via the French interconnector. I have looked into that issue extremely carefully. I myself shared with the Select Committee the concern to examine again the extent to which the scope for additional sales of coal rests upon reducing imports of electricity. I have also taken legal advice on the matter, a summary of which I intend to make public.

    The position is clear. As I am sure the right hon. Member for Chesterfield (Mr. Benn) will remember, measures to restrict imports of electricity across the interconnector would be contrary to article 30 of the treaty of Rome. It would also put the Government at considerable financial risk in relation to indemnities given at the time of electricity privatisation and reported to the House.

    The effect of removing Electricité de France’s non-leviable status, as the Select Committee recommends, would be highly uncertain and may lead to EDF being allowed access to the same premium prices available to Nuclear Electric and financed through the levy. The regional electricity companies would in turn have to be put under an obligation to purchase electricity from EDF. Far from reducing imports from France, this would reinforce their position, and our consumers would end up paying more for their electricity.

    I therefore have to tell the House that the proposal by the Select Committee to reduce the amount of electricity coming across the interconnector from the present 6.5 million tonnes of coal equivalent to zero, or anywhere near that, is not an option, but we are still looking at whether anything might be done. To this end, my hon. Friend the Minister for Energy will go to Paris tomorrow to follow up the conversations that we have been conducting with the French Government.

    Dr. Michael Clark (Rochford)

    Will my right hon. Friend give way?

    Mr. Heseltine

    No, not at the moment.

    I now turn to the suggestion that the additional tonnages that the Select Committee believes that it has identified can be purchased through a subsidy at a total cost of £500 million. This is intended to reflect the difference between British and world prices. It is an interesting approach. The Select Committee suggests that this could be achieved at a cost of no more than £5 per tonne, but I regret that I cannot agree with the Select Committee’s assessment of the likely costs. I am continuing to discuss these matters with the generators.

    Finally, I turn to the proposal that we should legislate to require the generators to take coal at a price and in a quantity that they would judge to be against their commercial interests. I have to say, at least to my hon. Friends, that this is not an attractive proposition. I have never hidden my regard for the immense amount of work that the Select Committee undertook, but many intractable problems remain to be resolved. The Government have to weigh all the consequences. I expect to set out the Government’s reply to the Select Committee and to publish the White Paper shortly.

    Dr. Michael Clark rose—

    Mr. Heseltine

    I give way to my hon. Friend.

    Dr. Michael Clark

    I am grateful to my hon. Friend for giving way. Of course, the detail of the Select Committee report will be debated at another time, but my right hon. Friend referred to the legal position on importing electricity from France—we shall consider that matter later—and I therefore invite him to consider the legal position on our using the French grid system, within the Common Market spirit of good will, to export electricity to Italy and Spain. If that does not happen, the French will have the prerogative to export electricity to us while we are denied the opportunity to export to France and Spain, because the French will wish to keep that market, too.

    Mr. Heseltine

    My hon. Friend is well informed on such matters. I assure him that my hon. Friend the Minister for Energy will discuss that and a range of other matters with the French Government tomorrow. I also reassure the House that there have already been consultations and discussions with the French on that matter.

    Mr. Malcolm Bruce (Gordon)

    To take up the point of the hon. Member for Rochford (Dr. Clark), does the President of the Board of Trade accept that nobody suggests that we should terminate the interconnector with France or reduce its use—certainly the Select Committee does not suggest that? The suggestion is that it should be operated as was intended in the first place, as a two-way exchange of electricity, which provides us with a market that would substitute up to 6 million tonnes of coal equivalent a year. Does the right hon. Gentleman accept that he is being asked simply to negotiate free and fair trade rather than allowing the French to have it all their own way?

    Mr. Heseltine

    I am sure that the hon. Gentleman will wish to consider the point that he is pursuing in the light of the legal advice about the exact position. The contracts are long standing and subject to the law. The hon. Gentleman will want to consider the matter further.

    I will go back to what I was saying, dealing with the record of the 1980s—

    Mr. Andrew Mackinlay (Thurrock)

    Will the right hon. Gentleman give way?

    Mr. Heseltine

    Is it about coal?

    Mr. Mackinlay

    No, it is about the fact that the right hon. Gentleman is going backwards.

    Mr. Heseltine

    No, I shall not give way. I must make progress.

    Mr. Derek Enright (Hemsworth) rose—

    Mr. Heseltine I must now make progress.

    A critical component of a healthy economy is the vibrancy of the small and medium-sized company. Today at last, Britain is generating small and medium-sized businesses. When the Government were elected in 1979, there were 1.75 million of them; today there are 1 million more, which grew and developed in the 1980s. Even during the recession of 1992 about 400,000 business start-ups took place.

    Why did that happen? It happened because we changed the tax regime to enable it to happen. Changes in corporation tax, in inheritance tax and in income tax made it pay to invest, to hold on, to take risks and to start businesses. It left discretionary wealth in the hands of people who were prepared to invest it in the enterprise culture. It is from the small and medium-sized company sector of the economy that jobs come.

    The hon. Member for Livingston made a great deal of the issue of unemployment—but let us consider the facts. Let me remind him that, over the last economic cycle, in 1979–90, the work force in employment grew by 1.5 million, twice as fast as in the rest of the EC. Even in recession, employment now is almost 1.5 million higher than it was 10 years ago. We still have a higher proportion of the adult population in work than almost any other European country.

    Mr. MacKinlay rose—

    Mr. Heseltine

    Let me put the heart of the matter to the hon. Member for Livingston. Has he any idea of the dilemma that our companies face? When he visits large companies, does he ever even look to see the changes that are there staring him in the face? He can walk round any company and ask any management; he can talk to the people employed there. There will be only one story, one explanation, one option. Fewer people are employed, in the drive for those companies to survive in an ever more competitive marketplace. Fewer people are employed as investment—the very investment that the hon. Gentleman keeps talking about—replaces people’s jobs.

    For example, we are producing 300,000 more vehicles a year than we were 10 years ago—but 100,000 fewer people are employed in the industry producing them.

    Mrs. Angela Browning (Tiverton)

    Although I have been in the House only for a few months, I worked in business for the previous 18 years, 15 of which—during the 1970s and 1980s—I spent selling the products of British manufacturing industry against the competition. I totally support what my right hon. Friend says about the competitiveness of British manufacturing industry. Is he aware that only last November the shadow Chancellor said in The Guardian that in Labour’s view the public sector would be the engine of growth? How out of date can the Labour party get?

    Mr. Heseltine

    My hon. Friend makes a telling point. Let me add to it: the other day the shadow Chancellor, looking at the success of the privatised utilities, argued that there should be a windfall tax. The Labour party does not have the money to renationalise businesses, so now it wants to tax them into subjection. It is the old story—when Labour Members see success they want to tax it—before breakfast, before lunch, before tea, and before dinner. Then they get up the next day and start taxing it all over again. That is when Labour Members are really happy, destroying success at every turn, every day, all the time.

