HC Deb 27 July 1976 vol 916 cc308-41

(c), in line 7, leave out 'British Shipbuilders' and insert 'a Corporation'.

(d), in line 8, leave out 'the sale of ships' and insert 'that or those activities'

(k), in line 37, leave out 'British Shipbuilders' and insert 'the Corporation concerned'.

(e), leave out lines 10 to 20.

(f), in line 22, leave out 'British Shipbuilders' and insert 'the Corporation concerned'.

(g), in line 23, leave out 'British Shipbuilders' and insert 'the Corporation'

(h), in line 24, leave out 'British Shipbuilders' and insert 'the Corporation'

(i), in line 28, leave out 'British Shipbuilders' and insert 'the Corporation'.

(j), in line 32, leave out 'British Shipbuilders' and insert 'the Corporation concerned'.

We are also to take New Clause 2—Right of persons engaged in the aircraft industry to object to practices of British Aerospace or its wholly-owned subsidiaries.

Mr. Huckfield

The subject of legal safeguards for the private sector against unfair trading practices by the public sector took up a great deal of debating time in our Standing Committee. When the matter was last discussed on 4th May I undertook on behalf of the Government to introduce on Report a new clause, modelled on Section 30 of the 1967 Iron and Steel Act, which would deal with unfair trading against British shipbuilders in the sale of ships, in other words, the main shipbuilding activity. As a result of a fair amount of pressure from my right hon. Friend the Member for Sunderland, North (Mr. Willey) I undertook to consider the desirability of including ship repair.

It is as a result of that reconsideration that I introduce New Clause 1. It extends to both the sale of ships and the sale of ship repair services. In other words, it covers the two industries which after vesting day there will be continuing competition in main line activities between the public and private sectors. We have not included slow-speed diesel marine engines because the companies named in the Bill have no private sector competitors in that field and one of the private sector shipbuilders will be customers for slow-speed diesel engines because they build small ships.

The Government fully recognise that anxieties exist in the industries mentioned and it is hoped that the powers in the clause need never be used. Even the powers in Section 30 of the Iron and Steel Act were only used once and that section has now been repealed.

Mr. Tom King

That was a wholly inadequate introduction to a very important new clause. We give a modified welcome to the clause. It is a very important departure, as the right hon. Member for Sunderland, North (Mr. Willey) has recognised. He pressed his case very strongly in Committee. The Under-Secretary introduced the clause very tersely and without justification or explanation of the way in which it has been constructed.

The Under-Secretary, who claims to have read all the Committee Hansards, will know that this matter was debated twice in Committee. The hon. Member for Glasgow, Kelvingrove (Mr. Carmichael), when he was Under-Secretary, justified the Government's not taking any action. The subject reappeared in a new clause introduced by the right hon. Member for Sunderland, North, and the Government moved their ground and made concessions, but failed to meet the points that we had raised.

What we are getting at in New Clause 2 will be obvious to the Minister. It is a view that we expressed in Committee. New Clause 1 deals specifically with shipbuilding, ship repairing and with the sale of ships. When it was hinted in Committee that the Government might take this position, we asked why it was limited to the sale of ships and whether it meant all practices in the production of ships. It is important to know whether it involves such activities as the procurement of materials.

The Government have partly accepted our case by introducing New Clause 1, but there is concern that a major State organisation operating in this industry could, like any other monopoly manufacturer, use its powers to the detriment of other firms in the industry. We assume that it is not the ambition of the Government that the creation of British Shipbuilders should put smaller shipbuilding concerns out of business, with the consequent loss of jobs. We assume that it is the Government's aim that these firms should continue to prosper and that the Government do not wish to freeze out any firm that wants to enter the industry. We are not aware of an embargo against anyone starting up these activities.

However, a major manufacturing operation has considerable power and it could be used unfairly to the detriment of the smaller companies in the industry. There are relevant sanctions in the Fair Trading Act, but such manufacturers can put pressure on the suppliers of materials to prevent their serving other customers, or to obtain preferential trade terms for themselves.

We had a series of unsatisfactory answers in Committee. The hon. Member for Kelvingrove said: We would not expect the corporations to use their commercial freedom to the detriment of the United Kingdom industry as a whole."—[Official Report, Standing Committee D, 22nd January 1976; c. 396.] I am sure that we would not expect it, but it could happen.

My hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) asked whether there would be any preferential pricing arrangements with the British Steel Corporation and the new Under-Secretary, the hon. Member for Nuneaton (Mr. Hurchfield), repeated a carefully worded statement saying that the corporation had assured him: that it will continue to make steel available to its customers on an equitable basis, subject to normal commercial considerations."—[Official Report, Standing Committee D, 4th May 1976; c. 2870.] What on earth does that mean? It can only mean that the corporation will do whatever it wishes and will defend its actions by saying that it was guided by commercial considerations. There is no protection in that statement.

My hon. Friend the Member for Cathcart asked later for a specific assurance that the BSC would not offer steel to the nationalised part of the industry more cheaply than to the private side. The Minister of State repeated the carefully worded statement that had been prepared by the BSC to give it total freedom of action.

I accept that it is not entirely unreasonable that steel should not be sold at exactly the same price to all customers. There may be quantity discounts or other special terms, but there is a wide range of matters in which some firms could face discrimination. For instance, at times of shortage of supplies the smaller customers might find that no supplies are available to them and that the largest customers—the nationalised corporations —will take the whole output.

The Under-Secretary referred to Section 30 of the Iron and Steel Act. Hon. Members who look up the Committee proceedings on that measure will find them laden with assurances that the corporation would act in a responsible nondiscriminatory way. It was said that the Section 30 procedures should not be needed, but they were included in the Bill and they were used. On the occasion that they were invoked, it was found that the complaints by the private sector—the British Independent Steel Producers' Association—were justified, and the BSC had to change its pricing policies.

We have been this way before. We have had bland ministerial assurances that nationalised corporations will act responsibly. I am not suggesting that the corporations act out of malice or vindictiveness, but they can over-reach fair competition and use various measures to the detriment of others in the industry.

The right hon. Member for Sunderland, North, without making any accusations of malpractice or vindictiveness, felt that it was important to have protections, and the Government have partly recognised that by the introduction of New Clause 1. The right hon. Member seemed to accept our arguments when he introduced a new clause in Committee dealing with both corporations. It said: is engaged in one or more of the activities specified in section 2(1) or (2) above and dealt with the procedure for making a written complaint.

6.30 p.m.

