Power Plant (Hansard, 18 July 1977)

§ 4. Mr. Kenneth Clarke
asked the Secretary of State for Industry whether he will make a statement about the future of the power plant manufacturing industry.

§ 10. Mr. Whitehead
asked the Secretary of State for Industry if he will make a further statement of Government policy with regard to recent mergers in the power generating industry, in the light of the CPRS Report.

§ Mr. Varley
As the House knows, the Government accepted the recommendation of the Central Policy Review Staff, supported by the National Enterprise Board, that it would be in the long-term interests of the country and of those employed in the industry if restructuring took place. It has not at this stage proved possible to find an acceptable basis for restructuring, but we shall continue to discuss with the companies the possibility of bringing it about.

§ Mr. Clarke
The right hon. Gentleman has not touched on the announcement to be made at 3.30 p.m. on Drax B. What is his personal position on this matter? Does he accept that there is some sympathy for him on this side of the House in that once again he has argued the logic of his industrial strategy against his right hon. and hon. Friends' wish to spend public money merely in response to political lobbies and he has lost again? Does he not think that his view on the power plant manufacturing industry and that of the CPRS, the NEB and the CEGB has been rejected in favour of the advice of the NUM and the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) and that the best thing that he could do would be to resign and argue his case properly?

§ Mr. Varley
I do not want lectures from the hon. Gentleman about whether or not I should resign. I think that he misunderstands the position. The objective was always to bring about voluntary restructuring. We have no powers to bring about restructuring. The hon. 1122 Gentleman knows that full well. It is true that the objective was supported by the CPRS, the NEB and the CEGB and, incidentally, by all those who have been engaged in these discussions. Unfortunately, at this stage it has not proved to be possible. However, I hope that at some stage in the future we can get back to discussions.

§ Mr. Whitehead
Is it not the case, however, that the proposed merger between Reyrolle Parsons and Clarke Chapman, if it goes ahead, will drive a coach and horses through the recommendations in the CPRS Report? Is it not the case that this is already increasing the hostility between the two separated parts of the boilermaking industry? Is my right hon. Friend aware, for example, that one of them is actually advising its foreign associates to come in and take work in Britain from the other half? Is this not to the detriment of British industry when we should be sharing out the work among British firms?

§ Mr. Varley
I think that the companies put out a statement which said that the merger between Reyrolle Parsons and Clarke Chapman was quite independent of the restructuring of the power plant industry. My understanding is that the talks about a merger in the boiler-making side of the industry are still in progress and that the NEB is taking part in them.

§ Mr. Nelson
Will the right hon. Gentleman at least ensure, as a matter of good competitive industrial policy, that he uses his influence to ensure that, if GEC makes a bid or produces a tender, the terms of that tender will be published?

§ Mr. Varley
I am afraid that questions about particular power stations and power station orders must be put to my right hon. Friend the Secretary of State for Energy. I understand that he will be making a statement at 3.30 p.m. today.

§ Mr. Mike Thomas
Will my right hon. Friend accept that a merger on the lines of the boilermakers merger as proposed was never available on the turbo-generating side? That is tragic and is regretted by the Parsons work force and management. Has my right hon. Friend any news of proposals to develop a joint research company and a turnkey project 1123 company with NEB assistance? Is he aware that the position taken by the Opposition Front Bench spokesmen on this issue has been specifically disowned by the hon. Members for Newcastle upon Tyne, North (Sir W. Elliott) and Tyne-mouth (Mr. Trotter)?

§ Mr. Varley
On the first part of my hon. Friend's question, I cannot give him any information about the possibility of turnkey projects and the other assistance that was recommended in the CPRS Report. I very much regret that it has not been possible to get restructuring at this stage. What we are talking about is not a single power station order. We are talking about getting an industry that is capable of being internationally competitive, having to find about two-thirds of its work from abroad.

§ Sir K. Joseph
Has not the Secretary of State, however, by his own arguments, which he is explicitly repeating now, accepted that it is bad for the people of this country and bad for industrial strategy that an order should go to the company that makes most noise rather than to the company that produces the best price for the job?

§ Mr. Varley
The right hon. Gentleman is one of the last persons to give me instructions about placing power station orders. Although it is not a specific matter for me, and no doubt the right hon. Gentleman will take the opportunity of raising it with my right hon. Friend, he will know that in November 1971 the Government of the day, of which he was a member, authorised the advance of Ince B power station by single tender to Reyrolle Parsons, because at that time—

§ Mr. Tom King
By agreement with GEC.

§ Mr. Speaker
Order.

§ Mr. Varley
I was only referring, Mr. Speaker, to the right hon. Gentleman's Government. I do not think that the hon. Member for Bridgwater (Mr. King) was a member of that Government. Perhaps he will keep quiet for a minute or two. I do not know whether the hon. Gentleman is involved, but the right hon. Gentleman's Government decided at the time that they would place an order with Reyrolle Parsons for Ince B. 1124 If that is the decision that will be taken today, it is entirely in line with the decision to which the right hon. Gentleman was a party.

§ Mr. Skinner
Will my right hon. Friend confirm that the CPRS Report was not included in the Labour Party manifesto? Will he also acknowledge that the Opposition are constantly wanting to get rid of jobs? The Opposition have a fixation about that matter, especially when it is with regard to steelworkers, British Leyland workers, Chrysler workers and, indeed, engineering workers, and obviously miners, which would be the case if Drax B were not announced very quickly. In view of that, does not my right hon. Friend think that the Opposition are being hypocritical, because when they were in power they saved Rolls-Royce, using the same criteria?

§ Mr. Speaker
Order. The Minister is not responsible for the Opposition.

§ Mr. Varley
I happen to think that the CPRS Report was a good report. The analysis that it made was very firm and sensible. What it is talking about in the report is trying to achieve an internationally competitive industry. As to supporting the mining industry, I think that the Government's desire to see a second coal-fired power station at Drax in Yorkshire was first announced by my right hon. Friend the Member for Barnsley (Mr. Mason) in 1969.

§ Sir W. Elliott
Will the right hon. Gentleman accept that the management and work force of C. A. Parsons have not been opposed to a restructuring of the industry? Will he further accept that the comments made by myself and by my hon. Friend the Member for Tynemouth (Mr. Trotter) during this long period in which there has been grave indecision, which has affected very heavily the lives of many families in Newcastle upon Tyne, have been criticism of the slowness in the decision being taken?

§ Mr. Varley
That rather conflicts with what has been said from the Opposition Front Bench, and it rather confirms the statement of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas). There has been no undue delay in reaching a decision. In fact, Sir James Woodeson said when he came to see me 1125 on 31st March this year that irrespective of a single power station order there would be some redundancies at C. A. Parsons in Newcastle. However, I am not concerned particularly about the workers in one section of this industry. I am concerned about all workers in the industry just as much as I am about the 9,500 workers who work for GEC.