    It is our duty to tell companies that they have our support in the battle to survive, even if that means telling the people the truth about the nature of change and the process of moving from job to job. Let us be clear—

    Mr. Mackinlay

    Will the right hon. Gentleman give way?

    Mr. Heseltine

    No, I shall not give way.

    The Government strategy is clear.

    Mr. Mackinlay

    What about the south-east?

    Mr. Heseltine

    What about a bit of silence, for a minute?

    We must set the conditions for growth and pursue competitiveness over the whole range of Government policy. That means low inflation, low interest rates, a competitive pound and support for exports, higher education, research and development and for training.

    Now I come to the next great success of the 1980s. The United Kingdom received one third of all inward investment into the EC in 1991. We have 41 per cent. of Japanese inward investment and 36 per cent. of the investment from the United States. It has been estimated that inward investment in 1991–92 created 23,000 jobs and safeguarded 29,000 more. That is success on a massive scale and the Labour party would do well to remember it.

    Several Hon. Members rose—

    Mr. Heseltine

    The hon. Member for Livingston called for an industrial strategy—

    Mr. Mackinlay

    Will the right hon. Gentleman give way?

    Mr. Deputy Speaker

    Order. I should be most grateful if the hon. Member for Thurrock (Mr. Mackinlay) would recognise that the Secretary of State is not giving way. [HON. MEMBERS: “He is frit.”] That may be hon. Members’ view, but the Secretary of State is not giving way to the hon. Member for Thurrock.

    Mr. Heseltine

    The hon. Member for Livingston called for an industrial strategy. What is the cornerstone of that strategy? It is to impose the social chapter of British industry. Spain, under a socialist Government, has 18.3 per cent. unemployment; companies are leaving France to bring jobs here, away from a socialist Government; German industrialists are shifting manufacturing to central Europe; as a result of the Maastricht treaty, Britain has the opportunity to attract inward investment on a growing scale. We now have the chance to restore the manufacturing base that the Labour party did so much to erode over 40 years—and what is Labour’s policy? It is to impose the social chapter.

    Jacques Delors says that Britain can be a paradise for Japanese investment. Good. Today, not tomorrow, please. And thank you.

    The Labour party says that it has changed; it will never change—because change requires courage, guts and vision. Change requires the will to stand up to vested interests and the Labour party is nothing except the representative of—

    Mr. Jimmy Boyce (Rotherham)

    On a point of order, Mr. Deputy Speaker.

    Mr. Deputy Speaker

    Order. I am sorry to stop the President of the Board of Trade in full flow, but there is a point of order.

    Mr. Boyce

    On a point of order, Mr. Deputy Speaker.

    Mr. Deputy Speaker

    Is it for me?

    Mr. Boyce

    Yes, it is. I wonder whether the President of the Board of Trade could—[Interruption.] Would you be kind enough to ask the President of the Board of Trade to lower his voice a couple of octaves because we can hear his ranting through the microphones on this side of the House at the same time as his ranting from the other side of the House?

    Mr. Deputy Speaker

    Neither the content nor the volume are the responsibility of the Chair.

    Mr. George Howarth (Knowsley, North) rose—

    Mr. Deputy Speaker Order.

    The hon. Member only came into the Chamber a few minutes ago and he has been leaping up and down ever since. He must resume his seat.

    Mr. Heseltine

    I hope, Mr. Deputy Speaker, that I have not offended you by the scale of my voice. I tend to adjust the volume depending on the penetration of the Opposition that I must make.

    I think that the House will wish me to extend a note of sympathy to the hon. Member for Livingston, because the 829disaster scenario to which he clings becomes less credible every day. Survey after survey shows confidence and recovery. The latest surveys by the Confederation of British Industry and the Institute of Directors show that British business knows that the recovery is coming and is under way. The surveys all have the same message—that Britain is moving ahead.

    In the three months to January, retail sales were 1.5 per cent. higher than a year earlier. In February, car registrations were 16 per cent. higher than the year earlier. In the fourth quarter of 1992, manufactured exports were at record levels, excluding oil and erratics, and were up 6.5 per cent. on a year earlier, and manufacturing investment was 5.5 per cent. up on the start of the year.

    The poor old hon. Member for Livingston is stuck where he was a year ago—he is the only person whose performance has not improved during the past 12 months—when he was talking about health service trusts. The Opposition—led by the hon. Member for Livingston—engaged in a scandalous campaign and exploitation of public concern about the national health service. Yet what has been the Government’s record under their stewardship of the NHS? More than 1 million more patients are being treated.

    The hon. Member for Livingston is now in the business of undermining British industry, but let me tell him that British industry is already making a commendable job of undermining him. I hope that the House will finish the job tonight and will support the Government.

  • Michael Heseltine – 1993 Statement on DAF Trucks

    Michael Heseltine – 1993 Statement on DAF Trucks

    The statement made by Michael Heseltine, the then Secretary of State for Trade and Industry, in the House of Commons on 2 February 1993.

    The Government have been disappointed to hear about the financial problems facing the Dutch-based company DAF NV, which today filed for a legal moratorium on its debts. We are concerned about the implications for its United Kingdom operations.

    I regret that it has not been possible for the company and its bankers to put together a satisfactory restructuring package. We have kept in close contact with the company and with the Bank of England, which has been closely involved in trying to help the relevant United Kingdom banks come to an agreement with their Dutch and Belgian counterparts, which have led the consortium. The United Kingdom banks have done all that they were asked, but unfortunately not all the other banks have felt able to agree an acceptable financing package with the Dutch and Belgian Governments.

    The legal position of Leyland DAF should be clarified this afternoon. We have not participated directly in the discussions on the financial restructuring, as that primarily related to the company’s Dutch and Belgian activities.

    The Government stand ready to work closely with Leyland DAF, the receivers, banks and other interested parties to mitigate, as far as possible, the impact on United Kingdom jobs. We hope that it will prove possible for all those involved to find a means of creating a business with a long-term commercial future out of at least part of DAF’s United Kingdom operations.

    While regretting the particular circumstances affecting Leyland DAF, we must remember that the United Kingdom vehicles sector has made excellent progress during the past few months. In the midlands alone, Rover recently announced a 5 per cent. increase in output for its four-wheel drive vehicles in 1992 and a new £9.5 million fleet deal; Jaguar will be launching a £560 million investment plan on the back of a sharp rise in sales in the United Kingdom and the United States markets; and Lucas is to build a new £3.7 million factory, creating 350 jobs. We must continue to build on those extremely encouraging prospects.