The Minister said that he would accept that in part. He said he was in sympathy with the principle. We had all the usual trite expressions that we get on such occasions when Ministers propose to do something markedly different from what is suggested. The Minister added: However, I recognise that there is concern on the part of small shipbuilders who remain in the private sector. I am sure that my right hon. Friend has noticed some of the correspondence that we had in the Financial Times and The Times, recently, and from those representing the private shipbuilding interests. Their main concern arises because they will be competing with British Shipbuilders."— [Official Report, Standing Committee D, 4th May 1976; c. 2858–61.] That was the limit of how far he was prepared to go. That was the justification because only shipbuilders had complained.

But in fact the right hon. Member for Sunderland, North had specifically mentioned Greenwell in his speech and his concern about its situation. He quickly made the point that as far as he was concerned shipbuilding included ship repair. But the Minister made clear that he had referred only to the clause about shipbuilders. Having rested his case on the argument that there was concern about shipbuilders, as soon as the right hon. Gentleman mentioned that he would like to include ship repairing as well, the Minister rushed off, without any justification, or any argument, to say that he would undertake to consider carefully the points about the ship repairing industry being the same as shipbuilding. He gave an undertaking about the introduction of an amendment on Report.

We have got the new clause on Report to cover ship repairing and shipbuilding. But the Under-Secretary made no attempt to answer the question I have consistently asked about the significance of the use of the word "sale". Does it cover the whole operation?

The hon. Member for Renfrewshire, East (Miss Harvie Anderson) mentioned a shipyard which felt that it had been unfairly discriminated against—I think it was the Ailsa Yard—in the placing of a Government contract. It is an area where there could be discrimination in the sale of a ship. But that is only a simple example.

There is the procurement of materials and services and there could be matters affecting employment policies, all of which could involve discrimination against people not within the nationalisation network. Can the Minister make quite clear what the significance of "sale" is?

Mr. Les Huckfield

Perhaps I can put the hon. Gentleman out of his misery at a fairly early stage. New Clause 1 includes both the sale of ships and the provision of ship repairing services.

Mr. King

We do not seem to be communicating. That is not my question. The provision of ship repairing services seems to be a wider category. What I am concerned about is whether it covers what I would call "production matters and procurement matters" as well as sale. That is the point.

The Under-Secretary must appreciate this point because it will have been thrust on our amendments. That is what they are all about. We are saying there should not be some narrow technicality which limits this from being a genuinely fair, competition, non-discrimination clause. This should be a wider ranging protection covering all the operations of these corporations.

The other safeguard relates to pricing. In respect of pricing we have an answer from the hon. Member for Kelvingrove to say that the corporations could not discriminate by unfair pricing because they would be required by the Treasury —[Interruption.] It is difficult to address comments to the Under-Secretary because there seems to be a continual conversation on the Government Front Bench. The Minister of State is now the sixth person who is carrying on a conversation with the Under-Secretary when I am trying to address points to him.

The question is whether corporations can compete unfairly by quoting unfair prices and thereby put other and smaller yards out of business because they cannot compete with those prices. The answer given to that and the defence advanced was that the corporations would be required to show a definite rate of return on their capital by the Treasury. That is total rubbish, because in a corporation of this size, with the number of yards which are active, it is the oldest trick in the book, within the generality of showing what may be a reasonable rate of return, to decide to pick off certain competitors and have a drive on the particular kind of ship that they may produce and to under-price.

In the retail trade it is called "a loss leader". There are plenty of companies in this country that show a very adequate return on capital but are still able to run loss leaders in certain areas. As the Under-Secretary appears to understand that point, he will appreciate that it is no protection at all to say that the corporation overall has to show an adequate rate of return.

Mr. Tom Litterick (Birmingham, Selly Oak)

Is the hon. Gentleman suggesting that it is all right for a private repair chain to use a loss leader technique in its activities but wrong for a public corporation to use a loss leader in its selling strategy?

Mr. King

The point is that within the private chain, which might operate a loss leader in a particular area to stimulate sales of a particular line, the commercial stategy is that it would have to do it within the constraint of being a profitable organisation, otherwise it would not survive. The private chain has that constraint upon it. I would ask the hon. Member for Birmingham, Selly Oak (Mr. Litterick), if the British Shipbuilding Corporation is set up and if in fact it makes losses, does he think that it will be closed down? The answer is "No". The practical answer is that it will continue. Therefore, the comment I would make in this situation is that there is not the same constraint on a nationalised industry.

Although the nationalised industries may be required to achieve an adequate return on capital, I believe that if that is not achieved the sanctions which the Treasury may set out are very weak. The history of the nationalised industries is littered with targets having been set and targets not having been achieved, and the result has been that no real sanctions have been applied.

Mr. F. A. Burden (Gillingham)

Would not my hon. Friend agree that if a private company behaves with undue discrimination, or discriminates improperly, that can be questioned on the Floor of the House, but with a national corporation it would fall within the day-to-day operations and could not be questioned on the Floor of the House? I think that is one of the great dangers.

Mr. King

I accept my hon. Friend's observation and I would go further. Usually these powers can be used most effectively when a company is in a monopoly position, but a sanction is possible under the powers of the Director General of Fair Trading. Where these powers exist they can be referred and investigated and action taken. But the effect of nationalised industries is that in many areas they are de facto monopolies.

I do not think this is a tremendously contentious view. After all, why do we set up the Post Office Users' National Council and the consumer councils of the nationalised industries?

This is all part of our worry—as much in the Labour Party as among the Opposition—about some of the practices of nationalised industries. Disconnections by electricity boards are a classic example of monopoly power. There must be protection against unrestrained use of these powers. The Government's new clause, to which I give a limited welcome, shows that they accept a measure of what I am saying. The principle behind it was initiated by the right hon. Member for Sunderland North. I make that point before anyone says that this is a dangerous, reactionary, right-wing Tory move.

We have digressed into the subject of loss leaders, but the only answer that we have been given is that the overall financial targets of the corporations are protection against individual unfair pricing. I leave hon. Members to draw their own conclusions. No doubt they will be able to say whether they think that that protection will be adequate if there is a small shipyard in their constituency that does not come under the Bill, or if a small company wants to set up there in one of the areas in which these corporations will be working.

Am I right in believing—we have had no clear statement on this—that the reason for the reference in the new clause to only one of the corporations, when surely in equity the principle applies to both, is the Government's argument that no companies could be affected in the aircraft industry? If so, that is a limited approach to aircraft manufacture. In aircraft production, as in shipbuilding, an enormous number of items are bought in. The method of operating procurement policies by the corporations could discriminate heavily against certain aircraft companies.

It is difficult to see why this principle is not accepted for both industries. Our new clause would merely provide the same protection for those aggrieved by the British Aerospace as for those aggrieved by British Shipbuilders. This is an important area for the Government to tackle. They talk of the need for fixed frontiers and a vigorous and profitable private sector. However, if people are going to compete in these fields, they must feel that they have proper protection against public corporations which, perhaps not intentionally but by over-zealous pursuit of commercial objectives, discriminate unfairly against them.

