IRON CASTING INDUSTRY (LEVY) (Hansard, 28 June 1967)

§ The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)
I beg to move, That the Iron Casting Industry (Scientific Research Levy) Order 1967, a draft of which was laid before this House on 11th May, be approved. This Order, to be made under the Industrial Organisation and Development Act 1947, is required to provide funds from within the iron casting industry to finance scientific research to be carried out on behalf of the industry by the British Cast Iron Research Association. The scheme which it outlines is similar to, and will replace, that at present operated by the Iron and Steel Board under Section 13 of the Iron and Steel Act 1953.
The Iron and Steel Board's scheme will end on 1st July, by the Iron and Steel Board (Termination of Levies) Order which was laid before Parliament on 30th March. The funds are to be raised by levies which will be calculated as they were under the Iron and Steel Board scheme.
The Order is acceptable to the bodies with whom it has been fully discussed in accordance with the 1947 Act. In addition, the National Steel Corporation and the British Cast Iron Research Association were also consulted.

§ Mr. Michael Alison (Barkston Ash)
The Parliamentary Secretary has pointed out that this is really the continuation of 707 something which has been in existence before, but he will allow us to raise one or two points by way of question and criticism.
I think that I am right in saying that the procedure which this Order replaces has been in existence only since 1966, that the system of levies is comparatively new, and that the British Cast Iron Research Association got its funds earlier by voluntary contributions. It is probably true to say that the new procedure proposed has not really had a very long time to prove itself, and I think there are one or two points which we would like to question about this Order.
The first point I would touch on is the rather broad phrase, the umbrella phrase, "scientific research", for which these funds are to be applied. This gives rise to some misgivings, because if one looks at the Report of the Iron and Steel Board for 1965, in which some description is given of the research work carried on in iron founding, one sees it is not so much a scientific as a technological sort of research, which goes on at plant level rather than in the laboratory. There is a long description in that Report about improved techniques of melting, the use of hot-blast cupolas, electric induction melting, and all the rest.
These are not the sorts of developments which one describes as "scientific research", and the first thing we want to know is: does this Order prescribe that the moneys so raised must be applied to that kind of laboratory backroom work which is purely scientific research, or is it the hon. Gentleman's proposal that these moneys may be applied to the continuation of the sort of technological development which goes on in plants, probably by individual firms not associated directly with the Research Association itself?
I think that it is a valid truism to say that necessity is the mother of invention, and a great many of the best ideas come, not from the laboratory, but from improvisation and development at plant level. Can we have the assurance, therefore, that "scientific research" ensures—probably presupposes—that a lot of this money will be available at the individual plant, and not spent simply on setting up new laboratories and new 708 buildings remote from the places of work?
I should like to raise a point on the question of finance. The research levy has been going on only since 1966, and one thing we should like to know is: what sort of pool of capital will the Cast Iron Research Association inherit from the old régime, the old parentage under the Iron and Steel Board of yesteryear? Will it set out with something in the "kitty"? Otherwise, it does not look to me as though it will be able to get very far, simply by the levy provision which this Order provides for, because the sums envisaged cannot, as far as I can see, be very substantial. Can the hon. Gentleman, therefore, tell us, is there anything in the "kitty"? And how much does he expect the levy will raise per annum?
I should like to say just a word about the way the levy is to be spread, because this has something to do with the subject of productivity, which is of great importance in our national and economic affairs at present. The interesting thing about the levy is this. If one looks at the description of "leviable worker", in paragraph 1(2) of the Order, one finds that certain categories of worker bear levy and others are excluded. We have foundry workers included, and persons employed wholly or mainly in the maintenance of premises, plant or machinery but it excludes certain other categories. such as clerical staff.
One criticism we have in this connection is that there is no proper incentive under the levy system to encourage the substitution of machinery for men. There should be something in the way the levy is spread to make it possible for a firm which increases output with the same number of men, or, perhaps, with a smaller labour force as a result of the introduction of modern plant and machinery, to have some sort of bonus or return.
To some extent, this is provided for in the Order, but it is unfortunate that one can take on as many clerks as one likes in a given foundry firm without incurring levy in respect of them, but, if one substitutes a piece of modern plant or machinery for foundry workers and in consequence one has to take on maintenance men, one has to pay the levy. The rational approach would be to have a slightly higher per capita levy focussed 709 on a slightly narrower base, namely, the foundry workers.

§ Mr. Speaker
Order. The hon. Gentleman cannot seek to amend the Order.

§ Mr. Alison
I take the point, Mr. Speaker. Perhaps the hon. Gentleman will explain the reasoning behind the inclusion and exclusion of certain categories of worker in relation to the question of productivity.
The question of enforcement always gives rise to anxiety on Orders of this kind in which the penalty provisions are often quite sweeping and serious. Article 9 provides for severe penalties, including imprisonment and heavy fines. I fear that the result of the Order will be that iron foundry managements will not run the risk of being fined or sent to prison and, as a consequence, there will be a great proliferation of clerical staff in order to make sure that all the forms and returns are correctly attended to. Curiously enough, as I have said, clerical workers are excluded from levy.
In Article 8, one sees those sinister bureaucratic words: shall furnish such returns or other information in such form and manner and within such time as may be specified … It is sad to think that, since 1923, it has been possible for the Research Association to carry on on a basis of voluntary subscriptions to research, and now, for the first time—or, at least, since 1966—the whole panoply of bureaucracy is introduced. I believe that there will he a proliferation of clerical workers unless we have a firm assurance from the hon. Gentleman that there will be no need, as a result of the Order, for iron founding firms to do a lot of extra paper work.
Article 6(5) prescribes that the moneys received by the Minister of Power from the levies must be paid to the British Cast Iron Research Association, being applied to that body exclusively. Under the 1966 scheme, which this one replaces, the levy moneys were paid to the Iron and Steel Board, which in turn made grants and loans to persons or bodies undertaking research in connection with the ineustry and, in particular, to the British Cast Iron Research Association. In other words, there was a wider spectrum of beneficiaries from the levies.
Why is there this narrowing in the Order? Will it be possible for the bene- 710 ficiaries under the previous scheme to continue to get money if they deserve it? These points have given rise to question and comment on this side of the House.

§ Mr. Freeson
I understand that there will be no variation in the application of the grant to the industry. It has previously been applied to the Association, and it will continue to be so applied. The only difference is that the Iron and Steel Board will cease to exist, and therefore the allocating of the money must be rearranged.
I was asked for an assurance that the money will continue to be applied not just to laboratory work but more essentially to applied science. I certainly give that general assurance; it will continue to be applied as in the past. I am not aware that there is a sizeable balance, although I would have to check this point. There may be a residual balance from one year to another—I should be surprised if there were not—but I have no figure. I understand that the levies will yield about £200,000 a year, which will enable the Research Association to continue to qualify for the Government grant, which usually comes on a five-year basis through the Ministry of Technology. At present, it amounts to £80,000 a year.
It was urged that the levy should be designed to encourage the use by plants of more equipment than men. This was the issue of productivity. The one amendment to the scheme relates to the definition of leviable worker, which has been amended to make it clear that it includes … persons employed wholly or mainly in the maintenance of premises, plant or machinery … for the production of iron castings. Therefore, to that extent there will be a move in the direction the hon. Gentleman suggested.
We have had full consultation with the industry and the various organisations in it, and we do not believe that there is reason to fear that there might be an increase in paper work and clerical staff.
I believe that I have now covered all the points, and I hope that the House will now accept the Order.