    Mr. Cook

    Will the President of the Board of Trade précis his answer by confirming that, when I asked what Government assistance may be available, the answer that we got today was that there will be none for Leyland DAF? Is he aware that the news that he has just confirmed is another bitter blow to Britain’s shrinking industrial base? Will he try to understand that it is not enough to express disappointment for the work force, as he did today? The work force, who face the loss of their jobs, want to know what he is going to do to help save them.
    Will the right hon. Gentleman remember that he prefers to be known as the President of the Board of Trade? Does he know that Leyland DAF is the leader in the British truck market? If that market share goes on imports, how many more millions will it add to the trade gap? Will he remember that he is the Minister responsible for regional policy? What help will he offer the communities whose local economy will be devastated if those factories and their suppliers close?

    Will the right hon. Gentleman remember that he promised to intervene before breakfast, before lunch and before dinner? Why did he not intervene to stop that major British company going into receivership?

    Why is it that the Belgian and Dutch Governments were willing to underwrite the loans that would secure the company’s future but not the British Government? Why did the British Government not support that rescue package by underwriting it?

    Will the right hon. Gentleman accept that, as advised this afternoon by DAF, the minority who wrecked the deal in the banking consortium were all British banks—NatWest, Barclays and Lloyds? Why has he not had talks with them to press them to take the longer view of the Dutch and Belgian banks who want to rescue, not close, the plants?

    Today 5,500 people face the prospect of redundancy. When they hear the Government talk about recovery, it must sound like a Government who do not know what is happening in the real world. Will the President of the Board of Trade do them the justice of now admitting that Britain faces a real industrial crisis and needs an industrial strategy that tackles it?

    Mr. Heseltine

    The hon. Member practises his usual technique of undermining any British company or institution. He would have done well to read the press release put out by DAF, a copy of which I have. Perhaps I can quote from it in dealing with the serious allegation that the hon. Member made: However, both Governments”— that is, the Dutch and Belgian Governments— have informed the Board of Management of DAF N.V. that they consider a further delay in a final decision on the restructuring and long term financing proposals to be unacceptable … I do not understand how, faced with that public information, the hon. Member can suggest that the British Government have been dilatory in performing their duties. Nor do I understand how he can name and single out three British banks which, he says, did not co-operate without, as far as I am aware, one shred of evidence to substantiate the charge. Does he understand the damage that he does to British banking interests by so careless a use of language?

    The Labour party might have learned from its experience in putting hundreds of millions of pounds through the National Enterprise Board into the motor industry when it suggests handing out short-term working capital to a company of this sort that such action is unlikely to solve the problems that it ought properly to address. Will the hon. Member realise that my Department has done all that has been asked of it by the company itself? We have been in touch with the company, and it has made no specific request to us for specific financial aid of the sort that we are discussing today. We have been in touch with the Bank of England, and we know that it has been in touch with British banks.

    All the hon. Member seeks to do is to make mischief out of a very difficult situation. He also fails to understand what receivership is about. There is every reason to hope that at least some of these jobs can be saved. What now must happen is an orderly process of analysis so that other people in the market can make offers for parts of this company in order that there can, we hope, be a viable commercial opportunity for those parts of the business that can stand competitive strains.

    Mr. Den Dover (Chorley)

    Will the Secretary of State confirm that in Chorley and Leyland in Lancashire there is purpose-built accommodation, a test track for vehicles, a major assembly plant for vehicles which is the largest in Europe, and Multipart office and warehousing? Will he also confirm that the labour force in Lancashire is one of the hardest working, best qualified, most skilled and most co-operative and, therefore, looks forward to constructive discussions?

    Mr. Heseltine

    I know that my hon. Friend the Member for Chorley (Mr. Dover) and my hon. Friend the Member for South Ribble (Mr. Atkins) have been extremely energetic in making sure that the best interests of their constituents were drawn to our attention. I am delighted to confirm the references that my hon. Friend made to the work people of Lancashire. I am equally delighted to know that, while national average unemployment is 10.5 per cent., in the travel-to-work area of Preston it is 7.9 per cent.

    Mr. Terry Davis (Birmingham, Hodge Hill)

    Is the Secretary of State aware that the Leyland DAF van factory in Birmingham increased its production, its sales and its market share last year in spite of the reduction in the market as a result of the recession, that 2,000 people work at that factory in my constituency, and that the factory has been forced to stop production this afternoon because suppliers have stopped deliveries, putting even more thousands of jobs at risk? Is the right hon. Gentleman aware that the factory has, in turn, been forced to stop its deliveries, including those of components of the Range Rover—the four-wheel drive vehicle mentioned by the Secretary of State—so putting yet more jobs at risk?

    The Dutch and Belgian Governments have been engaged in direct talks with the banks in an attempt to save jobs in those countries. Why will not the British Government talk to the banks to attempt to save British jobs and avoid an industrial disaster?

    Mr. Heseltine

    I fully understand that the hon. Gentleman is deeply concerned about the large number of jobs that will be affected in his constituency. I can only repeat what I said in my first reply: my Department has been absolutely satisfied that the British banks and the Bank of England have been fully engaged in the necessary dialogue. It is now a matter of the administrators, the receivers and management of the company working out proper arrangements to secure, where possible, commercially viable jobs within the DAF organisation. That will not be helped by exchanges across the Dispatch Boxes of the House of Commons based largely on inaccurate allegations from the Labour party. We must let the receivers do their job. Jobs may well be saved as a result.

    Mr. Iain Mills (Meriden)

    Does my right hon. Friend recognise that many of my constituents live near the factory in Birmingham and, like the constituents of Opposition Members, have contacted me as they are greatly concerned about both the direct effect on their jobs and the indirect effects on the many component suppliers? Will he give me an assurance that he will do everything possible to facilitate a quick solution, whether partial or total, to the problem? The workers have literally been presented today with a closure.

    Mr. Heseltine

    I give my hon. Friend an unqualified assurance of the sort that he requested. My Department has kept in touch with DAF over this difficult period and will certainly continue to do so. Any proper assistance that we are able to provide we will provide.

    Mr. Roy Hattersley (Birmingham, Sparkbrook)

    If, as the Government claim, the recession is at last gradually coming to an end, how can it make sense to allow the collapse of a company which, when recovery comes, would make a substantial contribution to our balance of payments? The Secretary of State will recall that he said to my hon. Friend the Member for Livingston (Mr. Cook) that no request had been made to the Government for immediate emergency support to see the company through its difficulty. Were such a request to be made, what would the right hon. Gentleman’s answer be?

    Mr. Heseltine

    I think that the right hon. Gentleman will realise that the company has been seeking a solution to its difficulties over a significant period. Were there to be a request for the short-term working capital which is, as I understand it, at the heart of the dilemma today, such a request could be put to my Department by a myriad different companies in the motor industry and many others. It would be extremely difficult to find any argument that I could deploy for providing taxpayers’ support for working capital for one company to enable it to compete more effectively with other British companies in the same industry that produce competitive products.

