HC Deb 21 June 1976 vol 913 cc1243-78

10.15 p.m.

The Minister of State, Department of Industry (Mr. Alan Williams)

I beg to move, That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975, in respect of the construction of a Fluid Catalyctic Cracking Plant at Immingham by Lindsey Oil Refinery Ltd. sums exceeding £5,000,000 but not exceeding £9,900,000. This authorisation is required under Section 8(8) of the 1972 Act when expenditure in excess of £5 million is contemplated for any single project.

As hon. Members will appreciate, this is part of the accelerated project scheme which the Government have introduced under Section 8 of the Act. There is available to the Government about £120 million for this accelerated project scheme.

The objectives of the accelerated project scheme are counter-cyclical, and the aim is to provide sufficient inducement to bring forward projects which have a sound long-term prospect, and in bringing forward these projects we have to be assured that they are projects which, without the assistance, would not take place for some time.

To qualify for assistance the scheme must meet several requirements. First, it must be commercially sound. Secondly, it must create net additions to the firm's investment programme in this country. Thirdly, the firm must show some evidence of deferment, of the fact that the project would not otherwise have taken place at this time. Fourthly, there must be advantage to the balance of payments. Fifthly, the project must be started before the end of September of this year and must normally cost more than a minimum sum of £500.000.

Each project is measured not just against these criteria but against the criteria published by my right hon. Friend the Secretary of State on 12th January of this year.

The accelerated scheme so far has had considerable success, and we are very pleased with the results that we have achieved. So far, 41 offers of assistance have been made, and these involve about £38 million of Government assistance. But the investment that arises from this Government expenditure of £38 million amounts to £250 million, and the benefit to the balance of payments from the schemes already approved will be £150 million in 1978 and in excess of £200 million by 1980.

There are many other projects under consideration, and the Industrial Development Advisory Board has already advised in favour of further projects which will give rise to investments amounting to an additional £125 million. So that, taking those projects which have already been approved and those for which the IDAB has recommended approval, there would then be a total investment brought forward into the trough period of £375 million.

One must not underestimate the importance of this. It was 10 per cent. of the total manufacturing investment in the last year. This will have been achieved by Section 8 assistance of £55 million. So the ratio of investment induced to expenditure made by the Government is seven to one, and that is a very satisfying rate of return.

A wide range of industries have benefited from the scheme—the chemical industry, plastics, pharmaceuticals, mechanical and electrical engineering, and food processing. However, I must stress that the scheme aims to bring investment forward. It is not an employment-inducing scheme as such. I am not saying that we do not want employment to arise from it, but the prime objective is not the creation of employment, and this is not an absolute requirement. It is only a satisfying incidental.

From all the offers which have been made so far, 7,500 jobs should be created or safeguarded. This is an employment spin-off, which was not one of the original intentions of the scheme. In addition, it must be borne in mind that substantial proportions of the orders for plant and equipment are placed in this country and these create demand and employment in those industries supplying the firm which is undertaking the investment.

Mr. J. W. Rooker (Birmingham, Perry Barr)

Would the Minister tell the House how many schemes have been approved so far for companies which are foreign controlled, such as that which we are discussing tonight?

Mr. Williams

Offhand, I cannot say. But if a foreign controlled firm set up in my hon. Friend's constituency and took large numbers of people out of the dole queue, then I would be surprised if there were any complaint.

Mr. Rooker

I would want a share in the equity.

Mr. Williams

That may well be my hon. Friend's opinion and he is entitled to express it. The fact remains that the job creation aspect of the scheme is ubstantial. The Lindsey oil project—

Mr. Michael Brotherton (Louth)

Is the Minister saying that 7,500 jobs are being created at Immingham in my constituency? If so, I would be very surprised.

Mr. Williams

I assume that the hon. Member's lack of understanding of what I have said is due to the background hubbub. I said that 7,500 jobs have arisen from all accelerated project schemes which have been made or have been safeguarded by those schemes which have been approved. I will come to the Immingham employment figures in a few minutes.

The Lindsey oil project is one of the most important of all the projects supported under the scheme. Construction costs will be about £70 million, for a plant to convert fuel oils from the Lindsey refinery near Grimsby, which is a rather sensitive area in employment terms. It will convert these fuel oils into higher value lighter distillates, such as petrol, which currently have to be imported.

The project meets the criteria of the scheme which I outlined in my comments, and it will be a net addition to the investment programme of the company and the country. It will reduce the need to import petrol and other lighter distillates and will therefore have a balance of payments advantage.

The project was deferred in October 1975 because of financial stringency, which many companies faced then, and because of the doubts which hung over market prospects in oil and oil derivatives.

Dr. Colin Phipps (Dudley, West)

I am surprised to hear the Minister say that this will have an effect on our balance of payments. This country is using 90 million tons of oil products a year with a refining capacity of 134 million tons. I find it difficult to believe that we need extra refining capacity to supply ourselves with gasolene.

Mr. Williams

This particular oil refinery produces heavier oils surplus to current requirements. These are exported, and this company imports fine oil which it requires. The balance of these figures would give rise to a balance of payments advantage which I will explain.

The project was deferred in October 1975. The company is to start the installation of tankage and piping before the end of September this year. That in itself is a substantial project. Work on the cracking plant will be under way we hope by the end of this year. I know that my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis), who has constantly harried me about job prospects in his constituency, will welcome the project and the opportunities it will give to his constituents. I am glad to have been able to respond to the pressures which he as a good constituency Member has applied to both the Government and the Department.

The project will provide 1,500 jobs for three years during the construction phase. These jobs are necessary in the area in which they will be provided, an area with unemployment above the national level and with new problems which have developed quite recently. About 70 per cent. of the equipment for the investment will come from British sources, so we are talking about substantial ordering of equipment from other British firms, which will have benefits in employment terms.

Mr. Bob Cryer (Keighley)

Does my hon. Friend have a guarantee from the company that it will purchase 70 per cent. of its equipment from Britain, or is that just the general guidance from it?

Mr. Williams

When we negotiate a project such as this we discuss with the firm concerned a whole range of questions including that aspect. We carry out a monitoring operation throughout the period of the project. Therefore, when we receive assurances it is reasonable to assume that they are firm assurances, subject, of course, to the supplying industries being able to provide the equipment. One of the tragedies of the situation is that one part of the equipment needed is available only from the United States or Austria, and an order for that equipment cannot therefore be placed in this country.

When the construction is completed—in about 1980–80 permanent new jobs will be provided in the plant. [HON. MEMBERS: "Oh."] Hon. Members seem surprised at that figure, but the House has always accepted that if regional policy means anything it means getting a proper balance of industry within each region, and there is a need for the capital intensive as well as the labour intensive. The important thing in employment terms—and providing jobs was not the prime objective of the scheme—for the people of the area is that during the upturn in the economy when there is uncertainty the project will provide extra jobs as construction proceeds over the next three years. That will give time to move other job opportunities into the area.

Mr. Clement Freud (Isle of Ely)

If the Minister answers my question I promise not to make a speech. If the Secretary of State does not undertake to pay this sum of between £5 million and £9.9 million, will this project not go ahead?

Mr. Williams

The hon. Member's promise not to make a speech is one I find hard to resist. Therefore let me tell him that our assessment is that we find it hard to believe that this project will go ahead if the assistance is not made available. If it would go ahead without the assistance, we would not be making that assistance available. More than 40 projects have been turned down simply because companies were not able to prove that the projects would otherwise have been deferred. We do not just take the word of anyone who comes along and says that if we do not provide the cash he will not carry out the investment.

Mr. Tim Renton (Mid-Sussex)

Can the Minister tell us how his Department made the assessment to which he referred? Can he also assure us that he will be dealing with the point raised by the hon. Member for Dudley, West (Dr. Phipps) about the balance of payments advantage?

Mr. Williams

I shall certainly be referring later to the balance of payments advantages.

With these projects, we first have to establish that a project has been deferred and then establish the reasons for the deferment, the cost factors involved and the cost of overcoming the risks envisaged by a company in bringing forward into a period of recession an investment decision which it would otherwise have delayed.

