HC Deb 18 June 1963 vol 679 cc412-24

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hugh Rees.]

12.45 a.m.

Mrs. Barbara Castle (Blackburn)

Though it may not be apparent at first glance, the matter which I want to raise tonight is one of fundamental and widespread national importance. As it happens, it arises on what may seem to be a limited and a local issue, namely, the decision of the President of the Board of Trade to grant an open general import licence to Messrs. International Computers and Tabulators to import the Remington Rand process data tabulator, Univac 1004, from the United States. I know that sounds very technical, not to say mysterious. Some hon. Members have told me tonight that they do not understand what my Adjournment is about. It may also sound as though it is not anything very serious.

When I raised this matter in a Question earlier, the President of the Board of Trade pointed out to me that imports of data processing equipment from the United States are brought into this country on open general licence, that no specific approval is required from his Department for their import, and, indeed, that if such approval were required by him he would not withhold it.

I want tonight to try to go a little below that technical and rather confusing surface and point out to the House what the decision to import these computers from the United States means to the country's economy as a whole, I.C.T. is one of the major producers in this country of office mechanisation equipment, and it has about 20,000 employees, of whom about 10,000 are directly engaged on production. This firm, despite its major rôle in this field, has now found that the mechanical equipment it is manufacturing has been completely outclassed by the electronic equipment developed in the United States, a notable example of this outclassing being the Remington Rand Univac 1004, for which this open import licence has now been given by the Board of Trade. It is, I am sure we will all agree, itself an alarming situation that the British computing and tabulating industry should have fallen behind in a field of modern industry in which, if we are ever to cure unemployment in this country, we ought to be way out ahead and developing rapidly.

What has been the reaction of this firm to the situation in which it has found itself? The reaction has been that it has thrown in the sponge in its efforts to keep up with the United States and, instead of trying to catch up in this field of development, it has entered into an agreement with Remington Rand of the United States to import its products instead. The consequences of this policy for British trade and for British employment are very menacingindeed. We have just spent quite a time discussing the Local Employment Bill. Here is an example in which employment in Britain is decreasing instead of expanding, as we have all been admitting that it ought to do.

The consequences of the I.C.T. decision on employment in this country are as follows. The chairman of I.C.T., Sir Edward Playfair, when this decision to import was made, forecast that there would be a substantial falling off in the present labour force of the firm during the next few months. This was followed by the announcement that the firm's factory at Southport, at present employing 800 men, is to be completely closed down over the next few months. But this is not all. It is not only Southport which is affected, though Southport is affected most completely and most dramatically. There are to be consequent redundancies and uncertainties in other factories in this country in the possession of this firm.

The figures I have obtained show that the firm's factory in Northern Ireland is to declare 500 workers redundant out of a labour force of 2,500. At its factory at Letchworth, 336 out of 3,000 are to be laid off. At the Croydon factory, 234 out of 2,000 will become redundant, and at the factory at Dartford, Kent, 250 out of a labour force of 1,200 will be dismissed.

Mr. Martin Maddan (Hitchin)

At Letchworth only 256 workers have been given the sack and there has been an undertaking that no more redundancies will be declared among the manual workers until at least April of next year.

Mrs. Castle

I am talking about forecasts. Sir Edward Playfair himself forecast the contraction of the labour force. All the hon. Member is saying is that instead of 336 having been declared redundant now only 256 have, with possible further redundancies in April of next year. We have just been discussing the need to expand and develop employment in this country.

Mr. Maddan

rose—

Mrs. Castle

I will not give way. This is an important matter and I have a lot to say in the few minutes available to me.

In at least two of these areas there is already a high rate of unemployment; Southport and Northern Ireland. It makes nonsense of the Government's full employment policy if about 2,000 workers are declared redundant out of a productive labour force of 10,000. It is a movement in entirely the wrong direction.