    The second issue involves the development of an alternative product to the van, which is the principal product line of the DAF organisation in the midlands. That issue was discussed with my Department before the last election, when figures of the order of £450 million were suggested as the possible investment needed to deal with the long-term programmes. We made it clear that we could not contemplate a project of that sort. Under the regional assistance that my Department is entitled to provide, the maximum amount available would be £18 million. The House should understand that we are either talking about subsidising short-term losses and the implications of that for a wide number of companies in this country or we are talking about dramatically large investment capital projects, and the House having to decide why we should invest in one company when a range of other companies which have invested their own capital are surviving in the marketplace.

    §Mr. John Butcher (Coventry, South-West) I congratulate my right hon. Friend on resisting the ghosts of Upper Clyde Shipbuilders. My right hon. Friend is aware of the large implications that this has for the engineering industry generally in the west midlands. Will he reassure me that he will place his office at the disposal of private sector bidders, who may be involved in quite complex negotiations across the North sea, in order to expedite such negotiations, whether purely British companies or British companies in alliance with European companies, so that we may have a speedy solution?

    Mr. Heseltine

    I welcome my hon. Friend’s constructive approach, which is precisely the approach that is likely to bring the best possible outcome for the large numbers of people employed by DAF and for the viability of the separate component parts of that organisation.

    There is no question but that in Leyland in Lancashire there is a modern factory with order books for an important product, and one hopes that there will be alternative owners and capital for that product. It must also be self-evidently the case that the products sold by the company over the years leave considerable demand for spare parts which, again, must offer potential jobs in some companies based on what we have here today. But none of this can be dealt with without a detailed set of negotiations conducted by the receivers in the calm atmosphere that is essential to constructive progress.

    Mrs. Audrey Wise (Preston)

    Is the Secretary of State aware that compliments to highly skilled, hard-working workers will not be well received unless they are accompanied by some action? The right hon. Gentleman is apparently willing for taxpayers’ money to be used to pay unemployment costs rather than invest in maintaining them at work. He casts scorn on short-term capital investment. Why does he not then find some long-term solutions to prevent the 2,500 workers in the Preston-Leyland-Chorley area from being put on the scrap heap? If the right hon. Gentleman is so scornful of short-term solutions, who does he not look for long-term solutions?

    Mr. Heseltine

    The hon. Lady should have more faith in the quality of the work people and the quality of the product in Leyland. She would do well to remember that her party has indulged in massive long-term investment in the automobile industry with scant benefit to show for it.

    Sir Giles Shaw (Pudsey)

    My right hon. Friend will be aware that this company was set up by his predecessors in office at the Department of Trade and Industry, and he will recall the substantial losses that were written off at that time to enable the consortium between Leyland and DAF to survive in order to employ those persons in Lancashire whose considerable skills were at risk. Can my right hon. Friend confirm that the project, which was initially to provide a trans-European prospect for commercial vehicles, where DAF would have the entry into the Community, still remains a realistic partnership on offer to any other company that may well seek to acquire the considerable assets which British taxpayers have supplied to that plant?

    Mr. Heseltine

    My hon. Friend is right. One of the arguments in favour of the DAF deal with Leyland in 1987 was that DAF would secure for Leyland greater access into the European single market. That it has done, and that is an additional asset now available within the negotiations that must come under way. It is obviously important that those negotiations are given a fair chance.

    Mr. David Marshall (Glasgow, Shettleston)

    Is the Secretary of State aware that 500 jobs are at risk in the excellent Leyland DAF Albion works in Glasgow which makes axles for the company? As the Dutch and Belgian Governments are doing all that they can to help, will the right hon. Gentleman advise the Secretary of State for Scotland that the Scottish Office, Scottish Enterprise and Glasgow Development Agency will need to do everything possible to protect and maintain those vital, highly skilled jobs in Glasgow?

    Mr. Heseltine

    The hon. Gentleman cannot have listened to what I said about the Dutch and Belgian Governments. They have made it clear that they are not satisfied with the arrangements that have been offered by the banks involved, so it would be wrong for me to suggest to any colleague of mine in the Government, including the Secretary of State for Scotland, that he should seek to act in a way that neither of those two Governments is prepared to do.

    Mr. Phillip Oppenheim (Amber Valley)

    While everyone is understandably concerned about the possibility of job losses, will my right hon. Friend bear in mind when considering requests for financial assistance the huge amount of Government money that the predecessor to Leyland DAF received in the 1970s? Does he recall that, under a Labour Government during the period that it received that money, manufacturing output in this country fell, whereas, despite the recession, it has risen under this Government? Will my right hon. Friend bear in mind that any money that he might give companies such as Leyland DAF would have to be taken from other companies that might better be able to utilise it in creating jobs and products that can be successfully sold?

    Mr. Heseltine

    My hon. Friend is perfectly right. I can only reiterate that the Labour Government’s experience, through the National Enterprise Board, of investing huge sums of taxpayers’ money in what was then seen as the creation of a long-term, viable automobile industry in this country was wildly unsuccessful. During the course of the 1980s, very largely as a result of inward investment in the industry, Britain can now enjoy the prospect of moving back to a trade surplus in the automobile industry. That is because we have viable companies with profitable records behind them. It is absolutely clear that no purpose is to be gained from trying to repeat the mistakes of the past and the Government trying to double-guess the commercial market in that industry.

    Mr. Michael J. Martin (Glasgow, Springburn)

    As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) said, many people in Glasgow are dependent on the Albion motor works for employment. There are highly skilled engineers throughout the group, and if steps are not taken to protect their jobs Britain will lose an engineering base that has taken generations to build. If the right hon. Gentleman argues that the recession will soon be over, we shall need skilled men and women to cope with the new situation.

    Mr. Heseltine

    It is precisely because Labour tried to protect industry after industry from the effects of world competition that so much of Britain’s manufacturing base was eroded. The then Government tried to protect it in the way that the hon. Gentleman suggests that we should do.

    Mr. John Wilkinson (Ruislip-Northwood)

    My right hon. Friend rightly said that he is willing to maintain a dialogue with interested parties. Will he discuss with his colleagues in the Ministry of Defence the military implications of the possible failure of Leyland DAF? As A. W. D. Bedford, another supplier of military vehicles to the British armed forces, failed only recently, will my right hon. Friend and his MOD colleagues see whether some restructuring can be achieved, whereby the important indigenous capability to build military vehicles that Leyland DAF hitherto provided can be maintained?

