INDUSTRY (FINANCIAL ASSISTANCE)

HC Deb 26 January 1976 vol 904 cc173-207

10.14 p.m.

The Minister of State, Department of Industry (Mr. Gerald Kaufman)

I beg to move, That the Financial Assistance for Industry (Increase of Limit) (No. 2) Order 1976, a draft of which was laid before this House on 15th January, be approved. The House will recall that Section 8(6) of the Industry Act 1972 lays down that the aggregate of sums paid plus the liabilities under any guarantees granted under Section 8 less repayments of loans or principal sums paid to meet any guarantees shall—[Interruption.]

Mr. Speaker

Order. I am having difficulty in hearing what the Minister is saying. Will conversationalists proceed outside the Chamber?

Mr. Kaufman

—not exceed the limits defined in Section 8(7). This in turn stipulates that the limits shall be £150 million but may be increased by £100 million on not more than four occasions with the agreement of the Treasury.

In order to avoid any chance of incurring commitments in advance of the authority of the House, we have adopted the practice of counting commitments arising from offers of assistance made and accepted, irrespective of the phasing of actual payment. These, together with sums already paid in discharging commitments and liabilities under guarantees, are carefully logged.

On this basis, the total of sums counting against the statutory limit is just over £245 million as against the present statutory limit of £250 million approved by the House on 18th February last year. At present, there is a moratorium on accepting further commitments under Section 8, unless these are made subject to the approval by the House of the draft Order, and the House is requested to authorise a further increase in the limit to £350 million, to permit on-going programmes to continue.

The House will wish me to describe briefly how the current total of commitments is made up. At the time of the debate on the first Order to increase the statutory limit in February last year, there were two industry schemes under Section 8—the Wool Textile Scheme, and the Offshore Interest Relief Grant Scheme. Since then, the Government have set in train further schemes to assist sectors of industry, for clothing, machine tools and ferrous foundries. The total of payments and commitmenes to date under these schemes is £15.6 million.

Of the assistance provided to individual companies, the sums paid and guarantees to Norton Villiers Triumph and Meriden have remained within the total of just over £18 million already approved by the House. Assistance to projects in connection with the country's offshore capability has been about £1.4 million.

As notified to the House on 13th October, the financial assistance to Kierney Trekker Marwin has been increased to £5.2 million through the granting of a guarantee of £250,000.

In terms of magnitude, the most significant cases affecting the total sums to be set against the statutory limit have been, first, those where assistance was initially provided in the form of interim guarantees, but where the guarantees were subsequently extinguished by a financial reconstruction. The three particular cases were Scientific and Medical Instruments, whose guarantee was extinguished by a Government contribution of £4.5 million to the formation of a new company, Cambridge Instruments; Alfred Herbert, where the guarantee was expunged through the provision of £26.2 million in a financial reconstruction; and British Leyland, where the guarantee totalling £100 million was extinguished through the assistance made available under the British Leyland Act 1975. In consequence, the total of payments and commitments had reached £162 million by 10th November, but was reduced to £62 million as the £100 million guarantee to British Leyland was withdrawn.

The second major factor has been the Government's agreement to provide assistance to Chrysler UK Limited. Immediately prior to the conclusion of these negotiations, the total sums accountable against the statutory limit stood at £81.8 million.

Under the terms concluded, whilst the maximum liability would be £162.5 million, the full sum must be counted against the statutory limit, which immediately pushed the total close to the existing limit of £250 million. Since then, steps have been taken to ensure that further commitments are not accepted pending the approval of the House to the draft Order currently before hon. Members.

A further, and very important, source of assistance has been directed under a special scheme to encouraging companies to bring forward significant investment projects which they have been compelled to defer through pressures of the economic recession. All hon. Members will, I am sure, acknowledge the urgent need to encourage industry to invest now.

This scheme, introduced by my right hon. Friend the Chancellor of the Exchequer in his Budget in April last year, has proved to be very successful in generating additional investment. Assistance totalling £11.77 million has been made available to bring forward projects of a total capital cost of £67 million. Companies assisted have embraced the chemical, pharmaceutical, mechanical, electrical and motor engineering industries. The appraisal of more than 20 other cases is well advanced, and a further 50 are in the early stages of appraisal. The potential new investment that would be brought forward will be measured in terms of hundreds of millions of pounds, and will make a major contribution to the vital need to modernise and strengthen manufacturing industry.

The same considerations apply to the industry schemes which are concentrated upon key sectors of the economy. Here again, the investment generated will have major national significance. Offers under these schemes are also in suspense.

Accordingly, in recognition of the wide benefits flowing from the investment schemes in progress, and in order to provide scope for further schemes to be introduced in the context of the Government's strategic policies, I would commend the draft Order to hon. Members and seek the approval of the House.

Mr. Peter Rees (Dover and Deal)

Would the Minister enlighten us on one point? Are we to understand that applications have already been put in which have absorbed the extra £100 million? Does he have actual projects in mind or is this purely hypothetical?

Mr. Kaufman

We are examining applications. No applications which would take us over the top of the limit approved by Parliament are being accepted. I cannot say to what extent the new total that we are asking the House to approve tonight will be taken up because we have not yet completed our examination of all the applications. They are still coming in.

10.22 p.m.

Mr. Michael Heseltine (Henley)

The Minister of State tonight asks the House for the third tranche of money authorised under Section 8 of the Industry Act 1972. As he says, if he has his way in the Lobby, the Order will bring to a total of £350 million the expenditure and commitments entered into under that section.

From the outset these powers have been controversial. There are those who, on philosophical grounds, question the desirability in principle of using Government money in any circumstances to assist industry, and there are those who on more practical issues doubt the ability of Government to substitute their judgment for that of the commercial market. Many question whether Government in this country in existing circumstances can augment the judgment of the market. The present absence of knowledge and professional machinery in Whitehall and Westminster simply appears too great. The argument, as all of us know who have taken part in industry debates, ranges across the entire political spectrum.

The Industry Act 1972 gave the opportunity to the overwhelming majority of us on both sides to enact a framework wherein Government and industry could have worked together in the pursuit of those common aims of industrial excellence upon which our industrial future must depend. To achieve them, the powers of Section 8 were made very wide. Many people believe that those powers were made too wide. Their very width therefore transfers the responsibility to Ministers for the way in which they are exercised and the granting of these powers in the first place can be justified only on the basis that Ministers will act with discipline and discretion.

Even so, in 1972, certain limitations were built into the legislation to restrict the use of the powers for political ends. An advisory board was set up, drawn from industry and the unions, to assist the judgment of Ministers who, if they had used the powers as they were originally intended, would inevitably have faced the unpalatable and harsh decisions which would have been consequent upon saying, "No". That is the sort of decision that the Government constantly talk about but rarely take.

Now this Government in two years have justified the worst forecasts of those of my hon. Friends who had such deep reservations at the time that the Bill was discussed, when they warned exactly what was likely to happen.

The reality is that the conspicuous mistakes associated with Section 8 of the Industry Act greatly overshadow the parts of the Order to which the Minister of State devoted virtually all his speech, because it is the conspicuous mistakes that have set the hallmark for the industrial policy of this Government.

The reality is that, as time has passed, the decisions have become more indefensible, the specialist advice available from IDAB has been flagrantly ignored, and, predictably, the cost of each decision has become larger. The Meridens and the Kirkby's have now given way to the Leylands and the Chryslers, and industrial decision-making by the Labour Government has become associated with a mixture of personal expediency and political opportunism. The fact is that the Scottish Daily News and Meriden have become drops in the ocean when we compare them with what followed.

British Leyland represented the largest ever commitment to a single company. The justification at the time had an all-too-familiar ring. It was said that the company needed investment. The Government therefore promised to divert investment from elsewhere, via its tax or borrowing powers and to monitor the company's progress, to ensure that a proper accountability was maintained on its expenditure.

The House will not have forgotten that, long before Mr. Riccardo's name was ever heard and the suggestion about threats ever introduced, it was the Prime Minister who was claiming to put a pistol to the heads of the workers of British Leyland. If the targets were not met, the funds from public sources would cease to flow.

This very afternoon, when the Minister of State was asked whether the targets were being maintained, whether the standards were being set by which the second tranche of funds was to flow, he was quite unable to answer the questions put to him.

The reality, as forecast at the time, is that, whatever words were used by the Prime Minister, to whom we were referred, or by the Minister of State, the workers of British Leyland knew better. The strikes have continued. The losses have exceeded the budget. In practice, the new investment—which this section of the Industry Act was supposed to be all about—has now, as far as the car parts are concerned, been brought to a halt. The funds have not stopped flowing. The funds are being used to finance the losses, which are running ahead of the original budget.