6.45 p.m.

We are obviously concerned about the existing companies, but the Minister's answer suggested that no one in his Department had considered the possibility of a new company starting up in any of these activities. He dealt only with the existing situation. No doubt the intention is that these corporations will last for a considerable period, so someone might start producing, for example, slow speed marine engines, and someone else could decide on an activity which would make him a customer of the first company. Someone might go into the aerospace industry or set up as a components manufacturer.

These people should have the same protection as is proposed for shipbuilding and ship repairing. If the Government are sincere in their attempt to establish this principle, they should accept the amendments to New Clause 1 along with New Clause 2. I should like to know whether, if New Clause 1 and the amendments to it are accepted, New Clause 2 will be necessary. That would ensure the same principle for both corporations and that is the right way to tackle this important matter.

Mr. Frederick Willey (Sunderland, North)

As the hon. Member for Bridgwater (Mr. King) will appreciate, I can give a stronger welcome to the new clause, which is substantially the one that I put down in Committee. I appreciate the Government having brought it forward. I differ from the hon. Member. I did not welcome the fact that the Bill deals with two industries at once and I speak only for shipbuilding and ship repairing. The same goes for the clause.

I put forward my new clause in Committee—here again, I differ from the hon. Gentleman—because although I did not support the Conservative amendments. I felt that this was a case not of anticipating malpractices but of affording people a legislative safeguard if they fear that malpractices are possible. I realised that small shipbuilders who were left outside the Bill might fear unfair competition.

I was also concerned, particularly, about the closure of Greenwells in my constituency. This is a State yard which has been closed during our Committee proceedings. We are trying to attract private enterprise to reopen it. I felt that the least that I could do was to try to reassure anyone who reopened it that he would be safeguarded against unfair competition. That is why I am satisfied.

I was a little concerned when the Minister seemed surprised by the suggestion that this provision should apply also to ship repair. It is clear that the intention is to apply the new clause to ship repair as well as shipbuilding. My major concern, because of the closure of Greenwells, was with ship repair. I still have some hesitation about the reference to sale of ships, but here, too, the Government's new clause is acceptable in the context of shipbuilding. I have discussed this matter with the SRNA.

At least the Government have been consistent in following precedent. The precedent is important because we want to ensure that there is a simple and expeditious procedure for any complaint to be immediately examined and the complainant satisfied. That is what the clause does. For that reason, speaking within the confines of shipbuilding and ship repairing, I am well satisfied with it.

Mr. Tebbit

We are grateful to Mr. Speaker whose selection of amendments and new clauses enables us to discuss unfair competition broadly in this debate.

The point underlined so well by the right hon. Member for Sunderland, North (Mr. Willey) is that there is a need, if additional firms are to continue in industry outside the public sector, for clear and proper provisions for appeal against unfair competition. I find it remarkable, though perhaps not surprising, that the Secretary of State has accepted that this concept should apply to the shipbuilding and ship repair industry, but not to the aircraft industry.

Some firms will continue in business in the private sector. If the Under-Secretary of State does not know—presumably he does not know, or the Government would have done something about it—there is, for example, Flight Refuelling Limited which, amongst other things, specialises in the manufacture of targets. These are expensive items, Doughty of Cheltenham manufactures a large range of components. Marshalls of Cambridge specialises in aircraft repair and the fitting out of what are known as green air frames.

To some extent, some of these problems could be resolved by restrictions on the diversification possibilities of the proposed British Aerospace corporation, but not altogether. The fitting out of air frames, the repair of aircraft and the manufacture of targets is already undertaken by firms which are being brought into State ownership by the Bill. Therefore, that would not constitute diversification.

My hon. Friend the Member for Bridgwater (Mr. King) pointed out that there is to be no legislative bar on new firms coming into the manufacture of aircraft, or ships for that matter, under this legislation. If the Under-Secretary of State could for a moment restrain himself from nattering to the Minister of State for Sport and Recreation and pay some attention to what is going on, it is just possible that he might do himself a service because he might then be able to answer first time round the points being made, instead of realising that he has not heard a word because of his incessant nattering.

I was saying that there seems to be no legislative bar—if the Minister of State for Sport and Recreation could restrain himself, it would be useful.

The Minister of State for Sport and Recreation (Mr. Denis Howell)

Pompous ass.

Mr. Tebbit

I do not know whether "Pompous ass" is the kind of parliamentary expression that we should hear from the Minister of State for Sport and Recreation. I do not know what his functions are, except to sit there nattering to the Under-Secretary of State for Industry. If he could manage to stay quiet and keep out of this matter, as he does not understand it, it would be helpful to the debate.

I was saying for about the third time —now that I have the Under-Secretary's attention—that there appears to be no legislative bar on new companies coming into aircraft manufacture. Therefore, the Government presumably would not be unhappy if a new firm—for example, one of the American manufacturers of light aircraft—were to consider coming to Britain. Some have already considered coming here, but have decided not to do so for reasons which do not concern us today.

What would happen if the Piper Aircraft Company were to come to Britain to manufacture aircraft? Would it be unprotected against unfair competition although Marathon, an American-owned company in the shipbuilding industry, would be protected? What is the logic in the Government's thinking of protecting one industry, but not the other? Did they not appreciate that somebody else might want to manufacture in this country? Do they not want anybody else to come into aircraft manufacture?

It is becoming generally known that it is the intention of the Organising Committee for British Aerospace—[Interruption.] The Minister seems to have assistance somewhere. It is now becoming obvious that amongst the decisions, which have probably been made by the Organising Committee for British Aerospace, is a decision to close the BAC factories at Weybridge and Hurn and that it may now he discussing the moving of work from the factories at Dunsfold and Kingston to the factory at Hatfield, which is a marginal seat.

I do not know what that fellow on the Treasury Bench with his feet on the Table is nattering about now, Mr. Deputy Speaker, but it is difficult to make oneself heard.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. With all these disturbances I am having great difficulty in following the argument. I appeal to hon. Members to allow the hon. Member for Chingford (Mr. Tebbit) to carry on with his speech uninterrupted.

Mr. Tebbit

I am grateful to you, Mr. Deputy Speaker.

As a result of these impending factory closures, many highly skilled men and very good facilities will be available. I hope that the Government will be in-interested in trying to bring in outside firms to take over those facilities in order to provide new jobs. It can be done. Fairey Aviation has landed a contract for $100 million worth of production, but not in Britain because of the Government's activities.

