HC Deb 28 July 1972 vol 841 cc2386-442

'(1) In any case where the Secretary of State proposes to provide financial assistance under Part II of this Act, and it is estimated by him that the assistance will or may exceed £1 million, details of the assistance and the reasons why it is being provided shall be published in the form of a statutory instrument which shall be laid before Parliament and be subject to approval of the Commons House of Parliament.

(2) In any case covered by subsection (1) above no assistance will be paid until the approval therein mentioned has been obtained, except where the Secretary of States certifies that the assistance is required with a degree of urgency which makes it impracticable to obtain such approval before any payment is made and that the assistance or part of the assistance paid before such approval is the minimum necessary in all the circumstances of the case'.—[Mr. Millan.]

Brought up, and read the First time.

Mr. Millan

I beg to move, That the Clause be read a Second time.

Mr. Speaker

With the new Clause it will be convenient to take the following Amendments:

No. 13, in Clause 7, page 8, line 4, leave out 'consent of the Treasury' and insert: 'approval of the Treasury, and provided a draft of any individual proposal for such assistance in excess of £1 million has been laid before Parliament and approved by resolution of the House of Commons'.

No. 59, in Clause 8, page 9, line 16, leave out subsection (1) and insert:

  1. '(1) On the recommendation of the Industrial Development Advisory Board, whose functions are set out in section 9, the Secretary of State may, with the approval of the Treasury and provided that a draft of any individual proposal for such assistance in excess of £1 million has been laid before Parliament and approved by resolution of the House of Commons, provide financial assistance for the purpose of—
    1. (a) maintaining the productive capacity of an industry essential to national defence;
    2. (b) maintaining the productive capacity of an industry which suffers from an unexpected and markedly unfavourably shift in its trading position due to circumstances out side its control.
    3. 2387
    4. (c) ensuring the retention of choice of suppliers of products vital to the British economy.
    5. (d) facilitating the contraction of an industry in an orderly manner to minimise the disruption of the economy generally and the social consequences in particular
    where, after carrying out all such economic and social assessments as are necessary, he is satisfied that he can demonstrate that
    1. (i) the net costs to the economy, including social costs, of not providing financial assistance are likely to be greater than the net costs of providing the assistance provided under this Act, and
    2. (ii) there is evidence for believing that there is a reasonable prospect of the industry not requiring such assistance other than on a short term basis, and in any event for a period not exceeding three years'.

No. 20, in page 9, line 17, leave out 'consent of the Treasury' and insert: 'approval of the Treasury, and provided a draft of any individual proposal for such assistance in excess of £1 million has been laid before Parliament and approved by resolution of the House of Commons'.

No. 23, in page 9, line 36, leave out '1977' and insert '1974'.

No. 60, in page 10, line 5, leave out '£250' and insert'£150'.

No. 24, in page 10, line 5, leave out '£250 million' and insert '£100 million'.

No. 61, in page 10, line 6, leave out 'two' and insert 'four'.

No. 62, in page 10, line 9, leave out '£150' and insert'£100'.

No. 25, in page 10, line 9, leave out '£150 million' and insert '£50 million'.

No. 53, in Clause 9, page 10, line 24, leave out subsection (4).

No. 55, in Clause 16, page 17, line 5, at end insert: '(2) Any report prepared under the last foregoing subsection shall contain details of any case where financial assistance has been provided or has been agreed to be provided under Part II of this Act and the total assistance paid or estimated to be paid in the year covered by the report or in earlier or later years has exceeded or is likely to exceed £1 million'.

Mr. Millan

It might be for the convenience of the House, as well as save time, if I speak not only to the new Clause but to the Amendments which are being taken with it, though they are not in the names of my right hon. and hon. Friends.

In Committee and on Second Reading there was a great deal of discussion and a certain amount of controversy about the whole question of parliamentary control. From both sides of the Committee there was an expression of opinion that the Bill did not provide the kind of parliamentary control which there ought to be in view of the potentially very considerable sums of money that would be spent under the Bill. That was particularly so in relation to Part II. The new Clause deals with Part II.

Perhaps the only concession made in Committee to that strong feeling was the new Clause which became Clause 9. I am thinking particularly of Clause 9(4), which provides that where the Industrial Development Advisory Board disagrees with the Secretary of State in relation to the assistance which he is to give under Clause 8, the Secretary of State will make a statement to Parliament about the whole matter. That is the only specific provision at present for any kind of parliamentary control.

In Committee the Minister made great play about the general principle of parliamentary accountability and how Ministers could be subject to Questions, how there were opportunities for debate and so on. I dare say that Ministers may try to use those arguments today. I shall not deal with that at any length because in Committee we made it clear that we did not believe that kind of answer was adequate.

It is often extremely difficult to question Ministers about important items of public expenditure. It is certainly impossible in the ordinary exchange at Question Time to pursue matters to any satisfactory conclusion. Moreover, it is often very difficult to have these matters considered in any way in parliamentary debate because of shortage of time.

That point of view has been vindicated by the report of the Expenditure Committee to which the hon. Member for Oswestry (Mr Biffen) has referred. That Committee has made the point in relation to Concorde. There we have the most flagrant example of this, although there are many other examples. Although there has been commitment to the expenditure of up to £1,000 million, of which Britain is to bear half, there has been no satisfactory system of parliamentary accountability in the whole of that project. The fact that it has been possible to question Ministers at Question Time has made no effective difference to that. There has been no parliamentary debate on Concorde this year, although it is only in the last year that the ultimate commitment to production of Concorde has taken place. That is an example of what all hon. Members know to be a fairly common experience. Large sums of money are committed but there is very little in the way of parliamentary control.

New Clause 8 seeks to single out items of assistance which have exceeded or may exceed £1 million and to say that where they arise there shall be a special kind of parliamentary control. The Clause is neutral in that is does not say that Part II is good or bad legislation. We on this side think that it is good legislation. Some hon. Members on the Government side think that it is bad legislation, but that makes no difference to the merits of the Clause. Whether it is good or bad legislation, the principle should be established that an item of assistance in excess of a certain sum should be subject to parliamentary control.

The figure of £1 million has been chosen because we were told in Committee by the Minister that from experience the Government had estimated that in a normal year there might be about 20 instances of assistance amounting to £1 million or above. Not every case would have to be subject to a separate parliamentary order. If they occurred within a reasonable space of time, several could be included in one order. Our parliamentary procedures, choked as they are by a great deal of legislation, could nevertheless, in an important area like this, accommodate a procedure for 20 projects in a normal year. There is nothing impractical in parliamentary terms in that. In principle it is important that something like this should be written into the Bill.

Another argument advanced by the Minister in Committee was that it is sometimes important to act quickly and that compliance with a provision for going through parliamentary procedure might lead to a situation becoming out of control. This is a valid point. I would not wish to have anything written into the Bill which would prevent a Gov- ernment from acting with the utmost urgency in an emergency. Therefore, in drafting the Clause we have tried to provide for cases of urgency where a Minister could act without parliamentary approval if he were to certify that he had to act in view of the urgency of the situation, but he would have to come to Parliament for approval later.

Some of the Amendments being taken with the Clause have a purpose almost exactly the same as what is laid down. I think particularly of Amendments Nos. 13 and 20.

On Amendment No. 23, which would shorten the period of operation of Clause 8 from 1977 to 1974, I need say no more than that we on this side would be resolutely opposed to any such limitation of Clause 8. Our complaint has consistently been that there should be no limitation on Clause 8. We think that the proposals for the reduction in the period have something to do with Britain's joining the Common Market, though we are assured that this is not the case.

The Government have tabled Amendments Nos. 60 to 62 to replace the present provision in Clause 8 for an initial tranche of expenditure of £250 million plus two tranches of £150 million by a provision for an initial tranche of £150 million plus four further tranches of £100 million.

This series of Amendments may have been tabled for bad reasons because of pressure from Government supporters who do not approve of Clause 8. However, we accept these Amendments because they give additional parliamentary control. It is not a substantial amount of parliamentary control when dollops of Government expenditure of £100 million at a time are being dealt with. However, it is reasonable to have one and a half hours to debate the matter. Although these Amendments are welcome for whatever reasons they have been tabled, we do not think they are a substitute for the provisions we propose in new Clause 8 because they are, after all, retrospective.

Once the initial tranche has been taken up, as it were, and the next order comes forward for £100 million, all we can do is talk about how the first sum has been spent, but we can do nothing about it. The money will have been spent by that time without any direct parliamentary control. This is not, therefore, an adequate substitute for what we propose in new Clause 8.

7.15 p.m.

I need hardly say that we are completely opposed to Amendments Nos. 24 and 25, which are attempts by hon. Members opposite to cut down expenditure under Clause 8.

Our Amendment No. 53 would eliminate subsection (4) of Clause 9. We believe that new Clause 8 and the associated provisions would give much better parliamentary control, and if that were accepted we should be perfectly happy to see subsection (4) eliminated. There is a point of principle here. I realise that it was put in to be helpful, but to a large extent it misses the point. It is important in one sense to know that a Minister is acting against the advice of an advisory board, but I cannot regard it as adequate to be told that it is all right from the standpoint of parliamentary control to spend any sum of money provided that some advisory board agrees with the Government that it should be done. As a parliamentarian I should regard that as of only incidental interest. It is nice to know that some advisory board has agreed about something, but the board is not responsible to Parliament, and our purpose here should be to secure parliamentary control.

Therefore, if our new Clause 8 were accepted we should like to see Clause 9(4) eliminated. If, on the other hand, the Secretary of State is not convinced by our arguments on parliamentary control generally, I should not wish to see Amendment No. 53 carried because that control, inadequate though it is, would be better than no control at all.

Our Amendment No. 55 would require the inclusion in the Minister's annual report of all items of assistance of more than £1 million. This is simply another safeguard. In a sense, it would not be needed if the earlier Amendments were adopted, because we should already be informed of items over £1 million; but it would even then be convenient, I suggest, to have them all listed in the annual report so that one could see the whole picture and know how things had gone during the year. If, on the other hand, the earlier Amendments are not accepted, it will be more important than ever to ensure that at least in the annual report we know what the Government have been up to in the preceding year. The IRC annual reports, for example, gave all that sort of information, and I regard it as the minimum information which should be made available to the House.

I hope that the Minister will accept the new Clause or, if he will not accept it as drafted, give an assurance, as he did on the previous new Clause, that the Bill as it stands will be strengthened to provide for a much more effective measure of parliamentary control than is provided for at present.

Mr. Adam Butler

Hon. Members who served on the Standing Committee and my right hon. and hon. Friends on the Front Bench are well aware of my deep concern about the desirability and the need for Parliament to have a greater say in deciding whether, for what purpose and how much public money should be spent. Historically accountability to Parliament and continuing and effective monitoring of public money in the public sector are vital. The Sixth Report of the Expenditure Committee, of which I was fortunate enough to be a member, has made a number of important recommendations in support of accountability and monitoring—for example, the wider use and publication of White Papers and greater and closer scrutiny of expenditure by Select Committees on behalf of the House.

However, those matters are not significant in this instance. The question behind the Amendments is how, within the important requirements of administrative efficiency, simplicity and speed. Parliament can have a say in initiating expenditure. I said in Committee that I thought it was intolerable that Ministers should have complete freedom of action without restraint. I moved and reluctantly withdrew Amendments in Committee requiring projects of £10 million or more to be subject to the affirmative resolution procedure. That indicates to my right hon. and hon. Friends and the Opposition that I have sympathy with the principle behind the Amendments. However, I have already indicated in Committee that my preference is for a larger sum of money. Therefore, having withdrawn my Amendments in Committee, it is difficult for me to support the Amendments now before the House.