Anyone who really believes that the next tranche of money for British Leyland will be actually surrounded by more restrictions than the earlier tranche simply has not come to understand the weakness with which this Government administer their industrial policies.

Then we had Chrysler. Perhaps the House will allow me to read from a document on industrial strategy. It states: By and large, profitability and return on capital, measured in financial terms, remain the best prima facie indicator of an industry's or company's efficiency in using resources and in giving consumer satisfaction.… Thus, if we are to achieve the over-riding objective of improving our industrial performance, available resources should go into those industries and companies which have the soundest performance and/or the best prospects as regards viability and rate of return. I doubt very much whether that text will immediately strike a familiar note in this House, but it is the Government's latest statement of their industrial strategy. It is dated December 1975, and I should like to pay tribute to my hon. Friend the Member for Blaby (Mr. Lawson), whose adroitness led to the extraction of that document from the fastnesses of the Government's most inner secret cells. It was published in the same month—for the benefit of the Government, but not for the public—as the Government announced a decision to commit £162 million to an American multinational company which had lost £4.3 million over the past 10 years, and which was generally agreed to have no longterm prospects of viability.

On 16th December the Secretary of State for Industry promised a viable strategy for Chrysler for the 1980's. In the same statement he explained his plans for dealing with potential financial losses for that company of £40 million in 1976, £24 million in 1977, and £24 million in 1978. A week later, on 23rd December, he explained to me that he could not give the figures for his viable strategy after these three loss-making years no one had worked them out for after 1979.

The reality is to be seen in the flood of volunteers for redundancy pay. The fact that they had come forward from the workforce of Chrysler shows just how much confidence they put in the future of this rescued giant that is supposed to have such a long-term viability. But this is the process which is so eloquently described in the same document on Government strategy which in theory sets out their latest thinking. Under the heading "Assessment of Viability" it says, An assessment of viability is a matter of facts, figures and commercial judgment in which wider economic and social factors have no part to play. However, it is not all bad news. The British taxpayer may be committed for £162 million. Twenty-five per cent. of the Chrysler jobs are gone. But for the American stockholder in Chrysler Incorporated it is quite another story. On the day that the Secretary of State for Industry told this House the details of the Chrysler deal, the quotation of Chrysler Incorporated on Wall Street was $10 a share. Late last week, that quotation stood at $14 a share. In the period from then to now, we all know that the Dow Jones index has risen. General Motors shares rose 1¾ per cent. less than the index. Ford shares rose 5 per cent. more than the index. But shares in Chrysler Incorporated rose 25 per cent. more than the index. At the time of the Secretary of State's announcement Chrysler Incorporated was worth £300 million. Today it is worth £427 million.

So for the American shareholders it was good news all the way. The British taxpayer had handed out £162 million, and the American shareholders personally, at our expense, gained £127 million profit in just 37 days. Even the hard-nosed Lord Ryder would have been impressed with profits of that scale and at that speed.

I have always been staggered by the fact that the present Government's priorities are to find £300 million for the shareholders of the British aerospace and shipbuilding companies when investment is back to the levels of the early 1960s and unemployment is up to the levels of the 1930s. In these circumstances surely that money could be better used. But at least they are British shareholders. In the case of Chrysler they are American shareholders, American multinational shareholders.

Some harsh words have been passed over the Chrysler deal. But as we decide tonight whether to satiate the present Government's appetite for taxpayers' money, let it not be my judgment, let it not be the judgment of virtually every independent British commentator, and let it not be even the judgment of the Secretary of State for Industry, who was rumoured in the national Sunday Press to have described the Chrysler deal as the worst Government decision for years. Let the Americans speak for themselves. I quote from Newsweek of 23rd December 1975, under the heading "Danegeld for Chrysler". It had this to say: Not since Ethelred the Unready had a British ruler been so generous to a foreign invader. Like a Viking chieftain, Chrysler chairman John Riccardo arrived with a threat … Prime Minister Harold Wilson decided that tribute was the better part of valor. The record of profligate expenditure on industrial schemes of no or dubious commercial prospect has destroyed the present Government's claim to further trust. We shall attempt to deny them further funds in the only way open to us—by voting against the Order tonight.

10.34 p.m.

Mr. Douglas Crawford (Perth and East Perthshire)

The Scottish National Party gives a very qualified welcome to the implementation of the third tranche of money under the Act passed by the Conservative Government. SNP Members welcome it because one of the beneficiaries will be Scotland, as a development area, and certain parts of which are a special development area. We take no pride in the fact that we are a development area, because it is a dreadful indictment of the Union of 1707 and the fact that we are governed from London. But it is a fact that we hope that Scotland will benefit from the Government's proposals as contained in the Order.

We have 7 per cent—plus unemployment. We have been told by a Minister that certain other countries in the Common Market are doing very much better than the United Kingdom, but we do not want to be compared with them. We want to be compared with Norway, Sweden, Switzerland and Austria in this matter. More significanly to the question of our own money which has been passed back to Scotland from Whitehall is the question of the 1969 paper, prepared by the Scottish Council, which said that the centralisation of decision-making over industry in Scotland had been increasing and ought to stop. Since then, nothing has happened—and the fact that nothing has happened has to stop.

We welcome this increase in money from the Government, particularly because, under Section 7 of the Industry Act 1972, the Secretary of State for Scotland will be administering it. But we have certain reservations, and with those reservations I want to put certain questions.

First, how much of the extra money is to go to Scottish companies in Cumnock and Prestwick? Secondly, how much of it is going to Marathon Shipbuilders on Clydebank? Thirdly, since the Secretary of State for Scotland is responsible for the administration of Sections 7 and 8 of the Conservatives' Industry Act, what proportion of the extra £100 million will come under his aegis and control?

My next question concerns certain newspaper reports over the weekend saying that the Government have changed their minds and have decided that the Scottish Assembly is to be given powers over trade and industry. We are told that we must not believe everything we read in the Press unless it helps the Gov- ernment. If we are to believe these reports, does it mean that the Secretary of State for Scotland is relinquishing his powers over trade and industry in Scotland under the 1972 Act? If he is, what proportion of the extra £100 million is the Assembly to control?

It is important to know the answer to this question because of the vagueness of the Government's commitment to the Scottish Development Agency. We have been told that the Government are to give £300 million to it, but we do not know over how many years—whether it is five, six or seven years, for example. We do not know how much money is to go to it for a particular year. It is very important to know how much of this extra £100 million is to go to the Assembly, especially as, out of that sum, quite a lot is already in the hands of the Scottish Industrial Estates Corporation for rural areas.

Because of the doubts surrounding the agency, what is the relationship of Sections 7 and 8 of the 1972 Act to Scotland, particularly as they affect the position of the Secretary of State for Scotland? We also wish to know, in this context, the relationship of Sections 7 and 8 as they affect the Assembly. These questions are vital to Scotland.

We favour the wish of the Government that more money should be given under Section 7(2) of the Industry Act, to promote the development or modernisation and efficiency of industry in the assisted areas. We welcome it cautiously—very cautiously. We hope that the Order will be passed, but we have those reservations.

10.40 p.m.

Mr. Norman Tebbit (Chingford)

My hon. Friend the Member for Henley (Mr. Heseltine), in a characteristic speech, summed up the situation well. He graciously referred back to those days when the Conservative Government's Industry Act 1972 was going through the House, recalling the criticism of it made by some Conservative Members, who were told then that it was all right because Ministers behaved responsibly. As my hon. Friend the Member for Henley has said, unhappily these criticisms proved to be true, and we have seen a series of investments ranging from the irresponsible to the downright lunatic.

We finish up with this new version of overseas aid, which once again comes under the heading of poor countries giving to rich countries, the poor British taxpayer supporting the American stock exchange with the willing votes of the Tribune-ites, speeding the money on its way.

We have no idea what new ventures the Minister has in mind to support with the next £100 million. The Minister has. We cannot ask him tonight which companies he has in mind. We can only pray. But we can ask him whether he is considering applications for aid in the light of the criteria laid down in the Chequers strategy. Is he looking for companies and industries which are profitable? The Minister is nodding. I do not know whether he is nodding at me or at his PPS, who is perhaps telling him that he should be looking for profitable industries to invest in. Is he looking for companies which conform to the criteria of the Chequers strategy?