Inevitably, this is a fairly lengthy investigation and we have to go into considerable detail in our discussions with the firm. In a sense, each project is tailor made.

In the legislation passed by the last Conservative Government, they provided for selective assistance. This is desirable, if it is properly scrutinised. There is an element of discretion, judgment and subjectivity in these matters and it is always possible for an hon. Member to say that £9.9 million is not needed for a project and that £9.7 million would do. It is a claim which I could probably never disprove to the satisfaction of the House. However, we have created a new section within the Department bringing in expertise from industry, including financial expertise, to help us evaluate projects.

Mr. Brotherton

Will the Minister be able to publish any proof that this project would not have gone ahead if the taxpayers had not offered £10 million? I think it is most unlikely. If he could prove that to the satisfaction of the House, even I might be tempted to vote for him.

Mr. Williams

I should be very sorry if hon. Members opposite voted against us, as the hon. Member seemed to be implying. I hope that the media on Humberside will make it clear that the 1,500 jobs which the Order would create over the next few years would be denied to the area by hon. Members opposite. The Opposition should be ashamed of themselves, especially after the crocodile tears they shed over unemployment earlier this evening.

Mr. Tom King (Bridgwater)

When did the company concerned enter into discussions with the Minister's Department?

Mr. Williams

I shall find out before I wind up the debate if the hon. Gentleman regards that as a matter of importance to the Opposition.

Mr. Kevin McNamara (Kingston upon Hull, Central)

My hon. Friend has made an important point about the reaction on Humberside to this matter. What estimate has his Department made of the number of people on Humberside—on the north or south banks—who will get any of the 1,500 jobs? Many of these jobs are for particular skills, some of which are not available on Humberside at present or do not figure in the unemployment statistics.

Mr. Williams

Yes, indeed. My hon. Friend is absolutely correct. However, I cannot tell him the precise number of jobs. I trust that he is not saying that he does not want the investment. He knows very well that it is by the nature of major construction work that a substantial part of the work is done by specialists who are brought in. We all expected that. The important point is that in addition a substantial number of people from the locality are given employment, too; and not only that, but one also has—if one dares to use such a phrase—a multiplier effect, in that the people who are employed for this three-year period will be spending in the area money that otherwise would not have been spent. At the wage levels applying in this area, with 1,500 jobs over three years, the additional spending power that will come to Humberside will be considerable.

My hon. Friend asked a Question about South Yorkshire a few weeks ago, and one of the supplementary questions that arose was to the effect that it was necessary to generate extra employment in the construction industry. My hon. Friend will realise, therefore, that this proposal is providing employment in an industry which has been pressing the Government for extra employment opportunities.

With luck, I might get through another half sentence. Then no doubt Opposition Members will think of a few more supplementary points that they would like considered.

I draw attention to the reply given on 6th December 1974 by my right hon. Friend the then Secretary of State for Energy. I hope that the House will excuse me if I quote it. I would sooner do that than paraphrase it. He said that the Government would be looking for an increase in upgrading capacity to convert heavier fractions"— of refinery output— into petrol and naphtha so as to avoid the need for costly imports of refined products, and to provide a good base for an expanding petrochemical industry."—[Official Report, 6th December 1974; Vol 882, c. 648.] That is precisely the strategic objective that this unit will help to attain. Again, it will mean that about 500,000 tonnes which would otherwise be imported will not be imported. We shall still have a deficit of about 3½ million tonnes, if I remember correctly, in terms of domestic production of these products. At present I believe that the deficit is about 4 million tonnes. When this project is completed, it will carry 500,000 tonnes off the deficit, so there is still a need to import these products.

Dr. Phipps

I am grateful to my hon. Friend for giving way. I hope that the House appreciates that in short debates of this kind, giving way helps, in the limited time, to bring out some of the important points. Is my hon. Friend aware that within the total United Kingdom refining industry there is the potential for more petrol and gasolene production? It is merely within the context of this particular refinery that there is a shortfall, and it is only in the context of this refinery that this investment will produce an import saving. An equal import saving could be produced by having the petrol made in the surplus capacity that we have.

A further point on which I should like an answer is that this seems to be spending £6,000 per job over three years and £110,000 per job thereafter. I just wonder whether this is the most efficient form of job creation that we can find.

Mr. Williams

Of course it is not the most efficient form of job creation. That is why I went out of my way originally to stress this point—which I think the hon. Member for Bridgwater (Mr. King) and his hon. Friends will confirm—in the debate on the Industry (Amendment) Bill. The scheme's primary objective is not job creation but to draw investment that is counter-cyclical forward into the trough period. It therefore anticipates the upturn. It has real benefits. Job spin-offs arise from it. The job creation is a welcome ancillary, but it is not the primary objective. However, that does not mean that the scheme is not worth pursuing.

Mr. James Johnson (Kingston upon Hull, West)

Should not my hon. Friend be telling the House that we deserve not one but 10 schemes like this? If there is an investment league, Humberside is almost bottom of that league compared with Lancashire, South Wales and Scotland. Is that not so?

Mr. Williams

I trust that my hon. Friend will not pursue that point too far, because I hope to draw attention to two other projects which are taking place in the Humberside area which are intended to help both investment and the production of extra employment. I accept the point that this company is jointly owned by Petrofina (UK) Ltd., which has been in operation in this country since before the war, and by Total Oil Great Britain Ltd. which has been in this country since about 1960. I think those are the correct dates.

The House must bear in mind that 20 per cent of industrial manufacturing capacity in this country is foreign owned. Before there is an outcry from anybody saying that that is too much, we should bear in mind that it is lower than in France and Belgium and vastly lower than in Canada. We are very dependent on—[Interruption.] I am sorry that hon. Gentlemen opposite seem to treat what I regard as the important subject of jobs rather lightly. Perhaps we can put it down to the time of night. Certainly investment in companies such as Hoover is welcome. I do not think that anyone would say we do not want their jobs and investment.

Mr. Giles Shaw (Pudsey)

I beg the Minister not to consider the noises emanating from the Opposition Benches as disapproving of the fact that the Government are proposing to support with £6,000 per job a multinational company such as Petrofina. It was to make the point clear to his hon. Friends below the Gangway that these people provide vital jobs in this country.

Mr. Williams

I am grateful to the hon. Gentleman for his intervention, but I must observe that the Opposition move in a mysterious way their approval to proclaim. I am delighted that we have taken up the cudgels again in my new role, since we were constant adversaries in my previous manifestation in the Department of Prices and Consumer Protection. This project will provide inducement to a basically foreign-owned firm to help with investment in this country.

At present both these companies import a proportion of the lighter distillates. The cracking plant will convert the surplus residual fuel oils from the Lindsey oil refinery into lighter distillates and so avoid the need for these imports. It is important to bear in mind that the need for lighter distillates is expected to increase in both the United Kingdom and Europe at a faster rate than oil products generally.

We believe that, as a result of our negotiations, the proposed assistance is the minimum necessary to bring the project forward. Payments would be made over the years 1977 to 1980, because they are paid after the various stages are completed. Therefore, we see the colour of the company's money before it gets its fingers on ours. That point should appeal to some of my hon. Friends. The Industrial Development Advisory Board has advised that assistance should be made available. The saving on the balance of payments is estimated to be about £17 million per year. Again, that will be a valuable contribution to our balance of payments situation.

Dr. Phipps

With respect, I do not think that my hon. Friend has fully grasped the point that I made. The capacity to produce the amount of petrol that is imported by these two companies exists in other refineries. These companies, for their own purposes, wish to import petrol for sale through their own garage chains. The fact is that the capacity exists in other refineries. We are therefore proposing to spend money to create capacity which is available elsewhere.

Mr. Williams

I am sorry, but that does not conform to the information that I have. I want to get this right. My information is that our productive capacity now is about 4 million tonnes a year less than our requirements, and therefore this goes part of the way towards meeting our needs. It will still not leave us self-sufficient in this type of product. That is my advice.