    Mr. Heseltine

    My hon. Friend is right to draw attention to the Army truck order that was won by Leyland with the help of DAF. That contract has about another 18 months to go. That supports the point that I was making, that here is a company with a good product and order books—and, hopefully, someone in the commercial marketplace will come to invest in it.

    Mr. Malcolm Bruce (Gordon)

    Does the President of the Board of Trade recollect that at the time of the Leyland DAF merger I and others expressed concern about the long-term implications for the British truck industry? Admittedly, there has been investment, but the situation now is that a major sector of our industrial base faces destruction. Does not the right hon. Gentleman accept the inconsistency of his statement to the House? On the one hand, there are full order books and a competitive business; on the other, there is no role for Government in ensuring its continuity.

    Mr. Heseltine

    That is a classic example of the Liberal Democrats wanting it both ways. They claim to want a single European market and to believe in Europe, but the moment a company sets out to achieve a Europe-wide base they criticise us.

    Mr. Richard Burden (Birmingham, Northfield)

    If the right hon. Gentleman really believes that he and his Department were doing all that was necessary in the run-up to today’s announcement, how does he explain the fact that last week there was speculation in the press, particularly in Holland, that jobs in Britain would be at risk because of the Government’s failure to get involved in a rescue plan? Does the right hon. Gentleman dispute the figures and the effects on jobs in Birmingham, Glasgow and Leyland claimed by my hon. Friends? What does the President’s statement amount to, other than a wringing of hands?

    Mr. Heseltine

    The hon. Gentleman can start with the employment of 5,500 people in Leyland DAF in this country. I do not accept that that automatically means that all those jobs are at risk. It is hoped that there will be commercial solutions, which will produce long-term, viable opportunities for at least parts of the company and, therefore, for a significant number of the work force.

    I fully accept that there has been speculation about the company’s future for some time. We were fully aware of that. The only issue is whether we should have joined the Dutch and Belgian Governments, and whether we would have reached a different decision from theirs. I do not think that it was necessary for us to join them, because they were dealing with problems that were largely located on the continent; but, in view of the advice that we have received from banking sources, I do not see any reason for us to have reached a different decision.

    Mr. Alex Salmond (Banff and Buchan)

    Was the Secretary of State aware of the existence of the Albion works in Glasgow? He did not mention it until he was prompted. When did his Department first learn the extent of the serious financial problems enveloping the company? Was an intervention package prepared by his Department at any stage, and was such a package then rejected by the Secretary of State on political grounds? Has the right hon. Gentleman tried and failed, or has he just failed?

    Mr. Heseltine

    Yes, I was fully aware of the existence of the Albion factory in Glasgow. I have before me a list showing the location of Leyland DAF employees, and showing that the axles for the van were produced at the Albion works in Glasgow, which at the time employed some 500 people. The number of employees may have changed since then, but it is of that order.

    The hon. Gentleman asked whether an intervention package had been presented. If he was asking whether we were prepared to put money into providing short-term working finance, I can tell him that we were not asked to do that, and that, if we had been asked, we would not have done it.

    Mr. Bob Cryer (Bradford, South)

    Was not selling off British Leyland to DAF an act of sabotage in the first place, and were not the Government warned at the time that it could lead to the extinction of a significant part of British manufacturing industry?

    The Secretary of State keeps talking about refusing to put money into manufacturing industry. Given that he knows that between 10,000 and 20,000 jobs may be at stake—if the component manufacturing jobs are taken into account—why will he not argue the case for putting money into British manufacturing industry to keep our skills and our industry alive? He is prepared to put money into the dole queue to finance the millions who are unemployed, and to add to the queue at a rate of more than £9,000 per head per year. That simply does not make economic sense, or compassionate sense.

    Mr. Heseltine

    The simple answer is that, having been here as long as the hon. Gentleman, I have observed the track record of parties in government which have put money into what is called “manufacturing industry”. It always results in mounting losses, and in Governments eventually having to face unpalatable conclusions. The Labour party knows that, but is not prepared to recognise it.

  • Grant Shapps – 2022 Statement on the Williams Report for Rail

    Grant Shapps – 2022 Statement on the Williams Report for Rail

    The statement made by Grant Shapps, the Secretary of State for Transport, in the House of Commons on 9 June 2022.

    Today, my department launches a public consultation on the primary legislative changes required to deliver structural reform of our railways. This follows publication of the Williams-Shapps Plan for Rail in May 2021, which heralded the start of the biggest transformation of Great Britain’s railways in three decades, and the announcement in the Queen’s Speech on 10 May 2022 of the introduction of a transport Bill to Parliament which will modernise rail services, put passengers and freight customers first, deliver for taxpayers and combine the best of the public and private sectors.

    The Williams-Shapps Plan for Rail highlighted the need for change. It was clear that our railways had become fragmented, the system was complicated, and passengers deserved better. This, alongside spiralling costs, delays to upgrades and commercial failures, pointed to a railway in need of fundamental reform. Getting this right means that we can ensure this historic industry delivers for its users, setting it on a more sustainable and secure footing. It also means delivering a stronger, more levelled up and increasingly green economy, of which the railways are a crucial part.

    Many of the commitments set out in the plan for rail do not require legislation in order to be taken forward, and the Government are already working in close partnership with the rail industry to deliver rapid improvements for passengers and freight customers. For example, new flexible season tickets went on sale last summer and we continue to work with train operators to roll out digital ticketing to make journeys easier. We are also undertaking a comprehensive accessibility audit of stations across Great Britain, continuing to cut the costs and time of infrastructure work through Project SPEED and developing a 30-year whole industry strategic plan.

    In addition to this, we have launched the Great British Railways Transition Team, under the leadership of Andrew Haines, to drive forward reforms and develop the model for a new arm’s-length body, Great British Railways, including its initial structure, leadership and people. GBRTT is focused on establishing a new, customer-focused industry culture, driving revenue recovery efforts and establishing an interim strategic freight unit to work collaboratively with the sector, ensuring an immediate focus on delivery of the Government’s ambitions for rail freight. GBRTT is also currently overseeing a competition for the location of a national headquarters for Great British Railways, to be based outside of London, in line with this Government’s commitment to levelling up.

    However, primary legislation is required to deliver key elements of structural reform set out in the plan for rail. This includes providing Great British Railways with the powers and authority it needs to act as the single guiding mind for the railways, ending years of fragmentation. The consultation launched today seeks views of all those with an interest in our railways, to help shape these reforms.

    The consultation is focused across three key areas as outlined below.

    The first is on the establishment of Great British Railways, including its proposed functions and duties and how we propose to legislate and work with stakeholders to enable Great British Railways to become the single guiding mind for the railways.

    The second is focused on how we will ensure clear accountabilities in the rail sector through a new governance framework, including the regulator’s role in providing independent scrutiny and challenge.