Mr. Kaufman

I very much welcome the presence of the hon. Member for Oswestry (Mr. Biffen) on the Opposition Front Bench. It is an extremely satisfactory and agreeable sight which has diverted me from my wish to reply to the hon. Member for Chingford (Mr. Tebbit). The other day I published the Government's criteria for assistance. We seek projects which qualify under those criteria. As for Chrysler and its qualification under those criteria, I shall reply to the hon. Member for Henley (Mr. Heseltine) when I wind up the debate.

Mr. Tebbit

I am grateful to the Minister, but he only makes me more puzzled as to how investment in a company like Chrysler can fit the criteria. If he pledges himself tonight not to put more public funds into sure-fire loss-makers like Chrysler, he may even have a degree of sympathy from us. I am not sure whether he would have any sympathy from his Friends, because this would imply that there was no more money for the next Scottish Daily News, although that was sold to this House by the present Secretary of State for Energy as a sure-fire money-maker. We assume that the Minister will clear up that matter later.

All we are told time and again, when we criticise Government policy on investment in industry, is that it is not their fault that every day a queue of business men turns up at the Department of In- dustry with begging bowls. The Minister nods. In that case he chooses very unreliable chaps to invite in with their begging bowls, and he chooses begging bowls with no bottoms to pour taxpayers' money through. If so many begging bowls are being presented, why cannot he find one or two which are profitable? He does not have to go as far as Lord Ryder, making money at that sort of rate—we would all have hesitations about that—but surely there are one or two profitable enterprises he can launch. The rate of spending is becoming frightening. It is accelerating. The demands come in faster and faster. The money is consumed faster and faster.

We are entitled to some clear answers from the Minister before anyone—let alone we on this side of the House—goes into the Lobby to vote for another handout for another bust company which cannot be put back on its feet.

10.45 p.m.

Mr. Nick Budgen (Wolverhampton, South-West)

I note with interest that the Scottish National Party gives the Order a cautious welcome. I am sure that many, if not all, my constituents would wish to give it a vigorous rejection. They know that increased taxation leads inevitably to increased unemployment. Coming as I do from the home of industrial Britain, I realise that most of my constituents will know that this increased hand out can be paid for honestly only by increased taxation or dishonestly by increased inflation. They know that for every extra £100 million paid by the State there is a declining chance for individual private entrepreneurs to give employment to the many people who, unhappily, are unemployed in Wolverhampton.

Many people in my constituency will be looking to this debate for a declaration of principle so that they can understand what the consistent theme is which allows Chrysler to be bailed out and NVT not to be bailed out. They will wish to know whether it was merely electoral bribery which made is necessary to bail out the Linwood plant. Was it just a plea to the SNP, a way of buying off the irreconcilable forces of the SNP, which made it necessary to bribe them with English taxpayers' money? Or did not the unhappy people of NVT have sufficient political leverage to extract more money from the taxpayer for them?

Those are some of the questions which my constituents would wish to ask the Minister, as he sits on the Government Front Bench amiably grinning and laughing, for they regard it as a matter of grave importance. Many of my constituents do not agree with my attitude to a proposed bail-out for NVT—I respect their point of view—but they are entitled to have a consistent view put forward from the Government benches. They are entitled to be able to look at some document setting forth the Government's principles and to say, "These are the principles which were fairly and honestly applied to NVT and Chrysler". They are not entitled to have to say to themselves, "There was one bribe, but we were not big enough to be bribed. Perhaps we did not behave unlawfully enough. Perhaps if we had kicked in a few policemen's teeth, perhaps if we had voted in a local Poujadist Member, like the SNP in Scotland, we would have been bought off".

My constituents are entitled to ask of the Government that their claim, if they make a claim for any discretionary grant, should be dealt with in an honourable and just way which showed some consistency and equity. They should not be treated as pawns in a political game, with money being handed out as some eighteenth century duke would hand out rotten boroughs to those who would support his particular interest in Parliament. For this is the ultimate corruption of a system of State handout which is being perpetrated by the Government.

Those of my constituents who agree with my view about NVT would also wish to know whether this is just one of a number of handouts which is to be made by the Government. The Minister is a far subtler parliamentary performer than I could ever hope to be, but my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) put a clear question to him a few moments ago. He asked whether the £100 million in aid had already been spoken for. [HON. MEMBERS: "He did not."] He did, in a very clear intervention. The Minister, who is a very cunning parliamentary performer, gave him a reply which was as clear as mud. He said that applications were not being accepted but that they were being examined, by which, I suppose, he meant—in using the word "accepted" —that they had come in but that they had not yet been approved.

So what we are to understand is that once the Labour Lobby fodder have done their duty tonight and the extra £100 million has been voted, if this £100 million has already been spoken for, we shall have to have this same debate asking for another £100 million pretty soon, and there will be another increase in tax.

The public-spirited entrepreneurs in my constituency who wish to take risks and who wish to provide employment for those who have become unemployed as a result of the failure of NVT will be faced once again with increased taxation, and once again by increased and arbitrary interference from the ever-growing power of the State. We shall be back to this once again, and the chances of those unhappy people in NVT getting back into profitable private employment will decline as we have to go through this charade night after night while the present Government continue in power.

10.52 p.m.

Mr. Peter Rees (Dover and Deal)

I had not intended to intervene in this debate but, as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) reminded the House, the answer from the Minister of State to, I hope, an intelligible question from myself was so obscure that I feel moved to press him a bit further on his intentions. The obscurity of his reply was only matched by the obscurity of the hon. Member for Perth and East Perthshire (Mr. Crawford), who represents the Scottish National Party in this Chamber, who appeared to deprecate the Act under which this Order is moved but welcomed its results because they might benefit the area from which he derives.

Mr. Crawford

Country.

Mr. Rees

I said "area". The hon. Gentleman represents only part of Perthshire. If he tells me that he represents the whole of Caledonia I shall be compelled to appeal to my hon. Friends who represent more favoured areas in Scotland.

We are entitled to ask the Minister of State with a little more particularity what is the proposed destination of the funds that we are being asked to vote tonight. Are they to give a little more boost to the high-flying drakes in whatever part of the United Kingdom, or are they to recover winged ducks most of which have fallen into the Clyde? This is a question that the country will wish us to put to the Minister.

We have heard the brave objectives pronounced at Chequers before Christmas, singularly unmatched by subsequent acts of the present Government. We have observed Mr. Riccardo come. He came, he saw and he conquered. He returned to Detroit to a triumph unmatched by any triumph seen in ancient Rome. He at least was able to overcome a Government of singular ineptitude and weakness.

I suspect that when we have the debate on unemployment on Thursday, the brave words of the Chancellor of the Exchequer that we have heard from time to time will again prove to be unmatched by deeds, and I suspect that he will be manoeuvred by his own left wing, by the hon. Member for Luton, West (Mr. Sedgemore), who sits so surprisingly silently, to reflate contrary to all the economic auguries. It may be too late to quibble over the question of Government intervention in industry and Government support for industry, although I would have preferred to see the previous Conservative Administration take a rather stricter line on this question. That is past history, but we are entitled to ask to which industries precisely—item by item and category by category—the Minister of State will, in his generosity, devote the extra £100 million he is asking us to provide tonight.

Mr. Budgen

Will my hon. and learned Friend agree that what we must press for most of all is a consistent statement of policy, so that we may know in advance which industry will dies and which will live?

Mr. Rees

I was coming to that, though I doubt that I shall suggest an answer which will encourage my hon. Friends, because I suspect that at the end of the day the criteria which the Minister will apply will not be economic but political. This is why so many of us on this side—not all, perhaps, but a great number—profoundly suspect the principle of Government intervention and support, whether it comes from a Conservative Government, a Labour Government, a Liberal Government, or even, dare I say, a Scottish National Party Government.

Mr. Crawford

A Scottish Government.

Mr. Rees

The hon. Gentleman must make his peace with his own taxpayers. Let him consider what might be the position if ever the time came when he was presiding over a Scottish adminstration, whether in Perth, Edinburgh or Glasgow—and I suspect that in the end it would be sited politically in Strathclyde even if it were geographically in Glasgow. It is all very well for the hon. Gentleman to shake his head. He must reassure his electors—I hope that they have paid heed to his utterances—that by asking for Scottish independence he is not delivering them over to the voters of Strathclyde and certain parts of Fife who, on the whole, would be rather more in favour of Socialism and Government direction than I suspect he is. Perhaps he will declare himself.

Mr. Crawford

I remind the hon. and learned Gentleman that the only party ever to have had an overall majority of votes in Scotland has been the Conservative Party. The Labour Party has never had an overall majority of votes in Scotland.