A compromise must be found. There must be some freedom of action to the Executive in the same way that there is in business. I am not convinced by the arguments which suggest that the project approach is unworkable. I look forward to hearing any persuasive arguments which my right hon. Friend can produce. If one can in business require subsidiary companies to work to budgets on certain projects, and to assess whether the project comes within the limits of the capital expenditure which is required to cost those projects in the usual way, I see no reason why the same approach should not be used by the Government Departments. If it is impracticable, then one has to look at the alternatives.

The system of tranches is probably one of the few ways in which one can work. I welcome Amendments Nos. 61 and 62, which increase the frequency of tranches and the amount of money within each. It is a question of judgment whether the figures my right hon. Friend will propose are the right ones. This would meet the point made by the hon. Member for Glasgow, Craigton (Mr. Millan) about Concorde in that one would have required so far five tranches or four tranches of the £100 million proposed.

If a project approach is not possible, then the tranche approach is necessary. I do not share the objection of the hon. Member for Craigton about the rôle of the advisory board. If freedom of action is to be given to the Secretary of State he should use it, making use of the full range of advice which will now be at his disposal from the advisory board. The advisory board must be drawn from a wide range of industry, commerce, and finance using men of great capability. In no circumstances can I see it operating as a rubber stamp for the Secretary of State's activities.

It is therefore a welcome change for the Secretary of State to know that in the event of his undertaking action with which the advisory board disagrees, this action will be publicised and certainly can be the subject of a debate. Other Amendments aim to reduce the time limit and, regardless of anything to do with the Common Market, I believe we are dealing with financial assistance some forms of which would themselves involve long timescales. If is is right to give this financial assistance, and in view of the need for some elements of certainty and continuity which is frequently stressed by business men, I see the five-year period ending in 1977 as being the time which can reasonably be allowed for expenditure to take place and for initial results to be assessed.

I have made my feelings clear on the subject in regard to parliamentary control and I look forward to hearing at what I hope will be an early hour what my right hon. Friend has to say on the subject.

Mr. Skeet

I am very concerned about this series of Amendments and I hope that my right hon. Friend the Secretary of State will accept certain proposals that we have put to him about public accountability for expenditure of more than £1 million. The argument in Committee was that if a grant was authorised the Comptroller and Auditor-General and the Public Accounts Committee could examine it, but unfortunately that would be in retrospect. Parliament should have control of such large grants, but I believe that control should be written into Clause 8 so that we can influence the Government before the decision is made. In other words, it is much more advantageous to control the course of events, to control the tiller, than simply to rely upon our colleagues in Select Committees to say, "We are very sorry. The Government have made a serious mistake and nothing can be done about it. Take out your handkerchief and weep."

I can provide my right hon. Friend with a satisfactory example which occurred under Section 7 of the Coal Industry Act, 1971. That Section authorises the Minister to give directions to the National Coal Board to dispose of certain assets. Because of an Amendment which several of us put down and which was reluctantly accepted by the Government, it was necessary to move by way of Statutory Instrument which would have to be approved by Parliament.

If in the disposal of assets—and there could be a number of them—it is thought wise under that Act to come back to the House for final sanction, when we are dealing with large sums of more than £1 million, I should have thought that it would not be unreasonable to suggest that Parliament should have some say in such instances. I therefore suggest that Amendments Nos. 13 and 20, referring to investments in excess of £1 million in relation to both Clauses 7 and 8, would be realistic, rational and prudent.

7.30 p.m.

Larger sums are generally covered by specific Acts. The Rolls-Royce example is well known and another is the establishment of the aluminium industry by the Labour Government. What I am concerned about has been the growth over the years of the methods of dealing with appropriations by the House. Grants have been made under the Appropriation Acts to deal with significant and important cases—in 1966, for example, the granting of no less than £33 million to take up rights under British Petroleum. It will be recollected that in 1914, 1919 and 1932 Acts were passed to authorise the Government to take a majority shareholding in British Petroleum, but there was no specific Act, other than the Appropriation Acts, to enable the Government on this occasion to take up rights.

I am not suggesting that that should be a form of control in this instance. What I am suggesting is that where there are substantial capital outlays, Parliament should have control under a specific Act. We have a few examples. The Rolls-Royce (Purchase) Act, 1971, is a case in point. If my right hon. Friend says that he would be concerned about the delays likely to be incurred, I should be unable to agree, because that legislation went through in practically no time as the House appreciated its signficance. The ICL was dealt with under the Science and Technology Act, 1965, while Harland and Wolff and UCS were dealt with under the Shipbuilding Industry Act, 1967. The British Aluminium Co. Ltd., Anglesey, and Aluminium Metal Ltd. were dealt with under the Industrial Expansion Act, 1968.

Now we move to the next series with millions of pounds in grants in substantial though less significant sums covered by collective legislation—the Industry Bill. But I am suggesting that each investment over the size of £1 million should receive the approbation of the House through a Statutory Instrument, and I do not think that that is an unfair request.

I am particularly concerned about the criteria in Clause 8. If we are to have an Executive given these enormous powers when in a position to dispense millions of pounds, probably £30 million to £40 million on any one venture, all it has to take account of under Clause 8 is not just the employment situation, but whether the Treasury will approve—and over the years the Treasury has approved of many things of which many of my hon. Friends and I would not approve—whether it will simply be to the benefit of the economy, whether it will be in the national interest, whether the money cannot be raised by any other means.

With terms as broad as those—"in the national interest" is a phrase that no one has attempted to construe—or simply to the benefit of the economy, while I do not suggest that my right hon. Friend would set up a whole line of hotels throughout the country and, on the contrary, I am certain that he would use this trust in an extremely responsible manner, one has to look ahead, and my right hon. Friend will have successors and what they might do in his place is beyond my immediate contemplation.

I should like to know the way in which my right hon. Friend visualises using these provisions. He has wisely come some way to meet us in reducing tranches. He has gone a long way, but not far enough. There will be a substantial base from which he can operate. Then he will have an opportunity of having two additional tranches. Will he share with us his thinking on the use of these moneys?

We are entering a period of expansion, with a vast increase in money supply. I noticed that the Financial Times mentioned an annual rate of 27 per cent. There is no shortage of liquidity in the economy, and if there is a sound investment, money from the market will come towards it. Over the years my experience has been that if a venture is particularly risky, or the State does not favour it, it does not get any money.

We have also found that Government ventures such as Herbert and Ingersoll have gone into liquidation, it having been appreciated from the beginning that those companies would not get going. They can be classified as risky ventures. Will my right hon. Friend indicate whether this money will be available not merely in the United Kingdom but to help finance operators on the Continental Shelf? Will it also become available to the nationalised industries—the National Coal Board and the British Gas Corporation, for example? I know that they can raise money through their own Acts, but may they be given supplementary moneys through this Bill?

I have dealt with the criteria, but perhaps my right hon. Friend will tell me what industries he intends to consider. We have dealt today with the machine tool industry, and brief references have been made to the shipbuilding industry. I expect that those two will be carefully examined—but are there any other industries that he wants to look at and give large sums to for reconstruction, development or any other purposes that he has in mind?

I also draw my hon. Friend's attention to the fact that now we are entering Europe we must be careful to be on the right side of the law in connection with Articles 85 and 86 of the Rome Treaty—the competition articles. We must be careful not to do anything that will lead to a substantial distortion of trade. If we too heavily subsidise a company which may have been prodigal over the years it will be hard on those companies that have looked after their funds sensibly if they find that they face competition from a State-subsidised company in the same field. That is very likely to happen, until we reach the stage when profits are made only if very large subsidies accompany them.

I should have thought that the whole policy of Europe must be to encourage competition, to try to get rid of unnecessary distortion of trade, and not to encourage our industry to become too dependent on the State. My right hon. Friend probably knows that the chemists in Sweden were anxious to be taken over by the State, and in fact were taken over. My right hon. Friend probably also knows that a new organisation has been set up in Italy, known as GEPI, which is another IRI. The whole purpose is to teach the long queue of applicants coming from industry to take over. It normally happens that the economy is run in such a way as to make it difficult for private firms to operate, and then the State says, "I will offer you money and take you over." That means that we have one State monopoly after another.

Is my right hon. Friend prepared to see the private sector expand in the United Kingdom, or does he wish it to contract? From my knowledge of him, I am certain that he would not wish to see it contracted. But is he not introducing in Clause 8 a provision which will lead to general industry in the private sector becoming too dependent on the State? How will he wean it from those large sums of money being offered as an ecouragement for it to do this and that? How will he make it more independent and more self-reliant?

It is a bit comical in a sense that these matters are being raised when the Opposition are suggesting that there should be a State holding company. It would not require many modifications of the Bill, when it has become an Act, to put that well and truly on the Statute Book and enable the Opposition to take over large sectors of the economy, including banking and probably insurance. The right hon. Member for Birkenhead (Mr. Dell) has himself said that with the provisions already in the Bill he would be able to do everything he wants.

The tranches could be reduced even further. With the buoyancy of the economy and the amount of money reticulating through the City of London, there is no shortage of money for good economic projects. If they are required, money will be found for them. I have not the foggiest idea what my right hon. Friend has in mind, but he may be thinking of such things as UCS, which may be helped through certain difficulties, or a small number of rescue operations. He must be aware that for the North Sea, which has been particularly risky, there has been no shortage of funds, not merely from the English market but from the United States and elsewhere. The Iranians are now participating with BP in North Sea development. Risky as it is, money has been flooding in from all quarters, and there has been no need to ask the State for expensive subsidies.

My right hon. Friend is very knowledgeable on these matters, and will be cognisant with the FCI and FCIC, merchant banks and the various consortia which are available. If a project is any good, it will receive full support.

If my right hon. Friend wanted to assist industry and push its development, he could recommend tax-free holidays to my right hon. Friend the Chancellor. Perhaps I should be entirely out of order if I went beyond that point.

I have been particularly concerned—this is why I am suggesting that we should have some form of parlimentary control—because we have seen a Conservative Government follow the concept of the buying of shares to obtain a stake in industry, when we consider that other methods can be used. This power has not been used very much over the past two or three years, but it was in some of the earlier Acts. We have followed the process which was initiated by the Labour Government. I believe that that is not in accordance with our thinking, and is totally unnecessary.

The right and power of the State to acquire shares in the private sector has appeared in the Industry Act, 1971, the Rolls-Royce (Purchase) Act, 1971, the Atomic Energy Act, 1971, the Local Employment Act, 1972, and now this Bill. Before then, we had the Shipbuilding Industry Act, 1967, and the Industrial Expansion Act, 1968. This is the evolution of a process which we on this side do not like. We think it is superfluous. We do not think the private sector likes it, and we do not feel that the public sector is particularly efficient. If my right hon. Friend is to ask for powers of this nature, which are inimical to the interests of industry and the country, he should let us have some parliamentary checks when investments take place. It is not unreasonable to suggest for the purpose a Statutory Instrument to be brought on late at night when those who are interested could recommend what they considered to be appropriate.

7.45 p.m.

Sir Harry Legge-Bourke (Isle of Ely)

I have not had an opportunity of speaking on the Bill before. I shall be as brief as I can be in speaking to the Amendments.

I had understood all the way through that one of the main objects of the Bill was to ensure adequate parliamentary control. The present Session and the previous one have taught us one lesson very clearly:that it is becoming increasingly difficult for Parliament to exercise the measure of control over Statutory Instruments that it should. On the negative procedure the opportunities have diminished terrifyingly in the present Session, because if a Government have a big legislative programme—and the present Government certainly have that—inevitably the right of an hon. Member at any lime to put down a Prayer and make sure that it will eventually be given an opportunity to be debated becomes very slender. With the Opposition's new programme, the muddle from Tolpuddle, which will involve a great deal of legislation, I see no more prospect if they ever return to power of their being any greater rights for back benchers to put down Prayers and have them debated than has been the case in this Parliament.