    The third centres on reform of wider industry structures and processes that are needed to deliver transformation of the railways and a new industry culture, including a new passenger champion role for transport focus and proposals for open data sharing.

    Great British Railways is key to delivering a customer-focused railway. The plans outlined in this consultation will deliver a rail system that is the backbone of a cleaner, greener public transport system, offering passengers and freight customers a better deal and greater value for money for taxpayers. The private sector has played an integral role in improving our railways over the past 25 years; these plans are designed to take the best of the private sector and fuse it with a single guiding mind that can drive benefits and efficiencies across the system as a whole.

    I hope that all those with an interest in our railways will find the time to participate and share their views through this consultation. Sharing your views will help to ensure the legislative changes that we enact will deliver the vision set out in the plan for rail, securing our railways so that they are able to flourish into the future and as we approach their bicentenary in 2025.

  • Kit Malthouse – 2022 Statement on Serious Violence Duty

    Kit Malthouse – 2022 Statement on Serious Violence Duty

    The statement made by Kit Malthouse, the Minister for Crime and Policing, in the House of Commons on 9 June 2022.

    The Government are today announcing the publication of a consultation on the draft statutory guidance on the serious violence duty (the duty) which will be issued by the Secretary of State as statutory guidance under chapter 1 of part 2 of the Police, Crime, Sentencing and Courts Act 2022 to support specified authorities and organisation exercising functions in relation to the duty.

    The Police, Crime, Sentencing and Courts Act 2022 introduced the duty to ensure specified authorities, being police, fire and rescue authorities, local authorities, specified health authorities and criminal justice agencies and organisations work collaboratively, to share data and information, understand the causes and consequences of serious violence, focusing on prevention and early intervention, and put in place plans informed by evidence to prevent and reduce serious violence. In addition, section 6(1) of the Crime and Disorder Act 1998 has been amended to ensure that serious violence is an explicit priority for community safety partnerships and that a strategy is in place to explicitly tackle serious violence.

    The duty is a key part of the Government’s programme of work to reduce serious violence and put an end to the tragedies afflicting our communities. It is very important we work together, across Government, statutory, private, and voluntary sectors to deliver this crucial change. The Government have made £130 million available this financial year, 2022-23, to tackle serious violence, including murder and knife crime.

    This Government committed to update and formally consult on the draft statutory guidance published in May 2021 on before the duty’s implementation. Officials have revised the guidance by engaging with other government departments, stakeholders and wider partners. Government amendments are also reflected in the new draft, and these:

    provide clarity that the definition of violence for the purpose of the duty includes domestic abuse and sexual violence,

    exclude patient information and in addition health or social care authorities cannot share personal information under the data sharing provisions in respect of the duty,

    restrict data requests from local policing bodies, PCCs, and in London the Mayor’s Office for Policing and Crime and the Common Council of the City of London as police authority, to information already held by an authority to whom the request is made,

    require that the Secretary of State lays a copy of the final statutory guidance for the serious violence duty in Parliament,

    clarify on the face of the legislation that specified authorities must publish a strategy and that regulations will provide further detail about the publication or dissemination of a strategy.

    Specific guidance is included for authorities operating in Wales, to reflect the distinct Welsh legislative and operational context as well as additional content on housing and homelessness. The outline policy for secondary legislation on the publication and dissemination of local partnerships serious violence strategies and local policing bodies’ discretionary role to support the development and implementation of the local serious violence strategy is included.

    The consultation, which launches today, 9 June, will run for a period of six weeks, closing on 21 July. Once the response to the consultation along with a final version of the guidance have been published, the duty and associated secondary legislation will be commenced to enable local partnerships to work towards publication and dissemination of their serious violence strategies.

    A copy of this consultation and the draft statutory guidance will be placed in the Libraries of both Houses and also made available on gov.uk.

  • Sajid Javid – 2022 Statement on a Smokefree 2030

    Sajid Javid – 2022 Statement on a Smokefree 2030

    The statement made by Sajid Javid, the Secretary of State for Health and Social Care, in the House of Commons on 9 June 2022.

    In 2019, this Government set the bold ambition for England to be smokefree by 2030—reducing smoking rates to 5% or less.

    Today, Dr Javed Khan OBE published his independent review on Smokefree 2030, providing this Government with a wide range of recommendations for how we can achieve this ambition.

    Tragically, smoking remains the single biggest cause of preventable illness and death across the country. There are still almost 6 million smokers in England—and two out of three will die from smoking unless they quit.

    Although smoking rates have fallen, we know that they are currently not falling fast enough.

    The Government are committed to levelling up society and extending the same chances in life to all people and all parts of our country. However, smoking is one of the largest drivers of health disparities and rates vary substantially across different parts of the country. As stated by Dr Khan in his independent review, at its most extreme, smoking prevalence is 4.5 times higher in Burnley than in Exeter.

    Smoking is a significant drain on the household finances of our most disadvantaged families. In Halton in Cheshire, smokers spend an estimated £3,551 a year on tobacco, nearly 15% of their income. Reducing smoking presents a huge economic opportunity in higher disposable income and higher labour productivity.

    Smoking is particularly high amongst certain populations, and one third of all cigarettes smoked in England are smoked by people with a mental health condition. Nearly 10% of mothers smoke at the time of giving birth, increasing the risk of sudden infant death syndrome by over three times compared to mothers who do not smoke. Further, the risk of stillbirth is increased by at least 60% if the father smokes. Smoking is also known to increase the risk of miscarriage.

    Behind all of these statistics are individuals, families and communities who are suffering from the harms of tobacco. This Government are committed to doing more to help smokers to quit and stop people from taking up this deadly addiction. We also know that most smokers want to quit.

    For these reasons, we asked Dr Khan to undertake this independent review to help the Government reduce the devastation that smoking causes in our communities. There are a number of recommendations in Dr Khan’s independent review. The Government will now consider their response.

    There is a call for greater investment—from local authority-led stop smoking services, through to improved data and evidence. The Government are already investing funding through the public health grant, but we will examine where we can go further.

    There is a call to offer vaping as a substitute for smoking. Vaping is far less harmful than smoking and is an effective quitting device. It is recognised that there is much more Government can do to tackle the myths and misconceptions that surround vaping. We have worked with the MHRA to provide guidance to support bringing e-cigarettes to market as licensed therapies and this Government will take forward a range of work on vaping as a substitute for smoking in due course.

    Dr Khan also calls for the NHS to prioritise further action to stop people from smoking. Smoking costs the NHS £2.5 billion every year. The benefits of focusing on preventing smoking-related illnesses, rather than treating them, are clear for patients and the NHS themselves.

    This Government are determined to address the challenges raised in the independent review and to meet the Smokefree 2030 target. We know that more action needs to be taken to protect our people from this dangerous addiction.