We could get work into this country outside the public sector in those factories which the Organising Committee for British Aerospace is now proposing to abandon, but we shall not get outside companies to come in unless they are guaranteed as much protection as the shipbuilding industry. The lack of a clause of this nature would be a further disincentive to that inward investment in this country which would provide the jobs which will be sorely needed in the aircraft industry to replace those which will be lost when the Bill is enacted, if that misfortune should befall the industry.

I hope that in reply the Minister will tell us why only the shipbuilding industry needs the provisions of New Clause 1 and why there are no similar provisions for the aircraft industry.

Mr. John Evans

As my constituency is 25 miles from the sea and as some hon. Members may wonder about my interest in the shipbuilding and ship repair industry, I should make it clear that when I left school at 15 years of age I went into the Swan Hunter shipyard on Tyneside where I served my apprenticeship as a fitter. I have since worked in every shipbuilding and ship repair yard on Tyneside, Wearside and in three yards on the Tees. I left the employment of Swan Hunter—

Mr. W. E. Garrett (Wallsend)

My hon. Friend is being modest. I think that he should mention that he spent some years at sea sailing the ships he helped to build.

Mr. Evans

I was going to mention that later.

I left the shipyards in February 1974 when I was elected to this House. I collected my tools from the Swan Hunter shipyard at Hebburn, and they are still in my garage. If political misfortune should ever befall me, I should be happy to go back to work with my colleagues in the shipbuilding industry.

Frankly, if we do not nationalise the shipbuilding industry quickly, there will be very little of that industry left on the North-East Coast or on Merseyside.

The hon. Member for Bridgwater (Mr. King), who would not give way earlier, asked whether, if the industry did not prove profitable, it would be closed down. The hon. Gentleman answered the question himself by saying "No". Is the hon. Gentleman aware that there has not been a profitable shipbuilding firm in Great Britain for the past 25 years? Each and every one has been sustained by Government grants, handouts, investment grants in regional areas or Government orders for warships for the Navy. If they had been left to their commercial selves they would have collapsed a long time ago.

7.0 p.m.

As the hon. Gentleman is aware, this is not the first reorganisation of the shipbuilding industry. There was a reorganisation of the shipbuilding industry in the late 1960s following the Geddes report. On that occasion under a Labour Government we poured hundreds of millions of pounds into the British shipbuilding industry, but we left it in the hands of private enterprise, even though workers—I use the word "workers" and not the phrase "trade unionists", which Opposition Members seem to be trying to use to divide them into two different camps—in the industry were demanding that if the Government were pouring millions of pounds into the industry it should be brought under public ownership. However, it was not. What was the end product of the Geddes reorganisation? It was the virtual collapse of the shipbuilding industry.

We are addressing ourselves in this clause to unfair competition. I welcome anything that will do anything to do away with that. We should deal with a far more important aspect of unfair competition, which has worried workers and employers in the shipbuilding industry for many years, and that is the degree of unfair competition from shipyards abroad. I should like to see something in the Bill which would insist that, if the Government are satisfied that there is unfair competition, from continental or Japanese shipyards, or new shipyards in other parts of the world financed by American or even British capital, they will take action to protect the British shipbuilding industry. That is one of the main worries of all those who work in the industry.

We all recognise that it is a shrinking industry. The workers certainly recognise only too clearly that it is a shrinking industry, and they are neither fools nor are they blind; they can read trade figures and statistics as well as anyone else. They are well aware of the decline of the British share of the world shipbuilding order book, much of that due to unfair competition.

Putting that on one side, the argument about investment in the industry has always fallen on deaf ears under a Labour Government and certainly has fallen on deaf ears under a Conservative Government. I suggest to the hon. Gentleman that, while we give consideration to unfair competition in the domestic scene, it is equally important, indeed, more important, that we give consideration to unfair competition on the international scene.

When one considers the record of nationalised industries over the last few years, the protection that the public have is far better in a nationalised industry than in most industries in the private sector. One of the areas from which the British public get considerable assistance is the Press. It is only too happy to chase or to harry or to, look, into any misdemeanour alleged against nationalised industry as far as the consumer is concerned. I am sure that when the day dawns for the shipbuilding industry to run down, with the consequent pay offs, it will be national headlines in the national Press. There were never any headlines in anyone's Press when the shipyards of Tyneside and Merseyside were paying off hundreds of thousands of workers just before the public holidays, at Christmas and at Easter. No one was interested in us then. No doubt they will be interested in the future whenever there is a rundown of an industry.

As for unfair competition, there obviously will be times when the nationalised boards will have to give consideration to the overall position, to the employment prospects of people in the industry. Shipbuilding and ship repairing are largely based on the development regions. Certainly, no one can deny that it is one of the major employers in the North-East of England, on Clydeside and on Merseyside. Essential judgments will sometimes, as in the past, have to be made not based entirely on commercial criteria.

As for unfair competition and the prospects for the industry, this Bill is one of the greatest examples of ensuring that the business of this industry is conducted in an open, fully public fashion, if our proposals on worker participation are put fully into operation. If we can ensure that the workers are taking part in all decisions on pricing, ordering, employment prospects and on what the nationalised boards' policy is to suppliers in the industry, then we shall not go very far wrong. One of the things a successful industry needs is a large number of suppliers. This is certainly true of industry in the North-East and on Merseyside. It is in the nature of the industry that it must have outside suppliers providing a wide variety of materials and a wide variety of labour. If that continues in the future I shall be satisfied in that respect as a shipbuilding worker.

I hope that the Minister will address himself to the much wider problem of unfair competition when it comes from abroad and puts the jobs of thousands of workers at risk.

Mr. Kenneth Warren (Hastings)

I recognise that the hon. Member for Newton (Mr. Evans) speaks with the sincerity of a man who was an apprentice on the shop floor and who knows his industry. I was an apprentice on the shop floor in the aircraft industry. I have much in common with his feelings that the workers ought to have an opportunity and a chance to take part in running their own industry. I fear that there is a wider gulf between the hon. Gentleman and his own Minister than there is between him and me. I shall demonstrate that in terms of the new clauses.

First, the hon. Gentleman said that he hoped that nationalisation would save jobs, but the hon. Member for Bristol, North-West (Mr. Thomas) said in a previous debate that he did not accept that nationalisation would save jobs. The difference between those two statements is the reality of what is going to be nationalisation as opposed to that which has been promised. No one regrets that more than I do. However, the hon. Gentleman having worked on the slipways will know that the only people who can save jobs are the customers. That is the only way in which one can have a full shipyard or full production line in an aircraft factory.

Mr. John Evans

May I just clarify what I meant to say—I said it in the heat of the moment—rather than what the hon. Gentleman alleged I said? What I intended to say was that if the industry is not nationalised there will be very little industry left if it is left in private hands. In that context nationalisation will save jobs.