Therefore, where parliamentary control is said to be desirable—and I am delighted that my right hon. Friend the Prime Minister and my right, hon. Friend the Secretary of State for Trade and Industry, have always said that that is one of the main purposes of the Bill, and is what distinguishes it from the old IRC set-up—we must be very careful to ensure that in appropriate cases we have the maximum capacity to operate the affirmative procedure.

The figure of £1 million is fairly impressive by any criterion. It is obvious that in Committee my right hon. Friend took careful note of some of the pressures that were brought to bear. By Amendment No. 60 the limit is to be reduced from £250 million to £150 million. Amendment No. 61 makes possible four occasions rather than only two for consideration to be given to raising that limit. By Amendment No. 62 we reduce from £150 million to £100 million the amount that any single increase can be. A number of my hon. Friends have put their names to Amendment No. 25, which would reduce to £50 million the maximum by which on any one of those four occasions it would be possible to increase the total.

At least it appears that those who served on the Standing Committee, to whose work I pay tribute, have become increasingly cognisant of the fact that a large amount of taxpayers' money will be put at the Government's disposal and that therefore there should be proper parliamentary control over it. I cannot see how we obtain that without affirmative Resolutions having to be passed by the House at appropriate times and without a limit based on the amount of money that can be voted at any one time, Even now, despite inflation and the erosion of the value of money over the years, I still believe that £1 million is quite a sum. I believe it a reasonable sum to have.

I note those who have put their names to Amendment No. 13, and I hope that my right hon. Friend will also do so. Apart from my hon. Friend the Member for Oswestry (Mr. Biffen), who has faithfully sat through today's debate, there is the vice-chairman of the 1922 Committee, my hon. Friend the Member for Wycome (Mr. John Hall); my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn), a secretary of the 1922 Committee and chairman of another very important party commitee; my hon. Friend the Member for Horsham (Mr. Hordern), the chairman of the Finance Committee as well as a member of the executive of the 1922Committee; and many others of my hon. Friends.

Although I speak here only for myself and I do not pretend to attempt to express the collective views of the 1922 Committee or any other committee, I have to take note of the measure of influence which those hon. Members have in various specialised spheres of activity in the political consideration given to these matters by the Conservative Patty. I hope that my right hon. Friend has given full weight to the important support given to Amendment No. 13 and that he will find a way of accepting it. Whether he can go quite as far as some of the later Amendments, No. 25 in particular, I am not sure. I feel that the wind is in the right direction judging by the Amendments which he has tabled.

When I look back at some of the things which happened in the days when the right hon. Member for Bristol, South-East (Mr. Benn) was Minister of Technology, when I recollect some of the exchanges which took place between him and the then Director of the Industrial Reorganisation Corporation and think of the fears that were expressed by some very notable businessmen trying to serve the Industrial Reorganisation Corporation as best they could, and the misgivings they had about the attempts of the right hon. Gentleman to interfere in matters of which he had no knowledge at all, I shudder to think of the way in which the Bill might be used if there were ever to be another Socialist Government.

This is a Socialist Bill by ethic and philosophy. I fear that it is the most grievous piece of legislation introduced by the present Government so far. I hugely admire the other legislation which has been introduced by my right hon. Friends but this Bill I find obnoxious for many reaons. At least, however, I recognise that there is a streak of enormous compassion running through it. I realise that there are some areas desperately needing the help which the Bill can give. It was only for that reason that I was prepared not to vote against it on Second Reading; it is only for that reason that I shall not vote against it on Third Reading. I believe that these thoughts are shared by many of my hon. Friends.

I hope that at least we shall live true to the doctrine which was said to be running through the Bill—namely, that it was a better way of ensuring adequate parliamentary control than was ever obtainable under the old Act involving the IRC. If that be the case, for goodness sake let us implement it properly and give Parliament the power it needs. To ask for an affirmative Resolution on anything over £1 million is a modest demand and I hope that my right hon. Friend will concede it.

Mr. John Mendelson

Perhaps I could best help the Secretary of State by saying immediately following the speech of the hon. and gallant Member for Isle of Ely (Sir H. Legge-Bourke) who is Chairman of the 1922 Committee that I do not regard this Bill as a Socialist Bill. I would like that put on record as firmly as possible. I do believe that it has a number of useful provisions but that is not really the reason why I intervened.

I want to say a word or two about an Amendment that has not yet been mentioned but which is being discussed with this group and which tries to reduce the period during which this assistance is to be given. I hope that those who tabled the Amendment will be trying to justify it. It is in my opinion a most unreasonable Amendment yet surprisingly it has been tabled by a number of hon. Members who know a good deal about industry.

It ought to be common ground that any major project or scheme of reorganisation, to be worth while, will in many cases require at least a period of development of two, three, four or five years. Unless it is intended to wreck the provisions of this Bill which so many people in our regions want, I cannot understand how hon. Members opposite can support a provision which would cut down the time so severely. I hope that those who are keen on this will not press it too far because it would create the gravest disappointment in many parts of the country including parts of their own constituencies. There are many people throughout the land who have argued with Ministers that these provisions are vital for their areas.

My second point concerns parliamentary control. The Government would help the House and those who support the basic considerations of the Bill if they were to meet some of the demands for improved Parliamentary control. It would in no way weaken the Government's hand; on the contrary it would strengthen it. One point not mentioned so far, arising out of our Concorde experience, is that one of the great weaknesses which the House has allowed to developed is the absence of opportunities to compare a scheme costing a great deal of money during the development stages with alternative schemes on which the same sum of money might have been expended.

I do not go along with many hon. Members who have been far too severe and sweeping in their criticism of the House of Commons in recent years. I do not agree with some of the criticism that has been made, as if Parliament allowed almost all large-scale expenditure to go through without taking a searching look at it or without having a real interest in it. That criticism has been overdone and it has done Parliament harm because a lot of people outside who do not understand what opportunities there are in this House to control the Executive have believed the criticism wholesale and have sometimes repeated it to us asking, "How can you allow all control to go from the House of Commons?"

Hon. Members know that this is wholly untrue, a misrepresentation and exaggeration of the real position. None the less, I do agree that there are far too few opportunities, while a project is being developed, to compare it with alternatives and perhaps to call a halt. The Government would strength the position of Parliament, which must be their concern as it is ours, and at the same time would strengthen their position in administering this Measure if they were to meet the many demands that have been made for improved Parliamentary control over the administration of legislation and the large amounts of money which the Government propose to spend.

Mr. Normanton

Before I take up the theme I wish to pursue relating to new Clause 8 and the Amendments coupled with it, as a back bencher I want to pay my respects and offer congratulations and thanks to my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) for the way in which he has forcibly, powerfully but accurately reflected the deep-seated feelings of back benchers like myself, certainly on this side of the House. That does not for a moment ignore the equally deep-seated feelings of all hon. Members over the urgency of trying to find solutions to this problem of the development areas. I said in Committee that the crunch came with the solutions in Clauses 7 and 8, and the crunch sticks in my gullet.

8.0 p.m.

Although I have put my name to many of the Amendments which we are debating with new Clause 8, I recognise that none of them will find their way to the Statute Book as a result of this debate or any decision which may arise from it. I regret that because I cannot find much satisfaction in the wording of new Clause 8. My view is summed up very clearly in the Amendments to which I have put my name and those tabled by my hon. Friends. I earnestly hope that my right hon. Friend will give clear and firm assurances about the lines he feels driven to follow, perhaps by way of tabling Amendments to the Bill in another place.

I do not need to remind my right hon. Friend that in Committee I tabled Amendment No. 82. I noted the criticisms and comments made by my right hon. Friend the Minister for Industrial Development in response to it. Therefore, the drafting has been altered in Amendment No. 59 to meet some of those criticisms.

The purpose of Amendment No. 59 is twofold:first, to lay down criteria by which the selective assistance will be given; and, secondly, to involved Parliament in decisions on how the money should be spent. I cannot help but think, painfully, in connection with the second objective, of the total inadequacy of the time and facilities which we have to examine the question of expenditure. This is a Bill of fundamental importance—fundamental in principle and in financial terms. It will not be overlooked that at this late stage on a Friday, with about 14 hon. Members in the Chamber, we are dealing with a mass of Amendments, all of which clearly express the deep concern of hon. Members about the adequacy or inadequacy of a fundamental piece of legislation.

In Committee the Minister agreed that criteria were desirable in theory but impossible to frame in practice. But, as my hon. Friend the Member for Gillingham (Mr. Burden) said in Committee, we can do the difficult immediately; the impossible takes a little longer. I do not accept, and never will accept, that it is impossible to formulate criteria. If it was impossible to formulate them in a Bill of this magnitude, the Bill should never have been presented.

There are few circumstances in which selective Government aid to private industry is justified. There are strong arguments against giving Governments wide discretionary powers in this field, as in any other, during peace time. My right hon. Friend preferred the second approach of providing substantial safeguards within a general framework of powers. It is true that a number of safeguards have been accepted by my right hon. Friend as a result of the discussions in Committee. But there were no safeguards in the Bill as it was presented and debated on Second Reading. The power to take equity has been limited, but I regard that safeguard as being totally inadequate The form of the Secretary of State's annual report was spelt out in Committee, although it was not in the Bill as originally drafted. The Industrial Development Advisory Board is to be made a statutory body. That, too, was not spelt out in the Bill. But is what has been done adequate to deal with such a massive piece of legislation—massive in principle and even more massive and open-ended in financial terms? I unhesitatingly say that, on the question of financial criteria and financial constraints, Clauses 7 and 8 are so open-ended as to be totally unacceptable.

The Government have been fortunate, and I would say that they have been far-sighted, in attracting someone of the calibre, integrity and national respect and regard as Mr. Gordon Richardson to be chairman of the advisory board. No doubt, under the direction and guidance of my right hon. Friend the Secretary of State, the board will be made up of extremely eminent, responsible, public-spirited and experienced men, although it will no more be the fount of ultimate wisdom than the officials of the Department of Trade and Industry.

However, boards can be changed over the years. If we had a Government which wished to use Clause 8 in a very different way from that in which the present Government intend to use it, the board could change substantially. Nor will improved accountability be of much help because it will be a considerable time after the event. I endorse what my hon. Friend the Member for Bedford (Mr. Skeet) said when he pointed out the irrelevance in terms of time and effectiveness of the provisions in the Bill and said, "All we can do is to take out our handkerchiefs and weep". I suggest that all we shall be able to do will be to hold a graveside requiem, finishing with "Amen". This is not the kind of institutional procedure which I expected this House to follow when I became a Member two years ago.

This is an extremely serious problem. Anyone who has read the Report of the Expenditure Committee knows that that point is made abundantly clear in it. In its conclusions about principles and criteria for assistance, the report argues: Clarity of purpose has frequently been absent. The Government must consider objectively whether an industry needs to be sustained and, if so, what should be its size and location and the length of time and total cost of such support.

It is precisely to avoid or at least to limit those deficiencies of past practices that I put down Amendment No. 59. Without spreading my remarks unduly and repeating what has already been voiced from this side of the House I would urge my right hon. Friend once again to give thought to the fundamental principles underlying that Amendment and I earnestly hope that he will give an assurance that it will be reflected in an Amendment in another place.

The second aim of the Amendment is to involve this House in decisions under Clause 8. With some considerable reluctance I am bound to be acutely conscious of the fact that my hon. Friend the Member for Oswestry (Mr. Biffen) and I both voted against Clause 8 in Committee. We did so firmly convinced of the total inadequacy—indeed, the definite dangers—which were built into Clause 8 in the form in which it still stands. I withdraw not one single word of what I said on that point.