Protests about this have poured in to me and other hon. Members. I am raising this matter tonight not to poach on any other hon. Member's preserve but because these developments are symbolic of the industrial sickness of this country; and it is the wider aspects of the matter with which I wish to deal. The Southport Trades Council has passed a resolution of protest and a copy of it has been forwarded to me. The resolution states: While recognising the need for the most modern equipment to be available in this country, we call on the President of the Board of Trade to limit the importation of this equipment to a small number of prototype models, and thereafter ensure that this equipment be built here under licence. We would draw the attention of the President of the Board of Trade to possible repercussions in the radio industry who are precluded by this decision from manufacturing transistors and components which they would manufacture if the units were built in the United Kingdom. In addition, we believe it to be imperative that the technical know-how for the manufacture of such equipment be resident in this country. This resolution was sent to the President of the Board of Trade. The sentiments expressed in it have broadly been echoed by workers from the I.C.T. factory at Dartford. I have informed my hon. Friend the Member for Dartford (Mr. Sydney Irving) and the hon. Member for Southport (Mr. Percival) that I intended to raise this matter tonight, and I will try to allow them each a few minutes in which to intervene and to make their local points.

I wish to deal with points of national policy. Why has not I.C.T. been able to develop as good a machine as the American one? If it had, this disastrous policy of importation would not have been necessary. I believe that the firm has tried to develop a similar machine to the one now to be imported but, apparently, failed. Why? It is imperative that this question be answered. Has the firm now thrown in the sponge and decided to concentrate more on marketing?

When I raised the question in the House on 14th March the President of the Board of Trade told me that these imports were to be a temporary measure while the firm re-established itself. Has he made any inquiry to satisfy himself that this is true? I draw his attention to the edition of the Electronics Weekly of 6th February, 1963, in which the announcement of I.C.T.'s decision to sell Remington computers was first made. The data processing correspondent of that newspaper wrote: Since the original Power Samas—British Tabulator Machine merger in January, 1959, to form ICT the organisation has undergone a dramatic change. This is particularly noticeable since Sir Edward Playfair became chairman 18 months ago. This latest move should se the withering away of the Punched Card core with its historical conflicts and the emergence of a new organisation with an emphasis more on marketing and usage than manufacture". It is that decision which has aroused my profound alarm and should arouse the alarm of the House. On 14th March the President said that all these imports were excusable because we ought to encourage American investment here. But this is not a question of American investment. This is a question of a major manufacturing company in this country in a modern electronics field deciding to act in future as the importers of American products. If we consider only our balance of payments, this means, at import prices of £30,000 per unit, that £3 million worth of dollar imports a year would be involved. There is thus a strain on our balance of payments as well as creating unemployment for British workers.

I entirely agree that we do not want permanent protection against American imports in any field. I am not asking purely for protection, but I am suggesting to the Parliamentary Secretary that we face an emergency. It is wrong for this firm to be allowed to consider purely its own limited financial interests. It ought to be required to serve the nationalinterest. It is wrong that groups of highly skilled workers, such as these employed in the Southport factory, should be dissipated by the closing down of the works there—and that is the danger. It is wrong that some of these technicians and supervisors, some of the most scarce, skilled men in British industry, should be turned loose to find what other employment they can.

I agree with the Southport Trades Council that the firm should be allowed to import only half-a-dozen or a dozen prototype machines and should manufacture under licence in this country. If this were done, the firm could retrain these excellent men at Southport, for these are highly skilled men in mechanical assembly work and they could be trained for electronics production.

Alternatively, the Government should develop new outlets for products from this firm. I understand that the German firm, Siemens-Halske, is manufacturing electro-mechanical equipment of the punched-card type for sorting letters in the German Post Office. Why cannot we do that in this country, instead of merely creating additional unemployment in an area such as Southport, which already has a high unemployment figure?

We also need a Government inquiry into the electronics industry. Some £50 million a year is being spent on research in electronics—most of it Government money—and we want to know what we are getting for it. We know what a poor return we have had for the expenditure in defence. After all the money spent on inertial guidance systems, we have now to buy that system in the United States for use in Polaris. Results of research in the civil field are equally poor because of the lack of interest by electronic firms in their social responsibilities for those engaged in industry. Either I.C.T. is not spending enough on research or it is not spending it effectively. Factory closures and redundancies show the need for Government-sponsored reorganisation of the electronics industry. In order to set on foot this planned expansion of one of the major growth industries of the country, I ask the Parliamentary Secretary to the Board of Trade to suspend open general licences for I.C.T. while we put our house in order and find work for a fine body of men.

1.1 a.m.