Mr. Warren

That would be acceptable if the Government could afford to nationalise and put in the money required to save jobs. The hon. Gentleman was here when the Chancellor of the Exchequer announced the £1,000 million cuts in Government expenditure last week, and he knows full well that the Government simply have not got the money to save the jobs which he and his fellow shipyard workers believe can be saved. There is considerable divergence among trade union opinion from the view that it is only the customer who can save jobs. because workers have believed the propaganda of the present Government which has been drenching Britain with the statement that nationalisation can save jobs.

We have never heard how much it will cost to nationalise these industries or whence the money will come to run them. At a rough guess, the nearest one can get—I should be delighted if the Minister could deny it—we think that about £400 million to £500 million will be needed. Where will it come from? Last week £1,000 million was cut and next week we shall need to find £500 million. Where is all this money to be found? Is it to be borrowed, or will it come from taxation? These are the essential questions that the workers have the right to have answered.

The House will notice that my name is missing from the supporters of New Clause 2. That is because I approach that clause and New Clause 1 with reluctance. I expect that I shall support both of them in the Lobby if there is a Division. However, the reason I support them with reluctance is that in essence they sum up the whole burden of what is nationalisation. Hundreds of people will be employed—probably, they can come from the slipways and production lines—to take up residence to hear the complaints, because the complaints will be legion.

There is talk in the papers about 3,000 jobs possibly being saved at the Driver and Vehicle Licensing Centre at Swansea, which was recently opened. That cost half as much as Concorde, but it will never get off the ground. Apparently, there are 3,000 people there who are willing and able to take on new jobs in the Civil Service. I should not be surprised to see the Driver and Vehicle Licensing Centre used as a base for complaints about these two industries.

That may sound farcical but we should look at the contentions that will arise. Earlier we passed Government Amendment No. 1. We let it slide past—I suppose because one does not want to lead the Government too clearly forward into the future. However, the Government have left a greater mess behind them with that amendment than they had before they submitted it. We shall have no shortage of complaints.

I want to give three examples to show how much this complaints machinery will be required. The Government have blandly stated that rotary-wing aircraft will be left out. That is marvellous. They probably all think that that means Westland Aircraft. As an aeronautical engineer I should be prepared to contend with any hon. Member or any Minister's adviser as to what a rotary-wing aircraft is. Is not the multi-rôle combat aircraft a rotary-wing aircraft? It swings its wings.

What about the complaints that will come from the key supplier for the whole MRCA programme? Who is that key supplier? It is no one in Britain, the United States, France, West Germany or Italy. It happens to be the Soviet Union that supplies the key titanium powder for the main aircraft for the defence of Britain in the 1980s. I speak with some authority as the treasurer of the Anglo-Soviet Parliamentary Committee—when I took over we were in the red, but now we are in the blue.

The complaints will not be from the chap down the road in one of the 296 companies concerned. They will come from foreign suppliers who will want to know the pricing policy of the British Government and the British Aerospace Corporation's instructions. Will they have preferential treatment and will they have the right to single source selection tenders? The machinery of the new clauses is vital for these two industries and for the ship repairing industry.

Perhaps the Boeing Aircraft Company, the MacDonnell Aircraft Company and Lockheed, perhaps even Marcel Dassault, will decide after our industry's nationalisation to come to this country and set up their own businesses to take advantage of the redundant workers who will be thrown on the scrap heap because of the nationalisation of the British aircraft industry. Will they have direct access to that machinery? They ought to have it. They will probably have a registered office in this country, which will allow them to make a complaint as they wish.

What will the complaints be about? Looking hack at Government Amendment No. 1, which was passed earlier, once again we have skated over the question of what is the manufacture of a complete aircraft. Hon. Members know full well—all those who sat through the 58 sittings of the Committee—that no one in the world manufactures a complete aircraft. An aircraft is defined usually as being one-third airframe, one-third engines and one-third equipment. Of the one-third airframe made by the companies to be nationalised, at least half is generally bought from other suppliers; so we end up with about 16 per cent. of an aircraft being made by the companies to be nationalised. Therefore, there is no such thing as the manufacture of a complete aicraft by one company, so immediately complaints can arise.

I do not want the House to think that I am splitting hairs. The people concerned will be up against skilled professionals looking for trouble with the British Aerospace Corporation. This complaints machinery must be there not only for shipbuilding but certainly for aviation.

On another section of the requirement for the complaints machinery, my hon. Friend the Member for Bridgwater (Mr. King) has already referred to the equipment suppliers. It would be very interesting to see the relationship between the Ferranti Company—a nationalised company—and the British Aerospace Corporation when that corporation, in some of its component parts, will have already tried to embark on competition with, say, the Ferranti Company, let alone suppliers such as Smiths or Marconi, and let alone people such as Litton coming in from abroad.

Will these people be allowed to complain? Who will be assured that in making the complaint he will be properly represented? Will he have to have counsel to represent him? What is the form of representation that is acceptable to the Minister?

7.15 p.m.

The last particular point I make is on pricing. It is a well known fact that there are such things as loss leaders. However, what I fear about nationalised corporations is that they tend to put out products and services that are all loss leaders in order to price others out of the market. It is interesting to look at the prices quoted by many companies today in the transport industry and by the British Steel Corporation, which have to compete with others to see whether they are supplying the goods and services that they are offering at a price that means a profit or a loss. Too frequently one finds in the year's end accounts that most of them must have been supplied at a loss, or they would not end up in the deficit position that they do.

I am afraid that there will be a lot of what is called in industry the cooking of overheads. This will entail tremendous investigations as to, for instance, whether the Ministry of Defence technical costs department will be allowed to reveal statistics to people making complaints about the overhead structure approved in companies which make up the British Aerospace Corporation.

What about people who say "I am making an unmanned aircraft; other people call it a guided missile; therefore, it cannot be in competition with anything that you make, because you have already precluded unmanned aircraft from the Bill."? What about that kind of complaint? Will people be allowed to manufacture? Will the British Aerospace Corporation come back into the complaints machinery and enter a complaint? The corporation ought to have a right to complain about unfair competition.

In summary, it is with reluctance that I approach the need for these two new clauses, because while we battle on with the minutiae of complaints and procedural wrangles, all that will happen is that the customers whom the hon. Member for Newton and I want to see for the shipyards, production lines and factories in Britain, will have gone to the foreigners who will have got the contracts.

Mr. W. E. Garrett

This debate and the Bill are to involve us in three long days on the Floor of the House. It is not for me to quibble too much. However, far too much time has been allocated for the Report stage. The justification for my complaints about the time has already been made clear by the way in which we are slowly proceeding through the Bill and are slowly getting involved in repetitive arguments. The Minister may have a fresher mind than many of us who served on the long Committee stage and he may have some more cheery ideas. However, I and many others have run outof ideas.