I know my hon. Friend's expertise in this matter, but I ask him to bear in mind that the Department has access to a considerable amount of information. Should the figures that I have given prove not to be correct, and should I catch the eye of the Chair in order to reply to the debate, given that I am ever allowed to sit down, I shall refer to this point again. The House usually likes a Minister to give way if constructive points are being made. I suspect that all those who have intervened in the debate have felt that their interventions were worth making, and if in answering the interjections I have headed off one or two urges to make a speech I have perhaps made a saving in time, and therefore the cost benefit is advantageous to us all.

The House will recall that on 24th March assistance was approved to bring forward the construction of an acetic acid plant for BP Chemicals International Ltd. on Humberside. Both that project and the Lindsey oil project are valuable additions to the infrastructure of the area. In addition, a Reckitt and Colman pharmaceutical factory at Hull has been brought forward. The three projects will provide more than 2,200 local jobs in the Hull-Grimsby-Humberside area during the construction period, and will eventually provide 300 permanent jobs. I am sure that no one would begrudge Humberside, Hull and Grimsby these opportunities.

Dr. Jeremy Bray (Motherwell and Wishaw)

The Minister referred to the BP acetic acid plant. Did he read the debate in the House on the Order on the BP plant when suggestions were made from both sides of the House which, had he followed them, would have made his speech even more informative than it has been? It was suggested that he should publish a memorandum in advance giving the details that he has had to spell out in response to questions from hon. Members.

Furthermore, can my hon. Friend say whether the money that he is proposing to advance is a grant, or a loan, and whether there are any circumstances in which it will be repayable by the company—for example, if it is proved that the company could profitably have gone ahead straight away with the investment?

Mr. Williams

I am sorely hurt to think that the House would have benefited by being deprived of the speech that I have made and being provided instead with the data in written form. I shall bear my hon. Friend's point in mind for future occasions, but such is my vanity that I cannot assure him that I shall give way to that suggestion.

All these projects will bring substantial benefits to the Humberside area, and I therefore commend this project and this Order to the House. It will make substantial permanent additions to manufacturing capacity. There will be a substantial benefit in terms of employment, certainly during the construction phase, and some subsequently, and there will be an important strengthening of the industrial base of Humberside.

Dr. Bray

My hon. Friend has not answered my important question. Is this money a grant, or a loan, and is it repayable under any circumstances—for example, if it turns out that the company could profitably have gone ahead with the investment according to the present timetable?

Mr. Williams

I was not trying to evade my hon. Friend's question. The accelerated project schemes are grants, and this is a grant to the company. I hope hon. Members will accept that there is—

Sir Paul Bryan (Howden)


Mr. Williams

I am sorry that I am being attacked—

Sir P. Bryan

I do not understand.

Mr. Williams

If the hon. Gentleman did not understand that, I am not capable of being more explicit than saying it was a grant.

I hope, the House will accept that the strengthening of the industrial base in Humberside should have support in this way.

10.50 p.m.

Mr. Tom King (Bridgwater)

If I may help the Minister of State in respect of his last reply, am I right in assuming that this is an interest relief grant that the company is getting?

The debate has been interesting, particularly for those of us who took part in the earlier debate referred to by the hon. Member for Motherwell and Wishaw (Dr. Bray) in respect of the grant of £10.1 million to that impoverished company, BP Chemical International, which took place on 24th March. The hon. Member for Kingston upon Hull, West (Mr. Johnson) was there representing his constituency interest and so was my hon. Friend the Member for Canterbury (Mr. Crouch) and others.

I feel that the Minister of State's speech was, in a sense, a mini-debate in itself. It brought home clearly that the House is starting to take much more of an interest in what is going on under these late night Orders and is questioning the wisdom on which they are advanced on such a superficial case from the Minister.

We should be grateful that the hon. Member for Dudley, West (Dr. Phipps), who we know has considerable experience in petroleum matters, is here. The whole House will have noticed that the questions he asked cast considerable doubt on the case being made by the Government. The only point which worried me was that the hon. Gentleman's mathematics did not seem to be too good. He talked about the on-going cost of the jobs. It is, in fact, £1 million per job and not £100,000 which he suggested. This refinery system will cost between £70 million and £80 million and will provide 80 permanent jobs, according to the evidence of the Minister.



Mr. King

I was interested in the comments made by the Minister of State when he said that Government money would not be put in until 1977 to 1980 and that, at least, the Government and their supporters will have seen the colour of the company's money by the time this investment was made.

Dr. Phipps


Mr. King

The hon. Gentleman will forgive me if I do not give way. Other hon. Gentlemen wish to speak and the Minister of State took 35 minutes. I do not criticise him for that, but I do not want to give way at this stage.

I wondered how the hon. Member for Birmingham, Perry Barr (Mr. Rooker) would feel about that because the colour of the money they will see is French money and Belgian money.

It was clear from the comments of the hon. Member for Birmingham, Perry Barr that he was unhappy with that prospect, because this company with the innocent-sounding name of Lindsey Oil Refinery is wholly, or jointly, owned by Total and Petrofina. We do not resent this but it is something which hon. Members opposite, with their antipathy to multi-nationals, will have to work out for themselves.

We recognise the contribution that multinationals have made to the development, not least of the regions. The Minister of State will appreciate that. However, the question we face tonight is not a question about employment on Humberside. We are all in favour of that and we bitterly regret the state into which that region has got under this Government. It is infinitely worse than it was under the previous Tory Government. Hon. Members opposite might like to quote the unemployment figures at the end of the last Conservative Government compared with the unemployment figures which exist now. In these circumstances, this is not a question of employment on Humberside because the £10 million of Government money, out of £80 million for the total project, will in the end produce only 80 permanent jobs.

To their credit, the Government have never claimed that the accelerated investment scheme had employment criteria. Of course there is a minor short-term employment benefit for the construction workers involved, which we discussed when we debated the acetic acid plant. Also, 70 per cent. of the orders in a £70 million investment will be placed with chemical engineering companies in this country, and that is not to be ignored. I trust that every hon. Member is also in favour of greater investment in British industry. But how can the limited funds available to the Government be best employed to create investments which would not otherwise exist and thus help both the balance of payments and employment creation in areas of high unemployment?

This is not an argument about selective assistance. As the Minister said, the original concept of selective assistance was created by the Conservative Industry Act 1972. Our wool textile scheme has been followed by the Government's schemes for ferrous foundries and machine tools and other sensible use of selective assistance to prime the pump in areas where funds are not otherwise available.

But this Order is made not under the 1972 Act but under the 1975 Act and the Government's amendments to the former. An amendment crucial to this debate was the deletion of the Conservative qualification in the 1972 Act that the funds would not be available from any other source. The Secretary of State had no power to put funds into any project if they were available from any other source. The present Government decided to delete that provision. Therefore, we have no knowledge, but we have the gravest suspicions, that the funds involved under this Order may be available elsewhere.

We are not dealing here with a situation in which the Government have ample funds and there is no question of any other projects being deferred. Hon. Members are concerned about so many different projects. Bankers have the expression "opportunity cost", under which the question is not just what something will cost or whether one wants to spend a certain amount on certain projects but what one cannot do elsewhere because funds are spent in a certain way.

I will not attempt to trespass on the territory of hon. Members representing Humberside constituencies, but I wonder whether these funds could not have made a greater contribution to employment in the fishing industry, and whether it is not possible to suggest that funds for this purpose could be available from another source.

There is no doubt that the Government face a very serious situation over public expenditure. We are told that they are seeking every possible way to limit spending in other areas, whether in the child benefit scheme or in other areas. When we consider the two companies involved in this project we cannot believe that two substantial, successful companies, Petrofina and Total, are so bereft of funds that they are wholly dependent on this relatively small additional contribution to enable this project to go ahead.

The Minister has done an efficient job in reading out the same criteria as his predecessor read out during the last debate. I hope that he lasts longer than his predecessor—and that is not meant unkindly. I was interested to observe that he read out the criteria in a slightly different order. I do not know why he did so, unless the hon. Gentleman's advisers felt that they wanted to liven the debate up a bit.

