HC Deb 29 July 1974 vol 878 cc396-407

10.27 a.m.

Mr. David Crouch (Canterbury)

I believe that there are very serious consequences for British industry as a result of the present Government's industrial policy. We do not know what that policy is. All that we have been treated to is not a White Paper, which we could have expected and through which the country could have been informed of what is in store, but a series of scares which appear in the Press daily.

What is the Government's industrial policy? We do not know. The Secretary of State has failed utterly to tell us by not publishing his plans. Or is it that he has been overruled at the last minute? Has the Prime Minister told him to pipe down on his pipedreams? Has the Home Secretary, in his wisdom, said that he has had enough? What about the Secretary of State for Education and Science and the Secretary of State for Prices and Consumer Protection? Have they had enough, too? We are entitled to know. We are about to go into the Summer Recess with this complete uncertainty about what the Government intend to do about the whole of the private sector of industry.

Today the Labour Party is split right down the middle. This miserable Government is split in two on this subject. Where does the Chancellor of the Exchequer stand on this matter? Does he believe in a national enterprise board?

Mr. John Ellis (Brigg and Scunthorpe)

Where is Ted?

Mr. Crouch

The Chancellor did not believe in a national enterprise board a year ago.

Mr. John Ellis

Where are your lot?

Mr. Crouch

The Chancellor is not in the Chamber. It was the Chancellor who moved an amendment against the Labour Party's proposals for a national enterprise board.—[Interruption.]

Mr. Deputy Speaker (Mr. George Thomas)

Order. We have been remarkably peaceful during the night.

Mr. Crouch

Thank you, Mr. Deputy Speaker, for your protection.

I must remind the House, including the noisy hon. Gentlemen who have just woken up after being asleep most of the night, that the Chancellor moved an amendment against the whole idea of a national enterprise board a year ago in the Labour Party's National Executive Committee. He was defeated by one vote. Does he believe that the Government can afford such a board? His Treasury advisers have no doubt but that it would be wildly inflationary. They are advocating deflationary policies. We have already seen the Chancellor ignoring this advice in his mini-Budget. Is he also reluctant to listen to their condemnation of his ambitious colleague the Secretary of State for Industry?

At a time when the whole country knows that we are in a fearful economic mess and is trying to make politicians of all parties hear its cry for a sense of national unity the Government refuse to listen and instead force upon the country their strangely divisive policies of pure undiluted Socialism. They do not give a damn, this Government, for what the public wants or for the fact that they are a minority Government who earned for themselves fewer votes than at any time since the war.

They will give us a Socialist State whether or not the public likes it. Is that to please the Fabian Society? No. Or the great body of Socialist moderates? No. It is not the majority in the country or in the Party whom they are aiming to satisfy, but the Left-wing militants who call all the tunes in this wretched Government.

My purpose today is to draw attention to the Government's completely irrelevant policies regarding further nationalisation of industry and wide intervention in the private sector of industry. The Secretary of State believes that he must do these things. He is quite determined. I do not believe that he will allow anyone to stand in his way. He is utterly convinced that it is the only solution for the problems facing us. I can accept his anxiety, but he is utterly wrong.

He is mad to pursue such policies at this or any time. It would be disastrous if he were to have his way. It is my hope that he will be forced to resign or will be sacked before he can start on his reign of industrial dictation. One thing is certain—the Secretary of State for Industry would find no place in any coalition which might develop in this country. His ideas are now the policies of the whole Government. They strike fear into the private sector of industry.

If he gets his way private industry will be finished. The system of private enterprise will be ended. The right hon. Gentleman has never tried to hide his hand. He believes in open debate and has put forward his views, not in a White Paper, but he has allowed us to see his arguments and he has told us exactly what he intends to do. The last Labour Party manifesto made this absolutely clear to the electorate. The Government said that they would nationalise the aircraft industry, the ports and parts of the pharmaceutical industry. I must declare an interest in that I am associated as a director with a company in the pharmaceutical industry.

I am, however, talking about a much wider range. The Labour Party manifesto said that it would also nationalise large parts of the construction industry, road haulage and the machine tool industry. The Government have also hinted at taking over the building of aeroengines, the running of banks and other financial institutions and having a good look at the multinational companies. Quite a mouthful!

This is not all, and this is not all that worries me. The Secretary of State believes that the private sector is so incompetent that ultimately all of it must come under his control. His megalomania is remarkable, and it drives him. He intends to "set up new machinery", his own words, to do all of this. There will be a new Industry Act and a national enterprise board, and planning agreements.

What does he mean? Does everyone know what the right hon. Gentleman means by "planning agreements"? Under planning agreements with companies the right hon. Gentleman will give them orders to do a number of things. He will order them with regard to prices, how much they sell at home or abroad, where they may operate, how much they should and can invest, what they should produce and develop. He will also dictate their industrial relations policy.