I submit that paragraphs (c) and (d) of my Amendment would not involve overnight crises, and I am quite certain, therefore, that there is no necessity whatever to give the Executive the discretionary powers which are contained in Clause 8. After all, we have had situations of maintaining the productive capacity of an industry essential to national defence upon which this House took urgent action, and would be prepared, I believe, and regardless of which party might be in power, similarly again to respond urgently, as was done in the Rolls-Royce situation. I see no reason why this sort of situation need be covered by blanket powers which are precisely what Clause 8 contains in its present form.

In paragraph (b) of my Amendment, it could be said, we provide for the Upper Clyde Shipbuilders situation. There again, there are in Clause 7 powers under which UCS could be adequately and appropriately dealt with. After all, UCS occupied debating time, or, at any rate, if not the debating time of this House, many, many hours, and in this Parliament alone. So I do not see that those two situations need be provided for, and in- deed, they are specifically excluded from the coverage of Clause 8.

Therefore, I very much and earnestly hope that my right hon. Friend the Secretary of State will accept the desirability of introducing where possible what my hon. Friends have indicated, the many ways in which we consider it realistically possible to introduce Parliamentary decision-making for which, as Clause 8 stands, to all intents and purposes it provides totally inadequate opportunity.

Finally, I would point out that paragraph (d)(i) and (ii) of my Amendment has been slightly altered to meet genuinely valid criticisms of the original text, and paragraph (b) covers the particularly difficult cases. It is generally agreed that it may be justifiable to give selective Government assistance to industry suffering from subsidised foreign competition, and I admit that it is difficult to write that kind of situation into a Bill without conflicting with international treaty obligations, but I refuse to accept that it is impossible to do so. The second criterion is sufficiently wide to allow for such cases, and, in my view, the Amendment allows for reasonable and useful criteria.

8.15 p.m.

I put down the Amendment; I have concentrated my thoughts and the time of the House on it, being firmly convinced, as I am, that there must be a much tighter drawing of the criteria contained in Clause 8. When I reflect and the House considers that we are in effect debating the very heart and core of this Bill, Clauses 7 and 8, whose titles both include the word "financial", let us just reflect very briefly, and as unemotionally as we can in the circumstances, what we are opening the gate to. The sum has been variously computed as being between £800 million and £1,000 million. I submit that this Bill is to all intents and purposes in practice open ended, and that any device, any realistic method based on experience in industry, which will impose some realistic constraints, whether they be in the form of criteria or whether they be in the form of limitations on the powers of the Secretary of State, should be incorporated into the Bill.

I earnestly repeat my request to my right hon. Friend and to his right hon. Friends that they look with real, deep concern at the anxiety which is being expressed from these benches, and reflect it in another place in the only form which I know, would make this Bill and its provisions acceptable to us.

Mr. Crouch

I had not intended to intervene in this debate, but I listened with interest to the views of my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) and I heard him expressing views which came very much from the heart as well as the head, and he accused my right hon. Friend of introducing a Measure which could only be described as a Socialist Measure I know that such a feeling exists on this side of the House and has existed since the Bill was first presented to the House. I do not happen to share that feeling. I have given a great deal of thought to this and exercised myself considerably about it.

I know that the purpose of the Amendments now before us is in some way to restrict the open-endedness of the Bill, particularly in Clause 8. We are not thinking so much of Clause 7 concerning regional policy as of the offer of assistance from the Government to industry in its wider problem, namely, modernisation and the protection of industry from the cold winds which today blow from the great world of competition. It is a perfectly valid argument economically to say that the measures which the Government are proposing are wrong and could have deep-seated disadvantages for us. I understand that argument but I cannot accept it.

I hope my intervention will be brief because I know that there are hon. Friends of mine who want to voice their sincere concern about this. In Britain today, however, our industry is facing the problem of structural change as we switch to the new processes, as we try to gear ourselves up into a much more modernised state to cope with the competition which is approaching us as we enter into the very much larger market of the European Economic Community.

Aid is necessary to assist the process of the private sector getting itself ready for this greater effort. The hon. Member for Penistone (Mr. John Mendelson) does not agree that I am now talking Socialism. I believe there is a necessary interaction between the Government and all sectors of the industrial economy. To assume that the Government are purely concerned with fiscal measures and with creating an economic climate in which we can all proceed by active competitive means is not in itself enough; it is to assume something that these days is not completely true.

All Governments in modern industrial societies are concerned with the whole health and the whole progress of the industrial economy, and while it is one thing to take such steps as are necessary on the fiscal and taxation side to prepare the way for progress and to encourage risk-taking in the private sector, it is also necessary for Governments today sometimes to step in and encourage the process to change.

Mr. Bruce-Gardyne

My hon. Friend is addressing his remarks in the context of these Amendments to Clause 8, but he will accept that one of the purposes of Clause 8 that we know relates to Upper Clyde Shipbuilders. Does my hon. Friend refer to Upper Clyde Shipbuilders as an example of progress, of adaptation to change and of the process of modernisation?

Mr. Crouch

I do not regard Upper Clyde Shipbuilders as being within the content of Clause 8—

Mr. Bruce-Gardyne

But it is.

Mr. Crouch

I see it as coming under Clause 7, as a regional matter. I do not see it as a case where we are thinking entirely of modernisation, of direct and immediate assistance to an area, a region or an assisted area. I will accept to some extent that there is behind the advance of aid being given to Upper Clyde the notion that there is some positive intention for modernisation to take place. It is a generous doling out by the Government of money not simply to provide employment, but to provide employment for the future.

I agree that in this case there were exceptional circumstances which persuaded the Government to take a step which I feel they had no alternative but to take, and I supported them. But I remind my hon. Friend that there are other cases where we are seeing this inter-action between Government and the private sector of industry, and this is not properly illustrated by Upper Clyde. It was better illustrated by the Rolls-Royce situation, which perhaps caught up on the Government rather too quickly for our own comfort.

We in this country are not alone in thinking of this problem and of Government intervention. There is not one of the present six countries in the Common Market in which Government intervention does not take place in ways other than mere taxation. I have been amused in the last few days, and particularly today, to hear references from both sides of the House to the suggestion initiated by the German Government to the Commission in Brussels that perhaps there was something not altogether right in the regional measures contained in the Bill. Coming from the Germans, that is rather amusing. The Germans have a policy, and a very positive policy, of regional assistance in areas which they actually term promotion areas and which cover one-tenth of their country.

In addition, I have received complaints from people in some of our largest industries of the German Government's intervention in ways other than regional help to assist industries going through a period of difficulty. One such complaint related to the German Government's stepping in to pay half the wages bill of an industry which at one time was not able to sustain itself. The British complaint was that this was unfair competition. However, I will leave that point as it could probably have been better considered under the earlier group of Amendments relating to the EEC. I only make the point that we are not alone in having to consider how the Government can give aid, whether the Government should give aid and whether in so doing a Government become Socialist in their application of policies.

Labour hon. Members, and there are few enough of them here now—[Hon. Members:"Two."]—would agree that their objective in aid to industry would be to control the private sector very positively. That is not my intention. My intention is to enable the private sector to flourish, and to continue to flourish, to retain all the advantages of competition, of incentive, of inventiveness and hard work that we associate with that private sector. I would not seek to control the private sector by attaching too many strings to the aid about which we are talking. Some of the restraints suggested in these Amendments would give us the worst and not the best of both worlds. We have to take a measure of risk when we are considering this type of aid to industry.

I was one of those who, I must confess, felt that it might have been better if the administration of such aid to industry were removed from the Secretary of State and his Department. I was rather sorry to see the IRC go so quickly. It was not perfect by any means but at least it was one stage removed from this hothouse and one stage removed from Whitehall itself. I was not one of those who distrusted its ability to make wise decisions, any more than I would distrust the decisions of the board of a nationalised industry or of a private sector company.

We have established and always can establish from this House sufficient checks and balances to satisfy ourselves that things are proceeding in the right direction. What we have to do with this Bill is to ensure that not only is our aid sufficient but that we have sufficient checks and controls—not overmuch check and control, but just sufficient—to ensure that we are not throwing away public money.

We have made mistakes in the past. Under the last Administration, particularly in the area of investment grants, a company had only to make out its claim sufficiently to satisfy the Department concerned and it got an investment grant, and that was the end of the matter. It was important, and it will be much more so in future, that any aid, whether very small or very large, should be watched continuously. We shall later discuss those checks in the Bill provided for in the Committee whereby we shall have regular accounting to Parliament.

My present concern is that there are written into these Amendments certain restraints which will make it difficult for the Bill to be applied with full success. We have to trust my right hon. Friend the Secretary of State. He is coming to the House every day. He is available for questioning. The Secretary of State and my right hon. Friend the Minister for Industrial Development can be reached at Question Time on the Floor of the House. Questions can always be put down to them expressing anxiety about any direction in which aid is being used or perhaps misused, or to express the view that we are not satisfied that the aid has produced the necessary expansion, the creation of jobs and so on. But I would be sorry to see my right hon. Friends as constrained in the administration of the Bill as is suggested by the Amendments.

8.30 p.m.

My hon. Friends are sincere and absolutely resolute in their views in opposition to the Bill, particularly Clause 8. I appeal to them in saying that today it is not only industry which is changing but also the whole climate in which it has to operate in our democracy.

We have to be a little more relaxed about some of the older shibboleths about Government participation in the changes we are facing. A degree of more sophisticated thought is necessary. Just as in the past the old soldier would have said that the Army could proceed on its own, the more modern soldier will say that the Army cannot proceed without an air umbrella above it. The simile can be applied to industry, particularly the service industries. They also require a form of aid umbrella behind them and they need to be helped by the Government. It should not necessarily be regarded as something which should drive out all incentive and competition from the private sector if the Government were to hold up such an umbrella.

This has not happened in Sweden. We often look to Sweden and admire Sweden because of the continued growth of her economy and GDP at a rate higher than that of Britain. In Sweden the extent of nationalisation is considerably less than in Britain. But the Swedes have had this interface between the State and the private sector for a long time and have learned to live with it. They have learned the full force of competition in industry. I am speaking of a country I know extremely well. My hon. Friends look upset at the mention of Sweden, which is usually mentioned by the Opposition Front Bench.

We should at least give consideration to the philosophy as we think of the full meaning of the Bill. The philosophy that satisfies me is that I do not believe for one moment that this is an open door which will allow the present Administration or any other to take greater control of the private sector. I have not heard of one leading industrialist in Britain saying that.

Mr. Skeet

My hon. Friend has referred to Sweden. An article in the Economist of 18th December, 1971, said: Without the robust profits from the state tobacco monopoly and the giant LKAB iron mines, Statsföretag would have been deep in the red last year. Will my hon. Friend recognise his fatal mistake?

Mr. Crouch

I have heard that reference made earlier in the debate. I cannot comment on it because I do not know the truth of that one. But I know of a number of other instances of successful co-operation in Sweden. I am thinking of an industry I know personally and which I used to advise which has linked with the Swedish Government on atomic power.

I conclude on the question of what I call the philosophy which enables me to accept the Bill as a Measure which is not inhibiting to the philosophies that keep a person interested and competitive in the private sector. It will be in the public interest very often that a private sector factory or industry must be kept going because of the necessity to retain the jobs. Sometimes, however, economic forces may show that that factory or industry simply should be closed. As I have said, I have found examples in West Germany at present where the Government have intervened to keep jobs going and have paid half the payroll bill. Economic forces can today be produced by international pressures on a very much wider scale than we have thought of previously. Very often international economic pressures on other countries are produced by Government intervention. There is also intervention such as marginal cost selling or price subsidies and interventions by Governments.