The point is whether this is a scheme that would have gone forward anyway. Would it otherwise have been deferred and has it genuinely been accelerated by the Government's contribution? That was the question asked by the hon. Member for Isle of Ely (Mr. Freud) who said that if it were answered he would not make a speech. This project has been widely canvassed in advance. [Interruption.] Even the hon. Member for Feltham and Heston (Mr. Kerr) might like to know this. He is being asked to vote £10 million towards this project. This will be money that will not be available for employment-creating schemes in his constituency or some other scheme to which he attaches importance

Does the hon. Gentleman realise that in the January issue of Chemical Age it was said that a decision on the project was expected in March? Is he aware that it was said that the expansion plans had been mooted by the companies for some time? The January issue of Petroleum Times said that the project was listed under those which would be under construction during 1976. Now the Government come along in late June and say that there is no hope of the project starting unless they put in £10 million.

Certainly funds for industry are important. Investment in industry is important. I get the feeling that the Secretary of State is like an advertising manager in a commercial company who has fought for his budget and, having won it, is determined to spend it. We have the gravest doubts about the scheme going forward. Everyone knows that in the present financial condition of the country the last thing we have is money to throw around where it is not needed. We are facing a desperate economic situation. The Government have a budget deficit of £12 billion.

It is in this context that we have to view the £10 million being sought tonight. Obviously this is a scheme of great advantage to the companies concerned and we do not blame them for putting it forward. We criticise most strongly the use of Government money in this form and we shall oppose the Order.

11.4 p.m.

Mr. Kevin McNamara (Kingston upon Hull, Central)

I am a little alarmed at the logic of the Opposition. They say that they will oppose this Order yet when we debated a similar Order concerning BP in March they gave it a fair wind. If we look for constancy in politics we should ask what principles the Opposition are applying now which they did not apply in March.

Members of the Opposition who represent constituencies on Humberside which have serious unemployment problems which could be ameliorated by the project and who propose gleefully to go into the Lobby to oppose the project will have to answer to their constituents for their action and pay for it at the polls.

Mr. Brotherton

The hon. Member must realise that the number of people in my constituency on Humberside affected by the Order is minimal but the waste of taxpayers' money is maximal.

Mr. McNamara

That is the type of statement that I would have expected the hon. Gentleman to make. He has not applied his mind to the proposition before the House but is following the doctrinaire line of his Front Bench. It is doubtful whether he understands the problems on the south side of the Humber, let alone those on the north side.

It would not do justice to this project merely to look at the location of the industrial complex when it is built. It is not a matter merely of the number of men who are employed in construction on Humberside, important though that may be. It is not merely a matter of the creation of new jobs on Humberside, important and skilled though they may be. It is a matter of the spread of employment throughout the country. Seventy per cent. of the plant will come from the chemical engineering industry as a whole. This will have a beneficial effect not only on Humberside but in other parts of the United Kingdom, too. There will be industrial investment which would not otherwise occur.

It matters little to me whether this is a project which the company would not have otherwise undertaken. It is sufficient for me if by this action the company is given a push in the right direction and is helped to create some employment in the Humberside area and if British industry is to some extent rejuvenated and helped, if only for a short period, to overcome serious unemployment problems on Humberside. On those grounds the project is greatly to be welcomed by everybody.

I admit that it is multinational firms which are carrying out the project. However, it comes ill from Tory Members to begrudge this money to multinationals now, for they have said, in speeches in Europe and elsewhere, that there is little need to control the multinationals, that they can be left to do what they like. I believe that multinationals should be subject to further constraints—for instance, in the way in which they invest. A bad impression has already been created on Humberside, when one multinational, Litton Industries, closed its operations.

It is fatuous for the Opposition to say that because multinationals are involved there is something wrong with the project. The investment picture in the country as a whole must be considered. The job opportunities created, not only on Humberside but elsewhere in the country, must be considered.

A number of points which my hon. Friend the Minister of State mentioned worry me. The Saltend project is important, as is the Reckitt and Colman scheme. This project, too, is important, even though in total in the three projects only 300 new jobs will be provided. I know that my hon. Friend regards it as a welcome spin-off of the accelerated project scheme.

Welcome though this scheme is, however, and even granted the great number of people who will be employed in the short term in construction, the scheme must not be seen as alleviating some of the distress which will be caused in the fishing industry by the failure of the owners in the past to invest in and reconstruct their industry and of the previous Tory Government and of my Government to have a proper fisheries policy when we joined the Common Market. It must not be seen as something to alleviate that situation. Our problems are those of investment and unemployment, which is well above the national average, and were so long before the Icelandic dispute and the acceleration in the rundown of the fishing industry.

Therefore, welcome though this project is, it should not be regarded as something to alleviate the tragic situation in the fishing industry as a whole, because it is quite separate and distinct. One cannot overnight train a bo'sun or a mate or a deckie-learner as a pipe fitter for Lindsey's, for example. Thus, this project, bringing capital into the area, with all the spin-off that that means, should not be seen as in some way alleviating the problems of the fishing industry.

But, having made that caveat, I must add that it would be wrong for the Opposition to create the impression that this sort of investment does not help to improve the morale of the industry and of the people of Humberside. Those of us who have had the good fortune to go round the new factories being built by Reckitt & Colman have seen the improved morale of the work force. That as much as anything is an important bonus of this scheme. They have seen the evidence of capital investment coming into the area, and that is an important element. The same applies to BP and elsewhere.

Although the permanent jobs which will be left on-site will be relatively few, they will be highly-skilled, requiring training and high performance standards, and this in turn will have an important effect upon the industry of Humberside. Finally, under both Governments, the development and intermediate regions have tended to get capital-intensive industry, and, welcome though it is, it does not create the number of jobs required to meet the unemployment problems of such areas. Although we welcome this investment, it does not get down to the root, chronic unemployment of areas which require not so much capital-intensive industry as labour-intensive investment.

Mr. Tom King

That is right.

Mr. McNamara

It does not need the Opposition to say "That is right." They did damn all when they were in Government.

11.14 p.m.

Mr. David Crouch (Canterbury)

It does not help the debate for the hon. Member for Kingston upon Hull, Central (Mr. McNamara) to criticise the Opposition for not having produced jobs, or even the present Government for not having done so in the past. We are talking about producing jobs tonight, although the Minister said that that was not his ideal or his aim.

Mr. Alan Williams

It is the spin-off.

Mr. Crouch

The hon. Gentleman's predecessor on 24th March introduced an Order to give £10 million to BP to produce 140 jobs in Kingston upon Hull in order to help alleviate the problem caused by unemployment in the fishing industry. The situation is monstrous. We are asked to vote £10 million but not for 140 jobs. We are all waiting here tonight, hundreds of us, to vote later, and, by God, we shall, because the House is getting fed up with voting £10 million to give 80 people a job.

I do not care what hon. Members on the other side say about us, whether we are concerned with people being unemployed in Kingston upon Hull, Humberside or elsewhere. This proposal is nonsense, and I can see hon. Members on both sides of the Gangway opposite who are getting restive with their Government for talking of £20 million to produce 220 jobs.

Are there cash limits? This debate is about £10 million—or shall we say it is about one district general hospital at today's inflated prices, or about six health centres at today's inflated prices? No, because I work in the health service, as hon. Members know, and there are cash limits in the health service today. It is teachers who are going out of jobs. It is doctors and nurses who will not get rises next year. It is hospitals that will not be built. Roads will be taken out of the preparation pool programmes.

This is what this Government are about, yet the Minister comes here tonight and smilingly tells us that his concern is not to produce jobs but to produce an accelerated project scheme. Hon. Members know that I am fair about this. I am only angry that this Government, with all their great ideals, are going off track badly. I am concerned to see hon. Members opposite on both sides of the Gangway equally worried that this Government should have so lost control of their expenditure that they are prepared to come late at night not to deal with jobs but to ask for another £10 million to help a company that is said to be in some difficulty about its investment programme in the future.

Are we to be told that there is an oil company in difficulties—an oil company that has no difficulties whatsoever with the Price Commission when it comes to raising prices? An oil company which cannot raise money today to produce 80 jobs? It is monstrous.