Let every manager, every man and woman in industry consider what this means. It means no enterprise, no initiative. It is 1984 in 1974. In addition to this piece of Socialist excess the Secretary of State will set up a national enterprise board. This, he says, will be used to attain objectives that can only be attained by direct and positive intervention. These are his words in his notes.

He says that the NEB will retain public control in areas of the economy of great national interest and that the NEB will purchase key sectors in manufacturing industry. The new Industry Act which he will introduce will be used to extend public ownership. The Government are out to turn Britain into a full Socialist State, in which the Secretary of State for Industry passionately believes. So, no doubt, do his supporters—and we are glad to see the Minister of State here this morning and some of his closest friends.

But there are many in the Government who shrink from such a mad policy. What a pity the Prime Minister is not big enough to stop the rot. The nation does not want it. If there is a General Election the public will show in no uncertain terms that they do not want it.

They are prepared to accept a mixed economy, as I am and as most balanced and moderate people are. Probably 25 million voters out of 40 million voters in this country are against such a revolution as proposed by the right hon. Gentleman. Nevertheless, the Government insist in floating such irrelevant, irresponsible and dangerous ideas. They are draining all confidence from industry, from the boardroom and the shop floor. They have split the Labour Party right down the middle and I think they have ruined their chances at the next election.

It is not for me to warn my opponents of the mistakes they are making. I should be gloating and rubbing my hands with glee. But I am afraid that the public may still not believe that such a fantasy as I have described could ever come to pass. I am afraid that they think of the Labour Party in terms of the model-ate majority epitomised by the intelligence of the Home Secretary and do not realise that the party is ruled by a wild minority, by men who want revolution and are determined to get it. At the risk of assisting the Prime Minister with his chances this autumn may I say that I hope he will disown his right hon. Friend and instead give British industry the chance to survive on its own. Now is the time for him to put the interests of the nation before party dogma.

10.36 a.m.

Mr. Hal Miller (Bromsgrove and Redditch)

I rise to speak on behalf of the motor industry of this country which accounts for over 8 per cent of our capital formation and over 12 per cent. of our exports. As I made plain in my maiden speech I believe that Governments of all parties have misused this industry to a degree unparalleled in history and in a manner quite inconsistent with the aims of growth to which both parties have subscribed.

I make no defence of the interference with this industry that took place when my party was in Government. It has militated directly against the growth of employment and of wages which I believe all of us wish to be one of our main aims. Whatever we may have done, however, is as nothing when compared with the proposals to which the industry is now to be subjected. We have been told of these proposals, not in the House, but in notes prepared in the Department of Industry and released through Transport House. There was no statement in this House, no Green Paper, not even a White Paper. It is for this reason that we hold this debate on the industrial policies of the Government, because we have not been afforded an adequate opportunity for such a discussion.

Mr. John Robertson (Paisley)

I did not know whether the hon. Gentleman was declaring an interest when he rose to speak. Has he an interest in the car industry?

Mr. Miller

I am happy to declare that I have no financial interest whatever in the motor car industry—either in shares, retainers, in directorships or in any other sense.

Mr. Robertson

How then can the hon. Gentleman speak on behalf of the motor industry?

Mr. Miller

I am not the official spokesman for the motor industry. It is true that I have accepted a responsibility on behalf of my party.

Mr. Robertson

So the hon. Gentleman is speaking for the Tory Party and not for the motor industry.

Mr. Miller

I have accepted a responsibility on behalf of my party to investigate the motor industry. I do not claim to be the party spokesman. I said that I had accepted a responsibility to look into the industry and to work on the basis of fact rather than on the basis of doctrine which the Labour Party takes as the basis for its proposals.

I refer to the programme of work transmitted through Transport House rather than in any ministerial statement or Government paper which we may have had an opportunity to discuss. In those notes, to which I suspect the Minister of State subscribes, we are told that the Government's programme of nationalisation and planning agreements is intended to counter low investment and poor growth, inflation, improve industrial relations, to make large corporations more accountable, to correct regional imbalance and to help to iron out some of the problems created by monopolies.

In the light of the record of the nationalised industries, what hope do we have that any of the aims of the Department's work programme will be met by an extension of nationalisation? Installed capacity in the motor industry is already running at about 2.6 million vehicles. Never in the last decade has that output been attained. Therefore, it is not merely a question of inadequate investment. The installed capacity is there for the output which our exports and trade balance required. However, the motor industry's efforts to produce have been frustrated largely by the proposals of the Labour Party.

We on this side were to blame for our use of the economic regulator, which has created untold damage in the motor industry, with sudden and violent fluctuations in demand which have led to the fluctuations in the demand for labour. This has been one of the root causes of the poor industrial relations in the industry.