Mr. Rees

I am fascinated by that little historical interlude. If the hon. Gentleman is suggesting that, in offering home rule for Scotland, he will deliver the Scots over to a Conservative future, I must tell him that I should vote wholeheartedly for home rule for Scotland, because that is a consummation devoutedly to be hoped for. I have many Scottish friends and relations, and if I could be convinced that they would be controlled according to good Scottish Conservative principles, or even British Conservative principles, I should regard that as a future to contemplate with some relish.

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. I think that the hon. and learned Gentleman is making a rather long aside. The Chair would be grateful if he would return to the main theme.

Mr. Rees

I am always diffident when corrected by the Chair—in particular, by its present distinguished occupant—but I have always understood it to be a principle of our debates that one should try as far as possible to follow where the debate leads. Therefore, when a percipient and acute Caledonian intervention is made, I feel it behoves someone who has the privilege to represent an English constituency to try to follow as best he can.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Perhaps my hon. and learned Friend would more readily keep within the strict confines of the debate if he were to advance as one of the criteria—perhaps the main criteria—that Scotland is a nation.

Mr. Rees

I find that a very difficult point. But I have some anxiety on this matter, since I represent a constituency in East Kent where a great number of people with Scottish antecedents live. Indeed, I am privileged to celebrate the occasion of St. Andrew's day with the Caledonian Society in St. Margaret's, as I am privileged also to celebrate St. David's day with the Welsh, and I am not aware that the whole Scottish nation is confined north of the border. In fact, I see among my right hon. and hon. Friends a great number with distinguished Scottish names who have the good fortune to represent English constituencies.

Perhaps with the concurrence of the Chair—and also of my hon. Friend who represents the Anglo-Saxon seat of Cirencester and Tewkesbury (Mr. Ridley) and of the hon. Member for Perth and East Perthshire, whether he has Scottish, Welsh or English antecedents—perhaps I may try to return to the main economic theme of this discussion, because at the end of the day it is the plaudits of Mr. Deputy Speaker rather than those of the House that I seek to achieve.

I want to put one further point to the Minister of State, should he be fortunate enough to catch Mr. Deputy Speaker's eye. Has he considered whether the liberal distribution of cash that he has in mind would do more good if it were distributed among the self-employed and service industries? It appears that the Administration which he so ably and eloquently represents is still unaffected by the view that the big and the beautiful is not necessarily the good.

Would not the distribution of largess, involving thousands rather than millions of pounds, in the service industries and among the self-employed achieve more in the industrial regeneration of this country and to alleviate the nation's employment situation then the distribution of millions of pounds to ailing and possibly outdated industries? The Minister should apply his mind a little more closely to that problem. We should like to know how he justifies the expenditure of the extra £100 million that he hopes to cajole out of the House tonight.

We know that the Minister of State is capable of sharp judgments, in pointed language. I hope he will realise that, although we have tended to poke a little fun—and the Minister has taken it with his usual placidity—we are making a serious point. I hope that he will not brush the matter aside and give us a frivolous or doctrinaire speech in reply.

Perhaps he will tell the House what kind of applications he has received and how favourably he has looked upon them. He might also give his view whether the infusion of money in different sectors of the economy might not do much more for the industrial, social and economical health of the country.

11.3 p.m.

Mr. Nigel Lawson (Blaby)

I, like my hon. and learned Friend the Member for Dover (Mr. Rees), had not intended to intervene in the debate, but I wish to try to answer the questions asked by my hon. and learned Friend about criteria. He returned to that theme several times. Admittedly, he went up several byways but he eventually returned to the matter at hand. Indeed, he travelled up as far as John o'Groat's but he came back again.

Let us examine the criteria used by the Government. I take this opportunity to pay a tribute to the Secretary of State for Industry on his paper on the criteria for assistance to industry, from which my hon. Friend the Member for Henley (Mr. Heseltine) quoted. That document came out in a surprising way as a result of a Written Question tabled by me. I was surprised because those of us who serve on the expenditure Committee asked for this information a long time ago. We were told by the Chief Secretary to the Treasury that it was forthcoming—but nothing happened. Indeed, we have not yet had a reply from the Treasury to our request. The matter has been overtaken by events. I understand that the reply is due in a few weeks' time.

I wish to draw attention to Section 5, paragraph 27, of that document headed "Rescue Operations". That paragraph gives a little lesson in industry and the economics of industry and how the system works—a lesson that many Labour Members would do well to learn. It begins: The number of bankruptcies every year runs into thousands (as does the number of new businesses) and it would certainly not be sensible to allow expectations to rise that the Government would step in regularly to keep loss-making activities going. A receivership or a liquidation"— The right hon. Gentleman even dares to mention those words. There are some hon. Members on the Conservative side of the House who are sometimes unwilling to mention them. But no! The Secretary of State is bold. He says: A receivership or a liquidation does not necessarily involve the complete cessation of a company's activities, since the responsibilities of the receiver or liquidator towards creditors will often be best fulfilled by maintaining the business as a going concern in order to secure the highest price. That is excellent stuff.

The right hon. Gentleman goes on: The resources of manpower, premises and equipment of insolvent businesses are in many cases taken up in whole or in part by other enterprises expanding or starting up. That is a great paean of praise to the private enterprise capitalist system and how it works. It is all true.

The document goes on: In the assisted areas a new employer, if he purchases the assets from a receiver, is eligible for help under Section 7 of the Industry Act under the Category A criterion, since he is held to he creating new employment. This, rather than the propping up of failed enterprises, is and should remain the principal contribution that the Industry Act—although not primarily an instrument for dealing with redundancies as distinct from promoting development and employment—can make towards dealing with redundancies; and it is likely to have the advantage of involving new management and additional private sector resources. This is a splendid paragraph, the best one in the whole document, and it is altogether a good document. It is the best ever to have come from this Government. It should be celebrated by the whole House, even at this late hour.

What puzzles many of us is that if these are the criteria, what on earth are the Government doing? There seems to be no relationship between what the Government do and the criteria they put forward. I ask the Minister to do two things. First, I ask that this document, with its criteria, should be incorporated into the legislation—as a sort of codicil to the Industry Act. It should be given legislative force. Second, I ask the Minister to publish the criteria for departing from the criteria.

11.8 p.m.

Mr. Michael Marshall (Arundel)

There is a certain familiar feeling about yet another late-night session in which we are being asked to approve yet another tranche of public expenditure. Some of the points that have been made are of vital importance as we look to the Minister to give us, if not some crumbs of comfort, at least an assurance about precisely how the criteria with which my hon. Friend the Member for Blaby (Mr. Lawson) has dealt are working in practice.

Any brief summary of the ways in which the Government have used the Industry Act 1972 as amended gives cause for concern. We have seen, time and again, this emerging principle, which seems to be outside and overriding that which is in the notes of guidance so skilfully extracted by my hon. Friend the Member for Blaby, of subsidising competition within industry. We have had this absurdity, as my hon. Friend the Member for Henley (Mr. Heseltine) pointed out, whereby we are now propping up different parts of the motor industry so that they may compete with one another. The view is shared on all sides of the House that this cannot make sense.

I hope that the Minister will say something about it. If we go back to the Triumph-Norton-Villiers failure we see a continuing thread whereby money is apparently to be spread throughout the industry to encourage competition. With Chrysler, it is hard for many of us to swallow the events of recent weeks, since money was offered to Mr. Riccardo on terms which so clearly favoured the American stockholders rather than the people of this country.

The second matter to emerge in recent months is that the search for profitable investment, as outlined in the criteria before us, does not seem to add up to the kind of policy decisions the Government are making. When we consider the whole question of the nationalisation of the aerospace and shipbuilding industries we find it hard to see how any assistance which might be provided under the order, or any part of the Industry Act, will fit in with the criteria of profitability which are so boldly claimed as part of the Government's current strategy.

The paper does not cover the older nationalised industries directly, but it says in paragraph 1: The same principles are in fact applicable to any subsidies paid to the older-established nationalised industries. If that is so, will the Minister tell us how he can in all honesty sustain the Government's policy that the nationalised industries must have economic pricing? The steel industry, for example, is having to absorb the impact of decisions which are not taken on an economic basis. As I interpret the Act, in the arguments about plant closures the British Steel Corporation would have a fair claim to assistance for maintaining plant which would have been closed under its strategy.

Hon. Members on both sides of the House are worried about the Shotton-Port Talbot situation. The Minister could help us by telling us when we may expect a decision on that, which will be relevant to the appeals for aid which I believe will come from the Corporation, on an increasing scale and very likely within the terms of the Act as I now interpret it.