I do not know where the Patronage Secretary is tonight. Perhaps he is talking in a state of some anxiety to the Minister of State to tell him that he has not enough people to turn out when we vote in one and a half hours' time to see that the Government gets their business. Perhaps they will get their business tonight, but I doubt whether they will get it for a third night in succession on this sort of measure, because everyone in the House and many in the country are now aware of what I said on 24th March.

I pointed out then that in Section 82 of the Industry Act 1972 and in Section 22 of the Industry Act 1975 we built a swinging door through which companies with big legal departments to advise them can find a way. It is not at all easy to understand the schedules to these Acts and to understand what they mean, but BP was the first to understand what was involved. What company in Britain has a bigger legal Department than BP? It is able to say "We may be the richest company in Britain, and a part-nationalised industry, but there is a way through for us here. We can embark on investments of £200 million or £300 million but we can also get some taxpayers' money for nothing, with no interest to be paid."

Mr. John Page (Harrow, West)

A grant.

Mr. Crouch

A grant, as my hon. Friend says. When I made my speech on 24th March I thought I had gone too far in criticising the chemical industry in which I work. Hon. Members on both sides recognise that I know the chemical industry. It is the richest industry in Britain. I also know the oil industry, which is not a failing industry either. I know industries that are failing and I should like to help them.

I should like to help the textile industry and some of the other industries which are suffering impossible competition from the Comecon countries and from Japan, but not the oil industry. Yet here we have the Department of Industry trying to persuade the House tonight that a company has read the Industry Act, realised that there is a swinging door and has said "We shall not be making this investment and giving employment to another 80 people. We cannot afford it unless you give us nearly £10 million. We know you will have to have a short debate in the House of Commons, but that is nothing. If you give it to us, we will go ahead with this refinery."But I suggest to hon. Members that they ask any oil company whether we need new refineries. Do we need another refinery on Canvey Island? I talk to the oil industry. I have never heard anyone in the oil industry yet say that we need another oil refinery in this country. Only the Minister of State says that we do, and I thought that he spoke tonight from a rather inadequate brief.

As I say, this proposal will probably be agreed. But why make this grant to this company, backed by two great petroleum companies in Europe? I am not against the fact that they come from the Continent. I believe in Europe. I believe in foreign investment in this country. I believe in creating investment to produce jobs and to produce wealth. I do not doubt that this project will produce wealth, and we know that it will produce 80 jobs. I concede that it will also produce some construction work. A great many people will be employed on the construction work in the three years that it takes to build this refinery.

But why make this grant tonight? Who else is in the queue? Why should we support this company? Which company shall we be asked to support next week, or the week after, or the week after that? This is a swinging door. There is nothing to stop every company in the country which feels that it has a good case under Section 22 of the 1975 Act from going to the Department and saying "We have a just case. We shall defer this investment unless you give us the money." It is astounding to me.

I have for long advocated the need for much greater investment. I have a Question down for answer on Monday by the Secretary of State for Industry to ask him what steps he will take to increase investment in manufacturing industry. I am desperately concerned that he should take such steps to encourage industry to invest itself. I do not think that we can afford any longer to dish out taxpayers' money to industry to invest on behalf of taxpayers. I realise that there are some elements in British industry which will always require money from the taxpayers, namely, the nationalised industries and the National Enterprise Board. But that is another story. Tonight, we are discussing the private sector. I am concerned in the private sector. Surely we are all concerned about taxpayers' money going into the private sector.

If we had heard tonight about a project under Section 7, say, to provide much bigger growth, employment and wealth in the developments areas and the regions, that would be another story. We should have to think differently, to speak differently and to argue differently. But we are not talking about a region. We are talking about helping a company to do something which it says it will not do unless the Government come forward with a grant of money. It is not a short-term loan. There are no conditions on the money. It is a grant of taxpayers' money that is not going to other areas which are desperately in need of investment, such as the social services. The Secretary of State for Social Services came here the other day to say that the child benefit scheme had had to be put on the shelf. This Minister does not have to put anything on the shelf. The Industry Act will go on and on unless at some stage—possibly tonight, or possibly the next time—Parliament says" Thus far and no further, until you give us a more convincing case".

There will be other projects coming forward. We may even get another case for another refinery. Will the Minister have the effrontery to come here again and say "There is another company wanting to build yet another refinery"? Another company could well make out as good a case as this one has, and the Minister could well make a similar speech to persuade us that a further tranche of money should be given to another profitable member of the private sector.

But I can tell the House why this is happening. The private sector has learned how to live in the Socialist world that this Government have created. When I spoke in the earlier debate to which I have referred already, I was interrupted by the hon. Member for Bolsover (Mr. Skinner), who tonight, for once, is not in his place. He said that I had it all wrong and that I did not understand why we needed these sums. He spoke in his usual moderate way—and he was very moderate that night. He said: The answer is to adopt a Socialist approach, but in the meantime we shall continue to do this to prop up the system and provide jobs. The alternative is the one that we have proposed for many ears."—[Official Report, 24th March 1976; Vol. 908, c. 572.] He makes it very clear—he wants to see us living in a Socialist State.

I believe that we must realise that the Socialist State is just around the corner, and is observed through the swinging door of the Industry Act. It may not be generally recognised by hon. Gentlemen opposite, but the legal departments of the oil and chemical companies know that there is a new vista. There is an opportunity —not a great one, but a small one—to get hold of money through the Government. It is money for nothing, money with no strings. [Interruption.] The hon. Member for Birmingham, Perry Barr (Mr. Rooker) knows that when I interrupt him it is to say that he is a breath of fresh air, and I would be grateful if he would not interrupt me from a reclining position in the seat usually occupied by the hon. Member for Bolsover. It is not his style. He is not that sort of hon. Member.

Tonight it is the turn of the Lindsey Oil Refining Company. Whose turn is it next? Is it Buggins' turn next? I want to hear from the Minister how much investment is being produced in this way, at what cost? He has told us that a very small number of jobs are being produced. I am worried about this. There is a great danger today of this Government not realising what they are doing. They are removing from the private sector the very incentives to stand on its own feet, and produce products which are sufficiently profitable to finance new investment. The Government are not encouraging the private sector to think in that way. They are reducing incentives by methods such as these. This is a deliberate attack on the incentive to industry to fend for itself. The private sector of industry should not be demanding millions of pounds from the Government. It should be demanding the freedom to generate enough money to further investment, produce wealth, and increase the number of jobs. This Socialist measure is having a depressing effect on industry. Industry is in danger of working the Socialist system to its own detriment and that of the country as a whole.

11.28 p.m.

Dr. Colin Phipps (Dudley, West)

Quickly for the record, concerning arithmetic, the hon. Gentleman referred to the Government share and not to total share. The Minister was very helpful in his speech in allowing many interruptions and I will not develop my complaint that we are, in fact, making an investment for something which is already adequately catered for in this country.

I do not want to deprive the constituencies involved of employment, but what concerns me is not so much the grant being put forward as the form in which it has been put forward. We are making so many fixed grants of limited sums to private industry for which we have no return whatever. I believe that we could get a greater effect on accelerating projects if we used the same amount of money for subsidising the interest rates. I know that this is a matter for the Treasury rather than my hon. Friend, but it is worth while making this point. The same amount of money would spread very much farther. For example, £10 million to subsidise interest rates by 10 per cent. could go 10 times farther than the money we are discussing tonight. That would greatly accelerate production, and that would be beneficial to the country both in terms of the employment provided and of the moneys received. It would provide a much more rapid way out of our current economic difficulties than the flat payment of grant.

The course adopted will be of no help in terms of an immediate return to the country, although I accept that the ultimate return may be greater. I would like the Government to consider dropping this form of block grant and using instead a subsidy for interest rates.

11.31 p.m.

Mr. Tim Renton (Mid-Sussex)

My hon. Friend the Member for Canterbury (Mr. Crouch) made a moving appeal for more investment by industry, not by the taxpayer. He appealed for increased productive manufacturing investment.