Mrs. Gwyneth Dunwoody (Crewe)

I hope that the hon. Gentleman will not mind if I point out to him that in factories such as Rolls-Royce in my constituency, which not only have full order books but are working as fast as they can to fulfil the orders, the labour relations problem is dealt with because they have intelligent man-management techniques. It is much more important to have properly trained people in personnel than it is to talk about the fluctuations that capitalism brings about by its own recycling.

Mr. Miller

I think that the hon. Lady will agree that one of the ills of the motor industry has been the system of lay-off. If she does not believe that, perhaps she will ask Transport House about it, because that follows from the information and discussion which I had there.

There is nothing in the Labour Party's proposals, so far as we have been able to understand them, and so far as they have been presented, which will cure the ills to which the motor industry is liable. What the industry requires is greater freedom from Government interference, with people who know their job, whether it be on the shop floor or in the office, being allowed to get on with it.

10.44 a.m.

Mr. Peter Viggers (Gosport)

The world outside this parliamentary hothouse will not understand why the debate on the most important issue facing the country today is given half an hour at the end of a very long sitting. One of the joys of the debate on the Consolidated Fund Bill is that if one feels strongly enough about an issue and waits long enough one can make a speech. We are told that at 10 to eleven the Minister of State will address us, and in the 10 minutes which I understand he will take it will be possible for him to rectify much of the damage done by his party in the last four months.

The Prime Minister has said that a clear frontier must be defined between public industry and private industry. Mr. Richard Marsh, when he was the Minister responsible for the steel industry, said on 19th January 1967: The private sector of the steel industry is essential to the effectiveness of the industry as a whole. It has a special part to play. Previously he had said: The Government have taken a conscious decision…that the private sector is as important as the public sector to the economy of the nation."—OFFICIAL REPORT, 19th January 1967; Vol. 739, c. 730.] I remind the Minister of State of the important speech made by the Home Secretary, whom many Members on both sides of the House respect. He said: we have to live with the realities of a mixed economy… I am also in favour of a healthy, vigorous and profitable private sector. We do and shall depend upon it to provide a great part of our jobs, our exports and our production. If those obvious statements about a mixed economy are accepted, the Government should seek to provide the framework within which the public and private sectors can be prosperous and can expand. Above all, the Government should give confidence to industry and an assurance that its long-term plans will not be frustrated by the twists and turns of Government policy or by the relentless advance of State control and ownership.

There are differing views about the extent to which the public sector should advance. We on this side accept that there are differing views about the extent to which public ownership should advance. Parties and individuals are entitled to hold different views. But no party and no individual should be entitled at this time of economic uncertainty to put forward ideas which threaten our industrial prosperity; for that is the effect of the vague and threatening pronouncements of the Secretary of State for Industry and his departmental colleagues.

I give one example of what I call random walk nationalisation. The Financial Times of 29th July reported: The Industry Secretary has agreed to consider a trade union proposal that the Post Office should take over at least part of Plessey's £142 million telecommunications business…The Department of Industry will look at the union's proposal in the context of a study which the Minister has asked the Post Office to make into the possibility of extending its manufacturing interests. The Post Office is unlikely to present its report before October.', Unless the Minister of State denies the Press report, here we have a Ministerial statement of an intention to consider the nationalisation of part of a company which does not even fall within the high-risk area for nationalisation as declared by the Government. What effect must this statement have on investment and employment in the telecommunications industry? These questions demand an answer. In the 10 minutes left to the Minister he can repair the damage that has been done in the last four months by the Government's vague and threatening behaviour.

Mr. Ronald Brown (Hackney, South and Shoreditch)

Declare your interest.

Mr. Viggers

I am happy to declare my interest. I work as director of a merchant bank of which I am extremely proud. I am also director of one or two other companies—

Mr. Ronald Brown

What are they?

Mr. Viggers

I am director of a small oil company. I am chairman of a quoted textile company, a central heating installation company, a hotel company and several other companies. These activities enable me to have the knowledge to say that the Government's activities are damaging and to ask them to repair that damage.

10.52 a.m.

The Minister of State, Department of Industry (Mr. Eric S. Heffer)

Like many hon. Members I wish that the House could have had more time to discuss the Government's industrial policy. That there has not been more time is neither the Government's fault nor anyone else's. During the night there have been some fairly lengthy debates which I have noted from a seated position.

I regret the intemperate speech which was made by the hon. Member for Canterbury (Mr. Crouch). It was not in his usual style. He does not usually speak in the House in so ranting a fashion. He made continuous personal attacks on my right hon. Friend the Secretary of State for Industry and tried to suggest, as his hon. Friends have been trying to suggest for some considerable time, that the Government's industrial policy is purely the responsibility of my right hon. Friend. The Opposition know that that is not true. They know that industrial policy is the Government's policy. It was clearly laid down in the manifesto on which the Labour Party fought the last election.