We simply cannot allow our major growth industries to go to the wall by not ourselves intervening to protect them.

Mr. Normanton

I was quickly roused from my dreams when my hon. Friend suddenly referred to the growth industries. Dare I ask him whether he would list those industries which are growth industries? I have still to find anyone who has been able to say today that an industry is a growth industry without having to eat his words tomorrow.

Mr. Crouch

If by that my hon. Friend means that there is no growth in British industry—

Mr. Normanton

I did not say that.

Mr. Crouch

Some industries are growth industries but they are not growing as fast as they would wish because of the very pressures I am talking about. One in particular is the chemical industry.

Mr. Bruce-Gardyne


Mr. Crouch

Yes. There are plenty of other examples. This tendency is growing in other parts of the world. That is what the Bill is about. My hon. Friends should be a little more generous to my right hon. Friends on the Front Bench who are prepared to sink their pride in the Bill by adopting a philosophy which is very much bigger for the betterment of British industry rather than the old shibboleths to which my hon. Friends are clinging.

By pocketing our pride on the Government side of the House, my right hon. Friend the Secretary of State is offering a chance to see that we get through some of the difficulties in British industry. There are all sorts of pressures and interventions from competition abroad. Only in this way can we give our industries a chance to break through, to develop and to achieve the sort of competitive stature and position that will be necessary so that they become growth industries again.

For the next two years investment in the chemical industry will still be declining. World markets are saturated. The problem is the same around the world. But this is not a time to let such an industry remain on a plateau, if not decline, because whilst one industry sits on a plateau of non-progress, reduced investment and expansion, and reduced research and development—as is happening in British industry today—one sees other nations such as Japan moving ahead fast. Are the Government to sit back saying, "We are clinging to the old shibboleths. We are great old Tories"? The great advantage of the Conservative Party is that we never are great old Tories when it comes to the crunch. We have always been a party capable of accepting change. [Interruption.]

My hon. Friends are obviously tired of what I have to say. [Hon. Members:"No."] I know why they are not tired, and I suspect an ulterior motive. They are rendering me almost speechless.

Mr. Normanton

I am grateful to my hon. Friend for allowing this intervention. I was hoping that he would reach the conclusion which many hon. Members reached in Committee and try to give voice to the desirability of establishing certain criteria by which aid should be given, one of which was the application of the principle of viability, cost-effectiveness and so on. If that is what my hon. Friend wants, perhaps we might be getting somewhere.

Mr. Crouch

Of course I do. I do not want my right hon. Friends to place their bets anywhere other than on a winner.

Mr. Bruce-Gardyne

Upper Clyde.

Mr. Crouch

My hon. Friend keeps referring to Upper Clyde. It sticks in his gullet and has upset him for a long time. Other hon. Members constantly mention Rolls-Royce.

In the Bill we are looking ahead and giving ourselves a chance to regroup and reform and to regenerate British industry. It is for that reason that I ask my hon. Friends to think as largely about this as do I and certainly my right hon. Friends on the Front Bench.

Mr. Biffen

It is a pleasure to be called to speak after my hon. Friend the Member for Canterbury (Mr. Crouch). I assure my hon. Friend of one thing only, because I do not want my contribution to be elevated into a philosophic discussion on the Bill. I want my contribution to be related to the Amendments.

It will not do for my hon. Friend to proffer the analysis that those of us like my hon. Friends the Members for Isle of Ely (Sir H. Legge-Bourke), for South Angus (Mr. Bruce-Gardyne), for Cheadle (Mr. Normanton), for Bedford (Mr. Skeet), myself and countless others within the Parliamentary Tory Party whom we represent by our presence this evening are small-minded and do not have the contemporary breadth of analysis of this problem which my hon. Friend happily possesses.

I rebut that with one quotation from the editorial in Management Today of July, 1972, which on the whole I should have thought would be a source which will have some impression upon my hon. Friend: At present, and almost by accident, the rate of subsidy to private industry must be by far higher than any Government has ever endorsed in peacetime:the deficits of the nationalised industries alone (which, of course, represent a direct subsidy to the private sector and partly represent the latters' buoyant profits) are running at a grotesque level. And nobody is directly accountable for the justification, explanation, use or misuse of these gigantic amounts. That is no way to run a business or a country—and the price will be paid by the next generation, not of products, but of people. I do not know who wrote those words. The editor of Management Today is, I believe, Mr. Bob Keller, who I should think would be the last person who could be slotted into the nostalgic wing of the Tory Party.

The point which has been made throughout this afternoon is a perfectly reasonable one. It is not nostalgic. It is one which is very much directed to relating our present and prospective legislation to what we believe are the realities of the industrial, economic and social situation and the way in which they react and interact upon each other.

I wish to clarify whether, when we make a speech on these Amendments, it is our one bite at the cherry, Mr. Deputy-Speaker. If this were so it would inevitably mean that the speech from the Treasury Bench became disjointed, because our only opportunity of clarification would be by means of intervention. I seek your confirmation, Mr. Deputy Speaker, that although I have in my name Amendments Nos. 13, 20, 23, 24 and 25, this is to be a composite speech and there will be no subsequent opportunity on any of these Amendments for me to comment upon the acceptability or otherwise of the reply given by the Front Bench.

Mr. Deputy Speaker

The hon. Gentleman's fears are correct. He can make only one speech upon all those Amendments.

Mr. Biffen

They are not my fears, Mr. Deputy-Speaker. They may be the fears of everybody else present. This composite speech will necessarily be more protracted than would otherwise have been the case. So that the matter is beyond all possible doubt, may I inquire whether that is also the case in respect of Amendment No. 23?

Mr. Deputy Speaker

I understand that Mr. Speaker is agreed to allow a separate Division on Amendment No. 23, if that is desired.

8.45 p.m.

Mr. Biffen

Again I seek your guidance, Mr. Deputy Speaker. Does the fact that there is to be a separate Division mean that, when the Division is called, one is able to make any comment?

Mr. Deputy Speaker

No, certainly not.

Mr. Biffen

It will probably be for the convenience of the House—[Interruption.] Does the hon. Member for Glasgow, Craigton (Mr. Millan) wish to enliven the proceedings?

Mr. Millan

I am sorry. I was just saying that this meeting of the 1922 Committee is by our courtesy as the authors of new Clause 8.

Mr. Biffen

Rarely has such an indifferent midwife produced so bouncing a child.

Amendments Nos. 13 and 20, which are the most closely related to new Clause 8, would provide for the affirmative procedure to be applied to projects of £1 million or more. This matter goes direct to the heart to the whole issue of accountability.

Those of us who served on the Standing Committee were much indebted to my hon. Friend the Member for Bosworth (Mr. Adam Butler) for the Amendments he moved on this issue. He chose the figure of £10 million but he was then, so to speak, no-balled by the wording of his own Amendment. My right hon. Friend the Minister for Industrial Development said: …the proposal to insert the words 'by order made' would necessitate the preparation and making of a Statutory Instrument in respect of each case of assistance throughout the regions, however large or small it may be. To avoid that technical knockout, both the hon. Member for Craigton and I have made proposals which, I hope, will make the proposition infinitely more acceptable to the Government than it could have been at the time of the debate in Committee, and I hope that my hon. Friend for Bosworth—he is not now in the Chamber—will feel disposed to lend his support to new Clause 8.

There is virtue in the passing reference to the Treasury which is preserved in Amendments Nos. 13 and 23. It is rather fashionable nowadays to disparage the Treasury, which has become, I suppose, one of the favourite whipping-boys of all parliamentary debate. Seeing so distinguished a Treasury Minister as my hon. Friend the Chief Secretary at the far end of the Front Bench, I take that as a further reason for making those remarks.

The Sixth Report of the Expenditure Committee, which is beginning to feature more in our debates as we become more aware of its recent publication and of its relevance to what we are discussing, had this to say in paragraph 268: …in the control of public expenditure the Treasury has special obligations. We believe that these should be "— these are words I enjoy— firmly asserted where public investment in the private sector is involved. The House naturally wishes to share in the monitoring process. I understand this to be the basis of the new Clause. The figure of £1 million is not unreasonable. As my hon. Friend the Member for Isle of Ely said, we are not talking in terms of the petty cash of industrial measures and public expenditure. The more it reflects upon this issue, the more will the House be concerned, I am sure, about some of the implications of the extent to which we shall have parity of consultation with other bodies which the Government will have to consult in the execution of their policy.

I wish in no sense to touch the wounds of Common Market controversy, but it is a fact that moneys which will be voted under Clause 7, and more particularly under Clause 8, will certainly impinge upon the significance of Article 93 of the Treaty of Rome, which provides that the Commission shall, in co-operation with Member States, keep under constant review all systems of aid existing in those States. I am not now objecting to that. I am merely saying that that is the kind of world in which the House will be living after 1st January. There will be constant monitoring of the various forms of aid offered, whether of regional significance under Clause 7 or of more general significance under Clause 8.

All the evidence adduced by the Select Committee shows how unsatisfactory was a good deal of the documentation and the monitoring of public expenditure. I hope that my right hon. Friend will not take it amiss—I know he will not—if I say that his answer in Committee on this issue was fascinating for some of the insight which it gave into the Department's thinking. I refer to the Department's thinking because the view which I shall now quote has to some extent already been mirrored in remarks made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley).

My right hon. Friend, explaining why this kind of more detailed monitoring could not be accepted by the Government, said: If it is known what criteria the Government are employing in the assistance they give, it would then be possible for the firm's rivals to make deductions about a number of matters which the firm requires to be kept a commercial secret."—[Official Report. Standing Committee H, 11th July, 1972; c. 560.] That is true. It is at the heart of the dilemma running through all these issues.

We have to come back to the basic proposition. The Bill will convert a large number of taxpayers, our constituents into conscript shareholders or conscript debenture holders in these various institutions, and we must have regard to that. The Select Committee itself spent a good deal of time mulling over that dilemma.

In paragraph 272 of its Report, with reference to the much-debated incident of the aluminium smelters which has been prominent in so many speeches today, the Select Committee said: In the case of the aluminium smelters, the inability of Parliament to discover either the very large amount paid out in investment grants or the unit cost of electricity supplied to the smelters must greatly weaken any serious attempt to judge whether the public expenditure was justified. There will always be a clash between the recipients' requirement for confidentiality and the anxiety that value for money is being secured on behalf of taxpayers. We have to strike a balance. The balance of the £1 million as being the size of project for the affirmative procedure errs overwhelmingly to the disadvantage of the managerial classes. The major beneficiaries will not have to expose themselves to the normal disciplines of the money market. We are not being ungracious to the industrial élite. We are doing not much more than our tax-paying constituents could expect of us.

I hope that new Clause 8, if that is the only thing on which a Division is permitted, will find its way into this legislation. I would prefer my right hon. Friend to say that whilst advising the rejection of new Clause 8 he intends, either here or in another place to write Amendments Nos. 13 and 20 into the Bill. I should not quibble whether such Amendment came from the Opposition or from the Government. It is an issue of major significance and the House should not delude itself otherwise.

I now turn to Amendments Nos. 24 and 25 [Interruption.] I appreciate that my hon. Friend the Member for Tyne-mouth (Dame Irene Ward) is anxious about the length of my speech.

Dame Irene Ward

It is very long.

Mr. Biffen

It is, and I am not in the least apologetic. I have to make several speeches rolled into one.