I am not too enthusiastic about the new clause being introduced. I should have preferred to leave it to British Shipbuilders or the British Aerospace Corporation to sort out particular problems themselves. We are getting a little too rigid in our approach to complaints from wherever they come. We have tipped the balance in the other direction. As the hon. Member for Hastings (Mr. Warren) said, there is a consumer complaints council for virtually every commodity that is produced or sold by the State or is part of the State's trading agencies. By and large, they seem to work. At least, they take some of the pressure off the mailbags of Members of Parliament—not much, but a little.

The new clause has obviously been proposed to placate some of my hon. Friends and possibly to placate some Opposition Members.

Mr. Tom King

The hon. Gentleman has said that the matter should be left to the Corporation to sort out. It will be judge and jury on its own cause and in its own interest. How would he feel if he let the Bill go through without the clause and a company came to his constituency and employed 150 men who were doing a good job but who were a bit of an embarrassment and so the corporation took a contract as a loss leader which resulted in the firm being closed down and 150 people losing their jobs? If the trade unions came to him and asked if he could help them, he would have to say that he argued in the House that such people should not have a right of redress.

Mr. Garrett

It is clear that the hon. Member did not grasp what I was trying to say, or perhaps I did not explain myself fully. Too much rigidity is being imposed on the corporation, but that is not to say that a genuine complaint against the corporation should be ignored or pushed aside. I should like the corporation to have the opportunity of deciding its own mechanism and procedures. That would be worth a try, but if it did not work, we could come back, as we have before, with a miscellaneous provisions Bill. There is too much rigidity and the job of the corporation is being hog-tied when it should be given freedom.

Many big commercial organisations have established procedures which, by and large, ensure that customers and employers—whether managing directors or ordinary staff—obtain a good deal in conditions of employment, and rates of pay. We should leave it like that, but it is probably too late to start on that line of thinking.

Mr. John Prescott (Kingston upon Hull, East)

My hon. Friend has said that not many hon. Members on this side of the House support the clause. As that has gone on record, and as the Government have sought not to nationalise the small Drypool shipyard on Humberside, I must put on record that the workers there fear that they may be left out when orders are placed, and they would welcome the clause.

Mr. Garrett

There we are. That is another expression of opinion. If the Report stage lasted six days, all sorts of opinions would be expressed on this controversial clause, and there would still not be enough time.

The clause gives the trade unions a say in pricing policy. If they believe that the pricing policy is cast too low and that that stops them from earning a higher wage, they will have a say at district, regional and national level in the pricing policy of the ships and in some of the commodities brought in for the manufacture of those ships. I can see the arguments for that, but the clause could have been left out. We could have stuck to the original Bill and let the corporation get on with it instead of imposing more bureaucracy.

Mr. Michael McNair-Wilson (Newbury)

I welcome the two new clauses but I have to admit to some reservations. I wonder whether the clauses are like the guarantee one has when one buys a new product which, if one makes the mistake of sending it back to the manufacturer, might lead to one losing rights rather than gaining them. What is the meaning of the sentence which reads: that the complainant has a reasonable case to make in support of it, shall afford the complainant and British Shipbuilders an opportunity of making representations in relation to the matter to a person appointed by the Secretary of State. Does that afford the right of legal representation to the complainant or is the machinery to be set up by the Department and the corporation such that the corporation will be judge and jury in its own case? I press that on the Minister because if we pass clauses which take away rights which are probably intrinsic, we shall achieve nothing.

I congratulate the Government on the clauses, albeit that they are tabled with the encouragement of the right hon. Member for Sunderland, North (Mr. Willey), because they are right to recognise the possibility of the corporations acting unfairly and, and more important, to recognise the value of competition between private enterprise and the State sector. That is a hopeful conversion to a view that hon. Members on this side of the House have held for many years. Hon. Members on the other side are being forced to recognise that view because they know that one of the tragedies of the State-owned industries is the difficulty of creating bench marks for success against which to measure performance.

In the situation which we are now creating for both the shipbuilding and aircraft industries, any competition that is left will help those industries and the corporations to ensure efficiency. The Minister scarcely needs me to remind him of the effect that British Caledonian—a privately owned company—had on British Airways and the effect on British Caledonian of the shuttle service which was introduced by British Airways. By the same token, the British Airways decision to fly to Manchester, Birmingham and Glasgow was one reason why British Rail recognised that they must introduce a train service to those places which was as good as, if not better than, the service offered by the airways. In consequence, Inter-City was born and that has drawn back a large number of passengers who would otherwise have used the domestic services operated by British Caledonian and British Airways. That was a good thing.

One of the arch-exponents of such a system is the Foreign Secretary who has said that the State should set up companies in competition with private enterprise to create greater competition and thus more efficiency. The right of people to object to the practices of British Aerospace and British Shipbuilders must be to the benefit of both those corporations.

Which of us who has arrived home before the Olympics finished on the television has not watched the competition of those superb athletes and seen each one of them exact the best that he possibly can from his performance? We have watched world records tumbling this year, and we know that this is all the result of excellence in performance. If we are to overcome some of the appalling problems that face us, we must achieve excellence in this country in all we do.

7.30 p.m.

One of the tragedies of the concept of State ownership, which on paper looks so attractive, is that it fails to remove the vices of human beings. One vice, alas, is that one may become inefficient and lazy. We are all subject to that vice. Fortunately, we have our constituents and the Press to probe us and keep us on the ball. But in the past when State-owned industries have been prodded hard by a particular company, they have taken action by subsuming that company within the nationalised industry. Like all monopolies and monoliths, the tendency is to destroy all that which causes discomfort. In that situation inefficiency becomes rampant. In setting up State organisations, we must not at the same time set uo a smokescreen or public relations exercise.

My hon. Friend the Member for Hastings (Mr. Warren) and several hon. Members spoke about the need for foreign companies to set up operations in the United Kingdom. We must not deny those organisations the facilities to set up enterprises in this country by loading the dice against them via State organisations. We must guard against such action in every possible way.

What matters in our country at the present time is that we should organise the system to provide the maximum possible number of jobs. I am not so much concerned about economic structures as to provide a system in which there are enough jobs to go around. Therefore, if a foreign company wants to come into the United Kingdom, I hope that it will not be prevented from so doing. The more jobs that come to the United Kingdom the better it will be for the wealth of our nation. We need to attract all the jobs we can.

The hon. Member for Newton (Mr. Evans) said that he had worked for Swan Hunter and he spoke of unfair competition. It that his reason for suggesting that Britain supplied only 3 per cent. of the world's shipping needs? Was he laying that at the door of unfair competition, or was he arguing that it was the other chap who was always breaking the rules?