On the one hand, the hon. Gentleman complains that he does not know what the Government's policy is and wishes that the Government would tell the House. On the other hand, he says that the Opposition know what the Government's policy is, and that it has all been published by my right hon. Friend in the speeches he has made throughout the country. I do not know what the Opposition are complaining about. I do not know whether they are complaining that they do not know what the Government's policy is or that they know only too well what the policy is. Perhaps it is just that they do not like the policy. It is perfectly understandable that people who are dedicated to a totally free enterprise system should not like a policy which is put forward by a party that believes that we must move stage by stage towards a Socialist society.

The hon. Member for Canterbury has repeated on many occasions that we intend to introduce compulsory and dictatorial planning agreements. That is not, and never has been, the Government's suggestion. If the hon. Gentlemen would read Labour's programme for 1973 upon which the policy is based they would learn that there is no question of compulsory planning agreements. Companies will be asked to give information and there will be discussions between the companies and the Government, involving the trade unions at all stages, and a voluntary agreement will be reached between the Government and the companies concerned. Hon. Gentlemen ignore the fact that in many European countries—

Mr. Viggers

On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to continue beyond 11 o'clock, as I am sure that many of us would wish to hear more of what he has to say? That would also enable him to answer the Opposition's questions.

Mr. Deputy Speaker

Mr. Heffer.

Mr. Heffer

Several European countries already have planning agreements. They are not Socialist countries. They are France, Belgium and Italy—

Mr. Ralph Howell (Norfolk, North) rose

Mr. Heffer

I am sorry, I cannot give way. Hon. Gentlemen must allow me to make my speech in the short time available. A debate on Irish affairs has been promised and it is right that that debate should take place. If hon. Gentlemen will listen for a moment, I will deal as quickly as I can with the questions that have been raised. If they constantly interrupt, it will not be possible for me to do so.

Planning agreements exist in France, Italy and Belgium. Some of them, particularly in France, are on a sector basis, others are with individual companies. We shall institute a system of planning agreements that is tailored to the needs of this country. They will be fitted in with our requirements. That is why we object to the statements being made to the effect that my right hon. Friend and I are commissars. We do not intend to dictate to companies. An agreement is an agreement. The agreements will be voluntarily arrived at. Once the White Paper is published—

Mr. Crouch


Mr. Heffer

—and there has been the fullest discussion on the White Paper, and consultations have been had with the people involved, companies will see the benefits that can be gained from planning agreements.

I come to the national enterprise board. I refute the charge that only my right hon. Friend the Secretary of State for Industry is concerned in this. The Prime Minister in introducing this policy at the Labour Conference last year said: An essential instrument in our industrial policy will be the National Enterprise Board, with the functions and structure set out on page 33 of the Labour programme. We intend to build a national enterprise board which will involve itself in competitive industry. The Opposition criticise the nationalised industries, but they have been a great success. Under successive Tory Governments they have not been given opportunities to expand and develop, and they have been held back. They have not been allowed realistic pricing policies. The effect has been a subsidy to private industry. Through the national enterprise board we intend to extend our policy into competitive industry. In that sense it will be a new form of publicly-owned industry. Conservatives say that if this were to happen, it would be the end of political democracy.

Mr. Crouch

I did not say that.

Mr. Heffer

The hon. Member for Canterbury may not have said that, but his Conservative colleagues constantly take that view. Unfortunately, the CBI in its document equates private industry with political democracy. One can have a dictatorship in a Communist country as well as in a country full of privately-owned industries. Dictatorships can exist anywhere.

We are a democratic Socialist Party. We believe in democracy; that is the essence of our policy. Our belief is that through our system of planning agreements, and through the national enterprise board, the extension of public ownership in the direction of our programe, including the participation of trade unions and workers at every stage, will ensure a great extension of democracy—the very reverse of what the Conservatives say.

In conclusion, may I say that I am deeply sorry that I have been unable to answer all the points because of the time factor—[Interruption.] I do not complain about the situation.

I should like to make one final point raised by Conservative Members regarding trade unions which take the view that industries should be publicly owned. The view was tantamount to a suggestion that it was a crime for a trade union to suggest that its members who work in an industry should not have the right to suggest that possibly it should be taken over. The whole history of public ownership began when workers originated the suggestion of workers' control. That happened in the coal industry and was aimed at attaining decent living conditions for miners. I can well understand why the trade unions want to be involved in any extension of public ownership.

Mr. Walter Harrison (Treasurer of Her Majesty's Household) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

Committee this day.