One question which he did not cover fully and which I should like to ask is why this investment in the Lindsey Oil Refinery is to be made by the taxpayer rather than by the shareholder companies in Lindsey—Total and Petrofina. These are both very large oil companies with plenty of funds available. The product they are intending to make at this refinery is one for which there is the prospect of a growing shortage in this country. They are intending to take a crude feedstock from nearby refineries and, putting it through a cracker, to turn it into naphtha and a feedstock for petroleum.

It is in this area that future growth of demand in this country lies. It is hard to imagine that if the Government had stood back from this project and had said that under no circumstances would the money be available from them, the oil companies would not have gone forward with the investment. They, better than anyone, know the growth of the market and the statistics. They must know that at this end of the refinery spectrum there is great potential in the United Kingdom.

In these circumstances, as in others, the Government have been gulled by the companies who have come to them and asked them for money. Even at this late stage the Government should stand back and tell the shareholders in Lindsey Oil that in the circumstances of the United Kingdom at the moment they must go ahead with the project on their own. I think that the Government would get a surprising answer. I believe that the project would go forward without Government help.

Must this assistance be in the form of a grant? Can it not be in the form of a loan at a reasonable rate of interest and repayable within a few years? If it has to be a grant, what reciprocal benefit will there be for the United Kingdom from Total and Petrofina? When BP wishes to build a catalytic cracking plant in Belgium or France, will it get similar help from the respective Governments over there? It is on those sort of terms that the Government should be negotiating. They should not simply allow grants under the Industry Act to be seen as an open purse to which any major company can come and, with a degree of blackmail, get the sort of help it is seeking from a Labour Government.

The Government must say either that there will be no money or that it will be forthcoming only if similar treatment is afforded to British companies in other countries. In the absence of some such assurance my hon. and right hon. Friends should vote against the motion tonight because it is a further example of unnecessary Government spending.

11.34 p.m.

Mr. Michael Grylls (Surrey, North-West)

It is a curious coincidence that on the eve of the visit by the French President we should be here discussing the granting of £10 million to a company which is basically a French multinational. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said quite rightly that he was worried about what was happening. It is rather curious that the hon. Member for Kingston upon Hull, East (Mr. Prestcott) is not here this evening. He has been one of those who have led the fight against multinationals. He would have been horrified to see from the Order Paper what was happening. Certainly the two shareholders in the company do not need the money. It is an enormous concern backed by Total and Petrofina.

Mr. McNamara


Mr. Grylls

I have agreed to speak for only five minutes, but I shall give way to the hon. Member shortly.

Here we have two major companies, Total, with a capitalisation in Britain alone of £23 million, and Petrofina, with a capitalisation in Britain of £20.4 million. As my hon. Friend the Member for Mid-Sussex (Mr. Renton) said, we are offering the money to two very rich companies. It seems that in the accelerated projects scheme it pays to be rich. It is the rich who are getting the Government hand outs. As my hon. Friend the Member for Canterbury (Mr. Crouch) said, BP, too, is a hugh company.

The Lindsey company is not new. It already has a very big plant at Killingholme. Phase I was completed in 1968 and phase II in 1970, both without any Government contribution. All that money came from the existing shareholders, and the company at that time had no need to ask for help and the investment was made without any Government assistance. There has been no proof, as my hon. Friend the Member for Mid-Sussex said, that the company would not have gone on with the investment if Government aid had not been forthcoming. As he said, the market for this type of product is likely to be one of increasing demand. The Minister hinted that the project might be deferred for a few months, but he was not at all specific and certainly there has been no evidence that the scheme would not go ahead if the Government stood firm.

It has been said that the assistance should have been in the form of a loan rather than a grant of taxpayers' money. Is it conceivable that a company would not go ahead with a project costing £70 million if it did not get a Government contribution of £10 million? If the company were in any way uncertain about the project, it would not put up £60 million of its own money.

The two main grounds of the Minister of State's opening argument were the possibility of deferment and the balance of payments disadvantages. Both arguments were shot down in flames. Certainly the Minister did not give any categoric proof that the project would be deferred. He just vaguely said that it might be.

Government supporters are genuinely concerned about the balance of payments considerations, but the hon. Member for Dudley, West (Dr. Phipps), who is a great expert in these matters, shot down that argument, too. There was no evidence that this project would benefit the balance of payments to any considerable extent.

The hon. Member for Kingston upon Hull, Central (Mr. McNamara), with the unemployment problems of his constituency, understandably said that it was important that the money should be made available so that jobs would be created. Certainly we agree that jobs should be created, but that has nothing to do with this subject, and the Minister admitted as much. The only effect on jobs will be that the £10 million here proposed to be given away unnecessarily is £10 million lost from assistance available under Section 7 of the Industry Act 1972. This is not an unemployment argument.

The hon. Member was right to say that we had to be cost-effective in spending Government money, but it is our criticism that the Government are not being cost-effective. They are offering this money to a company that does not need help, that is wealthy and that has a project with good prospects. If this money is given tonight, there will be less to offer to other areas.

The hon. Member also said this would be good for the morale of industry on Humberside. I think he is quite wrong. If other industries see Government money being handed out to a wealthy company, they are likely to be rather cynical. Smaller companies which are struggling to carry on in these difficult days see money scattered around like confetti to companies that do not need it. In the end, the smaller companies will have to pay for the Government grant. The money will come from companies that are struggling to carry on.

We ask the House to oppose the Order. The Order is irresponsible, it will not help the new project and the Minister of State has not made a case for it.

11.42 p.m.

Mr. Alan Williams

I am grateful for the support of my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) for the number of jobs which will be created by this project and for the help which he and other hon. Members from the area have given in our discussions of employment problems in the region.

My hon. Friend referred to multinational companies, and I refer him to a document agreed today by the OECD on guidelines for multinational companies and host countries. I gave a Press conference on this subject this morning and we shall be publishing a White Paper covering many of the points to which my hon. Friend referred.

The hon. Member for Bridgwater (Mr. King) tried mischievously—in the nicest sense; he would not do it in an unpleasant way—to equate the money with the number of jobs created and he claimed that each job would cost £1 million. I hope the Opposition realise the logic of trying to judge capital-intensive investment by such superficial, trivial and out-of-date criteria. Industry will look aghast at the comments of hon. Members opposite.

The hon. Member for Bridgwater even had the impudence to refer to the Tories' sensible use of selective assistance and contrast it with our use. I invite him to explain how sensibly selective they were in their offshore supplies scheme which was open ended and which could leave the Government to pick up a bill of £200 million. He calls that sensible administration.

Mr. Tom King

Will the Minister give way?

Mr. Williams

No. The hon. Gentleman did not give way to anyone and I gave way to everyone in my introductory speech. For reasons which I understand, the hon. Member for Surrey, North-West (Mr. Grylls) has left me only three minutes to wind up the debate.

The hon. Member for Bridgwater complained that I was using the same criteria as my predecessor. There is no satisfying him! The criteria were spelled out a couple of months ago and the hon. Gentleman complains that they are still the same. Oppositions normally call for consistency. The hon. Gentleman cannot be serious in his criticisms.

The hon. Gentleman asked when talks started with the company. The discussions started towards the end of last year. The project was first deferred three years ago and the deferment was reiterated in October last year.

My hon. Friend the Member for Dudley, West (Dr. Phipps) and the hon. Member for Canterbury (Mr. Crouch) referred to the problem of capacity. The hon. Member for Canterbury kept referring to refining capacity, but this is not refining capacity. That is the point. We have refining capacity. This is concerned with the second stage—cracking

the refined products and turning them into refined distillates. That is where Britain has a shortage. It is a shortage of capacity for cracking the oil and making the finer distillates. It is from this that the £17 million balance of payments benefit will come.

I shall be intrigued to see which Opposition Members troop, sheep-like into the Division Lobby against employment in Humberside.

Mr. Crouch

Before the Minister finishes his speech, will he tell the House whether cash limits apply in his Department as they apply in the Department of Health and Social Security?

Hon. Members


Question put:

The House divided: Ayes 282, Noes 261.

