HC Deb 08 November 1976 vol 919 cc17-20
11. Mr. John Garrett

asked the Secretary of State for Industry if he will report progress on drawing up planning agreements with leading companies.

6. Mr. Patrick McNair-Wilson

asked the Secretary of State for Industry whether any planning agreements under the Industry Act 1975 have yet been concluded.

22. Mr. Clemitson

asked the Secretary of State for Industry how many planning agreements have so far been reached; and with what companies.

26. Mr. George Rodgers

asked the Secretary of State for Industry what is now the extent of progress towards the achievement of planning agreements; and with which sectors of industry negotiations are taking place.

Mr. Varley

As the House knows, detailed discussions are in progress with eight companies in the process plant, turbo-generator and motor vehicle sectors of industry. Planning agreements are also being introduced with three nationalised industries. Announcements will be made as further companies agree to enter into operative discussions, and statements on the conclusion of planning agreements will be laid at the appropriate time.

Mr. Garrett

Does not my right hon. Friend agree that any strategy for the development of British industry must be based on plans drawn up between the Government and leading companies? Does he accept that some of us at least think that the efforts so far have been wholly inadequate and that we cannot settle down to the orderly planning of industry without a far greater number of planning agreements?

Mr. Varley

I agree with a great deal of what my hon. Friend has said. I am not satisfied with the progress either. These are voluntary agreements, as was set out in December 1974, but British industry and industrialists continually come to me and complain that, even where investment and technology are comparable with investment and technology overseas, they are not getting enough out of them. The best way to get a better performance by industry is to enter into planning discussions, and I hope that more companies will do so.

Mr. Hal Miller

What is the Government's input into these agreements, particularly with the motor industry? Does not the right hon. Gentleman understand that there is real lack of confidence among all those working in that industry in the Government's plans for it, whether through fuel tax, interest rates, the size of the market or licensing policy? Is there any firm Government purpose and policy towards that industry?

Mr. Varley

There would not have been much confidence in that industry if—

Mr. Miller

Tell us the Government's policy.

Mr. Varley

I can stand here all day if necessary and wait for the barracking to stop. The input of taxpayers' money into the motor industry over the last two and a half years has been about £250 million. The discussions with British Leyland and Chrysler are going extremely well. I hope that in due course we shall be able to announce the conclusion of planning agreements, and a statement will be made.

Mr. Clemitson

Does not my right hon. Friend agree that two of the vital elements needed for the recovery of the economy are the better planning of resources and the development of democracy in industry, in both of which planning agreements have a vital rôle to play? Is it not therefore extremely disappointing that no planning agreements appear yet to have been concluded?

Mr. Varley

It is disappointing, and I think that British industry is taking an extremely negative view of planning agreements. I know that the companies I have announced are anxious to enter into discussions, but by and large the response has been pretty poor and it is plain that the Government will have to take stock of the position very soon.

Mr. Cormack

How does the right hon. Gentleman expect British industry to have confidence in him or the Government when a sizeable percentage of the Labour Party wishes to see the mixed economy reduced to ruins and equates planning with nationalisation and complete State takeover? How can he expect to preserve credibility?

Mr. Varley

A year ago we entered into the industrial strategy exercise, if I can call it that, through the framework of the National Economic Development Council, and we have had about 40 sector working reports in which 1,000 people have been involved. But it is plain that, if we are to make progress and improve performance, that work has to be translated to the level of the company and the plant. That is not being done. Planning agreements have a role to play, and I hope that industry recognises it.

Mr. Rodgers

Does not my right hon. Friend agree that the calamity at Courtaulds would not have occurred had a planning agreement been established with that company? Does not he also agree that restriction on wages and salaries in isolation is both unfair and futile if we do not also control and influence investment in industry?

Mr. Varley

British industry has, over the last few months, had a climate in which it could enter into planning agreements. The voluntary pay policy has helped considerably. There has been a dramatic reduction in the number of disputes and strikes. Sometimes I ask myself what more industry requires. If it believes in an industrial strategy, it really should enter into planning agreement discussions.

Mr. Heseltine

Does not the right hon. Gentleman agree that the first requirement for industry to co-operate with the Government is that it should have confidence in the ability of the Government to govern the country? How does he think he will inspire that confidence when, in the year since the dialogue about planning agreements took place, the Government have seen their own borrowing requirement rising by £2,000 million, they have put up the borrowing rate to 15 per cent, minimum, and they have imposed a payroll levy in order to take another £1,000 million out of industry's resources?

Mr. Varley

At the same time the 100 per cent, capital investment allowances have been maintained, there has been substantial help to British industry on the basis of stock appreciation and the Price Code has been relaxed considerably, sometimes to the disappointment of my hon. Friends. All that has to be set in the balance. At this time, British industry has no reason to complain in the sense in which the hon. Gentleman complains.