Under the subheading "Market prospects", paragraph 15 of the splendid notes which the Department put out only in December says: A realistic appraisal of the market for the company's products, at home and overseas, and of the company's ability to sell in those markets at competitive prices, is essential. We can only go by the evidence of recent Government decisions. When we think of the whole motor industry situation we have reason to wonder precisely what vetting of market prospects is undertaken. We had the CPRS Report, which had to be dragged from the Prime Minister, screaming and protesting. There was also the Report of the Trade and Industry Sub-Committee of the Expenditure Committee. Those Reports added up to an overwhelming case for doubting British Leyland's future market feasibility. Yet the Government, turning aside advice from many quarters, and on a basis which has never been explained to us, com- mitted the country once more to massive investment in internal competition within the motor industry.

The Minister would help us if he gave an assurance that there is some positive vetting within the Department of market prospects. A number of us have questioned this in recent days in various contexts, notably the Post Office (Banking Services) Bill. Tonight, as we talk about help for manufacturing industry, we are entitled to more chapter and verse than we have had so far. We at least have "Criteria for Assistance to Industry", but we should like to know that behind the document's broad headings there are flesh-and-blood figures who can interpret those desirable criteria and put them into practice.

It is because I have such fears and reservations about the lack of information that I shall have no difficulty in joining hon. Members in all parts of the House in opposing the Order.

11.15 p.m.

Mr. Geoffrey Dodsworth (Hertfordshire, South-West)

I would like to follow my hon. Friend the Member for Arundel (Mr. Marshall) and ask the same question in a slightly different way. There are people called "number crunchers". May I ask who crunched the numbers tonight? It will assist hon. Members to know that number crunchers are people who do sums—sometimes on the back of envelopes, sometimes with calculators and sometimes with refined electronic devices. Did the Minister and his Department have any assistance in deciding the sum of money that should be authorised tonight?

We are told there should be criteria, but not what they are. We have asked for details and whether there have been any acceptances. We are told there have been applications, but no acceptances. Did the Minister consult with the Treasury before arriving at a situable figure to present to the House? I understand that a £100 million order falls within the area of book-keeping error for the Treasury, so we should not have too much confidence in its assistance. I have tried to get information from the Treasury on activities of this nature. On 20th January, I asked for a breakdown of information on all nationalised industry borrowing powers, the existing statutory limits, the increases permissible by Order and the estimated amounts outstanding on 31st December last year. One would think that with all the powerful machinery of government and its massive physical and mental resources, those questions could have been answered with the speed of light. Hon. Members will be disappointed to learn that the answers were not instantaneously available from the Treasury. I was told that the information was being collected and would be published as soon as possible. That is the basis on which we are controlling expenditure in Orders of hundreds of millions of pounds at a time.

We are being asked to give the go-ahead for another £100 million and not worry about it too much because it is in good hands. Many of us do not have much confidence that there is control and monitoring or that the figures are being added up correctly. Perhaps it is being done on the back of an envelope. If so, the Minister could give us more confidence and have a more favourable disposition of votes by showing us the calculations.

11.19 p.m.

Mr. Giles Shaw (Pudsey)

The debate has been useful if only for the fact that hon. Members have continually probed the Minister to obtain clarification. We need clarification on why he feels this sum is appropriate, what criteria should apply to these disbursements and how they should be controlled.

The demand for clarification has been the common factor in every contribution so far. At a time when the Government are seeking to encourage industry to reequip and re-invest for the boom the Chancellor of the Exchequer has just around the corner, it is vital that we are told in clear and unequivocal terms what the Government's policy on aid for industry will be. It is timely that we ask for clarification.

I should like to put three points to the Minister in addition to those which have already been made. The first, which follows from the comments made by my hon. Friend the Member for Blaby (Mr. Lawson) on the splendid Chequers criteria for the Industry Act 1972, concerns the effect of those criteria. My hon. Friend suggested that they be incor- porated as a codicil to the Industry Act 1975.

I remind the Minister that in those interminable debates in Committee on the Industry Bill we tried to pin down himself and his colleagues to providing criteria for the National Enterprise Board as to the measurement by which the Government would seek to judge the effectiveness and efficiency of that organisation. At no time did we get anywhere in trying to find a form of words or even a form of financial discipline which was acceptable to the Government at that date. The hon. Gentleman should at least agree to publish the criteria in the form of a directive under the Industry Act 1975 for all investments that the NEB may seek to make.

The Minister will note that Clause 1(6) of the criteria contains the statement: By and large, profitability and return on capital, measured in financial terms, remain the best prima facie indicator of an industry's or company's efficiency in using resources and in giving consumer satisfaction. That is an important phrase to have been included in the criteria. It is right. Indeed, it is time that the Government recognised that consumer satisfaction is as much measured by the return on capital employed as by any selective price restraint or price increase scheme which may or may not be in their mind.

Secondly, the Minister referred to schemes for selective assistance under Section 8—for example, the wool textile industry scheme. I give full credit to the Government for going over the top of the £15 million tranche to the £18 million requirement. But the return made by the industry was a massive reduction in the number of companies. There was a swing from about 120,000 operatives, in production terms, to about 67,000 currently and a trimming down of the industry to combat modern competitive market conditions. That was a major return to the country for that money.

In similar schemes the hon. Gentleman must seek a similar willingness by industry to contract, to re-equip and to reshape to face modern competitive conditions. I ask him to apply those criteria to the scheme he may have in mind in the projected examination of the £100 million under discussion.

Thirdly, to what extent is the professional expertise of the IDAB or, if necessary, the CPRS available in interpreting the viability of companies and their susceptibility to investment? Is that expertise regarded as paramount?

If we are to recover from our present deep malaise, we must have a combination of Government money, where this is regarded as essential, expertise to indicate whether the investment will produce any return, willingness by industry to demonstrate and measure that return and, above all, a climate in which risks properly taken will bring effective dividends. Those are the criteria by which this £100 million should surely be judged.

11.24 p.m.

Mr. Tom King (Bridgwater)

We are dealing with the second application by the Government for a further £100 million tranche under the Industry Act 1972, as amended by the Industry Act 1972. I am not surprised that my hon. Friend the Member for Chingford (Mr. Tebbit) got the impression that the occasions on which the Government ask for yet more money are becoming frequent. The frequency of application is an indicator of the Government's profligate spending in this area.

My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) has a sinister suspicion that this money might already be spoken for. I am sorry to confirm that my researches show that that is not only the case but that the Government have already allocated more money than is being asked for in this Order. My researches show that the Government have already allocated £400 million under various programmes. They have permission from this House for £250 million, and this Order will entitle them to a further £100 million, but they have entered into other commitments in their various programmes. There is the accelerated investment programme, and there is the machine tool scheme. I can find no trace of any expenditure committed in those respects, but I know that they are allocated under separate allocations. The fact is that more than £400 million has been attributed.

The difficulty in trying to establish the true situation is that we have a confused picture. Sums go in and out under Section 8 of the Industry Act with alarming frequency. The Minister made this clear. We had British Leyland money of £100 million. "Now you see it, now you do not", because then it became the British Leyland Act and the money has gone again and is no longer attributed to Section 8. We have the Alfred Herbert guarantee, which at one stage was under the guarantee section, and then it was suddenly switched under an Order to a full finding and total share acquisition.

We also have the funding powers of the NEB, which further confuse the position, and it is difficult to trace what is happening. When one looks at the figures supplied in an answer by the Minister of State to my hon. Friend the Member for Henley (Mr. Heseltine) one is struck by the extraordinary contrast between the sums involved. There are detailed and minute payments to Kierney Trekker Marwin, including one payment of £100,000 in March 1975, and slipped in at the bottom there is a small item of £162 million for Chrysler.

It may be the law of diminishing interest, but we might ask what has happened to Kierney Trekker and Marwin, because we ought to pay some attention to these small companies which are no doubt on their sixth application for special extra funds which they want for some project of which we have no information. In the scale of things, because our rate of expenditure in this Order is £1 million a minute, it is a little difficult to spend too much time on the last £100,000 for Kierney Trekker and Marwin, but I think that we ought to pay some attention to these sums.

We oppose this application tonight because we are totally opposed not only to the gross abuse of the reasonable powers that exist under the 1972 Industry Act but to the substantial amendment which the Government made to that Act by their 1975 Industry Act. It is stretching the bounds of credibility in this House to talk piously in the guidelines which have been referred to by my hon. Friend the Member for Blaby (Mr. Lawson). The guidelines say that the way in which Section 8 is operated depends on what opinion is obtained in each case from the Industrial Development Advisory Board. What the document does not go on to say is that we and the Government cannot ignore every opinion that the Board gives us, and it might have been more honest if that had been stated.