Amendments Nos. 24 and 25 go to the heart of the sums which will have to be voted under Clause 8. If the Amendments were accepted the provisions of Clause 8 would be substantially modified. My hon. Friend the Member for Cheadle made it amply clear why he felt the most profound misgivings about Clause 8. I was delighted to have his company in voting against the Clause in Committee. The Tory conscience needed more able and distinguished keepers than my hon. Friend and I, but in the circumstances we had to do the best we could.

The Clause is without question one of major consequence for the way in which the Conservative industrial policy will be expected to develop. We delude ourselves if we think that it is a hurried one-off operation. My hon. Friend the Member for Bedford said he had dis- covered in his analysis of the Italian situation that an organisation called IRI had become a major provider of funds to the private sector.

Mr. Skeet

It was called the State infirmary.

Mr. Biffen

I am well aware of the Financial Times article to which my hon. Friend is referring. He is very perceptive in his comments on the matter. It is a myth to think that Ministers will look around trying to find companies into which they can put money. They will have to hold them back. Companies will be beating a path to the ministerial door. These are the circumstances in which we have to ask ourselves "What is the background to this?" This is the significance of trying to scale down the sums of money.

The background is that anybody who wants to raise money can do so on the money market. I shall quote three examples of companies which have recently sought to raise money in the City of London. There was Mother care, a chain of retailers of baby carriages and similar merchandise, which sought £13.2 million; the subscription rolled in at the rate of £142 million. There was Gough Cooper, builders, which wanted a mere £2.835 million, and managed to notch up applications for £355 million. There was Anthony Gibbs, a private bank, which wanted a mere £3.132 million and received applications for £257 million. Make no mistake, there is money looking for investment. It is not looking for the kind of investment which we as politicians in our superior wisdom think are the activities to which our people should be devoted.

9.0 p.m.

Whether we are better judges of the maximisation of our national resources than the broader judgment of the market, I know not. I can only enter my modest reservation that, on the whole, the politically-productive direction of funds is likely to be less motivated in the long run than market-orientated funds. If that sounds ideological, so be it, but I would be happy at some stage, although not this evening, to monitor the rates of return which have been earned on those resources which have been politically directed and guided. I hope that my right hon. Friends will not regard the Amendment as in any sense flippant or destructive. It touches upon a central issue.

I now turn to Amendment No. 23, to which the hon. Member for Penistone (Mr. John Mendelson) referred. There are two fairly simple reasons. I shall deal with the controversial or partisan reason first. The proposed terminal date in Clause 8 could be our contribution to the next Government, and we have to ask ourselves whether we are so enamoured by Clause 8, so conscious of its potential, that we want to retain it so long as to put it into the hands of a subsequent Government, which could be a Labour Government. That is a perfectly reasonable view to take. A number of my hon. Friends believe that Clause 8, in the hands of a Labour Government, would be used for a scale of intervention far in excess of anything that they would be prepared to tolerate under a Conservative Administration. I am presenting the option that the Clause, which in any case is meant to have a terminal date, should have a terminal date which would make it fall within the likely span of the present Parliament rather than run over into the next Parliament.

There is a second and more substantial reason. The recent Select Committee report on public expenditure in private industry dealt with an area which, if not wholly uncharted, is still substantially unknown. Yet the sums which are being deployed in that area are massive. In the circumstances, it would be no act of humility if Parliament limited its ambitions under Clause 8, in terms of duration and the expenditure involved, so that we could reflect, and above all reflect upon the immensely valuable report from the Expenditure Committee.

We may—perhaps I am as guilty as or more guilty than most—occasionally take refuge in theoretical and philosophical propositions. On the whole, I apply myself fairly practically to these propositions. However, we delude ourselves if we think that the arguments which we are having this evening are some kind of Conservative Party extra-mural conference about the direction of the Tory Party's philosophy. It is about the hard and practical issues of whether vast sums of money being voted out of Government resources, essentially for private administration, even begin to match up to the requirements of this day and age, or even begin to match up to what is called for from us if we are to be effective and efficient monitors and to stand in the best traditions of Parliament.

Mr. Bruce-Gardyne

After that extremely powerful speech by my hon. Friend the Member for Oswestry (Mr. Biffen), making in the most dramatic and effective terms the case for more effective parliamentary scrutiny, I do not wish to detain the House for long because he made the point so very effectively. But I am bound to say that I think it unsatisfactory that we should be discussing a matter of this vast importance, with huge implications for all our constituencies, at 9 o'clock on a Friday evening. That is not a satisfactory form of parliamentary scrutiny. For long periods in our debate the Opposition Front Bench has been totally unoccupied. I do not criticise the hon. Members for Glasgow, Craigton (Mr. Millan) or Swansea, West (Mr. Alan Williams) for that, because I fully appreciate that they are being expected to hold the fort single-handed. It is a consequence of the circumstances in which the discussion is taking place, and that is very undesirable.

Mr. Alan Williams

My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and I are not here under any compulsion. We happen to be here because we care about the Bill. I remind the hon. Gentleman, however, that many other people working in this place are here by compulsion and it is probably no satisfaction to them to know that they are being held here by a bunch of sham revolutionaries who will not vote anyway.

Mr. Bruce-Gardyne

The hon. Gentleman had better wait and see. He is jumping to preliminary conclusions. I made it clear that I was not suggesting that he and his hon. Friend the Member for Craigton were here by compulsion. I said that they were holding the fort in circumstances which I understood from their point of view. But this is not a satisfactory method of parliamentary scrutiny of an extremely important part of the Bill—indeed, the crucial part.

I have learnt a certain number of things about the Bill today and I find them instructive. For example, I gather that assistance to UCS comes under Clause 7. I was ignorant of that. We were told by my right hon. Friend the Secretary of State that the assistance was under Part II of the Bill but, as far as I am aware, we were not told in Committee, on the Floor of the House or in the White Paper that it was under Clause 7 that assistance was to be given. This demonstrates graphically the need for more satisfactory parliamentary control and scrutiny, as suggested in new Clause 8 and the Amendment.

I regret that I did not hear my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) but I am glad to hear that he drew attention, and rightly, to the strength of the anxiety on this side of the House about Part II of the Bill. That is another reason why I think it unfortunate, to put it no more strongly, that we should be discussing the Bill at 9 o'clock on a Friday night.

I also learnt for the first time today that one of the motivations for Clause 8 is precisely to deal with the anxieties incorporated in the second part of Amendments Nos. 19 and 7 which we discussed earlier, namely, the danger that our assistance under Part I or under Clause 7 involves robbing Peter to pay Paul—assisting a firm in one constituency to the damage of another firm in another constituency. The answer we got about this was that Clause 8 was needed in order that the gravy allocated in South Angus could be compensated for by gravy in Oswestry, to ensure that the gravy allocated in South Angus did not cause damage in Oswestry. After that, however, one would need further growth in South Angus to ensure that the differential was maintained. I would hesitate to say that it was a matter of Oh, what a tangled web we weave, When first we practise to deceive! The snowballing effect of the types of incentive proposed in Part II can therefore be seen. The need for more effective parliamentary scrutiny can hardly be more clearly demonstrated than by the fact that there is no mention at any point in the Bill of Upper Clyde Shipbuilders. My hon. Friend the Member for Canterbury (Mr. Crouch) suggested that I had Upper Clyde Shipbuilders stuck in my gullet but I beg him to understand that here is a case involving assistance of £35 million-plus, an open-ended subsidy. It is a specific project which we know will be dealt with under the Bill. We do not know what more will be forthcoming. There are no further limitations on my right hon. Friends to indulge in Upper Clyde activities in other parts of the country in other industries under Part II. We must therefore concentrate on what we know.

My hon. Friend the Member for Canterbury may be convinced that the provisions of Part II and of Clause 8 are essential to enable British industry to surge forward into the last quarter of the twentieth century and to face the wider dangers of competition in the enlarged Community and to the challenges of a swiftly changing world. But the one project about which we know. Upper Clyde, can hardly by the remotest stretch of the imagination be said to coincide with this objective. Inevitably in the context of the Amendments one is bound to ask what sort of purposes will be fulfilled by Clauses 7 and 8 which make it undesirable that there should be the difficulty of parliamentary scrutiny over successive individual allocations of taxpayer funds which is suggested in the Amendments.

My right hon. Friends on frequent occasions have suggested that Clause 8 is the high technology Clause. It is said that with that Clause high technology will be assisted. But when it came to the point in Committee we were told that ICL would not be dealt with under that Clause. I suspect that it is not the high technology Clause but the low technology Clause. Even if the particular form of assistance for Upper Clyde does not come under Clause8, it is an Upper Clyde Clause and I cannot help wondering whether that is one of the reasons for some reluctance to accept a degree of parliamentary scrutiny as suggested in the Amendments.

Perhaps if we had the affirmative procedure we would also have a trail of bizarre investment propositions coming before us. My hon. Friend the Member for Oswestry touched precisely and very correctly on this point. The comment has been made also that if the affirmative Resolution procedure was required for any assistance over £1 million, my hon. Friend, the Minister for Aerospace would be coming back every day with a new affirmative Resolution for Concorde. I would not weep all that many tears over that, although with the present rate of progress he would come not once but twice a day.

9.15 p.m.

My right hon. Friend emphasised in the discussions in Committee that we shall have extensive parliamentary scrutiny at Question Time. Does he regard, say, 20 Questions answered orally every two weeks and covering the enormous field of responsibilities within the Department of Trade and Industry as extensive? That is not a very comprehensive form of scrutiny. Then, of course, there will be the Select Committees, including the Public Accounts Committee. But these are involved in retrospective scrutiny. One has only to look at the Public Accounts Committee's report on Concorde in the 1964–65 Session and study the strictures the Committee made at that time about the project to see how little comfort can be obtained from this form of post hoc scrutiny. At that stage the taxpayer has already been committed and it may be extremely difficult to extract him in mid-course.

Mr. Crouch

I agree that the post hoc investigation by a Select Committee does not help in the administration of aid and assistance. But my hon. Friend is misleading the House by suggesting that Clause 8 will provide help for industries like Upper Clyde and a whole miscellany of industries like that. The Clause does not say that. We are talking of financial assistance likely to benefit the economy or likely to be in the national interest which should be provided but which cannot appropriately be provided in other ways by the Secretary of State. My hon. Friend is misleading the House in trying to scare us into thinking that there are a whole lot of Upper Clydes which will claim money. New Clause 8 is the worst of both worlds. My hon. Friend is asking Parliament to step in and stand over the Secretary of State, and I believe that that would cause assistance to be maladministered.

Mr. Bruce-Gardyne

My anxiety about Clause 8 is that we do not know what it will be used for. As my hon. Friend the Member for Oswestry pointed out, there is no shortage of entrepreneurial capital for commercial enterprises with good prospects. One's interest is there- fore aroused about what are the precise purposes of Clause 8. I remind my right hon. Friend of the statement by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) in the Second Reading debate on the Industrial Expansion Bill which I quoted on Second Reading and which is surely relevant to these Amendments. He said on that occasion on behalf of the Conservatives: We object passionately to these large powers being given to the Government by way of an enabling Bill.…We brought forward individual Bills and, if necessary, we shall bring forward individual Bills again.…"—[Official Report, 1st February, 1968; Vol. 757, c. 1599.] We are not asking in the Amendments for individual Bills. We are saying that if there are individual tranches of financial assistance exceeding £1 million under Part II at least the affirmative Resolution procedure should be invoked.

I reinforce what my hon. Friend the Member for Oswestry said about Amendment No. 23 which raises a rather separate point. My hon. Friend produced a cogent argument for limiting ourselves to a trial period in these uncharted waters. He also introduced what he described as the more controversial argument of the desirability of eliminating temptation from the next Parliament on any speculation one might have about the political texture of that Parliament.