Division No. 188.] AYES [11.48 p m.
Allaun, Frank Crawshaw, Richard Gould, Bryan
Anderson, Donald Cronin, John Gourlay, Harry
Archer, Peter Crosland, Rt Hon Anthony Graham, Ted
Armstrong, Ernest Cryer, Bob Grant, George (Morpeth)
Ashley, Jack Cunningham, G. (Islington S) Grant, John (Islington C)
Ashton, Joe Cunningham, Dr J. (Whiteh) Grocott, Bruce
Atkins, Ronald (Preston N) Dalyell, Tam Hamilton, James (Bothwell)
Atkinson, Norman Davidson, Arthur Hardy, Peter
Bagier, Gordon A. T. Davies, Bryan (Enfield N) Harper, Joseph
Barnett, Guy (Greenwich) Davies, Denzil (Llanelli) Harrison, Walter (Wakefield)
Barnett, Rt Hon Joel (Heywood) Davis, Clinton (Hackney C) Hart, Rt Hon Judith
Bean, R. E. Deakins, Eric Hattersley, Rt Hon Roy
Benn, Rt Hon Anthony Wedgwood Dean, Joseph (Leeds West) Hatton, Frank
Bennett, Andrew (Stockport N) de Freitas, Rt Hon Sir Geoffrey Hay man, Mrs Helene
Bidwell, Sydney Dempsey, James Heffer, Eric S.
Bishop, E. S. Doig, Peter Hooley, Frank
Blenkinsop, Arthur Dormand, J. D. Horam, John
Booth, Rt Hon Albert Douglas-Mann, Bruce Howell, Rt Hon Denis
Boothroyd, Miss Betty Duffy, A. E. P. Hoyle, Doug (Nelson)
Bottomley, Rt Hon Arthur Dunnett, Jack Huckfield, Les
Boyden, James (Bish Auck) Eadie, Alex Hughes, Mark (Durham)
Bradley, Tom Edge, Geoff Hughes, Robert (Aberdeen N)
Bray, Dr Jeremy Edwards, Robert (Wolv SE) Hughes, Roy (Newport)
Brown, Hugh D. (Provan) Ellis, Tom (Wrexham) Hunter, Adam
Brown, Robert C. (Newcastle W) English, Michael Irvine, Rt Hon Sir A. (Edge Hill)
Brown, Ronald (Hackney S) Ennals, David Irving, Rt Hon S. (Dartford)
Buchan, Norman Evans, Fred (Caerphilly) Jackson, Colin (Brighouse)
Buchanan, Richard Evans, Ioan (Aberdare) Jackson, Miss Margaret (Lincoln)
Butler, Mrs Joyce (Wood Green) Evans, John (Newton) Janner, Greville
Callaghan, Jim (Middleton & P) Ewing Harry (Stirling) Jay, Rt Hon Douglas
Campbell, Ian Faulds, Andrew Jeger, Mrs Lena
Canavan, Dennis Fernyhough, Rt Hon E. Jenkins, Hugh (Putney)
Cant, R. B. Fitch, Alan (Wigan) John, Brynmor
Carmichael, Neil Flannery, Martin Johnson, James (Hull West)
Carter, Ray Fletcher, Raymond (Ilkeston) Johnson, Walter (Derby S)
Carter-Jones, Lewis Fletcher, Ted (Darlington) Jones, Barry (East Flint)
Cartwright, John Foot, Rt Hon Michael Jones, Dan (Burnley)
Castle, Rt Hon Barbara Forrester, John Judd, Frank
Clemitson, Ivor Fowler, Gerald (The Wrekin) Kaufman, Gerald
Cocks, Michael (Bristol S) Fraser, John (Lambeth,N'w'd) Kelley, Richard
Cohen, Stanley Freeson, Reginald Kerr, Russell
Coleman, Donald Freud, Clement Kilroy-Silk, Robert
Colquhoun, Ms Maureen Garrett, John (Norwich S) Kinnock, Neil
Concannon, J. D. Garrett, W. E. (Wallsend) Lambie, David
Cook, Robin F. (Edin C) George, Bruce Lamborn, Harry
Corbett, Robin Gilbert, Dr John Lamond, James
Cox, Thomas (Tooting) Ginsburg, David Latham, Arthur (Paddington)
Craigen, J. M. (Maryhill) Golding, John Leadbitter, Ted
Lee, John Owen, Dr David Strang, Gavin
Lestor, Miss Joan (Eton & Slough) Padley, Walter Strauss, Rt Hn G. R.
Lewis, Arthur (Newham N) Palmer, Arthur Summerskill, Hon Dr Shirley
Lewis, Ron (Carlisle) Park, George Swain, Thomas
Litterick, Tom Parker, John Taylor, Mrs Ann (Bolton W)
Loyden, Eddie Parry, Robert Thomas, Jeffrey (Abertillery)
Luard, Evan Pavitt, Laurie Thomas, Mike (Newcastle E)
Lyons, Edward (Bradford W) Pendry, Tom Thomas, Ron (Bristol NW)
Mabon, Dr J. Dickson Perry, Ernest Thorne, Stan (Preston South)
McCartney, Hugh Phipps, Dr Colin Thorpe, Rt Hon Jeremy (N Devon)
McElhone, Frank Prentice, Rt Hon Reg Tierney, Sydney
MacFarquhar, Roderick Prescott, John Tinn, James
McGuire, Michael (Ince) Price, C. (Lewisham W) Tomlinson, John
Mackenzie, Gregor Price, William (Rugby) Torney, Tom
Mackintosh, John P. Radice, Giles Tuck, Raphael
Maclennan, Robert Richardson, Miss Jo Urwin, T. W.
McMillan, Tom (Glasgow C) Roberts, Albert (Normanton) Varley, Rt Hon Eric G.
McNamara, Kevin Roberts, Gwilym (Cannock) Wainwright, Edwin (Dearne V)
Madden, Max Robinson, Geoffrey Walker, Harold (Doncaster)
Magee, Bryan Roderick, Caerwyn Walker, Terry (Kingswood)
Mahon, Simon Rodgers, George (Chorley) Ward, Michael
Mallalieu, J. P. W. Rodgers, William (Stockton) Watkins, David
Marks, Kenneth Rooker, J. W. Watkinson, John
Marquand, David Rose, Paul B. Weetch, Ken
Marshall, Dr Edmund (Goole) Ross, Stephen (Isle of Wight) Weitzman, David
Marshall, Jim (Leicester S) Ross, Rt Hon W. (Kilmarnock) Wellbeloved, James
Mason, Rt Hon Roy Rowlands, Ted White, Frank R. (Bury)
Maynard, Miss Joan Sandelson, Neville White, James (Pollok)
Meacher, Michael Sedgemore, Brian Whitehead, Phillip
Mellish, Rt Hon Robert Selby, Harry Whitlock, William
Mendelson, John Shaw, Arnold (Ilford South) Wigley, Dafydd
Mikardo, Ian Sheldon, Robert (Ashton-u-Lyne) Willey, Rt Hon Frederick
Millan, Bruce Shore, Rt Hon Peter Williams, Alan (Swansea W)
Miller, Mrs Millie (Ilford N) Short, Rt Hon E. (Newcastle C) Williams, Alan Lee (Hornch'ch)
Mitchell, R. C. (Soton, Itchen) Short, Mrs Renée (Wolv NE) Williams, Rt Hon Shirley (Hertford)
Molloy, William Silkin, Rt Hon John (Deptford) Williams, Sir Thomas
Moonman, Eric Silkin, Rt Hon S. C. (Dulwich) Wilson, Alexander (Hamilton)
Morris, Alfred (Wythenshawe) Sillars, James Wilson, William (Coventry SE)
Morris, Charles R. (Openshaw) Silverman, Julius Wise, Mrs Audrey
Moyle, Roland Skinner, Dennis Woodall, Alec
Mulley, Rt Hon Frederick Small, William Woof, Robert
Murray, Rt Hon Ronald King Smith, John (N Lanarkshire) Wrigglesworth, Ian
Newens, Stanley Snape, Peter Young, David (Bolton E)
Noble, Mike Spearing, Nigel
Oakes, Gordon Stallard, A. W. TELLERS FOR THE AYES:
Ogden, Eric Stewart, Rt Hon M. (Fulham) Mr. John Ellis and