We have in this Order one of the main reasons why it is necessary to ask for a further advance on the tranche, and that is the expenditure on Chrysler. The Chrysler expenditure of £162 million has still not been adequately explained to the House. We have never had explained what is the new process by which Chrysler will produce a new model for £5 million, a technique quite unknown to other car manufacturers in the world. I know that the House will wish the Select Committee well in its attempt to establish the true facts of the whole Chrysler situation. Whatever the Minister of State's ambitions in entering the House and reaching his present high position in the Government, I doubt whether he saw himself as an invigorator of the Dow Jones Index. His constituents may view with mixed pride his achievement on behalf of the American shareholders of Chrysler.

My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) has been absolutely consistent in his attitude on this. When his constituents were directly involved in Norton Villiers Triumph, he made clear his principles, and the whole House respected him for it. In this case, he asked for simple justice between different parts of the country and asked that political interests should not totally sway Government decisions.

It is at least gratifying to have had the Government's guidelines. My hon. Friend the Member for Blaby played a big part in getting them. However, although there are funds under Section 8 of the Industry Act, they are not as large as the funds of the NEB. We still have not had guidelines about how the NEB will operate, yet it is already set up and acquiring shareholdings.

This strategy and this application for funds might be more acceptable if they were consistent with the Government's overall economic strategy. But the Government's summing-up of their position in the paper on their criteria is: Thus, if we are to achieve the over-riding objective of improving our industrial performance"— an objective to which the whole House would subscribe— available resources should go into those industries and companies which have the soundest performance and/or the best prospects as regards viability and rate of return. Because the Government have totally failed in their expenditure under so much of this section to live by their own criteria, and in support of their own principles, we shall vote against them tonight.

11.32 p.m.

Mr. Kaufman

By leave of the House, I should like to reply. This debate has been another curious exercise in innocence by dissociation by the Opposition. They have been busy dissociating themselves from their own Act of Parliament. One of the reasons why I so welcomed the momentary appearance of the hon. Member for Oswestry (Mr. Biffen) on the Front Bench a short time ago is that when the Industry Act 1972 was going through the House he and a few very lonely hon. Friends kept the House sitting late into Friday night, forlornly opposing their Government, some members of whom have been attacking us tonight for implementing their legislation.

For example, the hon. Member for Pudsey (Mr. Shaw) asked why £100 million was the appropriate sum. Section 8(7) of the 1972 Act says: The said limit shall be £150 million, but the Secretary of State may, on not more than four occasions, by order made with the consent of the Treasury increase or further increase that limit by a sum specified in the order, being a sum not exceeding £100 million. That is why £100 million is the appropriate sum.

The hon. Member for Bridgwater (Mr. King), winding up this truncated debate, complained that this money was being voted at the rate of £1 million a minute—precisely under his party's legislation, forlornly opposed by the hon. Member for Oswestry during that battle four years ago, which I remember very well since I hung about for the legislation because I prided myself in those days on my Division record.

Mr. Tebbit

Was there anything to stop the hon. Gentleman from tabling an Order for £50 million in 90 minutes, or even £25 million, if only he could restrain himself?

Mr. Kaufman

No. The legislation enacted by the present Opposition is generous in this respect and we have availed ourselves of its flexibility. As my right hon. Friend the Secretary of State for Energy always used to say, they left us with a valuable instrument.

The hon. Member for Henley (Mr. Heseltine), in introducing the debate on behalf of his party, drew attention to what he regarded as some inconsistency between the criteria which I readily published in response to the question of the hon. Member for Blaby (Mr. Lawson)—the hon. Gentleman has been kind enough to acknowledge the fact—and the aid that we gave to Chrysler, for which the House voted with a substantial majority just before the Christmas Recess. The hon. Gentleman was very selective in his quotations from the criteria, and I add, not subtracting from or substituting for his quotation, paragraph 21 of the criteria. The paragraph reads: In considering an assessment of viability along with an assessment of the social costs and benefits involved, the Government have always been more prepared to give proposals for assistance the benefit of the doubt as to the prospects of viability where the social cost of withholding assistance would be particularly high. That was one of the criteria which we used for the Chrysler rescue as well as the criteria to which the hon. Member for Henley fairly referred.

The hon. Member for Perth and East Perthshire (Mr. Crawford) asked a number of questions which relate more to Section 7 than to Section 8. As Scotland is now totally an assisted area, it is covered by Section 7, although the Chrysler rescue assisted Linwood. [Interruption.] The industry schemes and the accelerated project schemes also apply to Scotland.

Scottish Aviation, about which the hon. Gentleman asked, is one of the companies which comes within Schedule 1 to the Aircraft and Shipbuilding Industries Bill. It will become part of British Aerospace when it becomes publicly owned. The hon. Gentleman may be interested to know that on the invitation of my hon. Friend the Member for Central Ayrshire (Mr. Lambie) I shall be visiting Scottish Aviation soon to discuss its particular problems. As regards Marathon, the hon. Gentleman will be pleased to know that the immediate crisis which we feared is not now so severe because of the order from the Persian Gulf which happily was recently gained.

The hon. Member for Chingford (Mr. Tebbit) and his hon. and learned Friend the Member for Dover and Deal (Mr. Rees) wished to know what kind of schemes we were considering under the latest tranche under Section 8. We have in mind, although this does not stand alone, the industry schemes—the hon. Member for Pudsey was good enough to refer to one of them—and the accelerated projects scheme. They are both excellent schemes because they generate a great deal of investment additional to the relatively small sums which the Government invest. They are considerable multipliers. That is one reason for their being such excellent schemes and having met with such a very good response.

I cannot vie with the hon. Member for Wolverhampton, South-West (Mr. Budgen) in talking about local Poujadists. He seems to be, with the greatest affection, an emblematic figure when it comes to Poujadists in his part of the country. I advise him, when he speaks of selective industrial assistance, not to refer so easily to rotten boroughs. Those of us who were in the House during the office of the Conservative Government remember how curiously a number of Conservative seaside towns, plus Oswestry, were suddenly and irrationally declared assisted areas when other areas which elected Labour Members were curiously omitted from being so designated.

Mr. Budgen

I am sure that the House has much enjoyed the Minister's jokes at my expense and my party's expense, but he has not answered the point I was making. What are the consistent criteria which allowed Chrysler to be bailed out and NVT not to be bailed out?

Mr. Kaufman

I have just read to the hon. Gentleman from the criteria that we published. I draw his attention to those criteria. His hon. Friend the Member for Blaby is quite right. They form a key document in consideration of these matters. I have read out part of those criteria as they applied to Chrysler and this should be added to that section of the criteria, read out by the hon. Member for Henley. If the hon. Member for Wolverhampton, South-West examines these and looks back to the speeches that we made when the NVT decision came before the House, he will appreciate that both these decisions are entirely consonant with the criteria.

Mr. Lawson

I am grateful to the hon. Gentleman for making the criteria available to the whole House, but the part he read was from paragraph 21, which deals with the employment criteria particularly in areas of high unemployment. That is a Section 7 matter. It is not a Section 8 matter, which we are now discussing. Paragraph 11 makes that absolutely clear.

Mr. Kaufman

The hon. Gentleman is not being as accurate as he generally is. The criterion for Section 7 is that of an assisted area. Section 7 relates to assisted areas. Section 8 relates to nation-wide interests. [Interruption.] Wolverhampton is not in an assisted area. The areas of the Chrysler rescue were partly in assisted areas and partly not in assisted areas.

We also had to take into account the fact that unemployment in Coventry, for example, is extremely high at present. That was one of the factors which had to be set against the expense of the Chrysler rescue.

Mr. Heseltine

If the level of unemployment in Coventry was so worrying in the circumstances, why was it not possible for NVT, also in the West Midlands, to attract assistance?

Mr. Kaufman

I believe that the hon. Gentleman was once a parliamentary candidate in Coventry. He ought to keep in touch with the things that are taking place there and get hold of the unemployment figures for the West Midlands. He would then find that Coventry has been hit extremely hard, by matters which have not affected the rest of the West Midlands to the same extent.

Mr. Crawford

Does the Minister agree with the hon. Member for Wolverhampton, South-West (Mr. Budgen), who was saying from a sedentary position that the reason why Linwood was saved was pressure from the Scottish National Party?

Mr. Kaufman

I rarely agree with the hon. Member for Wolverhampton, South-West. If he was saying that—I do not recollect it—I would have to disagree.

Mr. Bugden

I assure the Minister that I was saying that. It is my view that the Chrysler bail-out was in order to offer a bribe to the SNP in the support to Linwood.