I suggest to my right hon. Friends that there is perhaps an additional reason for accepting Amendment No. 23. My right hon. Friend the Minister for Industrial Development has frequently said that we need not worry about the Bill in this respect, saying that it is not the sort of thing that the Labour Party would want to use for its nefarious purposes and that it would not be suited to those purposes. From time to time in the House we have seen the way in which the attitude of a party in power can make it somewhat embarrassing or awkward to deal with the misbehaviour of the opposition party when it gets back to office. There is an unfortunate tendency for words uttered in government to be repeated against one when one is in Opposition.

If the Government were able to accept Amendment No. 23, at least they would be recognising and affirming at this stage, so that there would be no dubiety about it, that whatever the powers provided in Part II, they would be powers which could be entrusted safely if entrusted safely at all, only to a Government of Tory persuasion.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies)

At this point we are plainly touching on the heart of the Bill. I have listened today with interest and admiration to the arguments made so lucidly on both sides of the House. With your indulgence, Mr. Speaker, I should like to express a word of regret that it was not possible for me to be present throughout the Committee proceedings. Unfortunately, my kind of activity made it difficult. However, I assure hon. Members that I have carefully read what went on. If I may say so without offence, I thought that the Committee was of great interest and that it ventilated an enormous number of issues of fundamental importance to the consideration of the Bill.

Earlier in the discussion there were many admissions of sinners repenting, perhaps particularly on the Opposition benches, one or two attitudes and principles observed during the Labour Government. There was a certain anticipatory repentance of sins on my part by one or two Opposition Members who seemed to think that I, too, had fallen into the repenting sinner class. I can only tell them that that is not so. I am an unrepenting sinner still, if indeed that be my characteristic.

I have not yet believed, and I doubt that I ever shall, in the utility of using the public purse as a means of transferring resources from rich and prosperous operations to unsuccessful and loss-making operations. Generally speaking, it proves to be both defeating and damaging to both sides. Thus, I do not in any way subscribe to those various anticipatory comments. That seems to evoke a smile from the hon. Member for Penistone (Mr. John Mendelson), but I assure him that my statement is made from the heart.

Therefore, nothing in the Bill is argued with my support in the sense of believing that the Government should turn their back on the principle of reinforcing success and adopting instead a kind of easy going attitude to the thousand and one concerns and people who, throughout this and all other countries, are to be found ready to make the most of an occasion of a soft touch. It seems to me evident that Clause 8 strikes at the very heart of the Bill. My hon. Friend the Member for Oswestry (Mr. Biffen) said that it was a Clause which gave him profound misgivings; I assure my hon. Friends and hon. Members opposite that there is certainly no intention in my mind of becoming the soft touch that I personally deplore.

Clause 8 none the less provides what I regard as essential, without offering the many hostages to fortune that would be implicit in a manifest change of attitude, and drawing it up has presented a baffling problem. However, while still adhering firmly to the basic philosophy in which I believe, I think that there are and always will be cases when, for one reason or another, the Government will find it essential to take action to support industries or individual concerns for reasons which in realism are compelling. I have never doubted that.

Part of my unrepenting sinner attitude is that, looking back at what I have said over many years, including the years that I have had the honour to serve the House, I find that I have never failed to say that there were instances when, despite the depth of my philosophy, there were cases which defied its application. Therefore, a provision such as Clause 8 is essential.

This section of our debate has profoundly ventilated problems of accountability and I should like to spend some time on that, although in due course I will return to the questions asked by my hon. Friend the Member for Cheadle (Mr. Normanton), who was greatly concerned about the setting of adequate criteria to guide any activity under the Clause. I will deal with parliamentary accountability, but there are questions, which are some little distance from it, of the positive level of money flow required to sustain the activities to which I have referred and the period of time over which they might be sustained.

9.30 p.m.

New Clause 8 and its attendant Amendments put down by my hon. Friends would require the Government to ask the House for an affirmative Resolution in respect of any item in which £1 million or more was to be expended in order to maintain the principles outlined in Clauses 7 and 8. Having listened carefully to the debate it seems to me that the key point occurs in relation to Clause 8 and not Clause 7; the greater absorbs the lesser in this case, and the issues involved in Clause 7, with their consideration of regional problems and the whole method envisaged for seeking to redress the imbalance between different parts of the country, are obviously treated by the House as being in a very different category of consideration from those related to the more widespread problems of national activities, covering more than merely regional problems.

I should therefore address myself more closely to Clause 8, because that seems to contain the nodal point.

Mr. Bruce-Gardyne

I put it to my right hon. Friend that if Upper Clyde assistance came under the provisions of Clause 7 it was a prime example of the kind of assistance in respect of which the House needs closer scrutiny that it will obtain under the terms of the Bill.

Mr. Davies

That may be so, but I draw my hon. Friend's attention to the fact that at the moment we are talking in relation to the Govan Shipbuilders of the future and not of the past. The intention may be to handle this within Clause 7 but no action has yet taken place because the Bill is not law. No precise decision has been made, although it is probable, as it is a strictly regional operation, that it would be undertaken under Clause 7.

Reverting to Clause 8, I would point out to those hon. Members—notably my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), who spoke with much emotion and very convincingly about his preoccupations with this problem—that it is entirely understandable that Parliament should seek to be involved in issues which, by their very nature, are bound to provoke the most sensitive feelings, particularly among hon. Members on this side of the House but also among some hon. Members opposite.

I hope that hon. Members will bear with me. The problems are very great. They arise, first, because setting the kind of monetary level that is proposed in the new Clause and the Amendments involves the assessment of a number of Resolutions which would need to come before the House. In terms of my brief experience in Parliament, that poses a very real sanction. It is not just a question of accepting the 20 or so cases to which my right hon. Friend referred in Committee, although that is a fairly accurate assessment derived from experience with the Local Employment Acts.

Hon. Members will understand that once the Government have undertaken a commitment in this respect they cannot afford to be wrong; they will have to submit every case that might involve more than £1 million. Once that obligation is undertaken the commitment can become seriously greater. That implies a problem, in terms of the time of Parliament. It would be extremely difficult for Parliament and for the Administration to allow itself as much time as would be required.

In the nature of things the whole of such operations needs to be carried out to a large degree in absolute secrecy and confidence, but they also often need to be carried out with absolute urgency. When we are dealing with problems such as that to which my hon. Friend has referred—Upper Clyde Shipbuilders—and where these issues are involved, the decisions to be taken will find the greatest difficulty in meeting the requirements of the House, in terms of the time that it can make available for such conclusions.

Sir Brandon Rhys Williams (Kensington, South)

I have been listening to the debate with close attention—as I have listened to the debates all day. If grants of about £1million—perhaps a little more or less—were thought to be not suitable subjects for parliamentary consideration, how could taxpayers be confident that there was no waste? If I am right in believing that this House has a special responsibility for taxpayers' money, how can hon. Members tell constituents, "We are confident that we have done all that is possible to prevent the waste of your money"? How can I convince my old ladies in South Kensington, who are living on small fixed incomes, that the Government are not squandering what they are paying in tax?

Mr. Davies

I appreciate my hon. Friend's intervention, and I shall come to the point that he raises, but I was concerning myself then with the difficulties in bringing before Parliament for what we might call almost prior scrutiny—at least, scrutiny before commitment—a large number of individual proposals.

I had thought and hoped that it would be the view of those who were intimately concerned with the Bill in Committee that the more important aspect of the problem that might have appealed to them was the guidance to be given to the Government on the policy by which they administer the law that they will then have at their hand. My right hon. Friend had already conceded one or two important propositions for strengthening that very part of our reference to Parliament which reviews most carefully what has happened. I accept the comments about the relative imperfection of retrospection as regards that specific sanction, but the new Amendments I have put down, with their greater emphasis on appearance before Parliament for it to look at what has happened and then to authorise the next stage, constitute an important time during which there can be a positive intervention in the administration of the law that the Government have. I still hope it will be found that that kind of intervention will be the most powerful from the parliamentary point of view.

Sir H. Legge-Bourke

I am grateful for what my right hon. Friend has said so far. Before he completes his argument, could he illustrate a little more clearly than appears from the text of the Bill how he sees Clause 9 operating with the Industrial Development Advisory Board? To what extent will it operate on very much the same lines as the IRC with regard to obligations to Parliament? To what extent does he see the board asking him to make a statement to the House under subsection (4)?

Mr. Davies

As I see it, on any occasion when the board dissented from my decision it would require me to declare to Parliament that there was such disagreement. That would be a positive sanction of Parliament. I also attach great importance to the annual report which I should be required to make to Parliament. That report, in which I should have to go in considerable detail into the administration of the Act, would give a powerful opportunity. It should not be ignored that the responsibility of Ministers to Parliament and the way in which the Act is administered in Parliament are themselves powerful forces.

Looking back over the past two years of administering what at times is the most difficult operation in Government, the attribution of industrial development certificates, I am very conscious of the degree to which the non-attribution of a certificate gives rise to intervention of a kind which forces the Minister concerned to discuss, either directly on an individual case, or very publicly in Parliament in a case or principle, his reasons for refusal. Therefore, I do not discount, as I think the hon. Member for Glasgow, Craigton (Mr. Millan) did a little at the outset, this answerability on individual issues as a powerful factor in relation to the administration of the Act.

Mr. Bruce-Gardyne

Surely there is this distinction between the application of the IDC procedure and the selective assistance under Part II of the Bill in that the firm which has been refused the IDC is well aware of it and complains through its Member of Parliament and my right hon. Friend is answerable for this. But the firm liable to suffer because its much more incompetent and derelict competitor is enabled to undercut its pricing through selective assistance under Clause 8 may not know about that until it is too late.

Mr. Davies

I do not think that is the case. The truth is that we are constantly faced with the awareness of individual companies within a given industry of the advantages which others have and they do not. I would not give a great deal of credence to the thought that there would be a complete ignorance about those who might be in the state to which my hon. Friend refers.

Mr. Ridley

Surely if my right hon. Friend refuses an industrial development certificate that is the cause of the discontent. If something is granted under Clause 8 then everyone who receives the grant will be happy but it does not meet the case of parliamentary accountability because this House will wish to know what grants have been made in its name with its money?

Mr. Davies

I agree. The issues to which my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) referred are ones which broadly speaking are caught up, I would hope, in the retrospective reviews which would be considerable in the light of the Bill. The more immediate issues might I hope be caught up, particularly with refusals, by the immediate intervention of hon. Members on behalf of the party refused. In general I would firmly hope and intend that the provisions of the Bill do meet very strongly the demands of parliamentary accountability.

I am hesitant to launch myself into provisions which I can see will cause immense parliamentary difficulty in terms of time and which I must straightforwardly confess would, from the point of view of the interests of administrative control, also prove to be extremely embarrassing. It has occurred to me, and I revert to something I said earlier, that there is a considerable distinction between Clause 7, which is primarily a regional vehicle, and Clause 8 which is a national one. In connection with the regional activity it seems probable that the number of individual issues will be much greater but their size will not be so large. There is evidently in relation to these operations a need to try to ensure, as I am sure all hon. Members would agree, the maximum of regional answerability and regional delegation over the provisions of Clause 7.

Clause 8 would primarily have regard to major and national level industries widespread throughout the country and I undertake to the House, in the light of the debate, to consider by what means those could be brought forward in the form for which the House has asked. If I could find the right means of doing that I could introduce the necessary provisions in another place. I wonder whether the House would be kind enough to take my assurance that I will go into that most carefully and will also accept my assurance that it is with reluctance that I must say that to try to take up new Clause 8 as it is or the Amendments that go with it would prove exceedingly difficult.