Mr. John Evans

I was addressing myself to a specific case rather than to the subject of the ailments in the industry. The major reason for the collapse of the British shipbuilding industry was the complete lack of investment in British industry since 1945. If the Geddes Report had not been adopted, substantial sums of money would not have been pumped into the shipbuilding industry for purposes of modernisation and the industry would have collapsed long ago.

Mr. McNair-Wilson

I must remind the hon. Gentleman that in the last five years, apart from Harland and Wolff, a sum of £113 million of Government money has gone into the British shipbuilding industry. Last year, Harland and Wolff alone received £137 million and a further £60 million in outright grant. I am sure the hon. Gentleman is not saying that the Government put that into the industry for purposes other than investment.

Is it not too easy to find a popular scapegoat? Is not investment the one scapegoat that everybody employs for purposes of argument? Is it not often said "If only we had more investment, we could do this, that, or the other"? It is a combination of all these factors. It is a mistake to assume that there is one simple touchstone of which it can be said "If that were right, all else would be right".

Mr. Teddy Taylor

Does not the EEC bear some responsibility?

Mr. McNair-Wilson

I shall not follow my hon. Friend up the Common Market path because if I were to do so I am sure that I should be out of order.

We must not have too firmly in our minds the subject of possible unfairness because that will only prevent us from achieving what we want. I appreciate that no Japanese owner is allowed to buy a ship that is not made in Japan. I see no reason why we should not have a similar approach on the part of our Government. [HON. MEMBERS: "Oh!"] I have obviously stirred up some of my hon. Friends as well as Labour Members. I am trying to say that we have not been as clever in our appraoch as we might have been.

After all, several nationalised industries have gone abroad for their ships. If we pour money into those industries, surely we should expect them to give a few orders to our own shipping industry. It is surely not unreasonable to suggest that those industries should first buy British. It upsets me to see British policemen driving around in German motor cars or sitting astride German motor cycles. Can it truly be said that the German products are superior to British manufacture, or is it all affectation?

Mr. Tebbit

The fact that our police may drive foreign motor cars does not put our police force ahead of foreign police forces. The fact that they drive a certain make of car may make them slower in pursuit of a criminal who may be driving another make of motor car. However, in regard to our airlines we should be concerned that we do not wreck our chances by giving too much false protection to our own manufacturing industry.

Mr. McNair-Wilson

I do not disagree with my hon. Friend. All I am saying is that if we pour vast sums of money into nationalised industries, it is surely not unreasonable for those industries to give at least a measure of protection to our own manfacturing industry, particularly in terms of shipbuilding, in which we are suffering vast over-production.

Mr. Teddy Taylor

Does not my hon. Friend accept that even if we regarded that as a good idea which would benefit Great Britain, it would be unlawful under the Treaty of Rome?

Mr. McNair-Wilson

Again I shall not follow my hon. Friend into EEC matters since I may offend the rules of order.

My hon. Friend the Member for Hastings mentioned the achievements of Flight Refuelling Limited and Marshalls of Cambridge. I have had the privilege of visiting both companies and I am sure that the House is aware that Flight Refuelling has an enormous export market and is the only exponent of a remarkable device to enable refuelling to take place in the air. By the same token, Sir Arthur Marshall has built up an enviable reputation among all those involved in the aircraft industry for the way he is able to refurbish aircraft. Both these companies give us just cause to be proud.

We do not want to see British Aerospace so monolithic and monopolistic that we shall be forced into a position in which these companies cannot continue. Were they to feel that unfair competition had been brought to bear on them, surely they should have the right, as the new clause would give them the right, to object in the strongest possible terms.

I welcome the new clauses for the reasons I have given. I welcome them because I think that competition is a good thing. I welcome them because I think that the Government have shown that they recognise the need to maintain a private sector in these two areas which will be dominated by State companies.

I hope that the Minister will satisfy me over the point I have raised. It would be wrong to limit the rights which must exist if we are to have fair competition. I shall support both these clauses.

Mr. R. C. Mitchell

I welcome this new clause because I welcome competition between publicly owned industries and the private sector of industry. I see no reason why nationalised industries should have anything to fear from com- petition as long as it is fair. I should have liked the clause to go a little further.

I hope I am right in believing that when British Shipbuilders is set up, the various units inside it, such as Vosper Thorneycroft Limited will retain a separate entity and certain independence. I hope there will be some system whereby Vosper Thorneycroft can make a complaint against British Shipbuilders nationally if it thinks it has been unfairly treated. I am very much in favour of competition inside the nationalised industries. A good example of this is the British Transport Docks Board.

One thing which I fear from the setting up of the British Shipbuilding Corporation is that the Bill may allow Ministers to try to put pressure on the corporation to do things which are not commercially correct. It is right that ships should be built where they can be built most efficiently and not where there is high unemployment, or because some particular area fits in with someone's regional policy. If the shipbuilding industry is to survive, it must be efficient, and it can be efficient only if it is not interfered with from the outside.

This Bill has been much improved in Committee. The fears expressed to me by many of my constituents when it was first published have been very largely allayed by assurances that each individual unit inside British Shipbuilders will have its own autonomy. I hope that the Minister will reassert that tonight.

7.45 p.m.

Mr. Les Huckfield

I thank my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) for the genuine way in which he has expressed the concern of his constituents. I know that he feels strongly about this matter and I shall certainly take to heart what he has said and bear it in mind in future deliberations.

I welcome the contribution of my hon. Friend the Member for Newton (Mr. Evans). In contrasting his former overalls with the costume certain hon. Gentlemen opposite have appeared in this afternoon it is obvious that he speaks with the authentic voice of the shipyards. I wish that his sentiments were echoed on the Conservative Benches.

This is supposed to be one of the major contentious issues of the Bill. We had a great deal of lamenting and complaining from the Opposition in Committee, and claims were made that there would be unfair trade practices. We heard a great deal about the need to shackle British Shipbuilders. In fact, we had a great deal of wailing and gnashing of teeth upstairs which has hardly been matched by the attendance on the Opposition Benches tonight. It makes me wonder just how seriously the Conservatives take this matter.

While I urge the acceptance of New Clause 1, the Government cannot accept New Clause 2 or the Opposition amendments. Conservatives must come clean. Every time we discuss a nationalisation issue they grunt and groan, and want to shackle and nobble the new nationalised industry with all the rules and regulations they can devise to limit commercial freedom. Then, when the legislation has passed to the statute book they spend hours of their time claiming that these industries cannot make profits because there is too much ministerial interference.