Mr. Ian Percival (Southport)

Appreciating that I am intervening in an Adjournment debate, I must be extremely brief and confine myself to two observations about Southport. I am obliged to the hon. Lady the Member for Black-bum (Mrs. Castle) for having written to me in advance to say that she would be referring to Southport, but I cannot agree with the proposition she is advancing. I believe that she has some of her facts wrong and I ask her to reconsider, after what I have to say, whether, when she looks at the facts, the position may not be rather different from that which she has put forward. There never were 800 men employed and the hon. Lady does not appreciate the difficulty we have had in holding a labour force together. No one can blame the men for doing it, but skilled men have gone to other employment.

Mrs. Castle

They did not know that this was going on.

Mr. Percival

They were given fair warning and the Department is not responsible for the present situation. There are two points here. First, there is the closing of the I.C.T.factory in Southport, and, second, the importing of electronic equipment. I am satisfied that the first is not the result of the second. I deplore the closing of this factory. I have at least as much personal concern over its closing as any other hon. Member. I have been in constant communication for six months with both management and men, and I should like to pay tribute to both. The men are an excellent, skilled, loyal, labour force with a splendid record of industrial relationships tinder the leadership of William Critchley. They have co-operated fully in efforts to dispose of the factory as a going concern.

I am equally satisfied that I.C.T. has done everything on its part to do the same and to find somebody to take it over as a package deal in order to keep the same labour force. We have been trying over the past six months to keep the labour force in order that a deal should be done. But everybody appreciates that there is a limit and no one can blame a skilled man for saying, "I cannot hold on in the hope that someone will take over. I must go somewhere else." I am at a loss to understand why some manufacturer has not appreciated that that here is a golden opportunity—an excellent factory, a splendid labour force and first-class machinery, all available in a town in which it is a joy to live and work. One has not yet been found. It is sincerely to be hoped that one may be found. Everyone concerned is trying very hard to find someone who would be prepared to make this package deal.

This, however, is quite separate and distinct from importing electronic equipment. My information is that if the imports were to cease there would be less, not more, work for the manufacturing employees of I.T.C. I cannot expand on this now but the details I have been given convince me that this is so. I hope, therefore, that all who agree about this—and I am sure that we all do—will continue to make every effort to bring the advantages of the I.T.C. factory in South-port to the attention of anyone who might take it as a package deal. Equally I hope that this question, which is of immense importance to my constituency, will not be confused by the controversy over imports.

1.5 a.m.

Mr. Sydney Irving (Dartford)

The hon. Member for Southport (Mr. Percival) does not seem to be very disturbed about the threat of redundancy hanging over some of his constituents. I feel very differently about it. It is little satisfaction to them to be told, as the Parliamentary Secretary told them not long ago, that unemployment in the area is below the national average and that there are many employment opportunities within easy reach. It is a highly questionable proposition.

North-west Kent may be below the national average but the unemployment there is higher than for the last quarter of a century. Lists at local employment exchanges have been doubled, and there is anxiety about redundancy in firms which have hardly known it in recent years.

I put a straight question to the Minister—whether he is really satisfied that the group has done all in its power to keep abreast of new developments in the computer world or whether, as some fear, the situation is in part a failure in enterprise?

This is not the only grouse that the men have. Many of them feel that present imports, which are said to be an expedient to cover the time when punched cards end and their own developments start, could become a permanent and growing feature. Because of the ramifications in the structure of the group, it is feared that it could become more a selling organisation than a producing organisation. Whether this is true or not, the workers ought to be satisfied, and there are complaints in this connection, despite what the hon. Gentleman has said, about inadequate consultation and policy statements merely being handed down.

But the men are also disturbed by the fact that there appears, despite a promise, to be little serious attempt to establish retraining courses for men who have spent years in factories in the group to enable them to continue to be part of the organisation after the changeover.

The Dartford factory is one of the best mechanical factories in the group. The men and the organisation are facing the fundamental problem which will face most of industry in one degree or another if we are to modernise and keep abreast of scientific and technical development or even to survive. It is essential that confidence should be established between management and men if such developments are to take place smoothly. It is essential that proper consultation should take place and that the fullest retraining should be adopted.

I ask the Minister to cancel the open licence and also to satisfy himself with his right hon. Friend the Minister of Labour, that the fullest consultation and retraining have been adopted by the group.

1.7 a.m.

The Parliamentary Secretary to the Board of Trade (Mr. David Price)

First of all, I should like to apologise to the hon. Lady the Member for Blackburn (Mrs. Castle) for the absence of my hon. Friend the Minister of State, who would normally have replied to this debate. As I think the hon. Lady knows, my hon. Friend is on an important tour of North America, I appreciate that she might have preferred a reply from another Lancashire Member. However, I shall do my best to give her an answer and to answer the points made by my hon. Friend the Member for Southport (Mr. Percival) and the hon. Member for Dartford (Mr. Sydney Irving).