    The Department will now carefully consider the recommendations set out in this independent review. The independent review will help to inform our upcoming White Paper on health disparities, which we plan to publish this summer. To complement this, the Department will also be publishing a new tobacco control plan in due course.

    We would like to thank Dr Khan for his far-reaching work on the independent review, and for his clear and challenging recommendations.

    A copy of the independent Khan review will be deposited in the Libraries of both Houses.

  • Heather Wheeler – 2022 Statement on Transforming for a Digital Future Roadmap

    Heather Wheeler – 2022 Statement on Transforming for a Digital Future Roadmap

    The statement made by Heather Wheeler, the Parliamentary Secretary at the Cabinet Office, in the House of Commons on 9 June 2022.

    Later today, I will publish “Transforming for a Digital Future: Government’s 2022-25 Roadmap for Digital and Data”, which sets out an ambitious plan to ensure that, by 2025, we deliver a transformed, more efficient digital Government that provides better outcomes for everyone. I have requested that a copy of the full text be deposited in the Libraries of both Houses in Parliament.

    The importance of digital and data

    Digital and data are key to unlocking many of this Government’s priorities, from generating efficiencies to net zero and levelling up. Better digital systems and access to data will allow smaller teams across Government to work faster, make better decisions, and deliver better policies. Modern technology will minimise waste and reduce our reliance on paper-based forms. A more digitally skilled civil service, working across the UK, will ensure that citizens get access to the same great services no matter where they live.

    The opportunity

    The Government have some excellent digital services and examples of digital transformation, but we still need to harness the full potential of digital transformation at scale. Many services are in need of improvement to deliver the right outcomes, our technology is in need of refreshing to give value for money, we have significant and persistent gaps in skills and expertise, and our business systems are in need of reform to keep pace with the digital age.

    If we maintain the current course, we will miss opportunities to deliver the experiences and outcomes that citizens expect and we have committed to deliver, we will see talented digital and data professionals choosing to work elsewhere, and we will miss out on efficiency savings.

    Cross-Government support and collaboration

    This road map has been collectively agreed by the Cabinet Economic and Domestic Implementation Committee.

    The road map is the result of an unprecedented level of collaboration from digital leaders across Government. The Central Digital and Data Office (CDDO) in the Cabinet Office has worked with representatives from Departments to develop the road map, including regular engagement with the permanent secretary-level Digital and Data Board.

    CDDO will continue to work closely with Departments to support and monitor progress against the road map . Each mission has a senior civil servant “executive sponsor” who will act as an advocate for that mission and support work to progress against the specific commitments.

    As a result, I am confident that there is sufficient support and momentum behind this road map to ensure we will meet all of the commitments it sets out by 2025.

    What we will deliver by 2025

    The road map sets out a bold vision for change which is supported by a set of clear, feasible and measurable commitments that Departments have collectively agreed to deliver between now and 2025.

    By 2025 the most frequently used critical services will have great user experience and incorporate efficient processes that reduce their cost to run. We will provide a single, efficient and accessible digital identity process for citizens, and ensure that data which is central to priority Government objectives will be safely shared and used to improve policy and service delivery. We will build digital technology in a consistent way, improving the quality of what we build and our speed to deployment. We will be an employer of choice for digital talent, with highly skilled teams and leaders, and have funding structures and delivery approaches that enable and incentivise modern, efficient and user-centric investment and high-quality services.

    The pace of technological change and the growing expectations of citizens and businesses mean we must renew our focus and go further than ever before to realise the opportunities presented by digital transformation. I am confident that, by fulfilling the commitments set out in the road map, we will be able to do exactly that.

  • Sajid Javid – 2022 Statement on Monkeypox

    Sajid Javid – 2022 Statement on Monkeypox

    The statement made by Sajid Javid, the Secretary of State for Health and Social Care, in the House of Commons on 8 June 2022.

    Following the increased prevalence of cases of monkeypox in England, and transmission within the community for the first time, I would like to inform the House that as of Wednesday 8 June 2022, the following amendments have been laid and come into force:

    The Health Protection (Notification) Regulations 2010 have been amended to include monkeypox as a notifiable disease in Schedule 1 and monkeypox virus as a notifiable causative agent in Schedule 2.

    The National Health Service (Charges to Overseas Visitors) Regulations 2015 have been amended to include monkeypox in Schedule 1.

    The public health assessment remains that the threat to the public is low. These amendments will support the UK Health Security Agency, or UKHSA, and our health partners to swiftly identify, treat and control the disease, and reduce potential financial barriers to overseas visitors in England who require NHS-funded secondary care services in relation to monkeypox.

    Health Protection (Notification) Regulations 2010

    From today, 8 June 2022, monkeypox is a notifiable disease and there is now an explicit legal duty on doctors to notify the “proper officer” of the relevant local authority if they see a patient they suspect of having the monkeypox virus in England. While we believe cases have been reliably notified to date, this amendment puts beyond doubt the legal obligation of doctors to report cases of suspected monkeypox. Placing a legal duty on doctors to report suspected monkeypox cases, and provide the relevant patient information, will strengthen our understanding of the virus and its transmission within the UK and, if required, support the implementation of timely prevention and control measures.

    We have also placed a legal duty on laboratories to notify the UKHSA if they identify monkeypox virus when they test a sample in England, by listing the virus as a notifiable causative agent. Positive laboratory samples will be an important core dataset, strengthening surveillance and helping to inform our understanding of outbreak progression and trends to underpin action. Laboratory notification will also help to identify the links between cases and act as an important contingency if case notification by doctors has not occurred.

    National Health Service (Charges to Overseas Visitors) Regulations 2015 (“the charging regulations”)

    The charging regulations require providers of NHS-funded secondary care to make charges to people not ordinarily resident in the UK (“overseas visitors”) except where an exemption category applies.

    We have taken swift action to ensure that, should an overseas visitor in England need NHS- funded secondary care services in respect of monkeypox, they will not face any charge for them. Providing such services without charge removes a potential financial barrier to overseas visitors presenting for NHS-funded secondary care, therefore ensuring that the risk to the public’s health from infected visitors is minimised. This brings monkeypox into line with most other infectious diseases, such as tuberculosis and covid-19.

    The inclusion today of monkeypox in Schedule 1 of the charging regulations will mean that overseas visitors will not be charged for the diagnosis and treatment of monkeypox. The charging regulations have also been amended so that if any charges have already been incurred during this outbreak, they must be cancelled, or, if paid, they must be refunded.

  • Liz Truss – 2022 Statement on the British Virgin Islands

    Liz Truss – 2022 Statement on the British Virgin Islands

    The statement made by Liz Truss, the Foreign Secretary, in the House of Commons on 8 June 2022.