Mr. Kaufman

Then the hon. Gentleman is as inaccurate as usual. He has merely maintained his record for inaccuracy.

It being one and a half hours after the commencement of proceedings, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—

The House divided: Ayes 279, Noes 254.

Division No. 35.]	AYES	[11.44 p.m.
Allaun, Frank	Brown, Hugh D. (Provan)	Cronin, John
Anderson, Donald	Brown, Robert C. (Newcastle W)	Crosland, Rt Hon Anthony
Archer, Peter	Buchan, Norman	Cryer, Bob
Armstrong, Ernest	Buchanan, Richard	Cunningham, G. (Islington S)
Ashley, Jack	Butler, Mrs Joyce (Wood Green)	Cunningham, Dr J. (Whiteh)
Ashton, Joe	Callaghan, Jim (Middleton & P)	Dalyell, Tam
Atkins, Ronald (Preston N)	Campbell, Ian	Davidson, Arthur
Atkinson, Norman	Canavan, Dennis	Davies, Bryan (Enfield N)
Bagier, Gordon A. T.	Cant, R. B.	Davies, Denzil (Llanelli)
Bain, Mrs Margaret	Carmichael, Neil	Davis, Clinton (Hackney C)
Barnett, Rt Hon Joel (Heywood)	Carter-Jones, Lewis	Deakins, Eric
Bates, Alf	Cartwright, John	Dean, Joseph (Leeds W)
Bean, R. E.	Castle, Rt Hon Barbara	de Freitas, Rt Hon Sir Geoffrey
Benn, Rt Hon Anthony Wedgwood	Clemitson, Ivor	Delargy, Hugh
Bennett, Andrew (Slockport N)	Cocks, Michael (Bristol S)	Dell, Rt Hon Edmund
Bidwell, Sydney	Coleman, Donald	Dempsey, James
Bishop, E. S.	Colquhoun, Mrs Maureen	Dolg, Peter
Blenkinsop, Arthur	Concannon, J. D.	Douglas-Mann, Bruce
Boardman, H.	Conlan, Bernard	Duffy, A. E. P.
Booth, Albert	Cook, Robin F. (Edin C)	Dunn, James A.
Boothroyd, Miss Betty	Corbett, Robin	Dunnett, Jack
Bottomley, Rt Hon Arthur	Cox, Thomas (Tooting)	Dunwoody, Mrs Gwyneth
Boyden, James (Bish Auck)	Craigen, J. M. (Maryhill)	Eadle, Alex
Bradley, Tom	Crawford, Douglas	Edge, Geoff
Bray, Dr [...]Jeremy	Crawshaw, Richard	Edwards, Robert (Wolv SE)
Ellis, John (Brigg & Scun)	Lee, John	Rooker, J. W.
Ellis, Tom (Wrexham)	Lestor, Miss Joan (Eton & Slough)	Rose, Paul B.
English, Michael	Lewis, Ron (Carlisle)	Rowlands, Ted
Ennals, David	Litterick, Tom	Sandelson, Neville
Evans, Fred (Caerphilly)	Loyden, Eddie	Sedgemore, Brian
Evans, Ioan (Aberdare)	Luard, Evan	Selby, Harry
Fernyhough, Rt Hon E.	Lyon, Alexander (York)	Shaw, Arnold (Ilford South)
Fitch, Alan (Wigan)	Lyons, Edward (Bradford W)	Sheldon, Robert (Ashton-u Lyne)
Flannery, Martin	McCartney, Hugh	Shore, Rt Hon Peter
Fletcher, Ted (Darlington)	MacCormick, Iain	Short, Rt Hon E. (Newcastle C)
Ford, Ben	McElhone, Frank	Short, Mrs Renée (Wolv NE)
Forrester, John	MacFarquhar, Roderick	Silkin, Rt Hon John (Deptford)
Fowler, Gerald (The Wrekin)	McGuire, Michael (Ince)	Silkin, Rt Hon S. C. (Dulwich)
Fraser, John (Lambeth, N'w'd)	Mackenzie, Gregor	Sillars, James
Freeson, Reginald	Mackintosh, John P	Silverman, Julius
Garrett, John (Norwich S)	Maclennan, Robert	Skinner, Dennis
Garrett, W. E. (Wallsend)	McMillan, Tom (Glasgow C)	Small, William
George Bruce	McNamara, Kevin	Smith, John (N Lanarkshire)
Gilbert, Dr John,	Madden, Max	Snape, Peter
Ginsburg, David	Magee, Bryan	Spearing, Nigel
Golding, John	Mahon, Simon	Spriggs, Leslie
Gould, Bryan,	Marks, Kenneth	Stallard, A. W.
Gourlay, Harry	Marquand, David	Stewart, Rt Hon M.(Fulham)
Graham, Ted	Marshall, Dr Edmund(Goole)	Stoddart, David
Grant, George (Morpeth)	Marshall, Jim (Leicester S)	Stott, Roger
Grant, John (Islington C)	Mason, Rt Hon Roy	Strang, Gavin
Grocott, Bruce	Maynard, Miss Joan	Strauss, Rt Hon G. R.
Hamilton, James (Bothwell)	Meacher, Michael	Summerskill, Hon Dr Shirley
Hamilton, W. W. (Central Fife)	Mellish, Rt Hon Robert	Swain, Thomas
	Mendelson, John	Taylor, Mrs Ann (Bolton W)
Harper, Joseph	Mikardo, Ian	Thomas, Jeffrey (Abertillery)
Harrison, Walter (Wakefield)	Millan, Bruce	Thomas, Mike (Newcastle E)
Hart, Rt Hon Judith	Miller, Dr M. S. (E Kilbride)	Thomas, Ron (Bristol NW)
Hatton, Frank	Miller, Mrs Millie (Ilford N)	Thompson, George
Hayman, Mrs Helene	Mitchell, R. C. (Soton, Itchen)	Thorne, Stan (Preston South)
Healey, Rt Hon Denis	Molloy, William	Tierney, Sydney
Helfer, Eric S.	Moonman, Eric	Tinn, James
Henderson, Douglas	Morris, Alfred (Wythenshawe)	Tomlinson, John
Hooley, Frank	Morris, Charles R. (Openshaw)	Torney, Tom
Horam, John	Morris, Rt Hon J. (Aberavon)	Tuck, Raphael
Howell, Denis (B'ham, Sm H)	Mulley, Rt Hon Frederick	Varley, Rt Hon Eric G.
Hoyle, Doug (Nelson)	Murray, Rt Hon Ronald King	Wainwright, Edwin (Dearne V)
Huckfield, Les	Newens, Stanley	Walden, Brian (B'ham, L'dyw'd)
Hughes, Rt Hon C. (Anglesey)	Noble, Mike	Walker, Harold (Doncaster)
Hughes, Mark (Durham)	Oakes, Gordon	Walker, Terry (Kingswood)
Hughes, Robert (Aberdeen N)	Ogden, Eric	Ward, Michael
Hughes, Roy (Newport)	O'Halloran, Michael	Watkins, David
Hunter, Adam	O'Malley, Rt Hon Brian	Weetch, Ken
Irvine, Rt Hon Sir A. (Edge Hill)	Orme, Rt Hon Stanley	Wellbeloved, James
Irving, Rt Hon S. (Dartford)	Ovenden, John	White, Frank R. (Bury)
Jackson, Colin (Brighouse)	Owen, Dr David	White, James (Pollok)
Jackson, Miss Margaret (Lincoln)	Padley, Walter	Whitlock, William
Janner, Greville	Palmer, Arthur	Willey, Rt Hon Frederick
Jenkins, Hugh (Putney)	Park, George	Williams, Alan (Swansea W)
Jenkins, Rt Hon Roy (Stechford)	Parker, John	Williams, Alan Lee (Hornch'ch)
Johnson, James (Hull West)	Parry, Robert	Williams, W. T. (Warrington)
Johnson, Walter (Derby S)	Pearl, Rt Hon Fred	Wilson, Alexander (Hamilton)
Jones, Alec (Rhondda)	Pendry, Tom	Wilson, Gordon (Dundee E)
Jones, Barry (East Flint)	Perry, Ernest	Wilson, Rt Hon H. (Huyton)
Jones, Dan (Burnley)	Prescott, John	Wilson, William (Coventry SE)
Kaufman, Gerald	Price, C. (Lewisham W)	Wise, Mrs Audrey
Kelley, Richard	Price, William (Rugby)	Woodall, Alec
Kerr, Russell	Radice, Giles	Woof, Robert
Kilroy-Silk, Robert	Richardson, Miss Jo	Wrigglesworth, Ian
Kinnock, Neil	Roberts, Albert (Normanton)	Young, David (Bolton E)
Lamble, David	Roberts, Gwllym (Cannock)
Lamborn, Harry	Robertson, John (Paisley)	TELLERS FOR THE AYES:
Lamond, James	Roderick, Caerwyn	Mr. J. D. Dormand and
Latham, Arthur (Paddington)	Rodgers, George (Chorley)	Mr. Laurie Pavitt.
Leadbitter, Ted	Rodgers, William (Stockton)
NOES
Adley, Robert	Benyon, W.	Brocklebank-Fowler, C.
Aitken, Jonathan	Berry, Hon Anthony	Brown, Sir Edward (Bath)
Alison, Michael	Biffen, John	Bryan, Sir Paul
Amery, Rt Hon Julian	Biggs-Davison, John	Buchanan-Smith, Alick
Arnold, Tom	Blaker, Peter	Budgen, Nick
Atkins, Rt Hon H. (Spelthorne)	Body, Richard	Bulmer, Esmond
Awdry, Daniel	Boscawen, Hon Robert	Burden, F. A.
Baker, Kenneth	Bottomley, Peter	Butler, Adam (Bosworth)
Banks, Robert	Bowden, A. (Brighton, Kemptown)	Carlisle, Mark
Beith, A. J.	Boyson, Dr Rhodes (Brent)	Chalker, Mrs Lynda
Bell, Ronald	Braine, Sir Bernard	Churchill, W. S.
Bennett, Dr Reginald (Fareham)	Brittan, Leon	Clark, Alan (Plymouth, Sutton)