The hon. Member for Blackburn has criticised what she calls the issue of an open general licence covering the computers which I.C.T. is importing. I should like to make it clear from the start that there was no question of these imports requiring specific authorisation.

We have, in accordance with our general commercial policy and in line with our trading interests, worked for the removal of artificial barriers to trade. We have tried to secure the removal of quantitative restrictions on imports where-ever possible, and have, along with other countries, accepted an obligation not to impose quantitative restrictions except for balance of payments reasons.

In accordance with this obligation, we have removed restrictions on the import of most goods, but, because of the form of our legislation, these goods are shown as being covered by an open general licence rather than completely unrestricted. But the effect is exactly the same. There is no restriction on, and no need for authorisation by the Board of Trade of, imports of these goods.

The hon. Lady has urged that we should permit imports of certain types of computer and electronic data processing equipment only on a limited scale, so as to encourage production in this country, and avoid reductions in I.C.T.'s labour force. Quite apart from the international obligations to which I have referred—and they are more serious than the hon. Lady accepted in her remarks—I hope to show that such restrictions would be unjustified.

The field of data processing, with which the debate is specifically concerned, provides a striking example of the rapid development of electronic computing equipment, not only replacing more conventional equipment for data processing but also extending into a wide range of new applications, particularly to scientific work.

The range and variety of computer equipment which has been developed is already very extensive—ranging from relatively small pieces of equipment to large installations operating at very high speeds. The development does not reside only in the computer equipment itself. For its successful application, specially designed ancillary equipment must also be developed together with the "know-how" and what I call the software without which the advantages offered by these striking advances in computer technology cannot be fully achieved.

This is a field of intense international competition and there is no room for complacency. However, I can assure the hon. Lady that our industry is holding its own and producing some fine machines. As evidence of the way in which our industry is responding to the challenge of this rapidly expanding field, I would quote the information which appeared in our newspapers yesterday morning, that the Post Office has just placed with English Electric-Leo the largest single order ever placed in this country for business computing equipment.

I should also tell the House that the Univac 1004, the machine which I.C.T. is arranging to import from America, is not, strictly speaking, a computer. It is an electronic development of the conventional data processing equipment and it bridges the gap between these automatic machines and the more usual type of electronic computer proper. I understand that it is unique both in this country and in the United States as well. Therefore, I cannot accept the hon. Lady's charge that I.C.T. has failed in its research and development effort because it has not developed this particular machine. By her standard, every other firm in every other country would have failed similarly.

I do not believe it is any discredit to the British computer industry if it cannot always provide the best machine for every application in such a wide range of complex variations. Of course, if there were evdence that the British computer industry was not providing its share of new machines, I would agree with the hon. Lady that that would be something that we should look into seriously. But I am sure that no country can be best at everything, especially in a rapidly-advancing technical field where there is room for so many new developments. If this were not so, there would not be any international trade.

It is worth noting at this stage that I.C.T. sends to the markets of the world the products of its factories in this country. This trade is worth millions of pounds and we must continue, by our efforts and by our examples, to secure the maximum openings in the markets of the world for the products of all of our industries and thereby help to increase and maintain employment at home. I.C.T. has made it clear that it is its aim, as a company which holds a dominant position as a supplier of data processing equipment, to secure for the future an increasing share of a changing and expanding market, thereby establishing more firmly, in face of the changes that have taken place as a result of scientific and technological advances, the future prospects of the company and of the considerable number of staff whom it employs.

Following the development of electronic computers, the demand for conventional data processing equipment has declined. I.C.T. has itself undertaken the development of computers. But computers vary enormously over a wide range in design and size according to the data processing job to be done. As of now, I.C.T. has developed, and manufactures in this country, only certain types of computers within the range which it feels it must offer in order to maintain its position as a supplier of data processing equipment to the market. Competition in this field from British and foreign manufacturers is intense. It is, therefore, considered essential for the company, in order to meet this competition, to be able to offer an adequate range of equipment. What is adequate. I suggest, is a matter for I.C.T.'s commercial and technological judgment. Neither I nor my officials—

The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order,

Adjourned at a quarter past One o'clock