They must make up their minds about whether they want to lay down all these rules and regulations or to allow the industries a certain measure of commercial freedom. From the ambivalent attitudes expressed tonight it is obvious they have not made up their minds at all. Although the hon. Member for Bridgwater (Mr. King) says he is in favour of the new clause, his motives are entirely different from those of my right hon. Friend the Member for Sunderland, North (Mr. Willey). We welcome my right hon. Friend's contribution and his acquiescence in this clause, because his is the real concern of the shipyards and their workers. This is hardly the kind of concern which is echoed from the Tory Benches.

I have been asked by the hon. Member for Bridgwater for more information on the definitional aspects of the new clause. The definition we have included is the same as the wording in Section 30 of the Iron and Steel Act 1967. That section was restricted to the selling of certain iron and steel products. In this clause we are talking about the sale of ships and ship repair services.

The hon. Member for Bridgwater talks about the procurement of materials. I am sure that he wants to go back to the 1855 Undue Preference Obligations placed on the railways. He seems to say that neither British Steel nor British Shipbuilders should be able to act commercially. But we want them to have a measure of commercial freedom and the right to negotiate with each other. Assurances were given to hon. Gentlemen in Committee and I give those assurances once more. This is the way in which we regard the activities of the two corporations.

Hon. Members know that the situation in the aircraft industry is very different from that in the shipbuilding industry. The major aircraft manufacturers will be taken into public ownership by the Bill. Perhaps the only significant example to be excluded will be Brittan Norman, which makes light aircraft mostly assembled outside this country. The Conservatives must know that there are no other companies which would be affected which make complete fixed wing planes or guided weapons. They must recognise, therefore, that a situation exists in the aircraft industry different from that in the shipbuilding industry.

Mr. Tebbit

Even though there seems to be no reason why Westland Aircraft could not go into fixed-wing production, and although there is no good reason why we should not encourage foreign manufacturers to come here and set up manufacturing facilities, as they will, why is it that what would be a shackle on the aircraft industry is a good thing for the shipbuilding industry? Why does the Minister not have the courage to do the same thing in both industries?

Mr. Huckfield

From his behaviour in Standing Committee I thought that the hon. Member for Chingford (Mr. Tebbit) was learning a tiny bit about the shipbuilding industry. We have now seen that he did not. He must realise that we are dealing with totally different situations. Shortly the chairmen of both the organising committees will want to make a formal declaration of fair trading practice. I believe that covers the hon. Member's point.

The hon. Member for Hastings (Mr. Warren) seemed to be talking as though we were taking over not only aircraft manufacturers but the component firms. I do not know whether the hon. Gentleman has read the Bill. He was on the Standing Committee for a long time and he must know that the companies to be taken over are specified in the schedule. These companies will be covered by a formal declaration of fair trading practice shortly to be issued by the two chairmen.

Mr. Warren

Will the Under-Secretary give an assurance that the declaration of fair trading practice will include a statement that in no circumstances will British Aerospace compete with any other company in the British aircraft industry?

Mr. Huckfield

Before the hon. Gentleman intervened I said that the Conservatives wanted to shackle the nationalised industries with all kinds of obligations before they got off the ground. What the hon. Gentleman just said provides a perfect example of the shackling and nobbling of these industries that the Conservatives want, and that is why they oppose the Bill.

My hon. Friend the Member for Newton raised a genuine fear of shipyard workers about foreign competition. My right hon. Friend the Secretary of State is also very much concerned about it and we are having continual discussions on the matter in the EEC and OECD. We shall take to heart the fears that my hon. Friend expressed. It is only fitting, right and proper that he should raise them in the debate.

My hon. Friend the Member for Wall-send (Mr. Garrett) expressed another fear that has been put forward quite often, namely, that in introducing these provisions in the Bill we are going too far. I recognise that a number of my hon. Friends have reservations in that direction.

When the hon. Member for Newbury (Mr. McNair-Wilson) talks about the guarantee, we envisage a situation in which the complainant would be able to be legally represented before the person appointed by the Secretary of State to consider his case. I hope, therefore, that the hon. Gentleman does not regard that as signing away anyone's rights.

Finally, I urge the House to accept New Clause 1 and to reject New Clause 2 and the Opposition amendments. I would also hope that the Conservatives would have a little more confidence in their own fair trading legislation of 1973, because a great many of the points they have been trying to make this evening will be covered by the legislation they put on the statute book. If they continue to press their amendments, they can have little optimism or confidence in their own Act.

Mr. Tom King

Let me explain why we cannot accept the Under-Secretary's answer and why we shall be forced to press the matter to a Division. The point about the Fair Trading Act was covered in Committee. It could take up to three years for a complaint to be dealt with under that procedure, which is designed for a quite diffeernt series of matters.

I do not understand why it is respectable for the right hon. Member for Sunderland, North (Mr. Willey) to welcome some form of fair trading provision and for that to show his high standing and moral approach but is highly disreputable and devious for us to agree with him.

The Under-Secretary's answer was extremely disappointing because it was totally illogical. My hon. Friend the Member for Chingford (Mr. Tebbit) asked why something which is good for one corporation should be regarded as an appalling Tory shackle for the other. I was very disappointed with the speech by the right hon. Member for Sunderland, North. He said that he agreed with the principle and that it was right but that he was here to represent a shipbuilding and ship repairing constituency and that therefore he was not interested in what was happening on the aircraft side. He is a Member of this House and he is dealing with a Bill which he was appointed by the House to consider in Committee. He is a senior Member of the House and it is not enough for him to say that he is concerned only with the part of the Bill which affects his constituency.

Mr. Willey

I am saying merely that from my experience of shipbuilding and ship repairing what is proposed is appropriate for those industries. Nothing has been put to me to show that the same situation applies to aircraft.

Mr. King

The right hon. Gentleman recognises the principle and the probblems that can occur in any part of industry between a nationalised concern and an independent private undertaking. He says that unless evidence is shown to him that a situation exists in an industry he cannot accept that it does. I believe that he should have preserved his principles in the matter and recognised the force of the argument.

We are under the pressure of the guillotine and therefore I urge my right hon. and hon. Friends to vote for the amendments.

Question put and agreed to.

Clause read a Second time.

Amendment (b) proposed to the proposed clause:

to leave out lines 2 and 3 and insert the words 'one or more of the activities specified in Section 2(1) or (2) above, other than—(a) a Corporation, or'.—[Mr. Tom King.]

Question put, That the amendment to the proposed clause be made:—

The House divided: Ayes 294, Noes 305.

[For Division List No. 283 see col. 601]

Question accordingly negatived.

It being after Eight o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to Orders [20th July and this day], to put forthwith the Question necessary for the disposal of tire Business to be concluded.

Clause added to the Bill.

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