Clark, William (Croydon S)	Irving, Charles (Cheltenham)	Raison, Timothy
Clarke, Kenneth (Rushclifle)	James, David	Rathbone, Tim
Clegg, Walter	Jenkin, Rt Hon P. (Wanst'd & W'df'd)	Rawlinson, Rt Hon Sir Peter
Cockcroft, John	Johnson Smith, G. (E Grinstead)	Rees, Peter (Dover & Deal)
Cooke, Robert (Bristol W)	Jones, Arthur (Daventry)	Rees-Davies, W. R.
Cope, John	Jopling, Michael	Renton, Rt Hon Sir D. (Hunts)
Cormack, Patrick	Joseph, Rt Hon Sir Keith	Renton, Tim (Mid-Sussex)
Corrie, John	Kaberry, Sir Donald	Rhys Williams, Sir Brandon
Costain, A. P.	Kellett-Bowman, Mrs Elaine	Ridley, Hon Nicholas
Crouch, David	Kershaw, Anthony	Ridsdale, Julian
Crowder, F. P.	Kilfedder, James	Rifkind, Malcolm
Davies, Rt Hon J. (Knutsford)	Kimball, Marcus	Roberts, Michael (Cardiff NW)
Dean, Paul (N Somarset)	King, Evelyn (South Dorset)	Roberts, Wyn (Conway)
Dodsworlh, Geoffrey	King, Tom (Bridgwater)	Ross, Stephen (Isle of Wight)
Douglas-Hamilton, Lord James	Kitson, Sir Timothy	Rossi, Hugh (Hornsey)
Drayson, Burnaby	Knight, Mrs Jill	Rost, Peter (SE Derbyshire)
du Cann, Rt Hon Edward	Knox, David	Royle, Sir Anthony
Durant, Tony	Lamont, Norman	Sainsbury, Tim
Dykes, Hugh	Lane, David	St. John-Stevas, Norman
Eden, Rt Hon Sir John	Langford-Holl, Sir John	Scott-Hopkins, James
Edwards, Nicholas (Pembroke)	Latham, Michael (Melton)	Shaw, Giles (Pudsey)
Elliott, Sir William	Lawrence, Ivan	Shaw, Michael (Scarborough)
Emery, Peter	Lawson, Nigel	Shelton, William (Streatham)
Eyre, Reginald	Lester, Jim (Beeston)	Shepherd, Colin
Fairbairn, Nicholas	Lewis, Kenneth (Rutland)	Shersby, Michael
Fairgrieve, Russell	Lloyd, Ian	Silvester, Fred
Fell, Anthony	Loveridge, John	Sims, Roger
Finsberg, Geoffrey	Luce, Richard	Sinclair, Sir George
Fisher, Sir Nigel	McCrindle, Robert	Skeet, T. H. H.
Fletcher, Alex (Edinburgh N)	Macfarlane, Neil	Smith, Cyril (Rochdale)
Fletcher-Cooke, Charles	MacGregor, John	Smith, Dudley (Warwick)
Fookes, Miss Janet	Macmillan, Rt Hon M. (Farnham)	Speed, Keith
Fowler, Norman (Sutton C'f'd)	McNair-Wilson, M. (Newbury)	Spence, John
Fox, Marcus	McNair-Wilson, P. (New Forest)	Spicer, Michael (S Worcester)
Fry, Peter	Madel, David	Sproat, Iain
Galbraith, Hon T. G. D.	Marshall, Michael (Arundel)	Stainton, Keith
Gardiner, George (Reigate)	Marten, Neil	Stanbrook, Ivor
Gardner, Edward (S Fylde)	Mather, Carol	Stanley, John
Gilmour, Rt Hon Ian (Chesham)	Maude, Angus	Steel, David (Roxburgh)
Gilmour, Sir John (East Fife)	Maudling, Rt Hon Reginald	Stokes, John
Glyn, Dr Alan	Mawby, Ray	Stradling Thomas, J.
Godber, Rt Hon Joseph	Maxwell-Hyslop, Robin	Tapsell, Peter
Goodhart, Philip	Mayhew, Patrick	Taylor, Teddy (Cathcart)
Goodhew, Victor	Meyer, Sir Anthony	Tebbit, Norman
Goodlad, Alastair	MillS, Peter	Temple-Morris, Peter
Gorst, John	Miscampbell, Norman	Thatcher, Rt Hon Margaret
Gow, Ian (Eastbourne)	Mitchell, David (Basingstoke)	Thomas, Rt Hon P. (Hendon S)
Gower, Sir Raymond (Barry)	Moate, Roger	Thorpe, Rt Hon Jeremy (N Devon)
Grant, Anthony (Harrow C)	Monro, Hector	Townsend, Cyril D.
	Montgomery, Fergus	Trotter, Neville
Gray, Hamish	Moore, John (Croydon C)	Tugendhat, Christopher
Griffiths, Eldon	More, Jasper (Ludlow)	van Straubenzee, W. R.
Grist, Ian	Morgan, Geraint	Vaughan, Dr Gerard
Grylls, Michael	Morris, Michael (Northampton S)	Viggers, Peter
Hall, Sir John	Morrison, Charles (Devizes)	Wainwright, Richard (Coine V)
Hall-Davis, A. G. F.	Morrison, Hon Peter (Chester)	Wakeham, John
Hamilton, Michael (Salisbury)	Mudd, David	Walder, David (Clitheroe)
Hampson, Dr Keith	Neave, Airey	Walker, Rt Hon P. (Worcester)
Hannam, John	Nelson, Anthony	Walker-Smith, Rt Hon sir Derek
Harvie Anderson, Rt Hon Miss	Neubert, Michael	Wall, Patrick
Hastings, Stephen	Newton, Tony	Walters, Dennis
Havers, Sir Michael	Nott, John	Weatherill, Dennis
Hawkins, Paul	Onslow, Cranley
Hayhoe, Barney	Oppenheim, Mrs Sally	Wells, John
Heath, Rt Hon Edward	Osborn, John	Whitelaw, Rt Hon William
Heseltine, Michael	Page, Rt Hon R. Graham (Crosby)	Wiggin, Jerry
Hicks, Robert	Paisley, Rev Ian	Winterton, Nicholas
Higgins, Terence L.	Pardoe, John	Wood, Rt Hon Richard
Holland, Philip	Pattie, Geoffrey	Young, Sir G. (Ealing, Acton)
Hordern, Peter	Percival Ian	Younger, Hon George
Howell, David (Guildford)	Peyton, Rt Hon John	TELLERS FOR THE NOES:
Howell, Ralph (North Norfolk)	Pink, R. Bonner	Mr. Spencer Le Marchant and
Hurd, Douglas	Price, David (Eastlerigh)	Mr. Cecil Parkinson.
Hutchison, Michael Clark	Prior, Rt Hon James
Irvine, Bryant Godman (Rye)	Pym, Rt Hon Francis

Question accordingly agreed to.

Resolved, That the Financial Assistance for Industry (Increase of Limit) (No. 2) Order 1976, a draft of which was laid before this House on 15th January, be approved.