A word now on the issues revolving round criteria, to which reference was made by my hon. Friend the Member for Cheadle. My right hon. Friend the Minister for Industrial Development wrestles lengthily on this subject of criteria, as he has made clear in Committee. He and I were very anxious to find a means of dealing with this, but I must tell my hon. Friend that to find something which was not simply an open door in terms of criteria or alternatively something which was not so tight as to become an impediment to carrying forward the arrangements envisaged proved to be impossible. My hon. Friend's Amendment No. 59 illustrates the difficulty to which I refer. The proposed subsection (1)(b) of it refers to maintaining the productive capacity of an industry which suffers from an unexpected and markedly unfavourable shift in its trading position due to circumstances outside its control". If that were written in the Bill, it would be an open invitation which would be most difficult to refuse—far more difficult to refuse than the provisions of the Bill. Therefore, I commend to him the difficulty of trying to draft a criterion which will be effective without being so impeding to the purposes envisaged as to be entirely nugatory.

9.45 p.m.

My hon. Friend the Member for Oswestry strongly submitted that we should agree to the curtailment of time envisaged in Amendment No. 23. He gave two major reasons to which my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) added another. The first was that it would afford a very useful vehicle for the Labour Party should it again take power to do all those things which, by nature, and by the declarations which my right hon. Friends and I have made, we clearly would not. I tend to discount that argument. Much reference has been made to the critical importance of the Bill. If it were of critical importance to another party in government to have facilities of this kind, it would have them. It is not by virtue of providing for something which fits exactly the requirements of the present Government that we shall deprive another party in government of its capacity to act as it will.

My hon. Friend's other reason related to the importance which he saw of having experience of the operation of what is proposed, giving oneself time for a rethink and then two years later saying "I have seen all the strengths and weaknesses of what I have done and I can now act more certainly". But the great problem in dealing with this issue is uncertainty. To add an element of uncertainty of that quality to the negotiating and planning mechanism involved in these issues would deprive what is proposed of all effectiveness. This is why the date now in the Bill was inserted. It was with a view to the day when full entry to the Common Market had been achieved. It was to give a period of manifest certainty to industry in relation to any provision which might be made under this legislation. I should find it very hard to accept the Amendment, which would neutralise the Bill's efficacy from the point of view of the industrial benefit involved in it.

In the light of what I have said, the provisions envisaged in Amendment No. 53 are almost incidental. It was tabled by the hon. Member for Craigton as virtually a supplementary to the inclusion of new Clause 8. I have explained why I find it very difficult to accept new Clause 8 and what I shall try to do to meet some of the concern which has been expressed.

The intention behind Amendments Nos. 24 and 25 is to reduce the total amount of money proposed in the Bill for the purposes envisaged. Of course, the question of assessment of the money requirement in all of this matter is obviously a matter of the very greatest difficulty and I would not pretend for a moment that the total of £550 million split into an original tranche of £150 million followed by four of £100 million is an exact and precise, assessment of what is required, but it must be said that the experience which has been had hitherto in the problems of the kind of support for industry envisaged in Clause 8—I refer to such matters as the whole of question of support for the aircraft industry, of which there has been a good deal of experience, and of support for the textile industry, of which there has been a good deal of experience, and others, too—gives one an idea of the order of size of the sums involved in doing the operations which might prove necessary. I should have thought it very difficult to operate effectively on so small a scale as that envisaged in that Amendment to which I have referred.

I have tried hard in the course of these remarks to cover the many points which have been made during this debate. I am, I repeat, exceedingly conscious of the desire of the House to have the strongest possible activity itself in invigiating the proper use of the provisions sought. I will seek hard to meet it in the way I have suggested. I hope the House will find that what I have proposed in Amendments No. 60, 61 and 62 goes some way to help the situation. However, I conclude where I began by saying that, convinced as I am that the kind of provisions in Clause 8 have to be used with the very greatest reticence, I am none the less sure, that in order to bring about the kind of remedies of our industrial structure which at the moment I see as so necessary, something on the lines of Clause 8 will need to be in the hands of Government as a piece of positive legislation.

Mr. Millan

The Secretary of State has come a little way towards meeting those of us who have pressed the question of parliamentary control. I myself will not enter into the wider issues which were debated between hon. Members on the other side of the House earlier, but I shall stick, in view of the time and other circumstances, strictly to the question of parliamentary control.

I cannot say that I find all the arguments of the right hon. Gentleman terribly compelling. The argument about urgency, for example, was attempted to be dealt with in new Clause 8. I would not say its wording is as felicitous as perhaps one would require if it were accepted and were to be written into the Bill, but at least the problem is recognised and an attempt is made to deal with it. I personally believe that the question of urgency can be caught. If the Secretary of State is to produce some kind of solution for Clause 8 assistance I think he will have somehow or another to find a formula which deals with the question of urgency among other things. Therefore, I do not think that his was a terribly good argument for turning down the new Clause.

Mr. Davies

I apologise for not perhaps having dealt with the matter in the depth which the hon. Gentleman's introduction of it justifies. I think the difficulty about the provisions of new Clause 8 in relation to urgency is that it does not give reasonable elbow room to deal with urgency and so becomes ineffective to sustain parliamentary answerability. This is a real difficulty that, if one seeks to find words which are to provide for the urgency problem at all, they almost inevitably neutralise the effectiveness of the accountability.

Mr. Millan

I am not sure that that applies. For example, ICL has been mentioned a number of times. I appreciate that that matter is now being dealt with under the science and technology Act and will not be dealt with under Clause 8, but it raises the general issue of the kind of Clause 8 assistance that the Government might wish to give, and there was no particular urgency there in terms of parliamentary control. I know that the right hon. Gentleman had been pressed for quite a considerable time to make up his mind about giving assistance to ICL, the scale of the assistance, how it should be given, and so on, and there was what the Select Committee felt was unnecessary delay in the Government making up their mind. But once the Government had made up their mind it would have been perfectly possible to have had parliamentary proceedings without in any way prejudicing the operation.

I therefore do not accept that in every case by any means, or perhaps in the majority of cases, particularly with Clause 8 assistance, the question of urgency arises. But I appreciate that there are cases where it does arise, and I would not wish so to tie the hands of the Minister that even when he wanted to do something which virtually everyone agreed would be sensible he found himself quite unable to act because of legislative provision.

With regard to confidence, if it is true that there are many cases in which questions of commercial confidence arise and that therefore it is not possible to tell the House what is going on, that of itself makes it rather difficult for hon. Members to put down the parliamentary Questions which the Minister assured us a moment ago was one of the most effective ways of bringing scrutiny to bear on the decisions of Ministers. Under the Clause as it stands many things can happen without hon. Members knowing anything at all about them, so we will not be able to put down Questions even if the effect is that by putting them down we can adequately scrutinise what the Government had already done. Therefore, although what the Minister said at the end of his remarks represents some progress, and we are grateful for it, I do not think that we have yet had an adequate reply to the points that have been made in the debate.

I am not impressed, either, about the question of parliamentary time. Affirmative orders these days are strictly limited to one and a half hours of parliamentary time, and this ought not to be the major consideration. The vast bulk of Statutory Instruments are now subject to the negative procedure which unfortunately means that in a Session such as the current Session most Prayers are never reached at all. An affirmative order under Clause 8 must have one and a half hours of parliamentary time allotted to it, and that could perfectly well have been accommodated even in a busy Session.

Even if the affirmative procedure were adopted I would not have been particularly worried, although it reduces parliamentary accountability, if in many cases the action was taken and the order was debated a little later—not months later but a day or two or a week or two later—because that would be a fairly effective sanction against Governments behaving perhaps irresponsibly or because they were subjected to unnecessary pressures. Again, therefore, one has to say that although the Minister is obviously trying to be helpful, he is not, in the view of many of us, being helpful enough.

Let me quote something from the report of the Expenditure Committee, which seems to be the fashionable thing to do today. It is an excellent report and I am only sorry that we have not had it for a rather longer time in order to assimilate many of the important points made. In relation to UCS, paragraph 123 states: The Secretary of State told the House on 28th February 1972:'In contrast with arrangements made by the previous Government, I will see that this vast investment of public money is properly monitored and accounted for'. The report continues: The Secretary of State was unable to give us any details at this stage as to how this would be done.

10.0 p.m.

That seems an excellent example of what successive Ministers say. They are always full of goodwill and always promise to do better than their predecessors. As so on as they are told that there is a lack of parliamentary accountability they say, "It is perfectly true about what has happened previously under our predecessors but I assure the House most solemnly that in this case we shall do very much better. It will all be properly monitored and accounted for". That is all said in perfect good will and sincerity, but the common experience of hon. Members is that at the end of the day it does not mean very much, however sincerely the pledge may have been given.

That is one of the reasons why we have attempted to put into the Bill something concrete. The Secretary of State has tried to help by cutting down the extent of the individual tranches for which he is to give help under Clause 8. I have already welcomed that. We have now also had this pledge to try to put something into the Bill before it passes from the other place in specific relation to the selective assistance under Clause 8.

Division No. 331.] AYES [10.3 p.m.
Normanton, Tom
Pardoe, John
Skeet, T. H. H.
Mr. John Biffen and Mr. J. Bruce-Gardyne
Atkins, Humphrey Hawkins, Paul Mills, Peter (Torrington)
Baker, Kenneth (St. Marylebone) Higgins, Terence L. Moate, Roger
Butler, Adam (Bosworth) Hornsby-Smith.Rt.Hn.Dame Patricia Noble, Rt. Hn. Michael
Carlisle, Mark Howe, Hn. Sir Geoffrey (Reigate) Peyton, Rt. Hn. John
Chataway, Rt. Hn. Christopher Jenkin, Patrick (Woodford) Pym, Rt. Hn. Francis
Clarke, Kenneth (Rushcliffe) Jopling, Michael Rossi, Hugh (Hornsey)
Clegg, Walter Kershaw, Anthony Royle, Anthony
Crouch, David King, Tom (Bridgwater) Shaw. Michael (Sc'b'gh & Whitby)
Davies, Rt. Hn. John (Knutsford) Kirk, Peter Speed, Keith
Dean, Paul Knox, David Tebbit, Norman
Dixon, Piers Lambton, Lord Thomas, John Stradling (Monmouth)
Drayson, G. B. Lamont, Norman Thomas, Rt. Hn. Peter (Hendon, S.)
Eden, Sir John Lane, David Ward, Dame Irene
Fortescue, Tim Langford-Holt, Sir John Weatherill, Bernard
Gibson-Watt, David Legge-Bourke, Sir Harry Wood, Rt. Hn. Richard
Gilmour, Ian (Norfolk, C.) Le Merchant, Spencer TELLERS FOR THE NOES:
Goodhew, Victor Macmillan, Maurice (Farnham) Mr. Oscar Murton and Mr. Marcus Fox.
Grant, Anthony (Harrow, C.) McNair-Wilson, Michael
Haselhurst, Alan

Question accordingly navegatied.

Being realistic, that is probably as much as we are likely to get from the Government. It is a disappointment, but I do not believe that we shall get anything much more satisfactory than that.

We shall want to look very carefully at what is done before the Bill goes to another place and before it returns from another place. Hon. Members on both sides of the House will wish to pursue this matter not only on this Bill but as other Bills come forward raising similar issues, because the whole question of parliamentary accountability is not now adequately dealt with in our legislation or under the procedure of the House.

With those remarks and in view of what the Secretary of State has said, I beg leave to withdraw the new Clause.

Mr. Deputy-Speaker (Mr. E. L. Mallalieu)

Is it your pleasure that the new Clause be withdrawn?

Hon. Members


Question put, That the Clause be read a second time:—

The House divided:Ayes 3, Noes 52.

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