    On 18 January 2021 [Hansard, HCWS716, column 32WS], the House was informed that the then Governor of the British Virgin Islands, or BVI, had launched a commission of inquiry, or COI, into claims that corruption, abuse of position and serious impropriety had taken place in public office in recent years.

    On 4 April, the BVI Governor received the report of the independent commissioner, the right honourable Sir Gary Hickinbottom. The Governor announced that publication would follow in June after discussions between BVI political leaders and the UK Government on the report’s findings and recommendations. However, the arrest by US authorities on 28 April of the then Premier of BVI, Andrew Fahie, led to the Governor publishing the report the following day.

    The report is a thorough, evidence-based assessment of the state of governance in the BVI. The commissioner has identified that serious impropriety and gross failures of governance by elected officials through several administrations is highly likely to have taken place. I have today placed copies of the report in the Library of both Houses.

    The report makes 48 recommendations to address underlying issues, including urgent reforms, investigations and medium-term measures. These will help deliver the deep change that the people of the BVI deserve.

    The commissioner made a further recommendation, assessing that elected officials in the BVI would not deliver the essential reforms required: he reluctantly concluded that the only way to ensure required change would be for a temporary suspension of those parts of the constitution by which areas of Government are assigned to elected representatives, and the assumption of related powers by the Governor.

    Since the commissioner delivered his report, there have been a number of significant developments, not least with the removal of Andrew Fahie as Premier through a vote of no confidence and the creation of the new Government of National Unity, or GNU. The Governor has also ordered a number of criminal investigations, as recommended in the COI report.

    The UK and the Governor have worked with the GNU since its formation to turn its public commitments to reform into a strong implementation plan with a strict and comprehensive set of milestones that need to be met. If they are, that will protect against corruption and ensure the return of good governance.

    I believe, in the first instance, that the new Government should have an opportunity to demonstrate their commitment to reform through the implementation of the 48 COI recommendations and the further measures they have proposed.

    The Governor and UK Government will monitor implementation and assess progress quarterly. Each BVI Government Ministry and Department will also provide a monthly report. The detailed implementation plan will be published by the GNU in due course.

    If it becomes clear that this approach is not delivering the reform that the people of the BVI want and deserve, we will take action. This may require the swift implementation of the final report recommendation.

    In order to be able to do so quickly if required, the UK Government has submitted an Order in Council to the Privy Council that would allow this administration to be introduced. The Order will be laid in Parliament, but not brought in to force. Should it prove necessary to do so, I will instruct the Governor to make a proclamation in the BVI Gazette appointing a day that the Order will come into force.

    The people of the BVI want and deserve change and have made their desire for better governance clear. Elected officials know this. We want to support the new Government in making this change and allow them the opportunity to reform. The Order in Council will provide the people of the BVI with complete reassurance that change will happen.

    We have a duty to protect the people of BVI from corruption, criminality and poor governance. We will stand by them.

  • Wes Streeting – 2022 Speech on the Health and Social Care Leadership Review

    Wes Streeting – 2022 Speech on the Health and Social Care Leadership Review

    The speech made by Wes Streeting, the Labour MP for Ilford North, in the House of Commons on 8 June 2022.

    The Secretary of State has picked quite the week to talk about standards in leadership.

    I give a huge thanks to NHS staff and leaders for the work they are doing against the most extraordinarily difficult backdrop. I also thank General Sir Gordon Messenger and Dame Linda Pollard for carrying out the review. Its seven recommendations are sensible, and I am pleased the Secretary of State has already committed to implementing them.

    As this is a rare example of decisiveness from the Health Secretary, can he tell us when he intends to publish his implementation plan? All too often, the senior leadership of the NHS still does not represent the diversity of the population it serves. Instead of throwing red meat to his Back Benchers, for reasons that will probably be obvious to everyone, I would like to hear how, in particular, he intends to ensure that equality, diversity and inclusion will be improved, so that the best leaders are incentivised into the most challenging roles and are able to provide inclusive healthcare for the breadth of diversity in our great country. Can he explain why the review has not covered leadership in primary care or social care in any detail? Surely this is a missed opportunity. Let us face it: although he is trying to dress this up as the biggest shake-up in history, I am not sure that giving staff an induction on joining the NHS is a revolutionary development, and it hardly meets the scale of the challenge.

    The NHS faces the biggest crisis in its history. NHS staff are in a system under pressure like never before, and there are simply not enough of them. There are currently 106,000 vacancies across the NHS, and staff are leaving in droves. In some specialties, such as midwifery, they are leaving faster than we can recruit them. I do not know how the Health Secretary expects NHS managers to demonstrate good leadership and deliver the best outcomes for patients when there are no staff to lead. For an organisation the size of the NHS, one of the biggest employers in the world, not to have a plan for its workforce is unbelievably negligent. What is the NHS meant to do until he eventually delivers his long-term workforce strategy, which he has been promising for some time? How are managers meant to lead effectively when instead of thinking about patient care as their primary driver, they have become buildings and facilities managers, because the ceilings are falling in? The only place where more than 40 new hospitals really exist is in the Prime Minister’s imagination.

    The Health Secretary said that we should accept only the highest standards in NHS management, so let me ask him not about the generalities, but about the specifics. Last month, it was reported that North East Ambulance Service bosses oversaw cover-ups of negligence, leaving about 90 families not knowing how their loved ones died. He said yesterday that he is still considering whether to launch a review. Is he seriously considering protecting managers who cover up bad practice, instead of standing up for grieving families? Staff in that service were reportedly paid to sign gagging clauses, and I understand that attempts to get them to sign such clauses are still under way. In a written question, I asked how many non-disclosure agreements had been signed in the NHS since the Government said that they would be banned in 2014. He does not know and he is refusing to investigate the use of gaging clauses in the NHS. So how can he claim to be shaking up NHS culture and dealing with bullying when he has no interest in what is going on under his nose?

    Of course the NHS needs good leaders, but when it comes to examples of poor leadership in the NHS, the Health Secretary did not need the Messenger review; he just needed to look in the mirror. This is the man who described the NHS as Blockbuster Video

    “in the age of Netflix”,

    as if it was the greatest revelation since Moses received the 10 commandments. Who has been in government for the past 12 years? On his watch, on this Government’s watch, we have the highest waiting times in the NHS’s history; the lowest patient satisfaction since 1997; longer waiting times for cancer in every year since 2010; heart attack and stroke victims left waiting for about an hour, on average, for ambulances; and patients at risk of serious injury because the hospital is crumbling around them. He kicked off his own Health Week expecting applause for the fact that, despite his best efforts, there are still 9,000 people waiting for more than two years for treatment. He knows, I know, NHS staff know and the public know that with this Government, NHS staff are lions led by donkeys, wanting and inadequate.