O'Halloran, Michael Stoddart, David Mr. Alf Bates.
Ovenden, John
Adley, Robert Clark, Alan (Plymouth, Sutton) Forman, Nigel
Aitken, Jonathan Clark, William (Croydon S) Fowler, Norman (Sutton C'f'd)
Alison, Michael Clarke, Kenneth (Rushcliffe) Fox, Marcus
Atkins, Rt Hon H. (Spelthorne) Clegg, Walter Fraser, Rt Hon H. (Stafford & St)
Awdry, Daniel Cockcroft, John Fry, Peter
Baker, Kenneth Cooke, Robert (Bristol W) Galbraith, Hon. T. G. D.
Banks, Robert Cope, John Gardiner, George (Reigate)
Bell, Ronald Cordle, John H. Gardner, Edward (S Fylde)
Bennett, Dr Reginald (Fareham) Cormack, Patrick Gilmour, Rt Hon Ian (Chesham)
Berry, Hon Anthony Corrie, John Gilmour, Sir John (East Fife)
Biffen, John Costain, A. P. Glyn, Dr Alan
Biggs-Davison, John Critchley, Julian Godber, Rt Hon Joseph
Blaker, Peter Crouch, David Goodhart, Philip
Body, Richard Crowder, F. P. Goodhew, Victor
Boscawen, Hon Robert Dean, Paul (N Somerset) Goodlad, Alastair
Bottomley, Peter Dodsworth, Geoffrey Gow, Ian (Eastbourne)
Bowden, A. (Brighton, Kemptown) Douglas-Hamilton, Lord James Gower, Sir Raymond (Barry)
Boyson, Dr Rhodes (Brent) Drayson, Burnaby Grant, Anthony (Harrow C)
Braine, Sir Bernard du Cann, Rt Hon Edward Gray, Hamish
Brittan, Leon Dunlop, John Grieve, Percy
Brocklebank-Fowler, C. Durant, Tony Griffiths, Eldon
Brotherton, Michael Dykes, Hugh Grist, Ian
Brown, Sir Edward (Bath) Edwards, Nicholas (Pembroke) Grylls, Michael
Bryan, Sir Paul Elliott, Sir William Hall, Sir John
Buchanan-Smith, Alick Emery, Peter Hall-Davis, A. G. F.
Buck, Antony Eyre, Reginald Hamilton, Michael (Salisbury)
Budgen, Nick Fairbairn, Nicholas Hampson, Dr Keith
Bulmer, Esmond Fairgrieve, Russell Hannam, John
Burden, F. A. Farr, John Harvie Anderson, Rt Hon Miss
Butler, Adam (Bosworth) Fell, Anthony Hastings, Stephen
Carlisle, Mark Fisher, Sir Nigel Havers, Sir Michael
Chalker, Mrs Lynda Fletcher, Alex (Edinburgh N) Hawkins, Paul
Channon, Paul Fletcher-Cooke, Charles Hayhoe, Barney
Churchill, W. S. Fookes, Miss Janet Heseltine, Michael
Hicks, Robert Meyer, Sir Anthony Scott, Nicholas
Higgins, Terence L. Miller, Hal (Bromsgrove) Scott-Hopkins, James
Holland, Philip Mills, Peter Shaw, Giles (Pudsey)
Howe, Rt Hon Sir Geoffrey Miscampbell, Norman Shaw, Michael (Scarborough)
Howell, David (Guildford) Mitchell, David (Basingstoke) Shelton, William (Streatham)
Hunt, David (Wirral) Moate, Roger Shepherd, Colin
Hunt, John Monro, Hector Shersby, Michael
Hurd, Douglas Montgomery, Fergus Silvester, Fred
Hutchison, Michael Clark Moore, John (Croydon C) Sims, Roger
Irving, Charles (Cheltenham) More, Jasper (Ludlow) Sinclair, Sir George
James, David Morgan, Geraint Skeet, T. H. H.
Jenkin, Rt Hon P.(Wanst'd & W'df'd) Morgan-Giles, Rear-Admiral Smith, Dudley (Warwick)
Jessel, Toby Morris, Michael (Northampton S) Speed, Keith
Johnson Smith, G. (E Grinstead) Morrison, Hon Peter (Chester) Spence, John
Jones, Arthur (Daventry) Mudd, David Spicer, Jim (W Dorset)
Jopling, Michael Neave, Airey Spicer, Michael (S Worcester)
Joseph, Rt Hon Sir Keith Nelson, Anthony Sproat, Iain
Kaberry, Sir Donald Neubert, Michael Stainton, Keith
Kellett-Bowman, Mrs Elaine Newton, Tony Stanbrook, Ivor
Kershaw, Anthony Normanton, Tom Stanley, John
Kimball, Marcus Nott, John Steen, Anthony (Wavertree)
King, Evelyn (South Dorset) Onslow, Cranley Stewart, Ian (Hitchin)
King, Tom (Bridgwater) Oppenheim, Mrs Sally Stokes, John
Kitson, Sir Timothy Osborn, John Stradling Thomas, J.
Knight, Mrs Jill Page, John (Harrow West) Tapsell, Peter
Knox, David Page, Rt Hon R. Graham (Crosby) Taylor, R. (Croydon NW)
Lamont, Norman Parkinson, Cecil Taylor, Teddy (Cathcart)
Lane, David Pattie, Geoffrey Tebbit, Norman
Langford-Holt, Sir John Percival, Ian Thatcher, Rt Hon Margaret
Latham, Michael (Melton) Peyton, Rt Hon John Thomas, Rt Hon P. (Hendon S)
Lawrence, Ivan Pink, R. Bonner Townsend, Cyril D.
Lawson, Nigel Powell, Rt Hon J. Enoch Trotter, Neville
Lester, Jim (Beeston) Price, David (Eastleigh) Tugendhat, Christopher
Lewis, Kenneth (Rutland) Prior, Rt Hon James van Straubenzee, W. R.
Lloyd, Ian Pym, Rt Hon Francis Vaughan, Dr Gerard
Loveridge, John Raison, Timothy Viggers, Peter
Luce, Richard Rathbone, Tim Wakeham, John
McAdden, Sir Stephen Rawlinson, Rt Hon Sir Peter Walder, David (Clitheroe)
McCrindle Robert Rees, Peter (Dover & Deal) Walker, Rt Hon P. (Worcester)
Macfarlane, Neil Rees-Davies, W. R. Wall, Patrick
MacGregor, John Renton, Rt Hon Sir D. (Hunts) Walters, Dennis
Macmillan, Rt Hon M. (Farnham) Renton, Tim (Mid-Sussex) Warren, Kenneth
McNair-Wilson, M. (Newbury) Rhys Williams, Sir Brandon Weatherill, Bernard
McNair-Wilson, P. (New Forest) Ridley, Hon Nicholas Wells, John
Ridsdale, Julian Whitelaw, Rt Hon William
Madel, David Rifkind, Malcolm Wiggin, Jerry
Marshall, Michael (Arundel) Rippon, Rt Hon Geoffrey Winterton, Nicholas
Marten, Neil Roberts, Michael (Cardiff NW) Wood, Rt Hon Richard
Mates, Michael Roberts, Wyn (Conway) Young, Sir G. (Ealing, Acton)
Mather, Carol Rodgers, Sir John (Sevenoaks) Younger, Hon George
Maude, Angus Rossi, Hugh (Hornsey)
Maudling, Rt Hon Reginald Rost, Peter (SE Derbyshire) TELLERS FOR THE NOES
Mawby, Ray Royle, Sir Anthony Mr. W. Benyon and
Maxwell-Hyslop, Robin Sainsbury, Tim Mr. Spencer Le Marchant.
Mayhew, Patrick St. John-Stevas, Norman

Question accordingly agreed to.

Resolved, That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industry Act 1972, as amended by section 22 of, and Part I of Schedule 4 to, the Industry Act 1975, in respect of the construction of a Fluid Catalyctic Cracking Plant at Immingham by Lyndsey Oil Refinery Ltd. sums exceeding £5,000,000 but not exceeding £9,900,000.